Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 09, 2021 | Jun. 30, 2020 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity File Number | 001-36338 | ||
Entity Registrant Name | 22nd Century Group, Inc. | ||
Entity Central Index Key | 0001347858 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Tax Identification Number | 98-0468420 | ||
Entity Address, Address Line One | 8560 Main Street | ||
Entity Address, Address Line Two | Suite 4 | ||
Entity Address, City or Town | Williamsville | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 14221 | ||
City Area Code | 716 | ||
Local Phone Number | 270-1523 | ||
Title of 12(b) Security | Common Stock, $0.00001 par value | ||
Security Exchange Name | NYSEAMER | ||
Trading Symbol | XXII | ||
Entity Current Reporting Status | Yes | ||
ICFR Auditor Attestation Flag | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 106 | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 149,615,010 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 1,029 | $ 485 |
Short-term investment securities | 21,313 | 38,477 |
Accounts receivable, net | 2,159 | 867 |
Inventory, net | 2,034 | 2,266 |
Prepaid expenses and other assets | 1,806 | 648 |
Total current assets | 28,341 | 42,743 |
Property, plant and equipment: | ||
Machinery and equipment, net | 2,483 | 3,120 |
Operating leases right-of-use assets, net | 247 | 602 |
Total property, plant and equipment | 2,730 | 3,722 |
Other assets: | ||
Intangible assets, net | 8,211 | 8,494 |
Investments | 6,536 | 8,403 |
Convertible note | 5,876 | 5,589 |
Total other assets | 20,623 | 22,486 |
Total assets | 51,694 | 68,951 |
Current liabilities: | ||
Notes payable | 539 | 581 |
Operating lease obligations | 247 | 220 |
Accounts payable | 1,116 | 1,997 |
Accrued expenses | 4,830 | 2,619 |
Accrued severance, current | 339 | 359 |
Deferred income | 272 | 5 |
Total current liabilities | 7,343 | 5,781 |
Long-term liabilities: | ||
Notes payable | 292 | |
Operating lease obligations | 382 | |
Severance obligations | 241 | 446 |
Total liabilities | 7,584 | 6,901 |
Shareholders' equity | ||
Common stock value | 1 | 1 |
Capital in excess of par value | 189,439 | 187,735 |
Accumulated other comprehensive (loss) income | 74 | 7 |
Accumulated deficit | (145,404) | (125,693) |
Total shareholders' equity | 44,110 | 62,050 |
Total liabilities and shareholders' equity | $ 51,694 | $ 68,951 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares issued | 139,061,690 | 138,362,809 |
Common stock, shares outstanding | 139,061,690 | 138,362,809 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue: | |||
Sale of products, net | $ 28,111 | $ 25,833 | $ 26,426 |
Cost of goods sold (exclusive of depreciation shown separately below): | |||
Products | 26,673 | 25,818 | 25,527 |
Gross profit (loss) | 1,438 | 15 | 899 |
Operating expenses: | |||
Selling, general and administrative (including equity-based compensation ) | 14,971 | 12,954 | 8,585 |
Impairment of intangible assets | 176 | 1,142 | 0 |
Depreciation | 688 | 589 | 523 |
Amortization | 658 | 836 | 820 |
Total operating expenses | 20,621 | 23,581 | 24,918 |
Operating loss | (19,183) | (23,566) | (24,019) |
Other income (expense): | |||
Unrealized (loss) gain on investment | (434) | (2,419) | 284 |
Impairment of Panacea investment | (1,741) | ||
Realized gain on investments | 14,493 | ||
Realized (loss) on short-term investment securities | 5 | 221 | (54) |
Litigation expense | (1,891) | ||
Gain on the sale of machinery and equipment | 1 | 87 | |
Dividend income | 271 | ||
Interest income, net | 1,751 | 1,066 | 1,069 |
Interest expense | (72) | (56) | (11) |
Total other income (expense) | (490) | (2,992) | 16,052 |
Loss before income taxes | (19,673) | (26,558) | (7,967) |
Income taxes | 38 | ||
Net loss | (19,711) | (26,558) | (7,967) |
Other comprehensive income (loss): | |||
Unrealized gain (loss) on short-term investment securities | 72 | 207 | (22) |
Reclassification of (gain) loss to net loss | (5) | (221) | 43 |
Other comprehensive income (loss) | 67 | (14) | 21 |
Comprehensive loss | $ (19,644) | $ (26,572) | $ (7,946) |
Net loss per common share - basic and diluted | $ (0.14) | $ (0.21) | $ (0.06) |
Weighted average common shares outstanding - basic and diluted (in thousands) | 138,813 | 125,883 | 124,299 |
Products Other Than Modified Risk Tobacco Products [Member] | |||
Operating expenses: | |||
Research and development (including equity-based compensation ) | $ 4,090 | $ 6,381 | $ 5,215 |
Modified Risk Tobacco Product [Member] | |||
Operating expenses: | |||
Research and development (including equity-based compensation ) | $ 38 | $ 1,679 | $ 9,775 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Capital in Excess of Par Value [Member] | Accumulated Other Comprehensive Income [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Dec. 31, 2017 | $ 1 | $ 166,591 | $ (91,168) | $ 75,424 | |
Beginning balance (in shares) at Dec. 31, 2017 | 123,569,367 | ||||
Stock issued in connection with warrant exercises (in shares) | 490,012 | 490,012 | |||
Stock issued in connection with option exercises | 445 | $ 445 | |||
Stock issued in connection with option exercises (in shares) | 583,214 | 613,000 | |||
Equity-based compensation | 3,187 | $ 3,187 | |||
Unrealized gain (loss) on short-term investment securities | $ (22) | (22) | |||
Reclassification of warrant liability to capital in excess of par | 168 | 168 | |||
Reclassification of losses (gains) to net loss | 43 | 43 | |||
Net loss | (7,967) | (7,967) | |||
Ending balance at Dec. 31, 2018 | $ 1 | 170,391 | 21 | (99,135) | 71,278 |
Ending balance (in shares) at Dec. 31, 2018 | 124,642,593 | ||||
Stock issued in connection with RSU vesting (in shares) | 100,000 | ||||
Stock issued in connection with warrant exercises | 10,616 | $ 10,616 | |||
Stock issued in connection with warrant exercises (in shares) | 11,293,211 | ||||
Stock issued in connection with option exercises (in shares) | 39,988 | 75,000 | |||
Equity-based compensation | 3,540 | $ 3,540 | |||
Stock issued in connection with litigation expense | 1,891 | 1,891 | |||
Stock issued in connection with litigation expense (in shares) | 990,000 | ||||
Shares issued for Panacea, value | 1,297 | 1,297 | |||
Shares issued for Panacea (in shares) | 1,297,017 | ||||
Unrealized gain (loss) on short-term investment securities | 207 | 207 | |||
Reclassification of losses (gains) to net loss | (221) | (221) | |||
Net loss | (26,558) | (26,558) | |||
Ending balance at Dec. 31, 2019 | $ 1 | 187,735 | 7 | (125,693) | 62,050 |
Ending balance (in shares) at Dec. 31, 2019 | 138,362,809 | ||||
Stock issued in connection with RSU vesting (in shares) | 552,800 | ||||
Stock issued in connection with option exercises | 50 | $ 50 | |||
Stock issued in connection with option exercises (in shares) | 146,081 | 399,000 | |||
Equity-based compensation | 1,654 | $ 1,654 | |||
Unrealized gain (loss) on short-term investment securities | 72 | 72 | |||
Reclassification of losses (gains) to net loss | (5) | (5) | |||
Net loss | (19,711) | (19,711) | |||
Ending balance at Dec. 31, 2020 | $ 1 | $ 189,439 | $ 74 | $ (145,404) | $ 44,110 |
Ending balance (in shares) at Dec. 31, 2020 | 139,061,690 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net loss | $ (19,711) | $ (26,558) | $ (7,967) |
Adjustments to reconcile net loss to cash used in operating activities: | |||
Impairment of intangible assets | 176 | 1,142 | 0 |
Impairment of Panacea investment | 1,741 | ||
Amortization and depreciation | 1,094 | 1,186 | 1,200 |
Amortization of license fees | 251 | 239 | 143 |
Amortization of ROU assets | 182 | 212 | |
Realized gain on the sale of investments | (14,493) | ||
Unrealized (gain) loss on investment | 434 | 2,419 | (284) |
Realized (gain) loss on short-term investment securities | (5) | (221) | 54 |
Litigation settlement | 1,891 | ||
Gain on the sale of machinery and equipment | (1) | (87) | |
Warrant liability (gain) loss | (49) | ||
Accretion of non cash interest expense | 43 | 48 | 11 |
Accretion of non-cash interest income | (369) | (22) | |
Equity-based employee compensation expense | 1,654 | 3,540 | 3,187 |
Inventory write-off | 521 | 985 | |
(Decrease) increase in inventory reserve | (95) | ||
(Increase) decrease in assets: | |||
Accounts receivable | (1,292) | 4 | 86 |
Inventory | (289) | (207) | 334 |
Prepaid expenses and other assets | (787) | 280 | (182) |
Increase (decrease) in liabilities: | |||
Operating lease obligations | (552) | (212) | |
Accounts payable | (936) | (732) | 322 |
Accrued expenses | 2,183 | 792 | (167) |
Accrued severance | (225) | 792 | |
Deferred income | 267 | (78) | 55 |
Net cash provided by (used in) operating activities | (15,621) | (14,588) | (17,845) |
Cash flows from investing activities: | |||
Acquisition of patents and trademarks | (468) | (565) | (657) |
Acquisition of machinery and equipment | (54) | (527) | (449) |
Proceeds from the sale of machinery and equipment | 6 | 166 | |
Investment in Panacea | (12,000) | ||
Proceeds from sale of investments | 13,052 | ||
Sales and maturities of short-term investment securities | 39,728 | 19,320 | 37,415 |
Purchase of short-term investment securities | (22,743) | (1,842) | (34,216) |
Net cash provided by investing activities | 16,469 | 4,552 | 15,145 |
Cash flows from financing activities: | |||
Payment on note payable | (2,549) | (700) | (800) |
Proceeds from note payable issuance | 2,195 | ||
Proceeds from exercise of stock options | 50 | 445 | |
Net proceeds from exercise of stock warrants | 10,616 | ||
Proceeds from SBA loan | 1,183 | ||
Repayment of SBA loan | (1,183) | ||
Net cash used in financing activities | (304) | 9,916 | (355) |
Net increase (decrease) in cash and cash equivalents | 544 | (120) | (3,055) |
Cash and cash equivalents - beginning of period | 485 | 605 | 3,660 |
Cash and cash equivalents - end of period | 1,029 | 485 | 605 |
Net cash paid for: | |||
Cash paid during the period for interest | 29 | 3 | |
Non-cash transactions: | |||
Patent and trademark additions included in accounts payable | 55 | 155 | 152 |
Machinery and equipment additions included in accounts payable | 2 | 19 | |
Right-of-use assets and corresponding operating lease obligations | 198 | 814 | |
Patent and trademark additions included in accrued expenses | $ 28 | ||
Licenses acquired with notes payable | 2,326 | ||
Reclassification of warrant liability to capital in excess of par | $ 168 | ||
Stock issued in connection with investment | $ 1,297 |
NATURE OF BUSINESS AND SUMMARY
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1. – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation Nature of Business Reclassifications – Preferred stock authorized Concentration of Credit Risk Cash and cash equivalents – Short-term investment securities twenty-four the other income (expense) portion of the Company’s Consolidated Statements of Operations and Comprehensive Loss. Interest income is recorded on the accrual basis and presented net of investment related fees. Accounts receivable Inventory Machinery and equipment – 3 10 years Intangible Assets The Company’s capitalized intellectual property costs are amortized using the straight-line method over the remaining statutory life of the granted patent assets in each of the Company’s patent families, which have estimated expiration dates ranging from 2026 to 2041. Periodic maintenance or renewal fees are expensed as incurred. Annual minimum license fees are charged to expense. License fees paid for third-party intellectual property are amortized on a straight-line basis over the last to expire patents, which patent expiration dates are expected to range from 2019 through 2036. The Company believes costs associated with becoming a signatory to the MSA and acquiring a predicate cigarette brand have an indefinite life and as such, no amortization is taken. At each reporting period, the Company evaluates whether events and circumstances continue to support the indefinite-lived classification. Impairment of Long-Lived Assets Property, plant, and equipment Intangibles, Goodwill, and Other Intangible assets subject to amortization are reviewed for strategic importance and commercialization opportunity prior to expiration. If it is determined that the asset no longer supports the Company’s strategic objectives and/or will not be commercially viable prior to expiration, the asset is impaired. In addition, the Company will assess the expected future undiscounted cash flows for its intellectual property based on consideration of future market and economic conditions, competition, federal and state regulations, and licensing opportunities. If the carrying value of such assets are not recoverable, the carrying value will be reduced to fair value. Indefinite-lived intangible asset carrying values are reviewed at least annually or more frequently if events or changes in circumstances indicate that it is more likely than not that an impairment exists. The Company first performs a qualitative assessment and considers its current strategic objectives, future market and economic conditions, competition, and federal and state regulations to determine if an impairment is more likely than not. If it is determined that an impairment is more likely than not, a quantitative assessment is performed to compare the asset carrying value to fair value. Right-of-use assets (ROU) and Lease Obligations leases and record a Right-of-use (“ROU”) asset and a corresponding lease obligation for leases that qualified as either finance or operating leases. The Company elected to use the practical expedient which allowed the Company to carry forward the historical lease classifications of the existing leases. The Company determined that its leases contained (1) no variable lease expenses, (2) no termination options, (3) no residual lease guarantees, and (4) no material restrictions or covenants. All remaining renewal options were included in the computation of the ROU assets and lease obligations upon adoption. The Company reviews any lease arrangements in accordance with ASU 2016-02, Subtopic ASC 842, Leases. Any lease having a lease term greater than twelve months will be recognized on the Consolidated Balance Sheets as a ROU asset with an associated lease obligation—all other leases are considered short-term in nature and will be expensed on a month-to-month basis. The ROU assets and lease obligations are recognized as of the commencement date at the net present value of the fixed minimum lease payments for the lease term. The discount rate used is the interest rate implicit in the lease, if available, or the Company’s incremental borrowing rate which is determined using a base line rate plus an applicable spread. All financial results and disclosures for periods beginning after January 1, 2019 are presented in accordance with Subtopic ASC 842. 2018 results have not been adjusted continue to be reported under ASC 840. Refer to Note 4 for additional information regarding our ROU assets and liabilities. Income Taxes As a result of the Company’s history of cumulative net operating losses and the uncertainty of their future utilization, the Company has established a valuation allowance to fully offset its net deferred tax assets as of December 31, 2020 and December 31, 2019. Additionally, the Company has elected to present other comprehensive income items relating to net unrealized gains on short-term investment securities gross and not net of taxes. The Company’s federal and state tax returns for the years ended December 31, 2017 through December 31, 2019 are currently open to audit under the statutes of limitations. There are no pending audits as of December 31, 2020. Stock Based Compensation Revenue Recognition Derivatives Research and Development Loss Per Common Share Use of Estimates Fair Value of Financial Instruments Investments The Company accounts for investments in equity securities of other entities under the equity method of accounting if the Company’s investment in the stock of the other entity provides the Company with the ability to have significant influence over the operating and financial policies of the investee. If the Company does not have significant influence over the operating or financial policies of the entity, and such equity investment does not have a readily determinable market value, then the Company accounts for such equity investments in accordance with FASB ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assts and Financial Liabilities, which the Company adopted in the first quarter of 2018 with respect to the Company’s investments. Under ASU 2016-01 equity securities are recorded at fair value, with changes in fair value recorded through the statement of operations. Equity securities without a readily determinable market value are carried at cost less impairment, adjusted for observable price changes in orderly transactions for an identical or similar investment of the same issuer. The Company considers debt instruments as available-for-sale securities, and accordingly, all unrealized gains and losses incurred on the short-term investment securities (the adjustment to fair value) are recorded in other comprehensive income or loss on the Company’s Consolidated Statements of Operations and Comprehensive Loss. Refer to Note 6 for additional disclosures relating to the Company’s investments. Loss Contingencies Recent Accounting Pronouncement(s) – In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” The standard replaces the incurred loss model with the current expected credit loss (CECL) model to estimate credit losses for financial assets measured at amortized cost and certain off-balance sheet credit exposures. The CECL model requires companies to estimate credit losses expected over the life of the financial assets based on historical experience, current conditions and reasonable and supportable forecasts. The provisions of the ASU are effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years—excluding small reporting companies (SRCs) which have an effective date beginning after December 15, 2022 and interim periods within those fiscal years. The Company plans to adopt ASU 2016-13 on January 1, 2023 and is evaluating the expected impacts. We consider the applicability and impact of all ASUs. If the ASU is not listed above, it was determined that the ASU was either not appliable or would have an immaterial impact on our financial statements and related disclosures. . |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2020 | |
INVENTORY | |
INVENTORY | NOTE 2. – INVENTORY Inventories at December 31, 2020 and December 31, 2019 consisted of the following: December 31, December 31, 2020 2019 Inventory - tobacco leaf $ 821 $ 1,178 Inventory - finished goods Cigarettes and filtered cigars 171 106 Inventory - raw materials Cigarette and filtered cigar components 1,142 1,082 Less: inventory reserve (100) (100) $ 2,034 $ 2,266 During the year ended December 31, 2020, the Company wrote off inventory totaling $521 on the Company’s Consolidated Statement of Operations and Comprehensive Loss ( $361 included within research and development expenses and $161 included within cost of goods sold). During the year ended December 31, 2019, the Company wrote off inventory totaling $985 which is included within research and development expenses on the Company’s Consolidated Statement of Operations and Comprehensive Loss. |
MACHINERY AND EQUIPMENT
MACHINERY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
MACHINERY AND EQUIPMENT | |
MACHINERY AND EQUIPMENT | NOTE 3. – MACHINERY AND EQUIPMENT Machinery and equipment at December 31, 2020 and December 31, 2019 consisted of the following: December 31, December 31, Useful Life 2020 2019 Cigarette manufacturing equipment 3 10 years $ 4,893 $ 4,870 Office furniture, fixtures and equipment 5 Years 20 152 Laboratory equipment 5 Years 117 125 Leasehold improvements 6 Years 123 257 Less: accumulated depreciation (2,670) (2,284) Machinery and equipment, net $ 2,483 $ 3,120 Depreciation expense was $688, $589, and $523 for the years ended December 31, 2020, 2019 and 2018, respectively. |
RIGHT-OF-USE ASSETS, LEASE OBLI
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES | 12 Months Ended |
Dec. 31, 2020 | |
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES | |
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES | NOTE 4. – RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES The Company leases a manufacturing facility and warehouse in North Carolina, a corporate headquarters in Williamsville, New York, and a laboratory space in Buffalo, New York. During the fourth quarter of 2020, the Company made the decision to not renew its corporate headquarters lease which initial term expired on January 1, 2021. Upon adoption of ASC 842-Leases, the Company assumed all three optional one-year renewal options which created a lease term expiration of all initial renewal options within the lease agreement—which assumed a lease term expiration in 2023. With the non-renewal decision, the Company’s lease will operate month-to-month beginning on January 1, 2021. As such, the ROU asset and lease obligation was removed from the Consolidated Balance Sheets as of December 31, 2020. The remaining ROU assets and lease obligations relate to the laboratory space in New York and the manufacturing facility and warehouse in North Carolina. The following table summarized the Company’s discount rate and remaining lease terms as of December 31, 2020: Weighted average remaining lease term in years 1.1 Weighted average discount rate 4.5 % Future minimum lease payments as of December 31, 2020 are as follows: 2021 $ 245 2022 9 Total lease payments 254 Less: imputed interest (6) Total $ 248 The Company also leases a warehouse space in North Carolina to store and operate tobacco leaf processing equipment as well as proprietary tobacco leaf inventory. This lease is month-to-month and is not included within our Consolidated Balance Sheets. Operating lease costs for the years ended December 31, 2020 and 2019 were $335 and $250, respectively. In January 2021, the Company announced that it would relocate its corporate headquarters to the Larkinville District in downtown Buffalo and executed a new lease agreement for such space. Refer to Note 17 for additional information on this Type II subsequent event. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | NOTE 5. – INTANGIBLE ASSETS Our intangible assets at December 31, 2020 and December 31, 2019 consisted of the following: December 31, December 31, 2020 2019 Intangible assets, net Patent and trademark costs $ 5,667 $ 5,712 Less: accumulated amortization (2,936) (2,839) Patent and trademark costs, net 2,731 2,873 License fees 3,876 3,777 Less: accumulated amortization (948) (709) License fees, net 2,928 3,069 MSA signatory costs 2,202 2,202 License fee for predicate cigarette brand 350 350 $ 8,211 $ 8,494 Amortization expense relating to the above intangible assets for the years ended December 31, 2020, 2019 and 2018 amounted to $658, $836, and $820, respectively. During years ended December 31, 2020 and 2019, the Company incurred an impairment related to patent intellectual property that would be expired prior to expected commercialization. Impairment expense the year ended December 31, 2020 amounted to $176 (cost of approximately $448 less accumulated amortization of approximately $302). Impairment expense for the year ended December 31, 2019 amounted to $1,142 (cost of $2,092 less accumulated amortization of approximately $950) and related to tobacco intellectual property (patents, patent applications, and trademarks) that did not align to the Company’s very low nicotine strategic objectives. The impairment charges are included as a separate line item in operating expenses on the Company’s Consolidated Statements of Operations and Comprehensive Loss. There was no impairment recorded during for the year ended December 31, 2018. The estimated annual average amortization expense patent costs license fees |
INVESTMENTS AND CONVERTIBLE NOT
INVESTMENTS AND CONVERTIBLE NOTE RECEIVABLE | 12 Months Ended |
Dec. 31, 2020 | |
INVESTMENTS & CONVERTIBLE NOTE RECEIVABLE | |
INVESTMENTS & CONVERTIBLE NOTE RECEIVABLE | NOTE 6. – INVESTMENTS & CONVERTIBLE NOTE RECEIVABLE Investment in Panacea Life Sciences, Inc. On December 3, 2019, the Company entered into a securities purchase agreement with Panacea Life Sciences, Inc. (“Panacea”) for consideration valued at $13,297 ( $12,000 cash and $1,297 of the Company’s shares of common stock valued at $1 per share) in exchange for a 15.8% ownership interest. The Company’s investment consists of three instruments: shares of Series B preferred stock (“preferred stock”); a convertible note receivable with a $7,000 face value; and a warrant (“stock warrant”) to purchase additional shares of Series B preferred stock, to obtain 51% ownership of Panacea, at an exercise price of $2.344 per share. The convertible note receivable has a term of five years , bears interest of 10% per annum, and can be converted to shares of Series B preferred stock at the Company’s discretion. The embedded conversion option is not considered a derivative instrument for accounting purposes The preferred stock carries an annual 10% cumulative dividend, compounded annually, and has an implicit put option after the fifth anniversary date so long that the stock warrants have not been exercised. The put option is not considered a derivative instrument for accounting purposes. The stock warrant may be exercised at any time after the fifth anniversary date and would be accelerated if Panacea achieves certain sales targets for two consecutive years. The Series B preferred stock also has first priority equity preferences in the event of a liquidation, sale, or transfer of Panacea assets. These rights entitle the Company to the original Series B issuance price of $7,000 plus any unpaid accrued dividends. To allocate the cost of the stock warrant, the Company calculated a fair value based on the following assumptions: volatility of 70%, discount of 25% for lack of marketability, and a risk-free rate of 2%. The value of the stock warrant was allocated to the preferred stock and the convertible note receivable, equally, as a discount to the acquisition price. The discount on the preferred stock was determined to be for lack of control and the discount on the convertible note receivable was determined to be related to issuing the note at a below market interest rate for similar instruments. The discount on the convertible note receivable amounted to $1,433 and is being amortized into interest income over the term of the note. The discount on the preferred stock amounted to $1,433 and is being amortized into interest income over the term of the implicit put option. The convertible note receivable and the preferred stock investment are considered available for sale debt securities with a private company that is not traded in active markets. Since observable price quotations were not available at acquisition, fair value was estimated based on cost less an appropriate discount upon acquisition. The discount of each instrument is accreted into interest income over the respective term as shown within the Company’s Consolidated Statements of Operations and Comprehensive Loss. See Note 7 for additional information on these fair value measurements. The stock warrant was recorded at its cost basis in accordance with the practicability exception under ASU 2016-01. Impairment of Panacea Investment: As a result of increased competition and other macroeconomic factors, the Company recognized an impairment of $1,062 on the Panacea stock warrant during the second quarter of 2020. The impairment is recorded within the Consolidated Statements of Operations and Comprehensive Loss as “Impairment of Panacea Investment.” The Company recently entered into a non-binding agreement with Panacea to potentially restructure the investment and business relationship. The non-binding agreement with Panacea generally provides for (i) the transfer of $7,170 in operational assets, including an agricultural facility and various extraction and distillation equipment, from Panacea to the Company in exchange for the cancellation of the $7,000 convertible note receivable plus accrued interest; (ii) an amendment of transaction documents to remove any future investment rights and obligations of the Company in Panacea, (iii) cancellation of the stock warrant to purchase additional Series B preferred stock; and (iv) various other amendments to Panacea’s charter to amend various investors rights therein. As a result of the expected outcome of this non-binding agreement, the Company determined that the carrying value of the stock warrant and the convertible note receivable plus accrued interest exceeded the fair value outlined in the non-binding agreement. As such, the Company recorded an impairment of $679, which reduced the stock warrant carrying value, so that the carrying value of the stock warrant, and convertible note receivable plus accrued interest amounted to a value of $7,170 as of December 31, 2020. The impairment is recorded within the Consolidated Statements of Operations and Comprehensive Loss as “Impairment of Panacea Investment.” In accordance with ASC 326- Financial Instruments-Credit Losses As of December 31, 2020, the total carrying value of the Company’s investment in Panacea is outlined below, net of 2020 impairment expense: December 31, 2020 Panacea preferred stock $ 5,173 Panacea stock warrant 1,124 Accrued interest on convertible note receivable (included within prepaid expenses and other assets) 170 Convertible note receivable 5,876 Total $ 12,343 Investment in Anandia The Company (through its wholly-owned subsidiary, Botanical Genetics) previously held an equity investment in Anandia, a Canadian plant biotechnology company. Effective January 1, 2018, the Company adopted Financial Accounting Standards Board ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance changed how entities account for equity investments that do not result in consolidation and are not accounted for under the equity method of accounting. Under ASU 2016-01, the Company was required to measure its investment in Anandia at fair value at the end of each reporting period and recognize changes in fair value in net income. As allowed by ASU 2016-01, since the Company’s investment in Anandia did not have readily determinable fair value, the Company elected to account for its investment at cost. The cost basis is required to be adjusted in the event of impairment, if any, and for any observable price changes in orderly transactions for the identical or a similar investment of the same issuer. As result of an equity issuance by Anandia in January of 2018, the Company recorded an unrealized gain on its investment in Anandia in the amount of $6,147 during the first quarter of 2018. On August 8, 2018, all of Anandia’s outstanding common stock was acquired by Aurora Cannabis, Inc. (“Aurora”), a Canadian company (NYSE: ACB and TSX: ACB), and as a result the Company received in exchange for its Anandia equity: (i) 1,947,943 free trading shares of Aurora common stock, and (ii) Aurora stock warrants to purchase 973,971 shares of Aurora common stock (the “Anandia transaction”). The stock warrants have a five-year contractual term, an exercise price of $9.37 Canadian Dollars (CAD) per share. The fair value of the Aurora common stock and Aurora stock warrant was $9,222 and $2,808, respectively. The Company recorded a realized gain on the transaction in the amount of $4,516 during the third quarter of 2018. Additionally, the $6,147 unrealized gain on the Company’s investment in Anandia became a realized gain at time of the Anandia transaction. Subsequent to the transaction, the Company sold all of its Aurora common stock resulting in net sales proceeds to the Company of $13,052 and realized a gain on the sale of $3,830 during the year ended December 31, 2018. Investment in Aurora Cannabis, Inc. The Company’s investment in Aurora Cannabis Inc. (“Aurora”) stock warrant, discussed in the Anandia section above, are considered equity securities in accordance with ASC 321 – Investments – Equity Securities and a derivative instrument under ASC 815 – Derivatives and Hedging. The stock warrants are not designated as a hedging instrument, and in accordance with ASC 815, the Company’s investment in stock warrants are recorded at fair value with changes in fair value recorded to unrealized gain/loss as shown within the Company’s Consolidated Statements of Operations and Comprehensive Loss. See Note 7 for additional information on the fair value measurements. Reverse stock split- The carrying value of the Company’s investments at December 31, 2020 and December 31, 2019 consisted of the following: December 31, December 31, 2020 2019 Aurora stock warrants $ 239 $ 673 Panacea preferred stock 5,173 4,865 Panacea stock warrant 1,124 2,865 Total Investments $ 6,536 $ 8,403 Convertible Note Receivable $ 5,876 $ 5,589 |
FAIR VALUE MEASUREMENTS AND SHO
FAIR VALUE MEASUREMENTS AND SHORT-TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2020 | |
FAIR VALUE MEASUREMENTS AND SHORT-TERM INVESTMENTS | |
FAIR VALUE MEASUREMENTS AND SHORT-TERM INVESTMENTS | NOTE 7. – FAIR VALUE MEASUREMENTS AND SHORT-TERM INVESTMENTS FASB ASC 820 - “Fair Value Measurements and Disclosures” establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: ● Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; ● Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and ● Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. A financial asset’s or a financial liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The following table presents information about our assets and liabilities measured at fair value at December 31, 2020 and December 31, 2019, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value: Fair Value December 31, 2020 Level 1 Level 2 Level 3 Total Assets Short-term investment securities: Money market funds $ 8,636 $ — $ — $ 8,636 Corporate bonds — 12,677 — 12,677 Total short-term investment securities $ 8,636 $ 12,677 $ — $ 21,313 Investment - Aurora stock warrants $ — $ — $ 239 $ 239 Investment - Panacea preferred stock $ — $ — $ 5,173 $ 5,173 Convertible note receivable $ — $ — $ 5,876 $ 5,876 Fair Value December 31, 2019 Level 1 Level 2 Level 3 Total Assets Short-term investment securities: Money market funds $ 12,146 $ — $ — $ 12,146 Corporate bonds — 26,331 — 26,331 Total short-term investment securities $ 12,146 $ 26,331 $ — $ 38,477 Investment - Aurora stock warrants $ — $ — $ 673 $ 673 Investment - Panacea preferred stock $ — $ — $ 4,865 $ 4,865 Convertible note receivable $ — $ — $ 5,589 $ 5,589 Money market mutual funds are valued at their daily closing price as reported by the fund. Money market mutual funds held by the Company are open-end mutual funds that are registered with the SEC that generally transact at a stable $1.00 Net Asset Value (“NAV”) representing its estimated fair value. On a daily basis the fund’s NAV is determined by the fund based on the amortized cost of the funds underlying investments. Corporate bonds are valued using pricing models maximizing the use of observable inputs for similar securities. The investment in the Aurora stock (ACB) warrants is measured at fair value using the Black-Scholes pricing model and is classified within Level 3 of the valuation hierarchy. The unobservable input is an estimated volatility factor of 137% and 83% as of December 31, 2020 and December 31, 2019, respectively. Therefore, changes in market volatility will impact the fair value measurement of our ACB investment. A 20% increase or decrease in the volatility factor used as of December 31, 2020 would have the impact of increasing or decreasing the fair value measurement of the stock warrants by approximately $115. A 20% increase or decrease in the volatility factor used at December 31, 2019 would have the impact of increasing or decreasing the fair value measurement of the stock warrants by approximately $260. The Panacea convertible note receivable and the preferred stock investment are considered available-for-sale debt securities with a private company that is not traded in active markets. Since observable price quotations were not available, fair value was estimated based on cost less an appropriate discount upon acquisition. The discount of each instrument is accreted into interest income over the respective term and will adjust the amortized cost basis of the investments. See Note 6 for further information regarding the Company’s investment in Panacea. The following table sets forth a summary of the changes in fair value of the Company’s Level 3 investments for the year ended December 31, 2020. Fair Value at December 31, 2018 $ 3,092 Unrealized gain as a result of change in fair value (2,419) Accretion of interest income on convertible note receivable 22 Panacea convertible note receivable 5,567 Preferred stock in Panacea 4,865 Fair Value at December 31, 2019 $ 11,127 Unrealized loss as a result of change in fair value (434) Accretion of interest on Panacea investment 595 Fair Value at December 31, 2020 $ 11,288 The following tables set forth a summary of the Company’s available-for-sale debt securities from amortized cost basis to fair value as of December 31, 2020 and December 31, 2019: Available for Sale Debt Securities December 31, 2020 Amortized Gross Gross Cost Unrealized Unrealized Fair Basis Gains Losses Value Corporate bonds $ 12,603 $ 74 $ — $ 12,677 Convertible note receivable 5,876 — — 5,876 Investment - Panacea preferred stock 5,173 — — 5,173 $ 23,652 $ 74 $ — $ 23,726 Available for Sale Debt Securities December 31, 2019 Amortized Gross Gross Cost Unrealized Unrealized Fair Basis Gains Losses Value Corporate bonds $ 26,324 $ 64 $ (57) $ 26,331 Convertible note receivable 5,589 — — 5,589 Investment - Panacea preferred stock 4,865 — — 4,865 $ 36,778 $ 64 $ (57) $ 36,785 The following table sets forth a summary of the Company’s available-for-sale securities from amortized cost basis and fair value by contractual maturity as of December 31, 2020 and December 31, 2019: Available for Sale Debt Securities December 31, 2020 December 31, 2019 Amortized Amortized Cost Basis Fair Value Cost Basis Fair Value Due in one year or less $ 11,692 $ 11,753 $ 16,823 $ 16,851 Due after one year through five years 11,960 11,973 9,501 9,480 Due in five years — — 10,454 10,454 $ 23,652 $ 23,726 $ 36,778 $ 36,785 |
NOTES PAYABLE FOR LICENSE FEES
NOTES PAYABLE FOR LICENSE FEES | 12 Months Ended |
Dec. 31, 2020 | |
NOTES PAYABLE | |
NOTE PAYABLES FOR LICENSE FEES | NOTE 8. – NOTES PAYABLE License Fees On June 22, 2018, the Company entered into the Second Amendment to the License Agreement (the “Second Amendment”) with North Carolina State University (“NCSU”) that amended an original License Agreement between the Company and NCSU, dated December 8, 2015, and the First Amendment, dated February 14, 2018, to the original License Agreement. Under the terms of the Second Amendment, the Company was obligated to pay NCSU milestone payments totaling $1,200, which originally amounted to a present value of $1,175. As of June 30, 2020 the Company paid the final milestone payment of $300. The cost of the of acquired license amounted to $1,175 and is included in Intangible assets, net on the Company’s Consolidated Balance Sheets, and is amortized on a straight-line basis over the last-to-expire patent, which is expected to be in 2036. On October 22, 2018, the Company entered into a License Agreement with the University of Kentucky. Under the terms of the License Agreement, the Company is obligated to pay the University of Kentucky milestone payments totaling $1,200, of which $300 was payable upon execution, and $300 will be payable annually over three years CARES Act Paycheck Protection Program Loan On May 1, 2020, the Company received an U.S. Small Business Administration Loan (“SBA Loan”) from Bank of America, N.A. related to the COVID-19 crisis in the amount of $1,200. On May 12, 2020, the Company repaid the SBA loan in full. D&O Insurance During the second quarter of 2020, the Company renewed its Director and Officer (“D&O”) insurance for a one-year nine months The table below outlines our notes payable balances as of December 31, 2020 and December 31, 2019: December 31, December 31, 2020 2019 License Fees $ 293 $ 581 D&O Insurance 246 — Total current notes payable $ 539 $ 581 Long term license fees $ — $ 292 Accretion of non-cash interest expense amounted to $20 , $36, and $11 for the years ended December 31, 2020, 2019 and 2018, respectively. |
SEVERANCE LIABILITY
SEVERANCE LIABILITY | 12 Months Ended |
Dec. 31, 2020 | |
Postemployment Benefits [Abstract] | |
SEVERANCE LIABILITY | NOTE 9. – SEVERANCE LIABILITY During the second quarter of 2020, the Company recorded an accrual for severance benefits for $306 in accordance with FASB ASC 712 - “Compensation – Nonretirement Postemployment Benefits.” Consistent with certain contractual obligations related to a resignation, the Company will provide these severance benefits over a twelve-month period. During 2019, the Company recorded an accrual for severance benefits for $881 in accordance with FASB ASC 712 - “Compensation – Nonretirement Postemployment Benefits.” Consistent with certain contractual obligations, $771 of the related accrual will be paid via a monthly consulting fee for a period of forty-two months . The current and long-term accrued severance balance remaining as of December 31, 2020 was $339 and $241 , respectively. The current and long-term accrued severance balance remaining as of December 31, 2019 was $359 and $446 , respectively. |
WARRANTS FOR COMMON STOCK
WARRANTS FOR COMMON STOCK | 12 Months Ended |
Dec. 31, 2020 | |
WARRANTS FOR COMMON STOCK | |
WARRANTS FOR COMMON STOCK | NOTE 10. – WARRANTS FOR COMMON STOCK During 2018, the Company’s warrant holders exercised 794,869 outstanding warrants on a cashless basis resulting in the issuance of 490,012 shares of the Company’s common stock and the recording of a $168 reclassification of the remaining warrant liability to capital in excess of par. As of December 31, 2018, the outstanding warrants did not have an associated warrant liability. On November 25, 2019, the Company entered into Warrant Exercise Agreements (the "2019 Exercise Agreements") with all of the holders (the "Holders") of its outstanding warrants to purchase up to 11,293,211 shares of common stock of the Company with an exercise price of $2.15 per share (the "Warrants") whereby the Holders and the Company agreed that the Holders would immediately exercise for cash 7,350,000 of the Warrants at a reduced exercise price of $1.00 per share, generating proceeds to the Company before expenses of approximately $7,400. In addition, the Holders agreed to exercise the remaining 3,943,211 Warrants for cash on or prior to January 27, 2020 provided that the Holders are in compliance with the beneficial ownership limitation provisions contained in the Warrants. The Holders exercised all of the Warrants for cash during December 2019 and the Company received net proceeds of approximately $10,600 from the exercise of all of the Warrants, after deducting expenses associated with the transaction. In consideration for the Holders exercising their Warrants for cash, the Company issued to each Holder a new warrant (each, a "2019 Warrant") to purchase shares of common stock equal to the number of shares of common stock underlying the Warrants that shall be exercisable to the extent such Holder exercises for cash such Holder's Warrants pursuant to the 2019 Exercise Agreements. The terms of the 2019 are (i) exercisable from first issuance of the 2019 Warrants for a period of five years and (ii) had an initial exercise price equal to $1.25 per share. On December 22, 2019, the Company entered in to a Warrant Amendment Agreement with the holders of the 2019 Warrants (the "Amendment") whereby the Company agreed to amend the Warrants to (i) reduce the exercise price of the Warrants to $1.11 and (ii) to add a call provision whereby the Company may call the Warrants with prior notice to the holders for $0.001 per Warrant (during which time the holders may exercise the Warrants) provided that the Company's volume weighted average stock price exceeds $3.00 per share for ten The Company’s outstanding warrants for the year ended December 31, 2020 and December 31, 2019 do not include anti-dilution features and therefore are not considered derivative instruments and do not have an associated warrant liability. The following table summarizes the Company’s warrant activity since December 31, 2018: Number of Warrants Warrants outstanding at December 31, 2018 11,293,211 Warrants exercised in Q4 2019 (11,293,211) Warrants issued in Q4 2019 11,293,211 Warrants outstanding at December 31, 2020 11,293,211 See Note 17 “Subsequent Events” for information regarding the cash exercise of the outstanding warrants subsequent to December 31, 2020. |
RETIREMENT PLAN
RETIREMENT PLAN | 12 Months Ended |
Dec. 31, 2020 | |
RETIREMENT PLAN | |
RETIREMENT PLAN | NOTE 11. – RETIREMENT PLAN The Company sponsors a defined contribution plan under IRC Section 401(k). The plan covers all employees who meet the minimum eligibility requirements. Under the 401(k) plan eligible employees are allowed to make voluntary deferred salary contribution to the plan, subject to statutory limits. The Company has elected to make Safe Harbor Non-Elective Contributions to the plan for eligible employees in the amount of three percent (3%) of the employee’s compensation. Total employer contributions to the plan for the years ended December 31, 2020, 2019 and 2018 amounted to $150, $157 and $141, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 12. – COMMITMENTS AND CONTINGENCIES License agreements and sponsored research – Future Commitments Commitment Counter Party Product Relationship Commitment Type 2021 2022 2023 2024 2025 & After Total Research Agreement KeyGene Hemp / Cannabis Contract fee $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 300 $ 5,100 (1) License Agreement NCSU Tobacco Annual royalty fee 225 225 — — — 450 (2), (3) License Agreement NCSU Tobacco Minimum annual royalty 25 50 50 50 600 775 (3) License Agreement NCSU Tobacco Minimum annual royalty 50 50 50 50 500 700 (3) Research Agreement NCSU Tobacco Contract fee 121 — — — — 121 (4) Sublicense Agreement Anandia Laboratories, Inc. Hemp / Cannabis Annual license fee 10 10 10 10 110 150 (5) Growing Agreement Various Various Contract fee 115 — — — — 115 (6) $ 1,746 $ 1,535 $ 1,310 $ 1,310 $ 1,510 $ 7,411 (1) Exclusive agreement with the Company with respect to the Cannabis Sativa L. plant (the "Field"). The initial term of the agreement is five years with an option for an additional two years . The aggregate cost of the agreement over the initial term is $6,000 . The Company will exclusively own all results and all intellectual property relating to the results of the collaboration with KeyGene (the "Results”). The Company will pay royalties in varying amounts to KeyGene relating to the Company's commercialization in the Field of certain Results. The Company has granted KeyGene a license to commercialize the Results outside of the Field and KeyGene will pay royalties in varying amounts to the Company relating to KeyGene's commercialization outside of the Field of the Results. (2) The license agreement also requires a milestone payment of $150 upon FDA approval or clearance of a product that uses the NCSU licensed technology. The annual royalty fee is credited against running royalties on sales of licensed products. (3) The Company is also responsible for reimbursing NSCU for actual third-party patent costs incurred, including capitalized patent costs and patent maintenance costs. These costs vary from year to year and the Company has certain rights to direct the activities that result in these costs. (4) On September 11, 2020, the Company entered into a one-year Sponsored Project Agreement with NCSU for continued research of tobacco alkaloid formation. (5) The Company is also responsible for the payment of certain costs, including, capitalized patent costs and patent maintenance costs, a running royalty on future net sales of products made from the sublicensed intellectual property, and a sharing of future sublicensing consideration received from sublicensing to third parties. (6) Various R&D growing agreements for hemp / cannabis and tobacco. Investment in Panacea - Modified Risk Tobacco Product Application (“MRTP Application”) the approximate amount of $38, $1,679, and $9,775, respectively. The Company will continue to incur consulting and legal expenses as the MRTP Application continues through the FDA review process. The Company cannot currently quantify the additional expenses that the Company will incur in the FDA review process because it will involve various factors that are within the discretion and control of the FDA. Litigation Crede Settlement On June 19, 2019, the Company, Crede CG III, LTD. (“Crede”) and Terren Peizer (“Peizer”) participated in a settlement conference meeting as required by the United States District Court for the Southern District of New York (the “SDNY Court”) entitled Crede CG III, LTD. v. 22nd Century Group, Inc five The Company accrued an expense related to the settlement of this case during the second quarter of 2019 in the amount of $1,891, which is equal to the fair value of the 990,000 shares of Company common stock on July 22, 2019. The accrual was reclassified to capital upon the issuance of the common stock during the third quarter of 2019. Class Action On January 21, 2019, Matthew Jackson Bull, a resident of Denver, Colorado, filed a Complaint against the Company, the Company’s then Chief Executive Officer, Henry Sicignano III, and the Company’s then Chief Financial Officer, John T. Brodfuehrer, in the United States District Court for the Eastern District of New York entitled: Matthew Bull, Individually and on behalf of all others similarly situated, v. 22nd Century Group, Inc., Henry Sicignano III, and John T. Brodfuehrer Case No. 1:19-cv-00409 On January 29, 2019, Ian M. Fitch, a resident of Essex County Massachusetts, filed a Complaint against the Company, the Company’s then Chief Executive Officer, Henry Sicignano III, and the Company’s then Chief Financial Officer, John T. Brodfuehrer, in the United States District Court for the Eastern District of New York entitled: Ian Fitch, Individually and on behalf of all others similarly situated, v. 22nd Century Group, Inc., Henry Sicignano III, and John T. Brodfuehrer Case No. 2:19-cv-00553 On May 28, 2019, the plaintiff in the Fitch Bull On September 16, 2019, pursuant to a joint motion by the parties, the Court in the Bull Plaintiffs in the Bull On January 29, 2020, the Company and Messrs. Sicignano and Brodfuehrer filed a Motion to Dismiss the Amended Complaint. On July 31, 2020, the Court heard oral arguments on the motion to dismiss. On January 14, 2021, the Court granted motion, dismissing all claims with prejudice. The Plaintiffs filed a notice of appeal on February 12, 2021 to the Second Circuit Court of Appeals. The Second Circuit has granted an expedited briefing schedule and Plaintiff’s/Appellant’s must be filed no later than April 12, 2021. We believe that the claims are frivolous, meritless and that the Company and Messrs. Sicignano and Brodfuehrer have substantial legal and factual defenses to the claims. We intend to vigorously defend the Company and Messrs. Sicignano and Brodfuehrer against such claims. Shareholder Derivative Cases On February 6, 2019, Melvyn Klein, a resident of Nassau County New York, filed a shareholder derivative claim against the Company, the Company’s then Chief Executive Officer, Henry Sicignano III, the Company’s Chief Financial Officer, John T. Brodfuehrer, and each member of the Company’s Board of Directors in the United States District Court for the Eastern District of New York entitled: Melvyn Klein, derivatively on behalf of 22nd Century Group v. Henry Sicignano, III, Richard M. Sanders, Joseph Alexander Dunn, Nora B. Sullivan, James W. Cornell, John T. Brodfuehrer and 22nd Century Group, Inc Case No. 1:19-cv-00748 On February 11, 2019, Stephen Mathew filed a shareholder derivative claim against the Company, the Company’s then Chief Executive Officer, Henry Sicignano III, the Company’s Chief Financial Officer, John T. Brodfuehrer, and each member of the Company’s Board of Directors in the Supreme Court of the State of New York, County of Erie, entitled: Stephen Mathew, derivatively on behalf of 22nd Century Group, Inc. v. Henry Sicignano, III, John T. Brodfuehrer, Richard M. Sanders, Joseph Alexander Dunn, James W. Cornell, Nora B. Sullivan and 22nd Century Group, Inc., Index No. 801786/2019 Mathew Klein On June 10, 2019, Judy Rowley filed a shareholder derivative claim against the Company, the Company’s then Chief Executive Officer, Henry Sicignano III, the Company’s Chief Financial Officer, John T. Brodfuehrer, and each member of the Company’s Board of Directors in the Supreme Court of the State of New York, County of Erie, entitled: Judy Rowley, derivatively on behalf of 22nd Century Group, Inc. v. Henry Sicignano, III, Richard M. Sanders, Joseph Alexander Dunn, Nora B. Sullivan, James W. Cornell, John T. Brodfuehrer, and 22nd Century Group, Inc. Index No. 807214/2019 On January 15, 2020, Kevin Broccuto filed a shareholder derivative claim against the Company, the Company's then Chief Executive Officer, Henry Sicignano III, the Company's Chief Financial Officer, John T. Brodfuehrer, and certain members of the Company's prior Board of Directors in the District Court of the State of Nevada, County of Clark, entitled: Kevin Broccuto, derivatively on behalf of 22nd Century Group, Inc. v. James W. Cornell, Richard M. Sanders, Nora B. Sullivan, Henry Sicignano, III, and John T. Brodfuehrer, Case No. A-20-808599. On February 11, 2020, Jerry Wayne filed a shareholder derivative claim against the Company, the Company's then Chief Executive Officer, Henry Sicignano III, the Company's Chief Financial Officer, John T. Brodfuehrer, and certain members of the Company's prior Board of Directors in the District Court of the State of Nevada, County of Clark, entitled: Jerry Wayne, derivatively on behalf of 22nd Century Group, Inc. v. James W. Cornell, Richard M. Sanders, Nora B. Sullivan, Henry Sicignano, III, and John T. Brodfuehrer, Case No. A-20-808599. Mr. Wayne brings this action derivatively alleging generally the same allegations as the Brocutto case. The Complaint seeks unspecified monetary damages, corrective corporate governance actions, disgorgement of alleged profits and imposition of constructive trusts, and attorney's fees and costs. The Complaint also seeks to declare as unenforceable the Company's Bylaw requiring derivative lawsuits to be filed in Erie County, New York, where the Company is headquartered. On March 25, 2020, the Court ordered the Brocutto Wayne |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2020 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 13. – EARNINGS PER COMMON SHARE The following table sets forth the computation of basic and diluted earnings (loss) per common share for the years ended December 31, 2020, 2019 and 2018, respectively. Outstanding warrants, options, and restricted stock units were excluded from the calculation of diluted EPS as the effect was antidilutive. Year Ended December 31, 2020 2019 2018 (in thousands, except for per-share data) Net loss $ (19,711) $ (26,558) $ (7,967) Weighted average common shares outstanding - basic and diluted 138,813 125,883 124,299 Net loss per common share - basic and diluted $ (0.14) $ (0.21) $ (0.06) Anti-dilutive shares are as follows: Warrants 11,293 11,293 11,293 Options 6,581 7,837 8,672 Restricted stock units 2,938 951 — 20,812 20,081 19,965 |
EQUITY- BASED COMPENSATION
EQUITY- BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2020 | |
EQUITY- BASED COMPENSATION | |
EQUITY- BASED COMPENSATION | NOTE 14. – EQUITY BASED COMPENSATION On April 12, 2014, the stockholders of the Company approved the 22nd Century Group, Inc. 2014 Omnibus Incentive Plan (the “OIP”) and the authorization of 5,000,000 shares to be reserved for issuance thereunder. On April 29, 2017, the stockholders approved an amendment to the OIP to increase the number of shares available for issuance by an additional 5,000,000 shares and on May 3, 2019, the stockholders approved an additional amendment to the OIP to increase the number of shares available for issuance by an additional 5,000,000 shares. The OIP allows for the granting of equity and cash incentive awards to eligible individuals over the life of the OIP, including the issuance of up to an aggregate of 15,000,000 shares of the Company’s common stock pursuant to awards under the OIP. The OIP has a term of ten years and is administered by the Compensation Committee of the Company’s Board of Directors to determine the various types of incentive awards that may be granted to recipients under the OIP and the number of shares of common stock to underlie each such award under the OIP. As of December 31, 2020, the Company had available 3,987,167 shares remaining for future awards under the OIP. Restricted Stock Units (“RSU”) Unvested RSUs Weighted Average Number of Grant-date Shares Fair Value in thousands $ per share Unvested at December 31, 2018 — $ — Granted 1,301 $ 2.21 Vested (100) $ 2.02 Forfeited (250) $ 2.02 Unvested at December 31, 2019 951 $ 2.15 Granted 2,885 $ 0.71 Vested (325) $ 1.07 Forfeited (573) $ 1.90 Unvested at December 31, 2020 2,938 $ 0.85 The fair value of RSUs that vested during the years ended December 31, 2020 and 2019 was approximately $601 and $202, respectively, based on the stock price at the time of vesting. Stock Options. Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term Value in thousands $ per share Outstanding at December 31, 2017 8,157 $ 1.28 Granted 1,632 $ 2.64 Exercised (613) $ 0.87 Expired / cancelled (504) $ 1.71 Outstanding at December 31, 2018 8,672 $ 1.54 Granted 600 $ 2.07 Exercised (75) $ 0.93 Forfeited (1,360) $ 2.09 Outstanding at December 31, 2019 7,837 $ 1.49 Exercised (399) $ 1.04 Forfeited (169) $ 1.83 Expired (688) $ 1.51 Outstanding December 31, 2020 6,581 $ 1.50 3.9 years $ 3,983 Exercisable at December 31, 2020 5,737 $ 1.51 3.7 years $ 4,325 The intrinsic value of a stock option is the amount by which the current market value or the market value upon exercise of the underlying stock exceeds the exercise price of the option. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. No option awards were granted in 2020. The following assumptions were used for the years ended December 31, 2019 and 2018: 2019 2018 Risk-free interest rate (weighted average) 1.54 % 2.77 % Expected dividend yield — % — % Expected stock price volatility 70 % 90 % Expected life of options (weighted average) 5.15 years 5.61 years The Company estimated the expected volatility of the Company’s stock to be 70%. The expected term was estimated using the contract life of the option. The risk-free interest rate assumption was determined using yield of the equivalent U.S. Treasury bonds over the expected term. The Company has never paid any cash dividends and does not anticipate paying any cash dividends in the foreseeable future. Therefore, the Company assumed an expected dividend yield of zero. Restricted Stock and Stock Option Compensation Expense Year Ended December 31, 2020 2019 2018 Sales, general, and administrative $ 1,526 $ 3,166 $ 1,341 Research and Development 128 374 1,846 Total restricted stock and stock option compensation $ 1,654 $ 3,540 $ 3,187 As of December 31, 2020, unrecognized compensation expense amounted to $1,528 which is expected to be recognized over a weighted average period of approximately 0.9 years. In addition, there is approximately $637 of unrecognized stock option compensation expense that requires the achievement of certain milestones which have yet to be obtained. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
INCOME TAXES | |
INCOME TAXES | NOTE 15. – INCOME TAXES The following is a summary of the components giving rise to the income tax provision (benefit) ended years ended December 31, 2020, 2019 and 2018: 2020 2019 2018 Current: Federal $ — $ — $ — State — — — Total current $ — $ — $ — Deferred: Federal (3,932) (5,607) (1,446) State (200) 55 (14) Total deferred (4,132) (5,552) (1,460) Change in valuation allowance 4,170 5,552 1,460 Total income taxes $ 38 $ — $ — The provision (benefit) for income tax varies from that which would be expected based on applying the statutory federal rate to pre-tax accounting loss, including the effect of the change in the U.S. corporate income tax rates, as follows: 2020 2019 2018 Statutory federal rate (21.0) % (21.0) % (21.0) % Other items (0.3) (0.1) 0.1 Litigation Settlement — 1.5 Derivative liability — — (0.1) Stock based compensation 0.7 1.8 2.5 Research and development credit carryforward 0.2 (3.3) (1.2) State tax provision, net of federal benefit (0.8) 0.2 (0.1) Equity investment — — 1.5 Federal tax rate change — — — Valuation allowance 21.4 20.9 18.3 Effective tax rate (benefit) provision 0.2 % — % — % Individual components of deferred taxes consist of the following as of December 31: 2020 2019 2018 Deferred tax assets: Net operating loss carry-forward $ 18,498 $ 14,996 $ 11,527 Inventory 115 52 21 Stock-based compensation 1,099 1,049 813 Start-up expenditures 199 221 243 Research and development credit carryforward 1,171 1,209 326 Loss on equity investment — — — Accrued bonus 423 200 101 Severance liability 122 134 — Investment in Panacea 360 40 — Operating lease obligations 52 127 — Other 29 22 20 $ 22,068 $ 18,050 $ 13,051 Deferred tax liabilities: Machinery and equipment (237) (239) (215) Patents and trademarks (358) (351) (562) Gain on investment (13) (104) (612) Accrued expense (24) (51) (71) Operating lease right-of-use assets (52) (126) — Other intangible assets (224) (189) (153) (908) (1,060) (1,613) Valuation allowance (21,198) (16,990) (11,438) Net deferred taxes $ (38) $ — $ — The Company generated net operating losses (“NOL”) of approximately $15,500, $16,800, and $7,700 for the years ended December 31, 2020, 2019 and 2018 respectively, and these NOL carryforward losses do not expire. The Company had accumulated an NOL carryforward of approximately $46,900 through December 31, 2017 and this NOL carryforward begins to expire in 2031. As of December 31, 2020, the Company has a research and development credit carryforward of approximately $1,171 that begins to expire in 2031. Utilization of these NOL carryforwards may be subject to an annual limitation in the case of equity ownership changes, as defined by law. Due to the uncertainty of the Company’s ability to generate sufficient taxable income in the future, the Company has recorded a valuation allowance to reduce the net deferred tax asset to zero. These carryforwards are included in the net deferred tax asset that has been fully offset by the valuation allowance. ASC 740 provides guidance on the financial statement recognition and measurement for uncertain income tax positions that are taken or expected to be taken in a company’s income tax return. The Company has evaluated its tax positions and believes there are no uncertain tax positions as of December 31, 2020. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | NOTE 16. – REVENUE RECOGNITION The Company recognizes revenue when it satisfies a performance obligation by transferring control of the product to a customer. The Company’s customer contracts consist of obligations to manufacture the customer’s branded filtered cigars and cigarettes. For certain contracts, the performance obligation is satisfied over time as the Company determines, due to contract restrictions, it does not have an alternative use of the product, and it has an enforceable right to payment as the product is manufactured. The Company recognizes revenue under those contracts at the unit price stated in the contract based on the units manufactured. Revenue from the sale of the Company’s products is recognized net of cash discounts, sales returns and allowances. There was no allowance for discounts or returns and allowances at December 31, 2020 and December 31, 2019. Contract Assets and Liabilities Unbilled receivables (contract assets) represent revenues recognized for performance obligations that have been satisfied but have not been billed. These receivables are included as Accounts receivable, net on the Consolidated Balance Sheets. Customer payment terms vary depending on the terms of each customer contract, but payment is generally due prior to product shipment or within extended credit terms up to twenty-one Total contract assets and contract liabilities are as follows: December 31, December 31, 2020 2019 Unbilled receivables $ 349 $ 406 Deferred Revenue (272) (5) Net contract assets $ 77 $ 401 Disaggregation of Revenue The Company’s net sales revenue is derived from customers located primarily in the United States of America and is disaggregated by the timing of revenue recognition—net sales transferred over time and net sales transferred at a point in time. All revenue is related to contract manufacturing. Year Ended December 31, 2020 2019 2018 Net sales-over time $ 16,326 $ 16,466 $ 16,785 Net sales-point in time 11,785 9,367 9,641 Total Revenue $ 28,111 $ 25,833 $ 26,426 The Company had certain customers whose revenue individually represented 10% or more the Company’s total revenue. For the year ended December 31, 2020, two customers accounted for approximately 91% of total revenue. For the years ended December 31, 2019, and 2018, three customers accounted for approximately for 92.7% and 92.0% of total revenue, respectively. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2020 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENT | NOTE 17. – SUBSEQUENT EVENT Corporate Office Relocation On January 15, 2021, the Company signed a lease agreement to relocate its corporate headquarters to the Larkinville District in downtown Buffalo, NY. Details on the lease are described below ($ in thousands): Key Lease Terms $ in thousands Commencement Date February 15, 2021 Monthly Base Rent (Year 1) $ 6 Base Rent Annual Increase (Year 2 - onward) 2.5 % Initial Term (months) 36 In addition, the lease includes two optional, twenty-four-month extensions at the Company’s discretion. During the first quarter of 2021, the Company will recognize the respective ROU asset and lease liability for the above operating lease. Warrant Exercises During February and March of 2021, the Company’s warrant holders exercised 9,577,612 warrants for cash in exchange for common stock. In connection with these exercises, the Company received net proceeds of $9,993. On March 10, 2021, the Company’s warrant holders exercised for cash the remaining 1,715,599 outstanding warrants and no outstanding warrants remain. |
SELECTED QUARTERLY FINANCIAL DA
SELECTED QUARTERLY FINANCIAL DATA (unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
SELECTED QUARTERLY FINANCIAL DATA (unaudited) | |
SELECTED QUARTERLY FINANCIAL DATA (unaudited) | NOTE 18. – SELECTED QUARTERLY FINANCIAL DATA (unaudited) Below is selected quarterly financial data for the years ended December 31, 2020 and 2019: Three Months Ended March 31, June 30, September 30, December 31, 2020 2020 2020 2020 Revenue, net $ 7,058 $ 6,435 $ 7,310 $ 7,308 Gross (loss) profit $ 287 $ 201 $ 362 $ 588 Loss from operations $ (4,142) $ (4,753) $ (4,040) $ (6,248) Net loss $ (4,028) $ (5,057) $ (4,221) $ (6,405) Loss per common share – basic and diluted $ (0.03) $ (0.04) $ (0.03) $ (0.04) Three Months Ended March 31, June 30, September 30, December 31, 2019 2019 2019 2019 Revenue, net $ 6,294 $ 5,815 $ 6,462 $ 7,262 Gross profit $ (103) $ (86) $ (21) $ 225 Loss from operations $ (5,379) $ (5,029) $ (7,606) $ (5,552) Net income (loss) $ (2,073) $ (8,042) $ (10,245) $ (6,198) Loss per common share – basic and diluted $ (0.02) $ (0.06) $ (0.08) $ (0.05) |
NATURE OF BUSINESS AND SUMMAR_2
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | Principles of Consolidation |
Nature of Business | Nature of Business |
Reclassifications | Reclassifications – |
Preferred stock authorized | Preferred stock authorized |
Concentration of Credit Risk | Concentration of Credit Risk |
Cash and cash equivalents | Cash and cash equivalents – |
Short-term investment securities | Short-term investment securities twenty-four the other income (expense) portion of the Company’s Consolidated Statements of Operations and Comprehensive Loss. Interest income is recorded on the accrual basis and presented net of investment related fees. |
Accounts receivable | Accounts receivable |
Inventory | Inventory |
Machinery and equipment | Machinery and equipment – 3 10 years |
Intangible Assets | Intangible Assets The Company’s capitalized intellectual property costs are amortized using the straight-line method over the remaining statutory life of the granted patent assets in each of the Company’s patent families, which have estimated expiration dates ranging from 2026 to 2041. Periodic maintenance or renewal fees are expensed as incurred. Annual minimum license fees are charged to expense. License fees paid for third-party intellectual property are amortized on a straight-line basis over the last to expire patents, which patent expiration dates are expected to range from 2019 through 2036. The Company believes costs associated with becoming a signatory to the MSA and acquiring a predicate cigarette brand have an indefinite life and as such, no amortization is taken. At each reporting period, the Company evaluates whether events and circumstances continue to support the indefinite-lived classification. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Property, plant, and equipment Intangibles, Goodwill, and Other Intangible assets subject to amortization are reviewed for strategic importance and commercialization opportunity prior to expiration. If it is determined that the asset no longer supports the Company’s strategic objectives and/or will not be commercially viable prior to expiration, the asset is impaired. In addition, the Company will assess the expected future undiscounted cash flows for its intellectual property based on consideration of future market and economic conditions, competition, federal and state regulations, and licensing opportunities. If the carrying value of such assets are not recoverable, the carrying value will be reduced to fair value. Indefinite-lived intangible asset carrying values are reviewed at least annually or more frequently if events or changes in circumstances indicate that it is more likely than not that an impairment exists. The Company first performs a qualitative assessment and considers its current strategic objectives, future market and economic conditions, competition, and federal and state regulations to determine if an impairment is more likely than not. If it is determined that an impairment is more likely than not, a quantitative assessment is performed to compare the asset carrying value to fair value. |
Right-of-use assets and Lease Obligations | Right-of-use assets (ROU) and Lease Obligations leases and record a Right-of-use (“ROU”) asset and a corresponding lease obligation for leases that qualified as either finance or operating leases. The Company elected to use the practical expedient which allowed the Company to carry forward the historical lease classifications of the existing leases. The Company determined that its leases contained (1) no variable lease expenses, (2) no termination options, (3) no residual lease guarantees, and (4) no material restrictions or covenants. All remaining renewal options were included in the computation of the ROU assets and lease obligations upon adoption. The Company reviews any lease arrangements in accordance with ASU 2016-02, Subtopic ASC 842, Leases. Any lease having a lease term greater than twelve months will be recognized on the Consolidated Balance Sheets as a ROU asset with an associated lease obligation—all other leases are considered short-term in nature and will be expensed on a month-to-month basis. The ROU assets and lease obligations are recognized as of the commencement date at the net present value of the fixed minimum lease payments for the lease term. The discount rate used is the interest rate implicit in the lease, if available, or the Company’s incremental borrowing rate which is determined using a base line rate plus an applicable spread. All financial results and disclosures for periods beginning after January 1, 2019 are presented in accordance with Subtopic ASC 842. 2018 results have not been adjusted continue to be reported under ASC 840. Refer to Note 4 for additional information regarding our ROU assets and liabilities. |
Income Taxes | Income Taxes As a result of the Company’s history of cumulative net operating losses and the uncertainty of their future utilization, the Company has established a valuation allowance to fully offset its net deferred tax assets as of December 31, 2020 and December 31, 2019. Additionally, the Company has elected to present other comprehensive income items relating to net unrealized gains on short-term investment securities gross and not net of taxes. The Company’s federal and state tax returns for the years ended December 31, 2017 through December 31, 2019 are currently open to audit under the statutes of limitations. There are no pending audits as of December 31, 2020. |
Stock Based Compensation | Stock Based Compensation |
Revenue Recognition | Revenue Recognition |
Derivatives | Derivatives |
Research and Development | Research and Development |
Loss Per Common Share | Loss Per Common Share |
Use of Estimates | Use of Estimates |
Fair Value of Financial Instruments | Fair Value of Financial Instruments |
Investments | Investments The Company accounts for investments in equity securities of other entities under the equity method of accounting if the Company’s investment in the stock of the other entity provides the Company with the ability to have significant influence over the operating and financial policies of the investee. If the Company does not have significant influence over the operating or financial policies of the entity, and such equity investment does not have a readily determinable market value, then the Company accounts for such equity investments in accordance with FASB ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assts and Financial Liabilities, which the Company adopted in the first quarter of 2018 with respect to the Company’s investments. Under ASU 2016-01 equity securities are recorded at fair value, with changes in fair value recorded through the statement of operations. Equity securities without a readily determinable market value are carried at cost less impairment, adjusted for observable price changes in orderly transactions for an identical or similar investment of the same issuer. The Company considers debt instruments as available-for-sale securities, and accordingly, all unrealized gains and losses incurred on the short-term investment securities (the adjustment to fair value) are recorded in other comprehensive income or loss on the Company’s Consolidated Statements of Operations and Comprehensive Loss. Refer to Note 6 for additional disclosures relating to the Company’s investments. |
Loss Contingencies | Loss Contingencies |
Accounting Pronouncements | Recent Accounting Pronouncement(s) – In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” The standard replaces the incurred loss model with the current expected credit loss (CECL) model to estimate credit losses for financial assets measured at amortized cost and certain off-balance sheet credit exposures. The CECL model requires companies to estimate credit losses expected over the life of the financial assets based on historical experience, current conditions and reasonable and supportable forecasts. The provisions of the ASU are effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years—excluding small reporting companies (SRCs) which have an effective date beginning after December 15, 2022 and interim periods within those fiscal years. The Company plans to adopt ASU 2016-13 on January 1, 2023 and is evaluating the expected impacts. We consider the applicability and impact of all ASUs. If the ASU is not listed above, it was determined that the ASU was either not appliable or would have an immaterial impact on our financial statements and related disclosures. |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
INVENTORY | |
Schedule of Inventories | December 31, December 31, 2020 2019 Inventory - tobacco leaf $ 821 $ 1,178 Inventory - finished goods Cigarettes and filtered cigars 171 106 Inventory - raw materials Cigarette and filtered cigar components 1,142 1,082 Less: inventory reserve (100) (100) $ 2,034 $ 2,266 |
MACHINERY AND EQUIPMENT (Tables
MACHINERY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
MACHINERY AND EQUIPMENT | |
Schedule of Machinery and equipment | December 31, December 31, Useful Life 2020 2019 Cigarette manufacturing equipment 3 10 years $ 4,893 $ 4,870 Office furniture, fixtures and equipment 5 Years 20 152 Laboratory equipment 5 Years 117 125 Leasehold improvements 6 Years 123 257 Less: accumulated depreciation (2,670) (2,284) Machinery and equipment, net $ 2,483 $ 3,120 |
RIGHT-OF-USE ASSETS, LEASE OB_2
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS AND OTHER LEASES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES | |
Summary of discount rate and lease term | Weighted average remaining lease term in years 1.1 Weighted average discount rate 4.5 % |
Schedule of future minimum lease payments | 2021 $ 245 2022 9 Total lease payments 254 Less: imputed interest (6) Total $ 248 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
INTANGIBLE ASSETS | |
Schedule of Intangible Assets | December 31, December 31, 2020 2019 Intangible assets, net Patent and trademark costs $ 5,667 $ 5,712 Less: accumulated amortization (2,936) (2,839) Patent and trademark costs, net 2,731 2,873 License fees 3,876 3,777 Less: accumulated amortization (948) (709) License fees, net 2,928 3,069 MSA signatory costs 2,202 2,202 License fee for predicate cigarette brand 350 350 $ 8,211 $ 8,494 |
INVESTMENTS AND CONVERTIBLE N_2
INVESTMENTS AND CONVERTIBLE NOTE RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Marketable Securities [Line Items] | |
Schedule of carrying value of investments | December 31, December 31, 2020 2019 Aurora stock warrants $ 239 $ 673 Panacea preferred stock 5,173 4,865 Panacea stock warrant 1,124 2,865 Total Investments $ 6,536 $ 8,403 Convertible Note Receivable $ 5,876 $ 5,589 |
Investment in Panacea | |
Marketable Securities [Line Items] | |
Schedule of carrying value of investments | December 31, 2020 Panacea preferred stock $ 5,173 Panacea stock warrant 1,124 Accrued interest on convertible note receivable (included within prepaid expenses and other assets) 170 Convertible note receivable 5,876 Total $ 12,343 |
FAIR VALUE MEASUREMENTS AND S_2
FAIR VALUE MEASUREMENTS AND SHORT-TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
FAIR VALUE MEASUREMENTS AND SHORT-TERM INVESTMENTS | |
Schedule of assets and liabilities measured at fair value | Fair Value December 31, 2020 Level 1 Level 2 Level 3 Total Assets Short-term investment securities: Money market funds $ 8,636 $ — $ — $ 8,636 Corporate bonds — 12,677 — 12,677 Total short-term investment securities $ 8,636 $ 12,677 $ — $ 21,313 Investment - Aurora stock warrants $ — $ — $ 239 $ 239 Investment - Panacea preferred stock $ — $ — $ 5,173 $ 5,173 Convertible note receivable $ — $ — $ 5,876 $ 5,876 Fair Value December 31, 2019 Level 1 Level 2 Level 3 Total Assets Short-term investment securities: Money market funds $ 12,146 $ — $ — $ 12,146 Corporate bonds — 26,331 — 26,331 Total short-term investment securities $ 12,146 $ 26,331 $ — $ 38,477 Investment - Aurora stock warrants $ — $ — $ 673 $ 673 Investment - Panacea preferred stock $ — $ — $ 4,865 $ 4,865 Convertible note receivable $ — $ — $ 5,589 $ 5,589 |
Schedule of the changes in fair value of Level 3 investments | Fair Value at December 31, 2018 $ 3,092 Unrealized gain as a result of change in fair value (2,419) Accretion of interest income on convertible note receivable 22 Panacea convertible note receivable 5,567 Preferred stock in Panacea 4,865 Fair Value at December 31, 2019 $ 11,127 Unrealized loss as a result of change in fair value (434) Accretion of interest on Panacea investment 595 Fair Value at December 31, 2020 $ 11,288 |
Schedule of available-for-sale securities reconciliation | Available for Sale Debt Securities December 31, 2020 Amortized Gross Gross Cost Unrealized Unrealized Fair Basis Gains Losses Value Corporate bonds $ 12,603 $ 74 $ — $ 12,677 Convertible note receivable 5,876 — — 5,876 Investment - Panacea preferred stock 5,173 — — 5,173 $ 23,652 $ 74 $ — $ 23,726 Available for Sale Debt Securities December 31, 2019 Amortized Gross Gross Cost Unrealized Unrealized Fair Basis Gains Losses Value Corporate bonds $ 26,324 $ 64 $ (57) $ 26,331 Convertible note receivable 5,589 — — 5,589 Investment - Panacea preferred stock 4,865 — — 4,865 $ 36,778 $ 64 $ (57) $ 36,785 |
Schedule of available for sale securities classified by contractual maturity | Available for Sale Debt Securities December 31, 2020 December 31, 2019 Amortized Amortized Cost Basis Fair Value Cost Basis Fair Value Due in one year or less $ 11,692 $ 11,753 $ 16,823 $ 16,851 Due after one year through five years 11,960 11,973 9,501 9,480 Due in five years — — 10,454 10,454 $ 23,652 $ 23,726 $ 36,778 $ 36,785 |
NOTES PAYABLE FOR LICENSE FEES
NOTES PAYABLE FOR LICENSE FEES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
NOTES PAYABLE | |
Schedule of notes payable balances | December 31, December 31, 2020 2019 License Fees $ 293 $ 581 D&O Insurance 246 — Total current notes payable $ 539 $ 581 Long term license fees $ — $ 292 |
WARRANTS FOR COMMON STOCK (Tabl
WARRANTS FOR COMMON STOCK (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
WARRANTS FOR COMMON STOCK | |
Schedule of warrant activity | Number of Warrants Warrants outstanding at December 31, 2018 11,293,211 Warrants exercised in Q4 2019 (11,293,211) Warrants issued in Q4 2019 11,293,211 Warrants outstanding at December 31, 2020 11,293,211 |
COMMITMENTS & CONTINGENCIES (Ta
COMMITMENTS & CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
Contractual Obligation, Fiscal Year Maturity [Table Text Block] | Future Commitments Commitment Counter Party Product Relationship Commitment Type 2021 2022 2023 2024 2025 & After Total Research Agreement KeyGene Hemp / Cannabis Contract fee $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 300 $ 5,100 (1) License Agreement NCSU Tobacco Annual royalty fee 225 225 — — — 450 (2), (3) License Agreement NCSU Tobacco Minimum annual royalty 25 50 50 50 600 775 (3) License Agreement NCSU Tobacco Minimum annual royalty 50 50 50 50 500 700 (3) Research Agreement NCSU Tobacco Contract fee 121 — — — — 121 (4) Sublicense Agreement Anandia Laboratories, Inc. Hemp / Cannabis Annual license fee 10 10 10 10 110 150 (5) Growing Agreement Various Various Contract fee 115 — — — — 115 (6) $ 1,746 $ 1,535 $ 1,310 $ 1,310 $ 1,510 $ 7,411 (1) Exclusive agreement with the Company with respect to the Cannabis Sativa L. plant (the "Field"). The initial term of the agreement is five years with an option for an additional two years . The aggregate cost of the agreement over the initial term is $6,000 . The Company will exclusively own all results and all intellectual property relating to the results of the collaboration with KeyGene (the "Results”). The Company will pay royalties in varying amounts to KeyGene relating to the Company's commercialization in the Field of certain Results. The Company has granted KeyGene a license to commercialize the Results outside of the Field and KeyGene will pay royalties in varying amounts to the Company relating to KeyGene's commercialization outside of the Field of the Results. (2) The license agreement also requires a milestone payment of $150 upon FDA approval or clearance of a product that uses the NCSU licensed technology. The annual royalty fee is credited against running royalties on sales of licensed products. (3) The Company is also responsible for reimbursing NSCU for actual third-party patent costs incurred, including capitalized patent costs and patent maintenance costs. These costs vary from year to year and the Company has certain rights to direct the activities that result in these costs. (4) On September 11, 2020, the Company entered into a one-year Sponsored Project Agreement with NCSU for continued research of tobacco alkaloid formation. (5) The Company is also responsible for the payment of certain costs, including, capitalized patent costs and patent maintenance costs, a running royalty on future net sales of products made from the sublicensed intellectual property, and a sharing of future sublicensing consideration received from sublicensing to third parties. (6) Various R&D growing agreements for hemp / cannabis and tobacco. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
EARNINGS PER SHARE | |
Schedule of computation of basic and diluted earnings per common share | Year Ended December 31, 2020 2019 2018 (in thousands, except for per-share data) Net loss $ (19,711) $ (26,558) $ (7,967) Weighted average common shares outstanding - basic and diluted 138,813 125,883 124,299 Net loss per common share - basic and diluted $ (0.14) $ (0.21) $ (0.06) Anti-dilutive shares are as follows: Warrants 11,293 11,293 11,293 Options 6,581 7,837 8,672 Restricted stock units 2,938 951 — 20,812 20,081 19,965 |
Schedule of anti-dilutive shares excluded from dilutive securities | Year Ended December 31, 2020 2019 2018 (in thousands, except for per-share data) Net loss $ (19,711) $ (26,558) $ (7,967) Weighted average common shares outstanding - basic and diluted 138,813 125,883 124,299 Net loss per common share - basic and diluted $ (0.14) $ (0.21) $ (0.06) Anti-dilutive shares are as follows: Warrants 11,293 11,293 11,293 Options 6,581 7,837 8,672 Restricted stock units 2,938 951 — 20,812 20,081 19,965 |
EQUITY- BASED COMPENSATION (Tab
EQUITY- BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
EQUITY- BASED COMPENSATION | |
Summary of changes in unvested restricted stock | Unvested RSUs Weighted Average Number of Grant-date Shares Fair Value in thousands $ per share Unvested at December 31, 2018 — $ — Granted 1,301 $ 2.21 Vested (100) $ 2.02 Forfeited (250) $ 2.02 Unvested at December 31, 2019 951 $ 2.15 Granted 2,885 $ 0.71 Vested (325) $ 1.07 Forfeited (573) $ 1.90 Unvested at December 31, 2020 2,938 $ 0.85 |
Schedule of stock option activity | Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term Value in thousands $ per share Outstanding at December 31, 2017 8,157 $ 1.28 Granted 1,632 $ 2.64 Exercised (613) $ 0.87 Expired / cancelled (504) $ 1.71 Outstanding at December 31, 2018 8,672 $ 1.54 Granted 600 $ 2.07 Exercised (75) $ 0.93 Forfeited (1,360) $ 2.09 Outstanding at December 31, 2019 7,837 $ 1.49 Exercised (399) $ 1.04 Forfeited (169) $ 1.83 Expired (688) $ 1.51 Outstanding December 31, 2020 6,581 $ 1.50 3.9 years $ 3,983 Exercisable at December 31, 2020 5,737 $ 1.51 3.7 years $ 4,325 |
Schedule of fair value assumptions | 2019 2018 Risk-free interest rate (weighted average) 1.54 % 2.77 % Expected dividend yield — % — % Expected stock price volatility 70 % 90 % Expected life of options (weighted average) 5.15 years 5.61 years |
Schedule of compensation costs related to restricted stock and stock options | Year Ended December 31, 2020 2019 2018 Sales, general, and administrative $ 1,526 $ 3,166 $ 1,341 Research and Development 128 374 1,846 Total restricted stock and stock option compensation $ 1,654 $ 3,540 $ 3,187 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
INCOME TAXES | |
Summary of the components giving rise to the income tax provision (benefit) | 2020 2019 2018 Current: Federal $ — $ — $ — State — — — Total current $ — $ — $ — Deferred: Federal (3,932) (5,607) (1,446) State (200) 55 (14) Total deferred (4,132) (5,552) (1,460) Change in valuation allowance 4,170 5,552 1,460 Total income taxes $ 38 $ — $ — |
Schedule of effective income tax rate reconciliation | 2020 2019 2018 Statutory federal rate (21.0) % (21.0) % (21.0) % Other items (0.3) (0.1) 0.1 Litigation Settlement — 1.5 Derivative liability — — (0.1) Stock based compensation 0.7 1.8 2.5 Research and development credit carryforward 0.2 (3.3) (1.2) State tax provision, net of federal benefit (0.8) 0.2 (0.1) Equity investment — — 1.5 Federal tax rate change — — — Valuation allowance 21.4 20.9 18.3 Effective tax rate (benefit) provision 0.2 % — % — % |
Schedule of deferred tax assets and liabilities | 2020 2019 2018 Deferred tax assets: Net operating loss carry-forward $ 18,498 $ 14,996 $ 11,527 Inventory 115 52 21 Stock-based compensation 1,099 1,049 813 Start-up expenditures 199 221 243 Research and development credit carryforward 1,171 1,209 326 Loss on equity investment — — — Accrued bonus 423 200 101 Severance liability 122 134 — Investment in Panacea 360 40 — Operating lease obligations 52 127 — Other 29 22 20 $ 22,068 $ 18,050 $ 13,051 Deferred tax liabilities: Machinery and equipment (237) (239) (215) Patents and trademarks (358) (351) (562) Gain on investment (13) (104) (612) Accrued expense (24) (51) (71) Operating lease right-of-use assets (52) (126) — Other intangible assets (224) (189) (153) (908) (1,060) (1,613) Valuation allowance (21,198) (16,990) (11,438) Net deferred taxes $ (38) $ — $ — |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of contract assets and liabilities | December 31, December 31, 2020 2019 Unbilled receivables $ 349 $ 406 Deferred Revenue (272) (5) Net contract assets $ 77 $ 401 |
Schedule of disaggregation of revenue | Year Ended December 31, 2020 2019 2018 Net sales-over time $ 16,326 $ 16,466 $ 16,785 Net sales-point in time 11,785 9,367 9,641 Total Revenue $ 28,111 $ 25,833 $ 26,426 |
SUBSEQUENT EVENT (Tables)
SUBSEQUENT EVENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
SUBSEQUENT EVENTS | |
Schedule of key lease terms | Key Lease Terms $ in thousands Commencement Date February 15, 2021 Monthly Base Rent (Year 1) $ 6 Base Rent Annual Increase (Year 2 - onward) 2.5 % Initial Term (months) 36 |
SELECTED QUARTERLY FINANCIAL _2
SELECTED QUARTERLY FINANCIAL DATA (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
SELECTED QUARTERLY FINANCIAL DATA (unaudited) | |
Schedule of quarterly financial information | Three Months Ended March 31, June 30, September 30, December 31, 2020 2020 2020 2020 Revenue, net $ 7,058 $ 6,435 $ 7,310 $ 7,308 Gross (loss) profit $ 287 $ 201 $ 362 $ 588 Loss from operations $ (4,142) $ (4,753) $ (4,040) $ (6,248) Net loss $ (4,028) $ (5,057) $ (4,221) $ (6,405) Loss per common share – basic and diluted $ (0.03) $ (0.04) $ (0.03) $ (0.04) Three Months Ended March 31, June 30, September 30, December 31, 2019 2019 2019 2019 Revenue, net $ 6,294 $ 5,815 $ 6,462 $ 7,262 Gross profit $ (103) $ (86) $ (21) $ 225 Loss from operations $ (5,379) $ (5,029) $ (7,606) $ (5,552) Net income (loss) $ (2,073) $ (8,042) $ (10,245) $ (6,198) Loss per common share – basic and diluted $ (0.02) $ (0.06) $ (0.08) $ (0.05) |
NATURE OF BUSINESS AND SUMMAR_3
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2020itemsubsidiary | |
Condensed Financial Statements, Captions [Line Items] | |
Number of subsidiaries | 3 |
Number of line items affected by reclassifications | item | 2 |
Maximum maturity date of securities | 24 months |
Twenty Second Century Ltd [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Number of subsidiaries | 2 |
NATURE OF BUSINESS AND SUMMAR_4
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Machinery and equipment (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Inventory [Line Items] | ||
Inventory - tobacco leaf | $ 821 | $ 1,178 |
Inventory - finished goods | 171 | 106 |
Inventory - raw materials | 1,142 | 1,082 |
Less: inventory reserve | (100) | (100) |
Inventory, Net | 2,034 | 2,266 |
Inventory write-off | 521 | 985 |
Research and Development Expense [Member] | ||
Inventory [Line Items] | ||
Inventory write-off | 361 | $ 985 |
Cost of Sales [Member] | ||
Inventory [Line Items] | ||
Inventory write-off | $ 161 |
MACHINERY AND EQUIPMENT (Detail
MACHINERY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Machinery and Equipment, Gross | |||
Less: accumulated depreciation | (2,670) | $ (2,284) | |
Machinery and equipment, net | 2,483 | 3,120 | |
Depreciation | $ 688 | 589 | $ 523 |
Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 10 years | ||
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Cigarette manufacturing equipment | |||
Property, Plant and Equipment [Line Items] | |||
Machinery and Equipment, Gross | $ 4,893 | 4,870 | |
Cigarette manufacturing equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 10 years | ||
Cigarette manufacturing equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Office furniture, fixtures and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Machinery and Equipment, Gross | $ 20 | 152 | |
Property, Plant and Equipment, Useful Life | 5 years | ||
Laboratory equipment | |||
Property, Plant and Equipment [Line Items] | |||
Machinery and Equipment, Gross | $ 117 | 125 | |
Property, Plant and Equipment, Useful Life | 5 years | ||
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Machinery and Equipment, Gross | $ 123 | $ 257 | |
Property, Plant and Equipment, Useful Life | 6 years |
RIGHT-OF-USE ASSETS, LEASE OB_3
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS AND OTHER LEASES (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | |
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES | ||
Number of one-year renewal options | item | 3 | |
Weighted average remaining lease term in years | 1 year 1 month 6 days | |
Weighted average discount rate | 4.50% | |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2021 | $ 245 | |
2022 | 9 | |
Total lease payments | 254 | |
Less: imputed interest | (6) | |
Operating Lease, Liability | 248 | |
Operating Lease, Expense | $ 335 | $ 250 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Intangible assets, net | |||
Intangible assets, net | $ 8,211 | $ 8,494 | |
Amortization expense | 658 | 836 | $ 820 |
Impairment of intangible assets | 176 | 1,142 | $ 0 |
Intangible assets written off, cost | 448 | 2,092 | |
Intangible assets written off, accumulated amortization | 302 | 950 | |
MSA Signatory Costs | |||
Intangible assets, net | |||
Indefinite-lived intangible assets | 2,202 | 2,202 | |
Licensing agreements | |||
Intangible assets, net | |||
Indefinite-lived intangible assets | 350 | 350 | |
Patent and Trademark [Member] | |||
Intangible assets, net | |||
Gross | 5,667 | 5,712 | |
Less: accumulated amortization | (2,936) | (2,839) | |
Total | 2,731 | 2,873 | |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |||
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | 350 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 350 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 350 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 350 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 350 | ||
Licensing agreements | |||
Intangible assets, net | |||
Gross | 3,876 | 3,777 | |
Less: accumulated amortization | (948) | (709) | |
Total | 2,928 | $ 3,069 | |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |||
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | 244 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 244 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 244 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 244 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Five | $ 244 |
INVESTMENTS AND CONVERTIBLE N_3
INVESTMENTS AND CONVERTIBLE NOTE RECEIVABLE - Investment in Panacea (Details) $ / shares in Units, $ in Thousands | Dec. 03, 2019USD ($)$ / shares | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($)item$ / shares | Dec. 31, 2019USD ($) | Dec. 22, 2019$ / shares |
Marketable Securities [Line Items] | |||||
Long-term Investments | $ 6,536 | $ 8,403 | |||
Shares issued for Panacea, value | $ 1,297 | 1,297 | |||
Share price | $ / shares | $ 1 | ||||
Convertible note | 5,876 | 5,589 | |||
Exercise price | $ / shares | $ 1.11 | ||||
Impairment of Panacea investment | 1,741 | ||||
Preferred stock | |||||
Marketable Securities [Line Items] | |||||
Long-term Investments | $ 5,173 | 4,865 | |||
Dividend rate | 10.00% | ||||
Investment in Panacea | |||||
Marketable Securities [Line Items] | |||||
Long-term Investments | $ 13,297 | $ 7 | |||
Amount paid to acquire investments | 12,000 | ||||
Shares issued for Panacea, value | $ 1,297 | ||||
Share price | $ / shares | $ 1.875 | ||||
Ownership percentage (in percent) | 15.80% | ||||
Number of instruments comprising the investment | item | 3 | ||||
Note receivable term | 5 years | ||||
Note receivable interest rate | 10.00% | ||||
Number of years for acceleration of exercise date | 2 years | ||||
Assets transferred | $ 7,170 | ||||
Cancellation of note receivable | $7,000 | ||||
Interest Receivable | $ 170 | ||||
Value before impairment | 7,170 | ||||
Impairment of Panacea investment | 679 | ||||
Investments, Fair Value Disclosure [Abstract] | |||||
Total | 12,343 | ||||
Investment in Panacea | Preferred stock | |||||
Marketable Securities [Line Items] | |||||
Long-term Investments | 5,173 | ||||
Original issuance price | $ 7,000 | ||||
Discount on investment instruments | $ 1,433 | ||||
Investment in Panacea | Warrant | |||||
Marketable Securities [Line Items] | |||||
Long-term Investments | $ 1,124 | $ 2,865 | |||
Ownership percentage (in percent) | 51.00% | ||||
Exercise price | $ / shares | $ 2.344 | ||||
Impairment of Panacea investment | $ 1,062 | ||||
Investment in Panacea | Warrant | Fair Value, Inputs, Level 3 | Volatility | |||||
Marketable Securities [Line Items] | |||||
Assumption rate | 0.70 | ||||
Investment in Panacea | Warrant | Fair Value, Inputs, Level 3 | Discount for lack of marketability | |||||
Marketable Securities [Line Items] | |||||
Assumption rate | 0.25 | ||||
Investment in Panacea | Warrant | Fair Value, Inputs, Level 3 | Risk-free rate | |||||
Marketable Securities [Line Items] | |||||
Assumption rate | 0.02 | ||||
Investment in Panacea | Convertible note receivable | |||||
Marketable Securities [Line Items] | |||||
Convertible note | $ 5,876 | ||||
Discount on investment instruments | $ 1,433 |
INVESTMENTS AND CONVERTIBLE N_4
INVESTMENTS AND CONVERTIBLE NOTE RECEIVABLE - Investment in Anandia (Details) $ / shares in Units, $ in Thousands | Aug. 08, 2018USD ($)shares | Aug. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 22, 2019$ / shares | Aug. 08, 2018$ / shares |
Schedule of Equity Method Investments [Line Items] | |||||||||
Unrealized (loss) gain on investment | $ (434) | $ (2,419) | $ 284 | ||||||
Exercise price | $ / shares | $ 1.11 | ||||||||
Realized gain on investments | 14,493 | ||||||||
Proceeds from sale of investments | 13,052 | ||||||||
Investment in Anandia [Member] | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Unrealized (loss) gain on investment | $ 6,147 | ||||||||
Term of the warrant | 5 years | ||||||||
Realized gain on investments | $ 6,147 | ||||||||
Aurora Cannabis Inc [Member] | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Stock transferred (in shares) | shares | 1,947,943 | ||||||||
Fair value of stock transferred | $ 9,222 | ||||||||
Fair value of stock warrants acquired on August 8, 2018 | $ 2,808 | ||||||||
Realized gain on investments | $ 4,516 | $ 3,830 | |||||||
Proceeds from sale of investments | $ 13,052 | ||||||||
Aurora Cannabis Inc [Member] | Warrant | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Shares represented by warrants | shares | 973,971 | ||||||||
Exercise price | $ / shares | $ 9.37 |
INVESTMENTS AND CONVERTIBLE N_5
INVESTMENTS AND CONVERTIBLE NOTE RECEIVABLE - Stock split and carrying value (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | |||||
Jun. 30, 2020$ / sharesshares | Dec. 31, 2020USD ($)$ / shares | Dec. 31, 2019USD ($) | Dec. 22, 2019$ / shares | Dec. 03, 2019USD ($) | Aug. 08, 2018$ / sharesshares | |
Marketable Securities [Line Items] | ||||||
Exercise price | $ / shares | $ 1.11 | |||||
Investments | $ 6,536 | $ 8,403 | ||||
Convertible note | 5,876 | 5,589 | ||||
Preferred stock | ||||||
Marketable Securities [Line Items] | ||||||
Investments | 5,173 | 4,865 | ||||
Investment in Panacea | ||||||
Marketable Securities [Line Items] | ||||||
Investments | $ 7 | $ 13,297 | ||||
Investment in Panacea | Warrant | ||||||
Marketable Securities [Line Items] | ||||||
Exercise price | $ / shares | $ 2.344 | |||||
Investments | $ 1,124 | 2,865 | ||||
Investment in Panacea | Preferred stock | ||||||
Marketable Securities [Line Items] | ||||||
Investments | 5,173 | |||||
Aurora Cannabis Inc [Member] | ||||||
Marketable Securities [Line Items] | ||||||
Reverse stock split, ratio | 12 | |||||
Aurora Cannabis Inc [Member] | Warrant | ||||||
Marketable Securities [Line Items] | ||||||
Shares represented by warrants | shares | 81,164 | 973,971 | ||||
Exercise price | $ / shares | $ 112.44 | $ 9.37 | ||||
Investments | $ 239 | $ 673 |
FAIR VALUE MEASUREMENTS - Recur
FAIR VALUE MEASUREMENTS - Recurring (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Short-term Investments [Member] | ||
Assets | ||
Assets at fair value | $ 21,313 | $ 38,477 |
Money Market Funds | ||
Assets | ||
Assets at fair value | 8,636 | 12,146 |
Corporate Bonds | ||
Assets | ||
Assets at fair value | 12,677 | 26,331 |
Warrant | ||
Assets | ||
Assets at fair value | $ 239 | $ 673 |
Warrant | Volatility | ||
Assets | ||
Equity Securities, FV-NI, Measurement Input | 137 | 83 |
Input increase (decrease) assumption, as a percent | 20.00% | 20.00% |
Estimated change in fair value due to change in input | $ 115 | $ 260 |
Convertible note receivable | ||
Assets | ||
Assets at fair value | 5,173 | 4,865 |
Notes Receivable [Member] | ||
Assets | ||
Assets at fair value | 5,876 | 5,589 |
Fair Value, Inputs, Level 1 | Short-term Investments [Member] | ||
Assets | ||
Assets at fair value | 8,636 | 12,146 |
Fair Value, Inputs, Level 1 | Money Market Funds | ||
Assets | ||
Assets at fair value | 8,636 | 12,146 |
Fair Value, Inputs, Level 1 | Corporate Bonds | ||
Assets | ||
Assets at fair value | 0 | |
Fair Value, Inputs, Level 2 | Short-term Investments [Member] | ||
Assets | ||
Assets at fair value | 12,677 | 26,331 |
Fair Value, Inputs, Level 2 | Money Market Funds | ||
Assets | ||
Assets at fair value | 0 | |
Fair Value, Inputs, Level 2 | Corporate Bonds | ||
Assets | ||
Assets at fair value | 12,677 | 26,331 |
Fair Value, Inputs, Level 3 | Short-term Investments [Member] | ||
Assets | ||
Assets at fair value | 0 | |
Fair Value, Inputs, Level 3 | Money Market Funds | ||
Assets | ||
Assets at fair value | 0 | |
Fair Value, Inputs, Level 3 | Corporate Bonds | ||
Assets | ||
Assets at fair value | 0 | |
Fair Value, Inputs, Level 3 | Warrant | ||
Assets | ||
Assets at fair value | 239 | 673 |
Fair Value, Inputs, Level 3 | Convertible note receivable | ||
Assets | ||
Assets at fair value | 5,173 | 4,865 |
Fair Value, Inputs, Level 3 | Notes Receivable [Member] | ||
Assets | ||
Assets at fair value | $ 5,876 | $ 5,589 |
FAIR VALUE MEASUREMENTS - Chang
FAIR VALUE MEASUREMENTS - Changes in fair value, Level 3 (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair value at beginning of the period | $ 11,127 | $ 3,092 |
Unrealized gain as a result of change in fair value | 434 | (2,419) |
Accretion of interest on note | 595 | 22 |
Fair value at end of the period | $ 11,288 | 11,127 |
Convertible note receivable | ||
Assets purchased | 4,865 | |
Notes Receivable [Member] | ||
Assets purchased | $ 5,567 |
FAIR VALUE MEASUREMENTS - Avail
FAIR VALUE MEASUREMENTS - Available-for-sale securities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale Securities - Amortized Cost Basis | $ 23,652 | $ 36,778 |
Available-for-sale Securities - Gross Unrealized Gains | 74 | 64 |
Available-for-sale Securities - Gross Unrealized Losses | 0 | (57) |
Available-for-sale Securities - Fair Value | 23,726 | 36,785 |
Corporate Bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale Securities - Amortized Cost Basis | 12,603 | 26,324 |
Available-for-sale Securities - Gross Unrealized Gains | 74 | 64 |
Available-for-sale Securities - Gross Unrealized Losses | 0 | (57) |
Available-for-sale Securities - Fair Value | 12,677 | 26,331 |
Convertible note receivable | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale Securities - Amortized Cost Basis | 5,173 | 4,865 |
Available-for-sale Securities - Gross Unrealized Gains | 0 | |
Available-for-sale Securities - Gross Unrealized Losses | 0 | |
Available-for-sale Securities - Fair Value | 5,173 | 4,865 |
Notes Receivable [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale Securities - Amortized Cost Basis | 5,876 | 5,589 |
Available-for-sale Securities - Gross Unrealized Gains | 0 | |
Available-for-sale Securities - Gross Unrealized Losses | 0 | |
Available-for-sale Securities - Fair Value | $ 5,876 | $ 5,589 |
FAIR VALUE MEASUREMENTS - Matur
FAIR VALUE MEASUREMENTS - Maturity of available-for-sale securities by contractual maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
FAIR VALUE MEASUREMENTS AND SHORT-TERM INVESTMENTS | ||
Available For Sale, Maturities One Year or Less, Amortized Cost | $ 11,692 | $ 16,823 |
Available For Sale, Maturities One Through Five Years, Amortized Cost | 11,960 | 9,501 |
Available For Sale, Maturities Within Five Years, Amortized Cost | 0 | 10,454 |
Available For Sale Securities, Amortized Cost | 23,652 | 36,778 |
Available For Sale, Maturities One Year or Less, Fair Value | 11,753 | 16,851 |
Available For Sale, Maturities One Through Five Years, Fair Value | 11,973 | 9,480 |
Available For Sale, Maturities Within Five Years, Fair Value | 0 | 10,454 |
Available For Sale Securities, Fair Value | $ 23,726 | $ 36,785 |
NOTES PAYABLE FOR LICENSE FEE_2
NOTES PAYABLE FOR LICENSE FEES (Details) $ in Thousands | May 01, 2020USD ($) | Oct. 22, 2018USD ($)item | Jun. 30, 2018USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jun. 22, 2018USD ($) |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Proceeds from SBA loan | $ 1,200 | $ 1,183 | ||||||
Directors And Officers insurance, policy term | 1 year | |||||||
Annual premium | $ 2,744 | |||||||
Premium paid | $ 549 | |||||||
Proceeds from Notes Payable | 2,195 | |||||||
Debt Instrument, Term | 9 months | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.19% | |||||||
License fees, current | 293 | $ 581 | ||||||
D&O insurance payable | $ 2,195 | 246 | ||||||
Notes Payable, Current, Total | 539 | 581 | ||||||
License fees, long-term | 292 | |||||||
Accretion of non cash interest expense | 43 | 48 | $ 11 | |||||
License Agreement | North Carolina State University [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Aggregate milestone payments | $ 1,200 | |||||||
Notes Payable | $ 1,175 | |||||||
Annual milestone payments beyond upfront amount | $ 300 | |||||||
Finite-Lived Intangible Assets, Gross | 1,175 | |||||||
License Agreement | University Of Kentucky [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Aggregate milestone payments | $ 1,200 | |||||||
Notes Payable | 1,151 | |||||||
Annual milestone payments beyond upfront amount | 300 | |||||||
License acquired | 1,151 | |||||||
Upfront payment | $ 300 | |||||||
Number of installments | item | 3 | |||||||
Borrowings [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Accretion of non cash interest expense | $ 20 | $ 36 | $ 11 |
SEVERANCE LIABILITY (Details)
SEVERANCE LIABILITY (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Postemployment Benefits [Abstract] | ||
Severance expense | $ 306 | $ 881 |
Severance accrual | $ 771 | |
Severance period | 12 months | 42 months |
Accrued severance, current | $ 339 | $ 359 |
Accrued severance, noncurrent | $ 241 | $ 446 |
WARRANTS FOR COMMON STOCK (Deta
WARRANTS FOR COMMON STOCK (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 22, 2019 | Nov. 25, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Class of Warrant or Right [Line Items] | |||||
Number Of Warrants Exercised | 11,293,211 | 794,869 | |||
Stock issued in connection with warrant exercises (in shares) | 490,012 | ||||
Reclassification of warrant liability to capital in excess of par | $ 168 | ||||
Warrant liability gain (loss), net | $ 49 | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.11 | ||||
Proceeds from Warrant Exercises | $ 10,616 | ||||
Warrants Consecutive Trading Days | 10 days | ||||
Warrants Weighted Average Price | $ 3 | ||||
Warrant notice price (in dollars per share) | $ 0.001 | ||||
New Warrants [Member] | |||||
Class of Warrant or Right [Line Items] | |||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 11,293,211 | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.15 | ||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights, Exercised For Cash | 7,350,000 | ||||
Class of Warrant or Right, Cash Exercise Price of Warrants or Rights | $ 1 | ||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights, Remaining | 3,943,211 | ||||
Proceeds from Warrant Exercises | $ 7,400 | $ 10,600 | |||
Warrants 2019 [Member] | |||||
Class of Warrant or Right [Line Items] | |||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.25 | ||||
Initial exercise period | 5 years |
WARRANTS FOR COMMON STOCK - War
WARRANTS FOR COMMON STOCK - Warrant Activity (Details) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | |
WARRANTS FOR COMMON STOCK | |||
Warrant outstanding balance | 11,293,211 | 11,293,211 | |
Warrants exercised | (11,293,211) | (794,869) | |
Warrants issued | 11,293,211 |
RETIREMENT PLAN (Details)
RETIREMENT PLAN (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
RETIREMENT PLAN | |||
Employer match of employee contribution, as a percent | 3.00% | ||
Employer contribution | $ 150 | $ 157 | $ 141 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Licenses (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Contractual Obligation, Fiscal Year Maturity Schedule [Abstract] | |
2021 | $ 1,746 |
2022 | 1,535 |
2023 | 1,310 |
2024 | 1,310 |
2025 & After | 1,510 |
Contractual Obligation, Total | 7,411 |
Research Agreement | KeyGene | |
Contractual Obligation, Fiscal Year Maturity Schedule [Abstract] | |
2021 | 1,200 |
2022 | 1,200 |
2023 | 1,200 |
2024 | 1,200 |
2025 & After | 300 |
Contractual Obligation, Total | $ 5,100 |
Agreement Term | 5 years |
Agreement extension period | 2 years |
Aggregate cost over initial term | $ 6,000 |
Research Agreement | North Carolina State University [Member] | |
Contractual Obligation, Fiscal Year Maturity Schedule [Abstract] | |
2021 | 121 |
Contractual Obligation, Total | $ 121 |
Agreement Term | 1 year |
License Agreement | Annual Royalty [Member] | |
Contractual Obligation, Fiscal Year Maturity Schedule [Abstract] | |
2021 | $ 225 |
2022 | 225 |
Contractual Obligation, Total | 450 |
Milestone payment upon approval of a product | 150 |
License Agreement | Minimum Annual Royalty 1 [Member] | |
Contractual Obligation, Fiscal Year Maturity Schedule [Abstract] | |
2021 | 25 |
2022 | 50 |
2023 | 50 |
2024 | 50 |
2025 & After | 600 |
Contractual Obligation, Total | 775 |
License Agreement | Minimum Annual Royalty 2 [Member] | |
Contractual Obligation, Fiscal Year Maturity Schedule [Abstract] | |
2021 | 50 |
2022 | 50 |
2023 | 50 |
2024 | 50 |
2025 & After | 500 |
Contractual Obligation, Total | 700 |
Sublicense Agreement With Anandia | |
Contractual Obligation, Fiscal Year Maturity Schedule [Abstract] | |
2021 | 10 |
2022 | 10 |
2023 | 10 |
2024 | 10 |
2025 & After | 110 |
Contractual Obligation, Total | 150 |
Growing Agreement [Member] | |
Contractual Obligation, Fiscal Year Maturity Schedule [Abstract] | |
2021 | 115 |
Contractual Obligation, Total | $ 115 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Investment, MRTP, litigation (Details) $ / shares in Units, $ in Thousands | Dec. 03, 2019USD ($)$ / sharesshares | Jul. 22, 2019USD ($)shares | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jan. 15, 2020item | Nov. 19, 2019item |
Other Commitments [Line Items] | |||||||
Shares issued for Panacea, value | $ 1,297 | $ 1,297 | |||||
Share price | $ / shares | $ 1 | ||||||
Number of shares issued in settlement | shares | 990,000 | ||||||
Voting period for shares awarded in settlement | 5 years | ||||||
Fair value of shares awarded in settlement | $ 1,891 | ||||||
Number of counts | item | 3 | 3 | |||||
Modified Risk Tobacco Product [Member] | |||||||
Other Commitments [Line Items] | |||||||
Research and Development Expense | $ 38 | $ 1,679 | $ 9,775 | ||||
Investment in Panacea | |||||||
Other Commitments [Line Items] | |||||||
Ownership percentage (in percent) | 15.80% | ||||||
Amount paid to acquire investments | $ 12,000 | ||||||
Shares issued for Panacea, value | $ 1,297 | ||||||
Additional shares to be purchased, number | shares | 5,333,334 | ||||||
Share price | $ / shares | $ 1.875 | ||||||
Portion of commitment payable in cash | $ 8,500 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
EARNINGS PER SHARE | |||||||||||
Net loss attributed to common shareholders | $ (6,405) | $ (4,221) | $ (5,057) | $ (4,028) | $ (6,198) | $ (10,245) | $ (8,042) | $ (2,073) | $ (19,711) | $ (26,558) | $ (7,967) |
Weighted average common shares outstanding - basic and diluted (in thousands) | 138,813 | 125,883 | 124,299 | ||||||||
Loss per common share - basic and diluted | $ (0.04) | $ (0.03) | $ (0.04) | $ (0.03) | $ (0.05) | $ (0.08) | $ (0.06) | $ (0.02) | $ (0.14) | $ (0.21) | $ (0.06) |
EARNINGS PER SHARE - Anti-dilut
EARNINGS PER SHARE - Anti-dilutive securities (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities outstanding but excluded from computation of earnings per share | 20,812 | 20,081 | 19,965 |
Warrant | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities outstanding but excluded from computation of earnings per share | 11,293 | 11,293 | 11,293 |
Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities outstanding but excluded from computation of earnings per share | 6,581 | 7,837 | 8,672 |
Restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities outstanding but excluded from computation of earnings per share | 2,938 | 951 |
EQUITY-BASED COMPENSATION (Deta
EQUITY-BASED COMPENSATION (Details) - shares | May 03, 2019 | Apr. 29, 2014 | Dec. 31, 2020 | Apr. 12, 2014 |
EQUITY- BASED COMPENSATION | ||||
Number of shares authorized as of date | 15,000,000 | 5,000,000 | ||
Additional shares authorized during the period | 5,000,000 | 5,000,000 | ||
Plan term | 10 years | |||
Number of shares remaining for future awards | 3,987,167 |
EQUITY- BASED COMPENSATION - RS
EQUITY- BASED COMPENSATION - RSUs (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
RSUs, Number of shares | ||
Nonvested, Number, Beginning Balance | 951 | |
RSUs granted, number | 2,885 | 1,301 |
RSUs vested, number | (325) | (100) |
RSUs forfeited, number | (573) | (250) |
Nonvested, Number, Ending Balance | 2,938 | 951 |
RSUs, Weighted average grant-date fair value | ||
Nonvested, Weighted Average Grant Date Fair Value, Beginning Balance | $ 2.15 | |
RSUs granted, grant-date fair value | 0.71 | $ 2.21 |
RSUs vested, grant-date fair value | 1.07 | 2.02 |
RSUs forfeited, grant-date fair value | 1.90 | 2.02 |
Nonvested, Weighted Average Grant Date Fair Value, Ending Balance | $ 0.85 | $ 2.15 |
Fair value of RSUs that vested during the period | $ 601 | $ 202 |
EQUITY- BASED COMPENSATION - St
EQUITY- BASED COMPENSATION - Stock option activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Options | |||
Options, number, Beginning of Period | 7,837 | 8,672 | 8,157 |
Options granted, number | 600 | 1,632 | |
Options exercised, number | (399) | (75) | (613) |
Options forfeited, number | (169) | (1,360) | |
Options expired, number | (688) | (504) | |
Options, number, End of Period | 6,581 | 7,837 | 8,672 |
Options exercisable, number, End of Period | 5,737 | ||
Options, Weighted Average Exercise Price | |||
Options, Beginning of Period, weighted average exercise price | $ 1.49 | $ 1.54 | $ 1.28 |
Options granted, weighted average exercise price | 2.07 | 2.64 | |
Options exercised, weighted average exercise price | 1.04 | 0.93 | 0.87 |
Options forfeited, weighted average exercise price | 1.83 | 2.09 | |
Options expired, weighted average exercise price | 1.51 | 1.71 | |
Options, End of Period, weighted average exercise price | 1.50 | $ 1.49 | $ 1.54 |
Options exercisable, End of Period, weighted average exercise price | $ 1.51 | ||
Weighted Average Remaining Contractual Term | |||
Options, End of Period, weighted average remaining contractual term | 3 years 10 months 24 days | ||
Options exercisable, End of Period, weighted average remaining contractual term | 3 years 8 months 12 days | ||
Aggregate Intrinsic Value | |||
Options, End of Period, aggregate intrinsic value | $ 3,983 | ||
Options exercisable, End of Period, aggregated intrinsic value | $ 4,325 |
EQUITY BASED COMPENSATION - Fai
EQUITY BASED COMPENSATION - Fair value assumptions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
EQUITY- BASED COMPENSATION | ||
Risk-free interest rate (weighted average) | 1.54% | 2.77% |
Expected dividend yield | $ 0 | |
Expected stock price volatility | 70.00% | 90.00% |
Expected life of options (weighted average) | 5 years 1 month 24 days | 5 years 7 months 9 days |
EQUITY-BASED COMPENSATION - Com
EQUITY-BASED COMPENSATION - Compensation expense and unrecognized compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based employee compensation expense | $ 1,654 | $ 3,540 | $ 3,187 |
Unrecognized compensation | $ 1,528 | ||
Unrecognized compensation, period for recognition | 10 months 24 days | ||
Unrecognized compensation, options with milestone-based vesting | $ 637 | ||
Selling, General and Administrative Expenses [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based employee compensation expense | 1,526 | 3,166 | 1,341 |
Research and Development Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based employee compensation expense | $ 128 | $ 374 | $ 1,846 |
INCOME TAXES - Provision (Detai
INCOME TAXES - Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
INCOME TAXES | |||
Statutory federal rate | 21.00% | 21.00% | 21.00% |
Deferred: | |||
Federal | $ (3,932) | $ (5,607) | $ (1,446) |
State | (200) | 55 | (14) |
Total deferred | (4,132) | (5,552) | (1,460) |
Change in valuation allowance | 4,170 | $ 5,552 | $ 1,460 |
Income Tax Expense (Benefit), Total | $ 38 |
INCOME TAXES - Rate reconciliat
INCOME TAXES - Rate reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
INCOME TAXES | |||
Statutory federal rate | (21.00%) | (21.00%) | (21.00%) |
Other items | (0.30%) | (0.10%) | 0.10% |
Litigation Settlement | 1.50% | ||
Derivative liability | (0.10%) | ||
Stock based compensation | 0.70% | 1.80% | 2.50% |
Research and development credit carryforward | 0.20% | (3.30%) | (1.20%) |
State tax provision, net of federal benefit | (0.80%) | 0.20% | (0.10%) |
Equity investment | 1.50% | ||
Valuation allowance | 21.40% | 20.90% | 18.30% |
Effective tax rate (benefit) provision | 0.20% |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | |||
Net operating loss carry-forward | $ 18,498 | $ 14,996 | $ 11,527 |
Inventory | 115 | 52 | 21 |
Stock-based compensation | 1,099 | 1,049 | 813 |
Start-up expenditures | 199 | 221 | 243 |
Research and development credit carryforward | 1,171 | 1,209 | 326 |
Accrued bonus | 423 | 200 | 101 |
Severance liability | 122 | 134 | |
Investment in Panacea | 360 | 40 | |
Operating lease obligations | 52 | 127 | |
Other | 29 | 22 | 20 |
Total deferred tax assets | 22,068 | 18,050 | 13,051 |
Deferred tax liabilities: | |||
Machinery and equipment | (237) | (239) | (215) |
Patents and trademarks | (358) | (351) | (562) |
Gain on investment | (13) | (104) | (612) |
Accrued expense | (24) | (51) | (71) |
Operating lease right-of-use assets | (52) | (126) | |
Other intangible assets | (224) | (189) | (153) |
Total deferred tax liabilities | (908) | (1,060) | (1,613) |
Valuation allowance | (21,198) | $ (16,990) | $ (11,438) |
Net deferred taxes | $ (38) |
INCOME TAXES - NOLs, Unrecogniz
INCOME TAXES - NOLs, Unrecognized (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
INCOME TAXES | ||||
Deferred Tax Assets, Operating Loss Carryforwards, Not Subject to Expiration | $ 15,500,000 | $ 16,800,000 | $ 7,700,000 | |
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration | $ 46,900,000 | |||
Deferred Tax Assets, Tax Credit Carryforwards, Research | 1,171,000 | $ 1,209,000 | $ 326,000 | |
Liability for uncertain tax positions | $ 0 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($)item | |
Disaggregation of Revenue [Line Items] | |||||||||||
Allowance for discounts or returns and allowances | $ 0 | $ 0 | $ 0 | $ 0 | |||||||
Payment period | 21 days | ||||||||||
Unbilled receivables | 349 | 406 | $ 349 | 406 | |||||||
Deferred revenue | (272) | (5) | (272) | (5) | |||||||
Contract asset (liability), net | 77 | 401 | 77 | 401 | |||||||
Sale of products, net | $ 7,308 | $ 7,310 | $ 6,435 | $ 7,058 | $ 7,262 | $ 6,462 | $ 5,815 | $ 6,294 | $ 28,111 | $ 25,833 | $ 26,426 |
Number of customers | item | 2 | 3 | 3 | ||||||||
Transferred over Time [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sale of products, net | $ 16,326 | $ 16,466 | $ 16,785 | ||||||||
Transferred at Point in Time [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sale of products, net | $ 11,785 | $ 9,367 | $ 9,641 | ||||||||
Revenue [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Risk concentration, as a percent | 91.00% | 92.70% | 92.00% |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) $ in Thousands | Jan. 15, 2021USD ($)item | Mar. 31, 2021USD ($)shares | Dec. 31, 2019USD ($) | Dec. 31, 2018shares |
Subsequent Event [Line Items] | ||||
Stock issued in connection with warrant exercises (in shares) | shares | 490,012 | |||
Net proceeds from exercise of stock warrants | $ 10,616 | |||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Monthly base rent | $ 6 | |||
Base Rent Annual Increase, as a percent | 2.50% | |||
Lessor, Operating Lease, Term of Contract | 36 months | |||
Number of renewal options | item | 2 | |||
Lessor, Operating Lease, Renewal Term | 24 months | |||
Stock issued in connection with warrant exercises (in shares) | shares | 9,577,612 | |||
Net proceeds from exercise of stock warrants | $ 9,993 |
SELECTED QUARTERLY FINANCIAL _3
SELECTED QUARTERLY FINANCIAL DATA (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
SELECTED QUARTERLY FINANCIAL DATA (unaudited) | |||||||||||
Revenue, net | $ 7,308 | $ 7,310 | $ 6,435 | $ 7,058 | $ 7,262 | $ 6,462 | $ 5,815 | $ 6,294 | $ 28,111 | $ 25,833 | $ 26,426 |
Gross profit (loss) | 588 | 362 | 201 | 287 | 225 | (21) | (86) | (103) | 1,438 | 15 | 899 |
Loss from operations | (6,248) | (4,040) | (4,753) | (4,142) | (5,552) | (7,606) | (5,029) | (5,379) | (19,183) | (23,566) | (24,019) |
Net income (loss) | $ (6,405) | $ (4,221) | $ (5,057) | $ (4,028) | $ (6,198) | $ (10,245) | $ (8,042) | $ (2,073) | $ (19,711) | $ (26,558) | $ (7,967) |
Loss per common share - basic and diluted | $ (0.04) | $ (0.03) | $ (0.04) | $ (0.03) | $ (0.05) | $ (0.08) | $ (0.06) | $ (0.02) | $ (0.14) | $ (0.21) | $ (0.06) |