Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 11, 2019 | Jun. 29, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | HARROW HEALTH, INC. | ||
Entity Central Index Key | 0001360214 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 42,000,000 | ||
Entity Common Stock, Shares Outstanding | 24,685,594 | ||
Trading Symbol | HROW | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents, including restricted cash of $200 | $ 6,838 | $ 4,219 |
Investment in Eton Pharmaceuticals | 21,420 | |
Accounts receivable, net | 1,914 | 1,529 |
Inventories | 1,834 | 2,249 |
Prepaid expenses and other current assets | 837 | 714 |
Note receivable, current portion | 95 | |
Total current assets | 32,843 | 8,806 |
Property, plant and equipment, net | 6,375 | 6,215 |
Intangible assets, net | 3,059 | 2,860 |
Note receivable, less current portion | 302 | |
Goodwill | 2,227 | 2,227 |
TOTAL ASSETS | 49,451 | 23,917 |
Current liabilities | ||
Accounts payable and accrued expenses | 6,250 | 3,885 |
Accrued payroll and related liabilities | 2,283 | 1,209 |
Deferred revenue and customer deposits | 119 | 29 |
Current portion of deferred acquisition obligation and accrued interest | 53 | |
Current portion of note payable, net of unamortized debt discount | 2,529 | |
Current portion of capital lease obligations, net of unamortized discount | 720 | 598 |
Total current liabilities | 11,901 | 5,774 |
Capital lease obligations, net of current portion and unamortized discount | 720 | |
Accrued expenses, net of current portion | 800 | 800 |
Note payable, net of current portion and unamortized debt discount | 11,999 | 14,008 |
TOTAL LIABILITIES | 24,700 | 21,302 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, $0.001 par value, 5,000,000 shares authorized, and no shares issued and outstanding at December 31, 2018 and 2017 | ||
Common stock, $0.001 par value, 50,000,000 and 90,000,000 shares authorized, 24,339,610 and 20,623,129 shares issued and outstanding | 24 | 21 |
Additional paid-in capital | 98,938 | 91,430 |
Accumulated deficit | (74,211) | (88,836) |
TOTAL STOCKHOLDERS' EQUITY | 24,751 | 2,615 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 49,451 | 23,917 |
Surface Pharmaceuticals [Member] | ||
Current assets | ||
Investment | 4,947 | |
Eton Pharmaceuticals [Member] | ||
Current assets | ||
Investment | $ 3,507 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Restricted cash | $ 200 | $ 200 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 90,000,000 |
Common stock, shares issued | 24,339,610 | 20,623,129 |
Common stock, shares outstanding | 24,339,610 | 20,623,129 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | ||
Total revenues | $ 41,372 | $ 26,774 |
Cost of sales | (16,521) | (13,505) |
Gross profit | 24,851 | 13,269 |
Operating expenses: | ||
Selling, general and administrative | 29,243 | 25,019 |
Research and development | 825 | 413 |
Total operating expenses | 30,068 | 25,432 |
Loss from operations | (5,217) | (12,163) |
Other income (expense): | ||
Interest expense, net | (2,728) | (3,026) |
Loss on sale of assets | (393) | (354) |
Other income (expense), net | 103 | (884) |
Total other income (expense), net | 19,842 | (757) |
Income (loss) before income taxes | 14,625 | (12,920) |
Income tax benefit, net | 935 | |
Net income (loss) | $ 14,625 | $ (11,985) |
Basic net income (loss) per share of common stock | $ 0.67 | $ (0.60) |
Diluted net income (loss) per share of common stock | $ 0.61 | $ (0.60) |
Weighted average number of shares of common stock outstanding, basic | 21,917,570 | 20,027,712 |
Weighted average number of shares of common stock diluted | 23,812,045 | 20,027,712 |
Surface Pharmaceuticals [Member] | ||
Other income (expense): | ||
Investment gain | $ 4,947 | |
Eton Pharmaceuticals [Member] | ||
Other income (expense): | ||
Investment gain | 17,913 | 3,507 |
Product Sales, Net [Member] | ||
Revenues: | ||
Total revenues | 41,334 | 26,684 |
License Revenues [Member] | ||
Revenues: | ||
Total revenues | $ 38 | $ 90 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2016 | $ 19 | $ 83,264 | $ (76,851) | $ 6,432 |
Balance, shares at Dec. 31, 2016 | 18,627,915 | |||
Exercise of warrants | 179 | 179 | ||
Exercise of warrants, shares | 100,000 | |||
Registered direct offering sale of stock, net of offering costs | $ 1 | 2,939 | 2,940 | |
Registered direct offering sale of stock, net of offering costs, shares | 1,312,500 | |||
Sale of stock, net of costs (ATM) | $ 1 | 1,123 | 1,124 | |
Sale of stock, net of costs (ATM), shares | 557,714 | |||
Stock-based payment for services provided | 60 | 60 | ||
Stock-based payment for services provided, shares | 25,000 | |||
Relative fair value of warrants to purchase common stock issued in connection with note payable | 982 | 982 | ||
Stock-based compensation expense | 2,883 | 2,883 | ||
Net income (loss) | (11,985) | (11,985) | ||
Balance at Dec. 31, 2017 | $ 21 | 91,430 | (88,836) | 2,615 |
Balance, shares at Dec. 31, 2017 | 20,623,129 | |||
Exercise of warrants | $ 3 | 4,230 | 4,233 | |
Exercise of warrants, shares | 3,275,162 | |||
Sale of stock, net of costs (ATM) | 642 | 642 | ||
Sale of stock, net of costs (ATM), shares | 305,619 | |||
Stock-based payment for services provided | 150 | 150 | ||
Stock-based payment for services provided, shares | 75,700 | |||
Stock-based compensation expense | 2,486 | 2,486 | ||
Vesting of RSUs, net of tax withholding | ||||
Vesting of RSUs, net of tax withholding, shares | 60,000 | |||
Net income (loss) | 14,625 | 14,625 | ||
Balance at Dec. 31, 2018 | $ 24 | $ 98,938 | $ (74,211) | $ 24,751 |
Balance, shares at Dec. 31, 2018 | 24,339,610 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ 14,625 | $ (11,985) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization of property, plant and equipment | 1,608 | 1,401 |
Amortization of intangible assets | 235 | 364 |
Deferred income taxes | (935) | |
Amortization of debt issuance costs and discount | 613 | 978 |
Debt extinguishment | 884 | |
Loss on sale and disposal of assets and write down of assets and note receivable | 393 | 354 |
Stock-based payment for services provided | 150 | |
Stock-based compensation | 2,486 | 2,943 |
Changes in assets and liabilities: | ||
Accounts receivable | (384) | 1,392 |
Inventories | 415 | (821) |
Prepaid expenses and other current assets | (123) | 274 |
Accounts payable and accrued expenses | 2,365 | 346 |
Accrued payroll and related liabilities | 1,074 | (429) |
Deferred revenue and customer deposits | 90 | (62) |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 687 | (8,803) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Repayment of note receivable | 4 | |
Proceeds on sale of assets | 113 | |
Investment in patent and trademark assets | (435) | (252) |
Purchase of Klarity license | (50) | |
Purchases of property, plant and equipment | (1,768) | (772) |
NET CASH USED IN INVESTING ACTIVITIES | (2,199) | (961) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Payments on capital lease obligations | (691) | (626) |
Net proceeds from public equity offering | 2,940 | |
Payments on Park deferred acquisition obligation | (53) | (206) |
Proceeds from SWK debt, net of costs | 15,518 | |
Principal payments on LSAF note payable | (13,999) | |
Net proceeds from ATM sales of common stock | 642 | 1,124 |
Net proceeds from exercises of warrants and stock options, net of taxes remitted for RSU's | 4,233 | 179 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 4,131 | 4,930 |
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 2,619 | (4,834) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period | 4,219 | 9,053 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period | 6,838 | 4,219 |
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH | ||
Cash and cash equivalents | 6,638 | 4,019 |
Restricted cash | 200 | 200 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | 6,838 | 4,219 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for income taxes | 4 | 9 |
Cash paid for interest | 2,097 | 1,543 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Final fee on note payable recorded as debt discount and included in accrued expenses | 800 | |
Estimated relative fair value of warrants issued in connection with note payable | 982 | |
Note receivable in connection with sale of assets | 410 | |
Eton Pharmaceuticals [Member] | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Investment gain | (17,913) | (3,507) |
Surface Pharmaceuticals [Member] | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Investment gain | $ (4,947) |
Organization
Organization | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | NOTE 1. ORGANIZATION Harrow Health, Inc. (together with its subsidiaries, partially owned companies and royalty arrangements unless the context indicates or otherwise requires, the “Company” or “Harrow”) specializes in the development, production and sale of innovative medications that offer unique competitive advantages and serve unmet needs in the marketplace. Prior to 2017, the Company’s business was primarily focused on its ImprimisRx business, the nation’s leading ophthalmology pharmaceutical compounding business, and Park Compounding, Inc. (“Park”), a leading health and wellness compounding business. Since 2017, in addition to wholly-owning ImprimisRx and Park, the Company also has equity positions in Eton Pharmaceuticals, Inc. (“Eton”), Surface Pharmaceuticals, Inc. (“Surface”), and Melt Pharmaceuticals, Inc. (“Melt”). In 2018, the Company also founded its subsidiaries Mayfield Pharmaceuticals, Inc. (“Mayfield”) and Radley Pharmaceuticals, Inc. (“Radley”). The Company owns royalty rights in certain 505(b)(2) drug candidates being developed by Eton, Surface, Melt, Radley and Mayfield. In December 2018, the Company amended its restated certificate of incorporation to change its corporate name from “Imprimis Pharmaceuticals, Inc.” to “Harrow Health, Inc.”. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Harrow has prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of the Company and its wholly and majority owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management are, among others, allowance for doubtful accounts and contractual adjustments, realizability of inventories, valuation of investments in equity securities, deferred taxes, goodwill and intangible assets, recoverability of long-lived assets and goodwill, valuation of contingent acquisition obligations and deferred acquisition obligations, valuation of notes payable, and valuation of stock-based transactions with employees and non-employees. Actual results could differ from those estimates. Liquidity The Company has incurred significant operating losses and negative cash flows from operations since its inception. The Company incurred operating losses of $5,217 and $12,163 for the years ended December 31, 2018 and 2017, respectively, and had an accumulated deficit of $74,211 and $88,836 as of December 31, 2018 and 2017, respectively. In addition, cash provided by (used in) operating activities were $687 and $(8,803) for the years ended December 31, 2018 and 2017, respectively. While there is no assurance, the Company believes its existing cash resources, restricted cash and marketable securities of approximately $28,258 at December 31, 2018 will be sufficient to sustain the Company’s planned level of operations for at least the next twelve months. However, estimates of operating expenses and working capital requirements could be incorrect, and the Company could use its cash resources faster than anticipated. Further, some or all of the ongoing or planned activities may not be successful and could result in further losses. The Company may seek to increase liquidity and capital resources by one or more of the following which may include, but are not limited to: the sale of assets and/or businesses, obtaining financing through the issuance of equity, debt, or convertible securities; and working to increase revenue growth through sales. There is no guarantee that the Company will be able to obtain capital when needed on terms it deems as acceptable, or at all. Revenue Recognition and Deferred Revenue The Company recognizes revenue at the time of transfer of promised goods to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. (see Note 3). Cost of Sales Cost of sales includes direct and indirect costs to manufacture formulations and other products sold, including active pharmaceutical ingredients, personnel costs, packaging, storage, royalties (see Note 18), shipping and handling costs and the write-off of obsolete inventory. Research and Development The Company expenses all costs related to research and development as they are incurred. Research and development expenses consist of expenses incurred in performing research and development activities, including salaries and benefits, other overhead expenses, and costs related to clinical trials, contract services and outsourced contracts. Debt Issuance Costs and Debt Discount Debt issuance costs and the debt discount are recorded net of notes payable and capital lease obligations in the consolidated balance sheets. Amortization expense of debt issuance costs and the debt discount is calculated using the effective interest method over the term of the debt and is recorded in interest expense in the accompanying consolidated statements of operations. Intellectual Property The costs of acquiring intellectual property rights to be used in the research and development process, including licensing fees and milestone payments, are charged to research and development expense as incurred in situations where the Company has not identified an alternative future use for the acquired rights, and are capitalized in situations where we have identified an alternative future use for the acquired rights. Patents and trademarks are recorded at cost and capitalized at a time when the future economic benefits of such patents and trademarks become more certain (see Goodwill and Intangible Assets). The Company began capitalizing certain costs associated with acquiring intellectual property rights during 2015, if costs are not capitalized they are expensed as incurred. Income Taxes As part of the process of preparing the Company’s consolidated financial statements, the Company must estimate the actual current tax liabilities and assess permanent and temporary differences that result from differing treatment of items for tax and accounting purposes. The temporary differences result in deferred tax assets and liabilities, which are included within the consolidated balance sheets. The Company must assess the likelihood that the deferred tax assets will be recovered from future taxable income and, to the extent the Company believes that recovery is not more likely than not, a valuation allowance must be established which reduces the amount of deferred tax assets recorded on the consolidated balance sheets. To the extent the Company establishes a valuation allowance or increase or decrease this allowance in a period, the impact will be included in income tax expense in the consolidated statement of operations. The Company accounts for income taxes under the provisions of Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 740, “Income Taxes”, or ASC 740. As of December 31, 2018, and 2017, there were no unrecognized tax benefits included in the consolidated balance sheets that would, if recognized, affect the effective tax rate. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties in its consolidated balance sheets at December 31, 2018 and 2017, and has not recognized interest and/or penalties in the consolidated statements of operations for the years ended December 31, 2018 and 2017. The Company is subject to taxation in the United States, California, Florida, Georgia, Illinois, New Jersey, New York, and Wisconsin. The Company’s tax years since 2000 may be subject to examination by the federal and state tax authorities due to the carryforward of unutilized net operating losses. Cash and Cash Equivalents Cash equivalents include short-term, highly liquid investments with maturities of three months or less at the time of acquisition. Concentrations of Credit Risk The Company places its cash with financial institutions deemed by management to be of high credit quality. The Federal Deposit Insurance Corporation (“FDIC”) provides basic deposit coverage with limits up to $250 per owner. From time to time the Company has cash deposits in excess of FDIC limits. Investment in Eton Pharmaceuticals, Inc. In April 2017, the Company formed Eton as a wholly owned subsidiary. In June 2017 the Company lost voting and ownership control of Eton and it ceased consolidating Eton’s financial statements. At the time of deconsolidation, the Company recorded a gain of $5,725 and adjusted the carrying value in Eton to reflect the increased valuation of Eton and the Company’s new ownership percent in accordance with ASC 810-10-40-4(c), Consolidation In November 2018, Eton closed on an initial public offering of 4,140,000 shares of its common stock at $6.00 per share for gross proceeds of approximately $24,800 (the “Eton IPO”). Following the close of the Eton IPO, the Company’s common stock position in Eton equaled 19.98% of the equity and voting interests issued and outstanding of Eton, and it ceased using the equity method of accounting for its investment in Eton. The Company recognizes earnings and losses of Eton in its consolidated financial statements based on the fair market value of the shares owned and adjust the carrying amount of the Company’s investment in Eton accordingly. Eton’s common stock currently trades on the NASDAQ Global Market exchange. At December 31, 2018, the fair market value of Eton’s common stock was $6.12 per share, the closing share price of Eton common stock on that day. In accordance with ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities Accounts Receivable Accounts receivable are stated net of allowances for doubtful accounts and contractual adjustments. The accounts receivable balance primarily includes amounts due from customers the Company has invoiced or from third-party providers (e.g., insurance companies and governmental agencies), but for which payment has not been received. Charges to bad debt are based on both historical write-offs and specifically identified receivables. Accounts receivable are presented net of allowances for doubtful accounts and contractual adjustments in the amount of $270 and $275 as of December 31, 2018 and 2017, respectively. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out basis. The Company evaluates the carrying value of inventories on a regular basis, based on the price expected to be obtained for products in their respective markets compared with historical cost. Write-downs of inventories are considered to be permanent reductions in the cost basis of inventories. The Company also regularly evaluates its inventories for excess quantities and obsolescence (expiration), taking into account such factors as historical and anticipated future sales or use in production compared to quantities on hand and the remaining shelf life of products and active pharmaceutical ingredients on hand. The Company establishes reserves for excess and obsolete inventories as required based on its analyses. Investment in Surface Pharmaceuticals, Inc. In April 2017, the Company formed Surface as a wholly owned subsidiary. In May and July 2018, Surface entered into and closed on definitive stock purchase agreements with an institutional investor for the purchase of Surface’s Series A Preferred Stock (the “Surface Series A Stock”) that resulted in total proceeds to Surface of approximately $21,000. At the time of the first closing in May 2018, the Company lost voting and ownership control of Surface and it ceased consolidating Surface’s financial statements. The Surface Series A Stock (i) was issued at a purchase price of $3.30 per share; (ii) will vote together with the common stock and all other shares of stock of Surface having general voting power; (iii) will be entitled to the number of votes equal to the number of shares of preferred stock held; (iv) will hold liquidation preference over all other equity interests in Surface; and (v) will have mandatory conversion requirements into Surface common stock upon events including an underwritten initial public offering of Surface common stock or similar transaction. At the time of deconsolidation, the Company recorded a gain of $5,320 and adjusted the carrying value in Surface to reflect the increased valuation of Surface and the Company’s new ownership percent in accordance with ASC 810-10-40-4(c). The Company owns 3,500,000 common shares (which is approximately 30% of the equity interest as of December 31, 2018, and calculated after the second closing of the sale Series A Preferred Stock in July 2018) of Surface and uses the equity method of accounting for this investment, as management has determined that the Company has the ability to exercise significant influence over the operating and financial decisions of Surface. Under this method, the Company recognizes earnings and losses of Surface in its consolidated financial statements and adjusts the carrying amount of its investment in Surface accordingly. The Company’s share of earnings and losses are based on the shares of common stock and in-substance common stock of Surface held by the Company. Any intra-entity profits and losses are eliminated. During the year ended December 31, 2018, the Company recorded equity in net loss of Surface of $373 (which, net of the equity in net loss of Surface totaled an investment gain from Surface of $4,947 during the year ended December 31, 2018). As of December 31, 2018, the carrying value of the Company’s investment in Surface was $4,947. Property, Plant and Equipment Property, plant and equipment is stated at cost less accumulated depreciation and amortization. Depreciation and amortization is calculated using the straight-line method over the estimated useful life of the asset. Leasehold improvements and capital lease equipment are amortized over the estimated useful life or remaining lease term, whichever is shorter. Computer software and hardware and furniture and equipment are depreciated over three to five years. Business Combinations The Company accounts for business combinations by recognizing the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at their fair values on the acquisition date. The purchase price allocation process requires management to make significant estimates and assumptions, especially with respect to intangible assets, estimated contingent consideration payments and pre-acquisition contingencies. Examples of critical estimates in valuing certain of the intangible assets the Company has acquired or may acquire in the future include but are not limited to: ● future expected cash flows from product sales, support agreements, consulting contracts, other customer contracts, and acquired developed technologies and patents; and ● discount rates utilized in valuation estimates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. Additionally, any change in the fair value of the acquisition-related contingent consideration subsequent to the acquisition date, including changes from events after the acquisition date, such as changes in our estimates of relevant revenue or other targets, will be recognized in earnings in the period of the estimated fair value change. A change in fair value of the acquisition-related contingent consideration or the occurrence of events that cause results to differ from our estimates or assumptions could have a material effect on the consolidated financial position, statements of operations or cash flows in the period of the change in the estimate. Goodwill and Intangible Assets Patents and trademarks are recorded at cost and capitalized at a time when the future economic benefits of such patents and trademarks become more certain. At that time, the Company capitalizes third-party legal costs and filing fees associated with obtaining and prosecuting claims related to its patents and trademarks. Once the patents have been issued, the Company amortizes these costs over the shorter of the legal life of the patent or its estimated economic life, generally 20 years, using the straight-line method. Trademarks are an indefinite life intangible asset and are assessed for impairment based on future projected cash flows as further described below. The Company reviews its goodwill and indefinite-lived intangible assets for impairment as of January 1 of each year and when an event or a change in circumstances indicates the fair value of a reporting unit may be below its carrying amount. Events or changes in circumstances considered as impairment indicators include but are not limited to the following: ● significant underperformance of the Company’s business relative to expected operating results; ● significant adverse economic and industry trends; ● significant decline in the Company’s market capitalization for an extended period of time relative to net book value; and ● expectations that a reporting unit will be sold or otherwise disposed. The goodwill impairment test consists of a two-step process as follows: Step 1. The Company compares the fair value of each reporting unit to its carrying amount, including the existing goodwill. The fair value of each reporting unit is determined using a discounted cash flow valuation analysis. The carrying amount of each reporting unit is determined by specifically identifying and allocating the assets and liabilities to each reporting unit based on headcount, relative revenues or other methods as deemed appropriate by management. If the carrying amount of a reporting unit exceeds its fair value, an indication exists that the reporting unit’s goodwill may be impaired and the Company then performs the second step of the impairment test. If the fair value of a reporting unit exceeds its carrying amount, no further analysis is required. Step 2. If further analysis is required, the Company compares the implied fair value of the reporting unit’s goodwill, determined by allocating the reporting unit’s fair value to all of its assets and its liabilities in a manner similar to a purchase price allocation, to its carrying amount. If the carrying amount of the reporting unit’s goodwill exceeds its fair value, an impairment loss will be recognized in an amount equal to the excess. Impairment of Long-Lived Assets Long-lived assets, such as property, plant and equipment, purchased intangibles subject to amortization and patents and trademarks, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the consolidated balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposal group classified as held-for-sale would be presented separately in the appropriate asset and liability sections of the consolidated balance sheet, if material (See Note 9). Third Party Billing and Collection Agreements In connection with its acquisition of Park, the Company entered into a billing and collection agreement with a third party to assist in the billing and collection of workers’ compensation claims. Under the terms of the agreement, the Company is obligated to pay a fixed fee to the third party equal to 55% of the amounts billed and collected under the workers’ compensation claims. The Company accrues for such fees in accounts payable and accrued expenses in the accompanying consolidated balance sheets. Total billing and collection management expense under this agreement for the years ended December 31, 2018 and 2017 was $1 and $0, respectively, and is included in selling and marketing expenses in the accompanying consolidated statements of operations. The amount due under the agreement as of December 31, 2018 and 2017 was $25 and $41, respectively. Deferred Rent The Company accounts for rent expense related to its operating leases by determining total minimum rent payments on the leases over their respective periods and recognizing the rent expense on a straight-line basis. The difference between the actual amount paid and the amount recorded as rent expense in each fiscal year and interim periods within each fiscal year is recorded as an adjustment to deferred rent (see Note 18). Fair Value Measurements Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability. GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The established fair value hierarchy prioritizes the use of inputs used in valuation methodologies into the following three levels: ● Level 1: Applies to assets or liabilities for which there are quoted prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and must be used to measure fair value whenever available. ● Level 2: Applies to assets or liabilities for which there are significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. ● Level 3: Applies to assets or liabilities for which there are significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. For example, Level 3 inputs would relate to forecasts of future earnings and cash flows used in a discounted future cash flows method. At December 31, 2017, the Company did not have any financial assets or liabilities that are measured on a recurring basis. At December 31, 2018, the Company measured its investment in Eton on a recurring basis. The Company’s investment in Eton is classified as Level 1 as the fair value is determined using quoted market prices in active markets for the same securities. As of December 31, 2018, the fair market value of the Company’s investment in Eton was $21,420. The Company’s financial instruments included cash and cash equivalents, restricted short-term investments, investment in Eton, accounts receivable, accounts payable and accrued expenses, accrued payroll and related liabilities, deferred revenue and customer deposits, deferred acquisition obligations, notes payable and capital leases. The carrying amount of these financial instruments, except for deferred acquisition obligations, notes payable and capital leases, approximates fair value due to the short-term maturities of these instruments. The Company’s restricted short-term investments are carried at amortized cost, which approximates fair value. Based on borrowing rates currently available to the Company, the carrying values of the deferred acquisition obligations, notes payable and capital leases, approximate their respective fair values. Stock-Based Compensation All stock-based payments to employees, directors and consultants, including grants of stock options, warrants, restricted stock units (“RSUs”) and restricted stock, are recognized in the consolidated financial statements based upon their estimated fair values. The Company uses the Black-Scholes-Merton option pricing model and Monte Carlo Simulation to estimate the fair value of stock-based awards. The estimated fair value is determined at the date of grant. The financial statement effect of forfeitures is estimated at the time of grant and revised, if necessary, if the actual effect differs from those estimates. The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows FASB guidance. The measurement date for the estimated fair value of the equity instruments issued is the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the estimated fair value of the equity instrument is primarily recognized over the term of the consulting agreement. According to FASB guidance, an asset acquired in exchange for the issuance of fully vested, nonforfeitable equity instruments should not be presented or classified as an offset to equity on the grantor’s balance sheet once the equity instrument is granted for accounting purposes. Accordingly, the Company records the estimated fair value of nonforfeitable equity instruments issued for future consulting services as prepaid stock-based consulting expenses in its consolidated balance sheets. Basic and Diluted Net Income (Loss) per Common Share Basic net income (loss) per common share is computed by dividing income (loss) attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share is computed by dividing the income (loss) attributable to common stockholders for the period by the weighted average number of common and common equivalent shares, such as stock options and warrants, outstanding during the period. Basic and diluted net income (loss) per share is computed using the weighted average number of shares of common stock outstanding during the period. Common stock equivalents (using the treasury stock or “if converted” method) from deferred acquisition obligations, convertible note payable, stock options, unvested restricted stock units (“RSUs”) and warrants were 6,201,355 and 9,980,454 at December 31, 2018 and 2017, respectively, and, for the year ended December 31, 2017 are excluded from the calculation of diluted net (loss) per share for the period presented, because the effect is anti-dilutive for that time period. Included in the basic and diluted net income (loss) per share calculation were RSUs awarded to directors that had vested, but the issuance and delivery of the shares are deferred until the director resigns. The number of shares underlying vested RSUs at December 31, 2018 and 2017 was 236,693 and 137,067, respectively. The following table shows the computation of basic net income (loss) per share of common stock for the years ended December 31, 2018 and 2017: For the For the Year Ended Year Ended December 31, 2018 December 30, 2017 Numerator – net income (loss) $ 14,625 $ (11,985 ) Denominator – weighted average number of shares outstanding, basic 21,917,570 20,027,712 Net income (loss) per share, basic $ 0.67 $ (0.60 ) For the year end December 31, 2018, the Company computed diluted net income per share using the weighted-average number of common shares and dilutive common equivalent shares outstanding during that period. Diluted common equivalent shares for the year ended December 31, 2018, consisted of the following: For the Year Ended December 31, 2018 Shares Diluted shares related to: 21,917,570 Warrants 1,844,272 Restricted stock units - Stock options 50,203 Dilutive common equivalent shares 23,812,045 The following table shows the computation of diluted net income (loss) per share using the weighted-average number of common shares and dilutive common equivalent shares outstanding for the years ended December 31, 2018 and 2017: For the For the Year Ended Year Ended December 31, 2018 December 30, 2017 Numerator – net income (loss) $ 14,625 $ (11,985 ) Weighted average number of shares outstanding, basic 21,917,570 20,027,712 Dilutive common equivalents 1,894,475 - Denominator – number of shares used for diluted earnings per share computation 23,812,045 20,027,712 Net income (loss) per share, diluted $ 0.61 $ (0.60 ) Reclassification Certain amounts in the 2017 consolidated financial statements have been reclassified to conform to the classifications used to prepare the 2018 consolidated financial statements. These reclassifications had no material impact on the Company’s financial position, results of operations, or cash flow as previously reported. Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers The new standard became effective for the Company beginning January 1, 2018 and permits two methods of adoption: the full retrospective method, which requires the standard to be applied to each prior period presented, or the modified retrospective method, which requires the cumulative effect of adoption to be recognized as an adjustment to opening retained earnings in the period of adoption. The Company adopted the standard using the modified retrospective method. There was no effect for any adjustments to retained earnings upon adoption of the standard on January 1, 2018. Adoption of the new standard resulted in additional revenue-related disclosures in the footnotes to the Company’s consolidated financial statements (see Note 3). In January 2016, the FASB issued ASU 2016-01 , which requires that investments in equity securities (excluding equity method investments) be measured at fair value with changes in fair value recognized in net earnings. Under previous guidelines, changes in fair value of available-for-sale equity securities are recorded in other comprehensive income. The Company adopted ASU 2016-01 as of January 1, 2018. As of that date, a the Company did not have any investments in equity securities (at January 1, 2018) that were not equity method investments. In January 2017, the FASB issued ASU 2017-01, Business Combinations, Clarifying the Definition of a Business In August 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Classification Restricted Cash In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation: Scope of Modification Accounting In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting Recently Issued Accounting Pronouncements In February 2016, the FASB issued new lease accounting guidance in ASU No. 2016-02, Leases In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | NOTE 3. REVENUES On January 1, 2018, the Company adopted ASU 2014-09, using the modified retrospective transition method. There was no effect for any adjustments to retained earnings upon adoption of the standard on January 1, 2018. The Company has two primary streams of revenue: (1) revenue recognized from our sale of products within our pharmacy services and (2) revenue recognized from intellectual property license and asset purchase agreements. Product Revenues from Pharmacy Services The Company sells prescription drugs directly through our pharmacy and outsourcing facility network. Revenue from our pharmacy services divisions includes: (i) the portion of the price the client pays directly to us, net of any volume-related or other discounts paid back to the client, (ii) the price paid to us by individuals, and (iii) customer copayments made directly to the pharmacy network. Sales taxes are not included in revenue. Following the core principle of ASU 2014-09, we have identified the following: 1. Identify the contract(s) with a customer: A contract exists with a customer at the time the prescription or order is received by the Company. 2. Identify the performance obligations in the contract: The order received contains the performance obligations to be met, in almost all cases the product the customer is wishing to receive. If we are unable to be meet the performance obligation the customer is notified. 3. Determine the transaction price: the transaction price is based on the product being sold to the customer, and any related customer discounts. These amounts are pre-determined and built into our order management software. 4. Allocate the transaction price to the performance obligations in the contract: The transaction price associated with the product(s) being ordered is allocated according to the pre-determined amounts. 5. Recognize revenue when (or as) the entity satisfies a performance obligation: At the time of shipment from the pharmacy or outsourcing facility the performance obligation has been met. The following revenue recognition policy has been established for the pharmacy services division: Revenues generated from prescription or office use drugs sold by our pharmacies and outsourcing facility are recognized when the prescription is shipped. At the time of shipment, the pharmacy services division has performed substantially all of its obligations under its client contracts and does not experience a significant level of returns or reshipments. Determination of criteria (3) and (4) is based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. The Company records reductions to revenue for discounts at the time of the initial sale. Estimated returns and allowances and other adjustments are provided for in the same period during which the related sales are recorded and are based on actual returns history. The rate of returns is analyzed annually to determine historical returns experience. If the historical data we use to calculate these estimates do not properly reflect future returns, then a change in the allowance would be made in the period in which such a determination is made and revenues in that period could be materially affected. The Company will defer any revenues received for a product that has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered and no refund will be required. Intellectual Property License Revenues The Company currently holds five intellectual property license and related agreements in which the Company has promised to grant a license or sale which provides a customer with right to access the Company’s intellectual property. License arrangements may consist of non-refundable upfront license fees, data transfer fees, research reimbursement payments, exclusive license rights to patented or patent pending compounds, technology access fees, and various performance or sales milestones. These arrangements can be multiple element arrangements, each of which revenue is recognized at the point of time the performance obligation is met. Non-refundable fees that are not contingent on any future performance by the Company and require no consequential continuing involvement on the part of the Company are recognized as revenue when the license term commences and the licensed data, technology, compounded drug preparation and/or other deliverable is delivered. Such deliverables may include physical quantities of compounded drug preparations, design of the compounded drug preparations and structure-activity relationships, the conceptual framework and mechanism of action, and rights to the patents or patent applications for such compounded drug preparations. The Company defers recognition of non-refundable fees if it has continuing performance obligations without which the technology, right, product or service conveyed in conjunction with the non-refundable fee has no utility to the licensee and that are separate and independent of the Company’s performance under the other elements of the arrangement. In addition, if the Company’s continued involvement is required, through research and development services that are related to its proprietary know-how and expertise of the delivered technology or can only be performed by the Company, then such non-refundable fees are deferred and recognized over the period of continuing involvement. Guaranteed minimum annual royalties are recognized on a straight-line basis over the applicable term. Revenue disaggregated by revenue source for the year ended December 31, 2018 and 2017, consists of the following: For the year ended December 31, 2018 2017 Product sales, net $ 41,334 $ 26,684 License revenues 38 90 Total revenues $ 41,372 $ 26,774 Deferred revenue and customer deposits at December 31, 2018 and 2017, was $119 and $29, retrospectively. All deferred revenue and customer deposit amounts at December 31, 2017 were recognized as revenue during the year ended December 31, 2018. |
Investment in Eton Pharmaceutic
Investment in Eton Pharmaceuticals, Inc. and Agreements - Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment in Eton Pharmaceuticals, Inc. and Agreements - Related Party Transactions | NOTE 4. INVESTMENT IN ETON PHARMACEUTICALS, INC. AND AGREEMENTS - RELATED PARTY TRANSACTIONS In May 2017, the Company entered into two asset purchase and license agreements (the “Eton License Agreements”) with its previously wholly owned subsidiary, Eton. Pursuant to the terms of the Eton License Agreements, the Company assigned and licensed to Eton certain intellectual property and related rights to develop, formulate, make, sell, and sub-license formulations of synthetic corticotropin and injectable pentoxifylline (collectively, the “Eton Products”). Eton is required to make royalty payments to the Company of six percent (6%) of net sales of the Eton Products while any patent rights remain outstanding and then three percent (3%) of net sales in the event patent claims are not issued. In addition, Eton is required to make certain milestone payments to the Company including payments of $50 upon initial patent issuances for each Eton Product. The Eton License Agreements were conditioned upon Eton receiving net proceeds of the sale of its equity securities of not less than $10,000, which occurred in June 2017. See also Note 2, under the subheading Investment in Eton Pharmaceuticals, Inc. On May 1, 2017, the Company and Eton entered into a Management Services Agreement (the “MSA”), whereby the Company provided to Eton certain administrative services and support, including bookkeeping, web services and human resources related activities, and Eton will pay the Company a monthly amount of $10. A 30-day notice of termination was delivered to the Company on August 29, 2017. Eton paid the Company $40 for services under the MSA. As of December 31, 2018, the Company held 3.5 million shares in Eton at a fair market value of $6.12 per share. In November 2018, the Company entered into a lock-up agreement, that prohibits the sale of any of our Eton common stock until November 2019, without the approval of National Securities Corporation. As of December 31, 2018, the carrying value of the Company’s investment in Eton was $21,420. The Company owns 19.98% of the voting interests in Eton (3,500,000 shares of Eton common stock). The Company’s Chief Executive Officer, Mark L. Baum, is a director of Eton, and several employees of the Company (including Mr. Baum and the Company’s Chief Financial Officer, Andrew R. Boll) previously entered into consulting agreements with Eton. |
Investment in Surface Pharmaceu
Investment in Surface Pharmaceuticals, Inc. and Agreements - Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment in Surface Pharmaceuticals Inc. and Agreements - Related Party Transactions | NOTE 5. INVESTMENT IN SURFACE PHARMACEUTICALS, INC. AND AGREEMENTS - RELATED PARTY TRANSACTIONS In 2017 and amended in April 2018, the Company entered into two asset purchase and license agreements (the “Surface License Agreements”) with its previously wholly owned subsidiary, Surface. Pursuant to the terms of the Surface License Agreements, the Company assigned and licensed to Surface certain intellectual property and related rights to develop, formulate, make, sell, and sub-license formulations of certain topical eye drop formulations that utilize a proprietary delivery vehicle and a proprietary doxycycline capsule (collectively, the “Surface Products”). Surface is required to make royalty payments to the Company of four to six percent (4%-6%) of net sales of the Surface Products while any patent rights remain outstanding. Certain of the Surface License Agreements were conditioned upon Surface receiving net proceeds of the sale of its equity securities of not less than $10,000, which occurred in May 2018. See also Note 2, under the subheading Investment in Surface Pharmaceuticals, Inc In January 2018, the Company and Surface entered into an amended Management Services Agreement (the “MSA”), whereby the Company provided to Surface certain administrative services and support, including bookkeeping, web services and human resources related activities, and Surface paid the Company a monthly amount of $10. The MSA was terminated effective July 31, 2018. As of December 31, 2018, the Company was due $50 from Surface for reimbursable expenses and amounts due under the MSA and included in prepaid expenses and other current assets on the accompanying consolidated balance sheets. As of December 31, 2018, the Company owned 3,500,000 shares of Surface common stock (approximately 30% issued and outstanding equity interests). One of the Company’s directors, Richard L. Lindstrom, and the Company’s Chief Executive Officer, Mark L. Baum, are directors of Surface. In addition, the Company’s Chief Financial Officer, Andrew R. Boll, was a director of Surface and resigned as a director of Surface concurrent with the sale of the Surface Series A Stock. Several employees and a director of the Company (including Mr. Baum, Dr. Lindstrom and Mr. Boll) previously entered into consulting agreements and provided consulting services to Surface. Surface is required to make royalty payments to Dr. Lindstrom of 3% of net sales of certain Surface products while certain patent rights remain outstanding. Dr. Lindstrom is also a principal of Flying L Partners, an affiliate of the funding investor. The unaudited condensed results of operations information of Surface is summarized below: For the Year Ended December 31, 2018 Revenues, net $ - Loss from operations 1,370 Net loss $ (1,370 ) The unaudited condensed balance sheet information of Surface is summarized below: At December 31, 2018 Current assets $ 19,699 Non current assets 50 Total assets 19,749 Total liabilities 165 Total stockholders equity 19,584 Total liabilities and stockholders’ equity $ 19,749 |
Restricted Cash
Restricted Cash | 12 Months Ended |
Dec. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Restricted Cash | NOTE 6. RESTRICTED CASH The restricted cash at December 31, 2018 and 2017 consisted of funds held in a money market account. At December 31, 2018 and 2017, the restricted cash was recorded at amortized cost, which approximates fair value. At December 31, 2018 and 2017, the funds held in a money market account of $200 were classified as a current asset. The money market account funds are required as collateral as additional security for the Company’s New Jersey facility lease. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 7. INVENTORIES Inventories are comprised of finished compounded formulations, over-the-counter and prescription retail pharmacy products, commercial pharmaceutical products, related laboratory supplies and active pharmaceutical ingredients. The composition of inventories as of December 31, 2018 and 2017 was as follows: December 31, 2018 December 31, 2017 Raw materials $ 1,119 $ 956 Work in progress 6 - Finished goods 709 1,293 Total inventories $ 1,834 $ 2,249 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | NOTE 8. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following: December 31, 2018 December 31, 2017 Prepaid insurance $ 328 $ 164 Other prepaid expenses 334 426 Receivable due from Surface 50 - Deposits and other current assets 125 124 Total prepaid expenses and other current assets $ 837 $ 714 |
Asset Sales and Note Receivable
Asset Sales and Note Receivable | 12 Months Ended |
Dec. 31, 2018 | |
Asset Sales And Note Receivable | |
Asset Sales and Note Receivable | NOTE 9. ASSET SALES AND NOTE RECEIVABLE On June 27, 2017, the Company entered into an Asset Purchase Agreement (the “PA Agreement”) with Creative Pharmacy Solutions Central, LLC (the “Buyers”), which closed in July 2017. U nder the terms of the PA Agreement, the Company sold substantially all its assets associated with its sinus related business, including but not limited to, certain the Company’s lease obligation for its Pennsylvania based pharmacy (the “PA Assets”), for a total purchase price of approximately $450. Under the terms of the PA Agreement, the Buyers, upon closing, paid to the Company an aggregate cash amount of $40. In addition, the Buyers are obligated to pay the remaining $410 pursuant to a note bearing interest at 6% per annum (the “Sellers Note”). The Buyers are required to make forty-eight monthly cash payments to the Company of $10 following the closing, totaling $462; provided however, that the Buyer had the option to make a one-time payment of $365 any time prior to December 31, 2017, and the Company would waive any remaining amounts due on the Sellers Note. The principal amount of the Sellers Note was also subject to post-closing adjustment through December 31, 2017, if certain criteria were met, however, that period ended and no adjustments were made. There was $397 due under the Sellers Note as of December 31, 2017, which has not yet been paid. The Company recorded a loss of $69 during the year ended December 31, 2017, related to the sale of the PA Assets. The Company recorded a loss of $393, which was recorded in other expense, net, during the year ended December 31, 2018, related to the impairment and write-off of all amounts owed to it under its note receivable. The write-off is due to the Company’s estimate of collectability of the asset. In June 2017, in a separate transaction, the Company entered into an agreement to sell certain equipment to a third party for amount of $60 and closed the transaction in July 2017. The Company recorded a loss related to equipment of $52 during the year ended December 31, 2017. Assets sold during the year ended December 31, 2017 consisted of the following: December 31, 2017 Inventories $ 413 Furniture and equipment 226 639 Loss on asset sale (127 ) Assets sold $ 512 In February 2017, the Company entered into a stock purchase agreement (the “SPA”) with Livernois & London, LLC (“Livernois”). Pursuant to the terms of the SPA, the Company sold to Livernois 100% of the issued and outstanding shares of common stock of its Texas based subsidiary, ImprimisRx TX, Inc. dba ImprimisRx (“Imprimis TX”). The SPA did not transfer to Livernois any of the Company’s rights to intellectual property, products, clients, nor any of its existing business operations. As consideration for the purchase of Imprimis TX, Livernois paid the Company $10 and the Company assigned, and Livernois assumed, the remaining lease obligation totaling $113 for the Texas based facility. The Company recorded a loss of $173 from the sale of Imprimis TX for the year ended December 31, 2017, which is included in the accompanying consolidated statements of operations. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | NOTE 10. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment at December 31, 2018 and 2017 consisted of the following: December 31, 2018 December 31, 2017 Property, plant and equipment, net: Computer software and hardware $ 1,662 $ 1,239 Furniture and equipment 397 377 Lab and pharmacy equipment 3,184 2,545 Leasehold improvements 5,496 4,810 10,739 8,971 Accumulated depreciation and amortization (4,364 ) (2,756 ) $ 6,375 $ 6,215 The Company recorded depreciation and amortization expense of $1,608 and $1,401 during the years ended December 31, 2018 and 2017, respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | NOTE 11. INTANGIBLE ASSETS AND GOODWILL The Company’s intangible assets at December 31, 2018 consisted of the following: Amortization periods Accumulated Net (in years) Cost amortization Impairment Carrying value Patents 17-19 years $ 755 $ (49 ) $ - $ 706 Licenses 20 years 50 - - 50 Trademarks Indefinite 320 - - 320 Customer relationships 3-15 years 2,998 (1,014 ) (15 ) 1,969 Trade name 5 years 16 (13 ) (1 ) 2 Non-competition clause 3-4 years 294 (274 ) (20 ) - State pharmacy licenses 25 years 45 (5 ) (28 ) 12 $ 4,478 $ (1,355 ) $ (64 ) $ 3,059 Amortization expense for intangible assets for the year ended December 31 was as follows: For the For the Year Ended Year Ended December 31, 2018 December 31, 2017 Patents $ 28 $ 15 Licenses - - Customer relationships 201 257 Trade name 4 3 Non-competition clause 1 87 State pharmacy licenses 2 2 $ 235 $ 364 Estimated future amortization expense for the Company’s intangible assets at December 31, 2018 is as follows: Years ending December 31, 2019 $ 244 2020 242 2021 242 2022 242 Thereafter 2,089 $ 3,059 There have been no changes in the carrying value of the Company’s goodwill during the year ended December 31, 2018. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | NOTE 12. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses at December 31, 2018 and 2017 consisted of the following: December 31, 2018 December 31, 2017 Accounts payable $ 5,606 $ 3,241 Deferred rent 388 388 Accrued interest (see Note 13) 256 256 Accrued exit fee for note payable (see Note 13) 800 800 Total accounts payable and accrued expenses 7,050 4,685 Less: Current portion (6,250 ) (3,885 ) Non-current total accrued expenses $ 800 $ 800 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 13. DEBT LSAF Senior Note During 2015 and 2016, the Company entered into a loan and security agreement (the “Loan Agreement”) with IMMY Funding LLC, an affiliate of Life Sciences Alternative Funding LLC (“LSAF”), as lender and collateral agent. Pursuant to the terms of the Loan Agreement, as amended in January 2016 and December 2016, LSAF made available to the Company a term loan in the aggregate principal amount of up to $10,000, all of which was drawn on May 11, 2015. The term loan bore interest at a fixed per-annum rate of 12.5% and allowed for 2% of the interest to be paid-in-kind until December 2016. The Loan Agreement included a final fee of 5% of the aggregate principal amount of the term loan and prepayment fees of up to 1% of the principal balance were due on January 1, 2019. In connection with the Loan Agreement, the Company issued a warrant to purchase up to 125,000 shares of the Company’s common stock to LSAF. The Company then entered into subsequent amendments and related note payable agreements with LSAF related to the Loan Agreement and its warrants during 2016, including a convertible note agreement and note exchange agreement. Beginning January 1, 2017, the Company owed LSAF $13,332 under the Loan Agreement, its subsequent amendments and related agreements, including any interest that has been paid in kind of the principal balance, in aggregate. SWK Senior Note and LSAF Payoff – 2017 In July 2017, the Company entered into a term loan and security agreement in the principal amount of $16,000 (the “SWK Loan Agreement” or “SWK Loan”) with SWK Funding LLC and its partners (“SWK”), as lender and collateral agent. The SWK Loan Agreement was fully funded at closing with a five-year term, however, such term may be reduced to four years if certain revenue requirements are not achieved. Concurrently with the funding, the Company utilized a portion of the SWK Loan funds as full payment to an affiliate of LSAF to terminate all amounts due to LSAF in connection with the LSAF Agreement. In total, including previously made principal payments, the Company made payments of $13,999 to pay-off the LSAF Agreement and expenses, which also included the previously accrued exit fee, interest paid in kind and other expenses related to the payoff. The Company also recorded a loss on early extinguishment of debt during the year ended December 31, 2017 of $884 related to the pay-off. The SWK Loan bears interest at a variable rate equal to the three-month London Inter-Bank Offered Rate (subject to a minimum of 1.50% and maximum of 3.00%), plus an applicable margin of 10.50%. The SWK Loan Agreement permits the Company to pay interest only on the principal amount loaned thereunder for the first six payments (payments are due on a quarterly basis), which interest-only period could have been reduced to four payments if the Company had not met certain minimum revenue requirements. Following the interest-only period, the Company will be required to pay interest, plus repayments of the principal amount loaned under the SWK Loan Agreement, in quarterly payments, which shall not exceed $750 per quarter. All amounts owed under the SWK Loan Agreement, including a final fee equal to 5% of the aggregate principal amount loaned thereunder, will be due and payable on July 19, 2022. The Company may elect to prepay all, but not less than all, of the amounts owed under the SWK Loan Agreement prior to the maturity date at any time after July 19, 2019. The Company is also obligated under the SWK Loan Agreement to pay for certain expenses incurred by the SWK Lender through and after the date of the SWK Loan Agreement, including certain fees and expenses relating to the preparation and administration of the SWK Loan Agreement. The Company incurred expenses and final fee of approximately $1,282 in connection with the SWK Loan Agreement. The final fee and expenses are being amortized as interest expense over the term of the SWK Loan using the effective interest rate method and the related liability of $800 for the final fee is included in accrued expenses (see Note 12) in the accompanying consolidated balance sheets as of December 31, 2018 and 2017. In connection with the SWK Loan Agreement, the Company issued to SWK warrants to purchase up to 415,586 shares of the Company’s common stock (the “Lender Warrants”) with an exercise price of $3.08. In August 2017, the Company and SWK amended the warrants, to allow for the purchase up to 615,386 warrants with an exercise price of $2.08. The Lender Warrants are exercisable immediately, and have a term of 7 years. The Lender Warrants are subject to a cashless exercise feature, with the exercise price and number of shares issuable upon exercise subject to change in connection with stock splits, dividends, reclassifications and other conditions. The relative fair value of the Lender Warrants was approximately $982 and was estimated using the Black-Scholes-Merton option pricing model with the following assumptions: fair value of the Company’s common stock at issuance of $2.08 per share; seven-year contractual term; 113.5% volatility; 0% dividend rate; and a risk-free interest rate of 1.77%. For the years ended December 31, 2018 and 2017, debt discount amortization related to notes payable were $520 and $811, respectively. Notes payable at December 31, 2018 were as follows: December 31, 2018 SWK note $ 16,000 Less: Discount on note (1,472 ) Less: Current portion (2,529 ) Long-term portion $ 11,999 Future minimum payments under notes payable outstanding at December 31, 2018 are as follows: Amount 2019 $ 5,018 2020 4,402 2021 4,033 2022 7,410 Total minimum payments 20,863 Less: amount representing interest (4,863 ) Notes payable, gross 16,000 Less: unamortized discount (1,472 ) Less: current portion, net of unamortized discount (2,529 ) Note payable, net of current portion and unamortized debt discount $ 11,999 |
Capital Lease Obligation
Capital Lease Obligation | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Capital Lease Obligation | NOTE 14. CAPITAL LEASE OBLIGATION On August 9, 2016, the Company entered into a commercial lease agreement (the “Lease Agreement”) with Essex Capital Corporation (“Essex”). Pursuant to the terms of the Lease Agreement, the Company sold certain equipment (the “Equipment”) to Essex for a total purchase price of approximately $2,000, which was then leased back to the Company under a thirty-six month term net basis lease with monthly payments of approximately $64. The fair value of equipment sold and then leased under the Lease Agreement totaled approximately $2,000. The lease term may be extended for an additional twelve month period in the event the Company achieves certain financial milestones. The Company has the right to purchase the Equipment from Essex upon the expiration of the Lease Agreement for a purchase price equal to the Equipment’s then fair market value, with such fair market value not to exceed fifteen percent of the original Equipment value on August 9, 2016. If the Equipment is not purchased at the end of the term, the Company may automatically extend the lease on a month-to-month basis or return the Equipment and terminate the Lease Agreement. The Company expects to purchase the Equipment at the end of the term of the lease and has accrued the final payment amount of $300. The Company also incurred expenses of approximately $67 in connection with the Lease Agreement. The issuance costs were recorded as a discount. The discount is being amortized as interest expense over the term of the lease using the effective interest method. The Company used an interest rate of 16.8% for calculation of the present value of the future minimum payments under the Lease Agreement. For the years ended December 31, 2018 and 2017, debt discount amortization related to the Lease Agreement was $93 and $167, respectively, and is included in interest expense in the accompanying consolidated statement of operations. At December 31, 2018, future payments under the Company’s capital lease were as follows: Amount 2019 $ 751 Total minimum lease payments 751 Less: amount representing interest payments (15 ) Present value of future minimum lease payment 736 Less: unamortized discount (16 ) 720 Less: current portion, net of unamortized discount (720 ) Capital lease obligation net of current portion and unamortized discount $ - The cost of the equipment under capital leases as of December 31, 2018 and 2017 was $2,070, with related accumulated depreciation of $729 and $444, respectively. |
Stockholders' Equity and Stock-
Stockholders' Equity and Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity and Stock-Based Compensation | NOTE 15. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION Common Stock At December 31, 2018 and 2017, the Company had 50,000,000 and 90,000,000 shares of common stock, $0.001 par value, authorized, respectively. On July 10, 2018, the Company amended its amended and restated certificate of incorporation to reduce the number of authorized shares of common stock from 90,000,000 to 50,000,000. Issuances During the Year Ended December 31, 2017 In March 2017, we entered into securities purchase agreements with two accredited investors, which provided for the sale by the Company of 1,312,500 shares of its common stock, at a price of $2.40 per share (the “Registered Offering”). We received net proceeds of $2,940 after deducting the underwriter discount of 6% of the gross proceeds from the Registered Offering and other related expenses. In March 2017, the Company issued 25,000 shares of its restricted common stock, with a fair value of $60, as payment for investor relations related services. In April 2017, the Company issued 100,000 shares of common stock as a result of warrant exercises. The Company received cash proceeds of $179 upon the exercise of the warrants with an exercise price of $1.79. In November 2015, the Company entered into a Controlled Equity Offering SM During the year ended December 31, 2017, 56,822 shares of the Company’s common stock underlying RSUs issued to directors vested, but the issuance and delivery of these shares are deferred until the director resigns. Issuances During the Year Ended December 31, 2018 In January 2018, the Company issued 25,273 shares of its restricted common stock, with a fair value of $44, in lieu of a cash payment for accrued royalty expenses. RSUs granted in February 2015 to Andrew R. Boll, the Company’s Chief Financial Officer, vested, and in February 2018, 30,000 shares the Company’s common stock were issued to Mr. Boll. RSUs granted in February 2015 to John P. Saharek, the President of ImprimisRx (formerly, the Company’s Chief Commercial Officer), vested, and in February 2018, 30,000 shares the Company’s common stock were issued to Mr. Saharek. In March 2018, the Company issued 35,427 shares of its restricted common stock, with a fair value of $64, in lieu of a cash payment for accrued royalty expenses. In December 2018, the Company issued 15,000 shares of its restricted common stock, with a fair value of $42, related to a milestone payment due under a sales and marketing agreement. The Company sold 305,619 shares of common stock and received net proceeds of $642, after deducting $20 for sales commission and offering expenses, under the Sales Agreement during the nine months ended September 30, 2018. In November 2018, the Company terminated the Sales Agreement. During the year ended December 31, 2018, the Company issued 2,364,889 shares of its common stock related to the exercise of common stock warrants with an exercise price of $1.79, and received net proceeds of $4,233. During the year ended December 31, 2018, the Company issued 910,273 shares of its common stock related to the cashless exercise of 1,576,665 common stock warrants with an exercise price of $1.79. During the year ended December 31, 2018, 99,626 shares of the Company’s common stock underlying RSUs issued to directors vested, but the issuance and delivery of these shares are deferred until the director resigns. Preferred Stock At December 31, 2018 and 2017, the Company had 5,000,000 shares of preferred stock, $0.001 par value, authorized and no shares of preferred stock issued and outstanding. Stock Option Plan On September 17, 2007, the Company’s Board of Directors and stockholders adopted the Company’s 2007 Incentive Stock and Awards Plan, which was subsequently amended on November 5, 2008, February 26, 2012, July 18, 2012, May 2, 2013 and September 27, 2013 (as amended, the “2007 Plan”). The 2007 Plan reached its term in September 2017, and we can no longer issue additional awards under this plan, however, options still outstanding and previously issued under the 2007 Plan will remain outstanding until they are exercised, reach their maturity or are otherwise cancelled/forfeited. On June 13, 2017, the Company’s Board of Directors and stockholders adopted the Company’s 2017 Incentive Stock and Awards Plan (the “2017 Plan” together with the 2007 Plan, the “Plan”). As of December 31, 2018, the 2017 Plan provide for the issuance of a maximum of 2,000,000 shares of the Company’s common stock. The purpose of the Plan is to attract and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons in the Company’s development and financial success. Under the Plan, the Company is authorized to issue incentive stock options intended to qualify under Section 422 of the Internal Revenue Code, non-qualified stock options, restricted stock units and restricted stock. The Plan is administered by the Compensation Committee of the Company’s Board of Directors. The Company had 1,572,640 shares available for future issuances under the 2017 Plan at December 31, 2018. Stock Options A summary of stock option activity under the Plan for the year ended December 31, 2018 is as follows: Number of shares Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life Aggregate Intrinsic Value Options outstanding - January 1, 2018 2,259,979 $ 5.50 Options granted 296,500 $ 1.80 Options exercised - $ - Options cancelled/forfeit (74,470 ) $ 4.29 Options outstanding - December 31, 2018 2,482,009 $ 5.10 5.51 $ 3,990 Options exercisable 1,337,780 $ 4.94 6.22 $ 3,525 Options vested and expected to vest 2,368,925 $ 5.09 5.53 $ 3,805 The aggregate intrinsic value in the table above represents the total pre-tax amount of the proceeds, net of exercise price, which would have been received by option holders if all option holders had exercised and immediately sold all options with an exercise price lower than the market price on December 31, 2018, based on the closing price of the Company’s common stock of $5.69 on that date. During 2018 and 2017, the Company granted stock options to certain employees, directors and consultants. The stock options were granted with an exercise price equal to the current market price of the Company’s common stock, as reported by the securities exchange on which the common stock was then listed, at the grant date and have contractual terms ranging from five to 10 years. Vesting terms for options granted in 2018 and 2017 to employees and consultants typically included one of the following vesting schedules: 25% of the shares subject to the option vest and become exercisable on the first anniversary of the grant date and the remaining 75% of the shares subject to the option vest and become exercisable quarterly in equal installments thereafter over three years; quarterly vesting over three years. Certain option awards provide for accelerated vesting if there is a change in control (as defined in the Plan) and in the event of certain modifications to the option award agreement. The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option pricing model. Beginning on April 1, 2018, the Company began calculating expected volatility based solely on the historical volatilities of the common stock of the Company. In the past, the expected volatility was based on the historical volatilities of the common stock of the Company and comparable publicly traded companies, the Company previously utilized this methodology based on its estimate that it had limited relevant historical data regarding the volatility of its stock price on which to base a meaningful estimate of expected volatility. The expected volatility is based on the historical volatilities of the common stock of the Company and comparable publicly traded companies based on the Company’s belief that it currently has limited relevant historical data regarding the volatility of its stock price on which to base a meaningful estimate of expected volatility. The expected term of options granted was determined in accordance with the “simplified approach,” as the Company has limited, relevant, historical data on employee exercises and post-vesting employment termination behavior. The expected risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The financial statement effect of forfeitures is estimated at the time of grant and revised, if necessary, if the actual effect differs from those estimates. For option grants to employees and directors, the Company assigns a forfeiture factor of 10%. These factors could change in the future, which would affect the determination of stock-based compensation expense in future periods. Utilizing these assumptions, the fair value is determined at the date of grant. The table below illustrates the fair value per share determined using the Black-Scholes-Merton option pricing model with the following assumptions used for valuing options granted to employees: 2018 2017 Weighted-average fair value of options granted $ 1.42 $ 2.04 Expected terms (in years) 5.77 - 6.11 5.81 - 6.11 Expected volatility 76 - 126 % 112 - 117 % Risk-free interest rate 2.05 - 3.00 % 1.77 - 2.01 % Dividend yield - - The following table summarizes information about stock options outstanding and exercisable at December 31, 2018: Weighted Average Weighted Weighted Remaining Average Average Range of Number Contractual Exercise Number Exercise Exercise Prices Outstanding Life in Years Price Exercisable Price $1.47 - $2.60 837,375 7.74 $ 2.04 420,774 $ 2.16 $3.04 - $4.50 536,622 6.97 $ 3.96 415,784 $ 3.98 $5.49 - $6.36 99,350 4.52 $ 5.97 97,784 $ 5.97 $6.64 - $8.99 1,003,632 2.98 $ 7.98 398,408 $ 8.16 $42.80 5,030 1.62 $ 42.80 5,030 $ 42.80 $1.47 - $42.80 2,482,009 5.51 $ 5.10 1,337,780 $ 4.94 As of December 31, 2018, there was approximately $1,888 of total unrecognized compensation expense related to unvested stock options granted under the Plan. That expense is expected to be recognized over the weighted-average remaining vesting period of 1.9 years. The stock-based compensation for all stock options was $1,317 and $1,672 during the years ended December 31, 2018 and 2017, respectively. Restricted Stock Units RSU awards are granted subject to certain vesting requirements and other restrictions, including performance and market based vesting criteria. The grant-date fair value of the RSUs, which has been determined based upon the market value of the Company’s common stock on the grant date, is expensed over the vesting period of the RSUs. Unvested portions of RSUs issued to consultants are remeasured on an interim basis until vesting criteria is met. Grants During the Year Ended December 31, 2017 During the year ended December 31, 2017, the Company granted an aggregate of 62,892 RSUs to its non-employee directors valued at $200. These RSUs vest in equal quarterly installments over a one-year period subject to the director’s continued service at the vesting date, but the issuance and delivery of these shares are deferred until the director resigns. A summary of the Company’s RSU activity and related information for the year ended December 31, 2017 is as follows: Number of RSUs Weighted Average Grant Date Fair Value RSUs unvested - January 1, 2017 1,292,876 $ 2.43 RSUs granted 62,892 3.18 RSUs vested (56,822 ) 3.94 RSUs cancelled/forfeit - RSUs unvested at December 31, 2017 1,298,946 $ 2.42 Grants During the Year Ended December 31, 2018 During the year ended December 31, 2018, the Company granted an aggregate of 136,360 RSUs to its non-employee directors valued at $300. These RSUs vest in equal quarterly installments over a one-year period subject to the director’s continued service at the vesting date, but the issuance and delivery of these shares are deferred until the director resigns. A summary of the Company’s RSU activity and related information for the year ended December 31, 2018 is as follows: Number of RSUs Weighted Average Grant Date Fair Value RSUs unvested - January 1, 2018 1,298,946 $ 2.42 RSUs granted 136,360 2.20 RSUs vested (159,626 ) 3.94 RSUs cancelled/forfeit - RSUs unvested at December 31, 2018 1,275,680 $ 2.16 As of December 31, 2018, the total unrecognized compensation expense related to unvested RSUs was approximately $441 which is expected to be recognized over a weighted-average period of 0.1 years, based on estimated vesting schedules. The stock-based compensation for RSUs was $1,149 and $1,211 during the years ended December 31, 2018 and 2017, respectively. Subsidiary Stock-Based Transactions During the year ended December 31, 2018 the Company recognized $21 in stock-based compensation related to equity instruments granted by Surface and Melt to consultants, the Company’s employees and directors, including its CEO, Mark Baum, CFO, Andrew Boll, and a director, Richard Lindstrom,. The Company recorded stock-based compensation (including issuance of common stock for services and accrual for stock-based compensation) related to equity instruments granted to employees, directors and consultants as follows: For the For the Year Ended Year Ended December 31, 2018 December 31, 2017 Employees - selling and marketing $ 82 $ 449 Employees - general and administrative 2,169 2,229 Directors - general and administrative 235 205 Consultants - selling and marketing 150 60 Total $ 2,636 $ 2,943 Warrants From time to time, the Company issues warrants to purchase shares of the Company’s common stock to investors, lenders (see Note 13), underwriters and other non-employees for services rendered or to be rendered in the future. A summary of warrant activity during the year ended December 31, 2018 is as follows: Number of Shares Subject to Warrants Outstanding Weighted Avg. Exercise Price Warrants outstanding - January 1, 2018 6,264,215 $ 1.91 Granted - Exercised (3,941,554 ) 1.79 Expired (115,688 ) 6.94 Warrants outstanding and exercisable - December 31, 2018 2,206,973 $ 1.91 Weighted average remaining contractual life of the outstanding warrants in years - December 31, 2018 2.60 The table below illustrates the fair value per share determined by the Black-Scholes-Merton option pricing model with the following assumptions used for valuing warrants granted during the year ended December 31, 2017 related to loan agreements: 2017 Weighted-average fair value of warrants granted $ 1.70 Expected terms (in years) 7.00 Expected volatility 113.5 % Risk-free interest rate 1.77 % Dividend yield - All warrants outstanding as of December 31, 2018 are included in the following table: Warrants Outstanding Warrants Exercisable Warrants Exercise Warrants Expiration Warrant Series Issue Date Outstanding Price Exercisable Date Lender warrants 5/11/2015 125,000 $ 1.79 125,000 5/11/2025 Settlement warrants 8/16/2016 40,000 $ 3.75 40,000 8/16/2021 PIPE Investor and Placement Agent Warrants 12/27/2016 1,426,587 $ 1.79 1,426,587 12/27/2019 Lender warrants (see Note 13) 7/19/2017 615,386 $ 2.08 615,386 7/19/2024 2,206,973 $ 1.91 2,206,973 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 16. INCOME TAXES The Company is subject to taxation in the United States, California, New Jersey, Texas and Pennsylvania. The provision for income taxes for the years ended December 31, 2018 and 2017 are summarized below: December 31, 2018 December 31, 2017 Current: Federal $ - $ - State 6 5 Total current $ 6 $ 5 Deferred: Federal $ 3,294 $ 6,474 State 440 (283 ) Change in valuation allowance (3,734 ) (7,126 ) Total deferred - (935 ) Income tax provision (benefit) $ 6 $ (931 ) Income tax expense for the years ended December 31, 2018 and 2017, are recorded in the general and administrative expenses line item in the accompanying consolidated statements of operations. A reconciliation of income taxes computed by applying the statutory U.S. income tax rate to the Company’s loss before income taxes to the income tax provision is as follows: December 31, 2018 December 31, 2017 U.S. federal statutory tax rate 21.00 % 35.00 % Benefit of lower tax brackets 0.00 % (1.00 )% State tax benefit, net 0.04 % 1.60 % Research and development credits (0.14 )% 0.00 % Employee stock-based compensation 0.46 % (0.84 )% Loss on debt conversion 0.00 % (2.39 )% Change in Rate 0.00 % (62.97 )% Other 0.13 % 3.04 % Valuation allowance (21.93 )% 34.82 % Effective income tax rate (0.44 )% 7.27 % Deferred tax assets and liabilities reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows: December 31, 2018 December 31, 2017 Deferred tax assets (liabilities): NOL’s $ 19,726 $ 17,405 Depreciation and amortization 30 58 Other 602 351 Research & development credits 617 596 Deferred stock compensation 3,036 2,534 Basis Difference in Surface (1,464 ) - Basis Difference in Eton (6,340 ) (985 ) Park stock purchase identifiable intangibles (484 ) (501 ) Total deferred tax assets, net 15,723 19,457 Valuation allowance (15,723 ) (19,457 ) Net deferred tax liabilities $ - $ - Realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Accordingly, the net deferred tax assets have been fully offset by a valuation allowance. The valuation allowance decreased by approximately $3,700 and increased by approximately $7,100 during 2018 and 2017, respectively. As of December 31, 2018, the Company had net operating loss carryforwards for federal income tax purposes of approximately $67,463 and federal research and development tax credits of approximately $375. Under new tax law, federal NOLs can be carried forward indefinitely. The federal research credits will expire beginning in the year 2026. As of December 31, 2018, the Company had net operating loss carryforwards for state income tax purposes of approximately $64,629 which expire beginning in the year 2017 and state research and development tax credits of approximately $305 which do not expire. In March 2016, the FASB issued ASU 2016-09, Improvement to Employee Share – Based Payment Accounting Utilization of the net operating losses may be subject to substantial annual limitation due to federal and state ownership change limitations provided by the Internal Revenue Code and similar state provisions. Such annual limitations could result in the expiration of the net operating losses ad credits before their utilization. In June 2006, the FASB issued interpretation ASC 740-10-50, Accounting for Uncertainty in Income Tax Accounting for Income Taxes The Company did not have any unrecognized tax benefits as of December 31, 2018 and 2017, all of which is offset by a full valuation allowance. These unrecognized tax benefits, if recognized, would not affect the effective tax rate. There was no interest or penalties accrued at the adoption date and at December 31, 2017. A reconciliation of the change in the UTB balance from January 1, 2018 to December 31, 2017 is as follows: Fed & State Tax Balance at January 1, 2018 $ - Additions for tax positions related to current year - Additions/(reductions) for tax positions related to prior years - Balance at December 31, 2018 - Total unrecognized tax benefits as of December 31, 2018 $ - On December 27, 2017, the United States Government passed new tax legislation that, among other provisions, will lower the corporate tax rate from 35% to 21%. In addition to applying the new lower corporate tax rate in 2018 and thereafter to any taxable income the Company may have, the legislation affects the way the Company can use and carryforward net operating losses previously accumulated and results in a revaluation of deferred tax assets and liabilities recorded on our consolidated balance sheet. Given the current deferred tax assets are offset by a full valuation allowance, these changes will have no net impact on the consolidated balance sheet. However, when the Company become profitable, it will receive a reduced benefit from such deferred tax assets. The effect of the legislation was a reduction in the deferred tax assets and the corresponding valuation allowance of approximately $8,059. |
Employee Savings Plan
Employee Savings Plan | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Savings Plan | NOTE 17. EMPLOYEE SAVINGS PLAN The Company has established an employee savings plan pursuant to Section 401(k) of the Internal Revenue Code, effective January 1, 2014. The plan allows participating employees to deposit into tax deferred investment accounts up to 100% of their salary, subject to annual limits. The Company makes certain matching contributions to the plan in amounts up to 4% of the participants’ annual cash compensation, subject to annual limits. The Company contributed approximately $248 and $288 to the plan during the years ended December 31, 2018 and 2017, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 18. COMMITMENTS AND CONTINGENCIES Operating Leases In May 2014, the Company entered into a lease agreement for 7,565 square feet of office space that commenced on September 1, 2014. In May 2017, the Company entered into an amended lease agreement, to lease an additional 2,635 square feet (10,200 square feet in total). Monthly rent following the amendment is $29, with a 3% increase in the base rent amount on an annual basis. The lease agreement allows for the monthly rent amount to be abated for two months at various times during the lease agreement and expires on December 31, 2021, and includes an option to extend the lease through December 31, 2027. In January 2015, the Company entered into a commercial lease agreement, for the lease to Park of approximately 4,500 square feet of laboratory and office space. The monthly rent amount is $10 and includes annual increases of approximately 3%. The current lease term expires on December 31, 2020 and includes 2 options that allow for the lease term to be extended 10 additional years beyond the stated expiration date. In February 2015, the Company entered into a lease agreement for approximately 8,600 square feet of laboratory, warehouse and office space in Ledgewood, New Jersey. The Company amended the lease agreement in July 2017, to add approximately 7,000 square feet of additional space and amended the lease agreement again in September 2018, to add approximately 9,400 square feet. The lease term expires on July 31, 2024, and includes 2 options that allow for the lease term to be extended 10 additional years beyond the stated expiration date. The monthly rent amount is $25 and includes annual increases of approximately 3.75%, and the lease allowed for the first five months of rent amounts to be abated. Rent expense for the years ended December 31, 2018 and 2017 was $725 and $649, respectively. The following represents future annual minimum lease payments, as of December 31, 2018: 2019 $ 797 2020 857 2021 742 2022 320 2023 330 2024 196 Total $ 3,242 Legal Dr. Sobol In December 2016, Louis L. Sobol, M.D. (“Sobol”) filed a lawsuit in the U.S. District Court for the Eastern District of Michigan, Southern Division against the Company, asserting claims on behalf of himself and an as-yet-uncertified class of consumers. The claims allege violations under the Telephone Consumer Protection Act, 47 U.S.C. § 227 via the Company’s alleged transmittal of advertisements to its clients via facsimile. In June 2018, Sobol filed a motion for class certification and in July 2018 the Company filed a response in opposition to the motion for class certification. A hearing on class certification was heard in October 2018, however, prior to a decision regarding class certification was made, in February 2019, the Company entered into a proposed settlement agreement to award the proposed class up to $1,400 in damages. Due to the nature of the lawsuit and claims, the Company expects total damages related to this lawsuit will total approximately $640. The Company expects the Court will rule to accept the settlement agreement in the spring of 2019. The Company accrued an expense of $640, its estimated damages related to the settlement agreement, during the year ended December 31, 2018. Allergan USA In September 2017, Allergan USA, Inc. (“Allergan”) filed a lawsuit in the U.S. District Court for the Central District of California against Imprimis Pharmaceuticals, Inc., primarily claiming violations under the federal Lanham Act and California’s Sherman Act. The parties have each filed a motion for summary judgment and Imprimis also filed a motion to stay. The parties’ motions is scheduled to be heard on March 26, 2019. The trial date is currently set for April 2019. The Company believes the claims are frivolous, and we have previously and will continue to dispute all claims asserted against it and intends to vigorously defend these allegations. Nonetheless, the Company cannot predict the eventual outcome of this litigation, it could result in substantial costs, losses and a diversion of management’s resources and attention, which could harm the Company’s business and the value of its common stock. Spectrum In February 2018, the Company filed a complaint against Spectrum Laboratory Products, Inc., Spectrum Chemical Manufacturing Corp. and Spectrum Pharmacy Products, Inc. (collectively “Spectrum”) in the Los Angeles County Superior Court asserting claims for breach of contract, breach of implied covenant of good faith and fair dealing, violation of California Commercial Code Section 2101 and fraud. The claims stem from prior business dealings between the Company and Spectrum and allege false representation by Spectrum regarding their products, fraudulent labeling and misrepresentations of approved product usages. The complaint was filed with the Court and in May 2018, Spectrum filed an answer with the Court. In November 2018, we dismissed, without prejudice, the Company lawsuit against Spectrum. Novel Drug Solutions et al. In April 2018, Novel Drug Solutions, LLC and Eyecare Northwest, PA, (collectively “NDS”) filed a lawsuit against the Company in the U.S. District Court of Delaware asserting claims for breach of contract. The claims stem from an asset purchase agreement between the Company and NDS entered into in 2013. In July 2018, NDS filed a first amended complaint which added a claim for fraudulent inducement. In July 2018, the Company filed a motion to dismiss certain causes of action found in the complaint, and the Company motion to dismiss was denied. In October 2018, the Company filed counterclaims alleging breach of contract and breach of covenant of good faith and fair dealing and named certain individual defendants. The lawsuit is currently in the discovery phase. The Company believe the claims are frivolous and have previously and will continue to dispute all claims asserted against it and intends to vigorously defend these allegations. Nonetheless, the Company cannot predict the eventual outcome of this litigation, it could result in substantial costs, losses and a diversion of management’s resources and attention, which could harm the Company’s business and the value of its common stock. California Board of Pharmacy In March 2018, the California Board of Pharmacy filed an accusation against Park related to a compounded formulation the Company believes was legally dispensed and was, without its knowledge, inappropriately administered to a patient unknown to the Company, by the prescribing healthcare professional. The Company filed its response to the accusation and has requested a formal hearing. The Company believes the claims are frivolous and have previously and will continue to dispute all claims asserted against it and intends to vigorously defend these allegations. Nonetheless, the Company cannot predict the eventual outcome of this litigation, it could result in substantial costs, losses and a diversion of management’s resources and attention, which could harm the Company’s business and the value of its common stock. Product and Professional Liability Product and professional liability litigation represents an inherent risk to all firms in the pharmaceutical and pharmacy industry. The Company utilizes traditional third-party insurance policies with regard to its product and professional liability claims. Such insurance coverage at any given time reflects current market conditions, including cost and availability, when the policy is written. John Erick et al. In January 2018, John Erick and Deborah Ferrell, successors-in-interest and heirs of Jade Erick, (collectively “Erick”) filed a lawsuit in the San Diego County Superior against Kim Kelly, ND, MPH asserting claims related to death of Jade Erick. In April 2018, Erick filed an amendment to the lawsuit, naming the Company as a co-defendant. In September 2018, co-defendant Dr. Kelly filed a cross-complaint against the Company and various Spectrum entities. The cross-complaint seeks indemnity and contribution from the Company and Spectrum. The Company answered the claims filed by Dr. Kelly in October 2018. The case is currently in the discovery phase. The Company believe the claims are frivolous and have previously and will continue to dispute all claims asserted against it and intends to vigorously defend these allegations. Nonetheless, the Company cannot predict the eventual outcome of this litigation, it could result in substantial costs, losses and a diversion of management’s resources and attention, which could harm the Company’s business and the value of its common stock. General and Other In the ordinary course of business, the Company may face various claims brought by third parties and it may, from time to time, make claims or take legal actions to assert its rights, including intellectual property disputes, contractual disputes and other commercial disputes. Any of these claims could subject the Company to litigation. Indemnities In addition to the indemnification provisions contained in the Company’s charter documents, the Company generally enters into separate indemnification agreements with each of the Company’s directors and officers. These agreements require the Company, among other things, to indemnify the director or officer against specified expenses and liabilities, such as attorneys’ fees, judgments, fines and settlements, paid by the individual in connection with any action, suit or proceeding arising out of the individual’s status or service as the Company’s director or officer, other than liabilities arising from willful misconduct or conduct that is knowingly fraudulent or deliberately dishonest, and to advance expenses incurred by the individual in connection with any proceeding against the individual with respect to which the individual may be entitled to indemnification by the Company. The Company also indemnifies its lessors in connection with its facility leases for certain claims arising from the use of the facilities. These indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not incurred any payments for these obligations and, therefore, no liabilities have been recorded for these indemnities in the accompanying consolidated balance sheets. Klarity License Agreement – Related Party In April 2017, the Company entered into a license agreement (the “Klarity License Agreement”) with Richard L. Lindstrom, M.D., a member of its Board of Directors. Pursuant to the terms of the Klarity License Agreement, the Company licensed certain intellectual property and related rights from Dr. Lindstrom to develop, formulate, make, sell, and sub-license the topical ophthalmic solution Klarity designed to protect and rehabilitate the ocular surface (the “Klarity Product”). Under the terms of the Klarity License Agreement, the Company is required to make royalty payments to Dr. Lindstrom ranging from 3% to 6% of net sales, dependent upon the final formulation of the Klarity Product sold. In addition, the Company is required to make certain milestone payments to Dr. Lindstrom including: (i) an initial payment of $50 upon execution of the Klarity License Agreement, (ii) a second payment of $50 following the first $50 in net sales of the Klarity Product; and (iii) a final payment of $50 following the first $100 in net sales of the Klarity Product. All of the above referenced milestone payments were payable at the Company’s election in cash or shares of the Company’s restricted common stock. Dr. Lindstrom was paid $122 and $50 in cash during the years ended December 31, 2018 and 2017, respectively, and was due an additional $15 and $19 at December 31, 2018 and 2017, respectively. The Company incurred $118 and $183 for royalty expenses related to the Klarity License Agreement during the years ended December 31, 2018 and 2017, respectively. Dr. Lindstrom is a member of the Company’s Board of Directors. Sales and Marketing Agreements During 2017 and 2018, the Company entered various sales and marketing agreements with certain organizations, to provide sales and marketing representation services to ImprimisRx in select geographies in the U.S., in connection with the Company’s ophthalmic compounded formulations. Under the terms of the sales and marketing agreements, the Company is required to make commission payments to equal to 10% - 14% of net sales for products above and beyond the initial existing sales amounts. In addition, the Company is required to make periodic milestone payments to certain organizations in shares of the Company’s restricted common stock if net sales in the assigned territory reach certain future levels by the end of their terms, as applicable. The Company accrued $42 related to stock-based payments for these agreements during the year ended December 31, 2018, and $1,511 and $183 were incurred under these agreements for commission expenses during the years ended December 31, 2018 and 2017, respectively. Asset Purchase, License and Related Agreements The Company has acquired and sourced intellectual property rights related to certain proprietary innovations from certain inventors and related parties (the “Inventors”) through multiple asset purchase agreements, license agreements, strategic agreements and commission agreements. In general, these agreements provide that the Inventors will cooperate with the Company in obtaining patent protection for the acquired intellectual property and that the Company will use commercially reasonable efforts to research, develop and commercialize a product based on the acquired intellectual property. In addition, the Company has acquired a right of first refusal on additional intellectual property and drug development opportunities presented by these Inventors. In consideration for the acquisition of the intellectual property rights, the Company is obligated to make payments to the Inventors based on the completion of certain milestones, generally consisting of: (1) a payment payable within 30 days after the issuance of the first patent in the United States arising from the acquired intellectual property (if any); (2) a payment payable within 30 days after the Company files the first investigational new drug application (“IND”) with the FDA for the first product arising from the acquired intellectual property (if any); (3) for certain of the Inventors, a payment payable within 30 days after the Company files the first new drug application with the FDA for the first product arising from the acquired intellectual property (if any); and (4) certain royalty payments based on the net receipts received by the Company in connection with the sale or licensing of any product based on the acquired intellectual property (if any), after deducting (among other things) the Company’s development costs associated with such product. If, following five years after the date of the applicable asset purchase agreement, the Company either (a) for certain of the Inventors, has not filed an IND or, for the remaining Inventors, has not initiated a study where data is derived, or (b) has failed to generate royalty payments to the Inventors for any product based on the acquired intellectual property, the Inventors may terminate the applicable asset purchase agreement and request that the Company re-assign the acquired technology to the Inventors. $245 and $108 were accrued in accounts payable and accrued expenses under these agreements during the years ended December 31, 2018 and 2017, respectively, and $561 and $153 were incurred under these agreements as royalty expenses for the years ended December 31, 2018 and 2017, respectively. |
Segment Information and Concent
Segment Information and Concentrations | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information and Concentrations | NOTE 19. SEGMENT INFORMATION AND CONCENTRATIONS The Company operates the business on the basis of a single reportable segment, which is the business of developing proprietary drug therapies and providing such therapies through sterile and non-sterile pharmaceutical compounding services and drug development. While the Company is described as having certain individual businesses, in general, those business operations often overlap, decisions and resources may be intermingled between components and discrete financial information about the businesses, on an individual basis, is not available. The Company’s chief operating decision-maker is the Chief Executive Officer, who evaluates the Company as a single operating segment. The Company categorizes revenues by geographic area based on selling location. All operations are currently located in the United States; therefore, total revenues for 2018 and 2017 are attributed to the United States. All long-lived assets at December 31, 2018 and 2017 are located in the United States. The Company sells its compounded formulations to a large number of customers. No single customer contributed 10% or more of the Company’s total pharmacy sales in the years ended December 31, 2018 and 2017. The Company receives its active pharmaceutical ingredients from three main suppliers during the years ended December 31, 2018 and 2017. These suppliers collectively accounted for 51% and 68% of drug and chemical purchases during the years ended December 31, 2018 and 2017, respectively. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 20. SUBSEQUENT EVENTS The Company has performed an evaluation of events occurring subsequent to December 31, 2018 through the filing date of this Annual Report on Form 10-K (the “Annual Report”). Based on its evaluation, nothing other than the events described below needs to be disclosed. From January 1, 2019 through the date of the filing of the Annual Report, the Company issued 52,000 shares of its common stock related to the exercise of common stock warrants with an exercise price of $1.79 and received net proceeds of $93. From January 1, 2019 through the date of the filing of the Annual Report, the Company issued 293,984 shares of its common stock related to the cashless exercise of 419,800 common stock warrants with an exercise price of $1.79. Mayfield and Elle Pharmaceuticals On February 1, 2019, the Company entered into an Asset Purchase Agreement (the “May Asset Purchase Agreement”) with Elle Pharmaceutical, LLC (“Elle”), where the Company acquired intellectual property and related rights from Elle to develop, formulate, make, sell, and sub-license lidocaine-based gel formulations (collectively, the “May Products”). As consideration, the Company agreed to pay Elle $25 at the time of signing the May Asset Purchase Agreement and make royalty payments to Elle up to seven and a half percent (7.5%) of net sales of the Products as compounded drug formulations. In connection with the May Asset Purchase Agreement, the Company assigned the May Products to Mayfield, and Mayfield entered into a separate Royalty Agreement with Elle (the “Elle Royalty Agreement”). Pursuant to the terms of the Elle Royalty Agreement, Mayfield, is required to make royalty payments to Elle up to seven and a half percent (7.5%) of net sales of the May Products as commercially available drugs (e.g. a market approved drug via the U.S. Food and Drug Administration 505(b)(2) pathway), while any patent rights remain outstanding, as well as other conditions. In addition, Mayfield agreed to pay Elle $175 upon Mayfield receiving third-party financing equal to or greater than $10,000 of gross proceeds. In connection with the May Asset Purchase Agreement and Elle Royalty Agreement Mayfield issued to Elle 1,000,000 of its common stock. Segment of Business Operations Beginning on January 1, 2019, the Company began evaluating performance of the Company based on operating segments. Segment performance for its two operating segments will be based on segment contribution. Our reportable segments consist of (i) our commercial stage pharmaceutical compounding business (Pharmaceutical Compounding), generally including the operations of our ImprimisRx and Park Compounding businesses; and (ii) our start-up operations associated with pharmaceutical drug development business (Pharmaceutical Drug Development). Segment contribution for our segments represents net revenues less cost of sales, research and development, selling and marketing expenses, and select general and administrative expenses. The Company does not evaluate the following items at the segment level: ● Operating expenses within selling, general and administrative expenses that result from the impact of corporate initiatives. Corporate initiatives primarily include integration, restructuring, acquisition and other shared costs. ● Selling, general and administrative expenses that result from shared infrastructure, including certain expenses associated with legal matters, our board of directors and principal executive officers, investor relations and other like shared expenses. ● Other select revenues and operating expenses including R&D expenses, amortization, and asset sales and impairments, net as not all such information has been accounted for at the segment level, or such information has not been used by all segments. ● Total assets including capital expenditures. For periods beginning on and after January 1, 2019, results of operations, including segment net revenues, segment operating expenses and segment contribution, the Company expects to present segment information in a format similar to the table below: Pharmaceutical Pharmaceutical Compounding Drug Development Total Net revenues $ $ $ Cost of sales Gross profit Operating expenses: Selling, general and administrative Research and development Segment contribution Corporate Research and development Amortization Asset sales and impairments, net Operating loss $ |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Harrow has prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of the Company and its wholly and majority owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management are, among others, allowance for doubtful accounts and contractual adjustments, realizability of inventories, valuation of investments in equity securities, deferred taxes, goodwill and intangible assets, recoverability of long-lived assets and goodwill, valuation of contingent acquisition obligations and deferred acquisition obligations, valuation of notes payable, and valuation of stock-based transactions with employees and non-employees. Actual results could differ from those estimates. |
Liquidity | Liquidity The Company has incurred significant operating losses and negative cash flows from operations since its inception. The Company incurred operating losses of $5,217 and $12,163 for the years ended December 31, 2018 and 2017, respectively, and had an accumulated deficit of $74,211 and $88,836 as of December 31, 2018 and 2017, respectively. In addition, cash provided by (used in) operating activities were $687 and $(8,803) for the years ended December 31, 2018 and 2017, respectively. While there is no assurance, the Company believes its existing cash resources, restricted cash and marketable securities of approximately $28,258 at December 31, 2018 will be sufficient to sustain the Company’s planned level of operations for at least the next twelve months. However, estimates of operating expenses and working capital requirements could be incorrect, and the Company could use its cash resources faster than anticipated. Further, some or all of the ongoing or planned activities may not be successful and could result in further losses. The Company may seek to increase liquidity and capital resources by one or more of the following which may include, but are not limited to: the sale of assets and/or businesses, obtaining financing through the issuance of equity, debt, or convertible securities; and working to increase revenue growth through sales. There is no guarantee that the Company will be able to obtain capital when needed on terms it deems as acceptable, or at all. |
Revenue Recognition and Deferred Revenue | Revenue Recognition and Deferred Revenue The Company recognizes revenue at the time of transfer of promised goods to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. (see Note 3). |
Cost of Sales | Cost of Sales Cost of sales includes direct and indirect costs to manufacture formulations and other products sold, including active pharmaceutical ingredients, personnel costs, packaging, storage, royalties (see Note 18), shipping and handling costs and the write-off of obsolete inventory. |
Research and Development | Research and Development The Company expenses all costs related to research and development as they are incurred. Research and development expenses consist of expenses incurred in performing research and development activities, including salaries and benefits, other overhead expenses, and costs related to clinical trials, contract services and outsourced contracts. |
Debt Issuance Costs and Debt Discount | Debt Issuance Costs and Debt Discount Debt issuance costs and the debt discount are recorded net of notes payable and capital lease obligations in the consolidated balance sheets. Amortization expense of debt issuance costs and the debt discount is calculated using the effective interest method over the term of the debt and is recorded in interest expense in the accompanying consolidated statements of operations. |
Intellectual Property | Intellectual Property The costs of acquiring intellectual property rights to be used in the research and development process, including licensing fees and milestone payments, are charged to research and development expense as incurred in situations where the Company has not identified an alternative future use for the acquired rights, and are capitalized in situations where we have identified an alternative future use for the acquired rights. Patents and trademarks are recorded at cost and capitalized at a time when the future economic benefits of such patents and trademarks become more certain (see Goodwill and Intangible Assets). The Company began capitalizing certain costs associated with acquiring intellectual property rights during 2015, if costs are not capitalized they are expensed as incurred. |
Income Taxes | Income Taxes As part of the process of preparing the Company’s consolidated financial statements, the Company must estimate the actual current tax liabilities and assess permanent and temporary differences that result from differing treatment of items for tax and accounting purposes. The temporary differences result in deferred tax assets and liabilities, which are included within the consolidated balance sheets. The Company must assess the likelihood that the deferred tax assets will be recovered from future taxable income and, to the extent the Company believes that recovery is not more likely than not, a valuation allowance must be established which reduces the amount of deferred tax assets recorded on the consolidated balance sheets. To the extent the Company establishes a valuation allowance or increase or decrease this allowance in a period, the impact will be included in income tax expense in the consolidated statement of operations. The Company accounts for income taxes under the provisions of Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 740, “Income Taxes”, or ASC 740. As of December 31, 2018, and 2017, there were no unrecognized tax benefits included in the consolidated balance sheets that would, if recognized, affect the effective tax rate. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties in its consolidated balance sheets at December 31, 2018 and 2017, and has not recognized interest and/or penalties in the consolidated statements of operations for the years ended December 31, 2018 and 2017. The Company is subject to taxation in the United States, California, Florida, Georgia, Illinois, New Jersey, New York, and Wisconsin. The Company’s tax years since 2000 may be subject to examination by the federal and state tax authorities due to the carryforward of unutilized net operating losses. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents include short-term, highly liquid investments with maturities of three months or less at the time of acquisition. |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company places its cash with financial institutions deemed by management to be of high credit quality. The Federal Deposit Insurance Corporation (“FDIC”) provides basic deposit coverage with limits up to $250 per owner. From time to time the Company has cash deposits in excess of FDIC limits. |
Investment in Eton Pharmaceuticals, Inc. | Investment in Eton Pharmaceuticals, Inc. In April 2017, the Company formed Eton as a wholly owned subsidiary. In June 2017 the Company lost voting and ownership control of Eton and it ceased consolidating Eton’s financial statements. At the time of deconsolidation, the Company recorded a gain of $5,725 and adjusted the carrying value in Eton to reflect the increased valuation of Eton and the Company’s new ownership percent in accordance with ASC 810-10-40-4(c), Consolidation In November 2018, Eton closed on an initial public offering of 4,140,000 shares of its common stock at $6.00 per share for gross proceeds of approximately $24,800 (the “Eton IPO”). Following the close of the Eton IPO, the Company’s common stock position in Eton equaled 19.98% of the equity and voting interests issued and outstanding of Eton, and it ceased using the equity method of accounting for its investment in Eton. The Company recognizes earnings and losses of Eton in its consolidated financial statements based on the fair market value of the shares owned and adjust the carrying amount of the Company’s investment in Eton accordingly. Eton’s common stock currently trades on the NASDAQ Global Market exchange. At December 31, 2018, the fair market value of Eton’s common stock was $6.12 per share, the closing share price of Eton common stock on that day. In accordance with ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities |
Accounts Receivable | Accounts Receivable Accounts receivable are stated net of allowances for doubtful accounts and contractual adjustments. The accounts receivable balance primarily includes amounts due from customers the Company has invoiced or from third-party providers (e.g., insurance companies and governmental agencies), but for which payment has not been received. Charges to bad debt are based on both historical write-offs and specifically identified receivables. Accounts receivable are presented net of allowances for doubtful accounts and contractual adjustments in the amount of $270 and $275 as of December 31, 2018 and 2017, respectively. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out basis. The Company evaluates the carrying value of inventories on a regular basis, based on the price expected to be obtained for products in their respective markets compared with historical cost. Write-downs of inventories are considered to be permanent reductions in the cost basis of inventories. The Company also regularly evaluates its inventories for excess quantities and obsolescence (expiration), taking into account such factors as historical and anticipated future sales or use in production compared to quantities on hand and the remaining shelf life of products and active pharmaceutical ingredients on hand. The Company establishes reserves for excess and obsolete inventories as required based on its analyses. |
Investment in Surface Pharmaceuticals, Inc. | Investment in Surface Pharmaceuticals, Inc. In April 2017, the Company formed Surface as a wholly owned subsidiary. In May and July 2018, Surface entered into and closed on definitive stock purchase agreements with an institutional investor for the purchase of Surface’s Series A Preferred Stock (the “Surface Series A Stock”) that resulted in total proceeds to Surface of approximately $21,000. At the time of the first closing in May 2018, the Company lost voting and ownership control of Surface and it ceased consolidating Surface’s financial statements. The Surface Series A Stock (i) was issued at a purchase price of $3.30 per share; (ii) will vote together with the common stock and all other shares of stock of Surface having general voting power; (iii) will be entitled to the number of votes equal to the number of shares of preferred stock held; (iv) will hold liquidation preference over all other equity interests in Surface; and (v) will have mandatory conversion requirements into Surface common stock upon events including an underwritten initial public offering of Surface common stock or similar transaction. At the time of deconsolidation, the Company recorded a gain of $5,320 and adjusted the carrying value in Surface to reflect the increased valuation of Surface and the Company’s new ownership percent in accordance with ASC 810-10-40-4(c). The Company owns 3,500,000 common shares (which is approximately 30% of the equity interest as of December 31, 2018, and calculated after the second closing of the sale Series A Preferred Stock in July 2018) of Surface and uses the equity method of accounting for this investment, as management has determined that the Company has the ability to exercise significant influence over the operating and financial decisions of Surface. Under this method, the Company recognizes earnings and losses of Surface in its consolidated financial statements and adjusts the carrying amount of its investment in Surface accordingly. The Company’s share of earnings and losses are based on the shares of common stock and in-substance common stock of Surface held by the Company. Any intra-entity profits and losses are eliminated. During the year ended December 31, 2018, the Company recorded equity in net loss of Surface of $373 (which, net of the equity in net loss of Surface totaled an investment gain from Surface of $4,947 during the year ended December 31, 2018). As of December 31, 2018, the carrying value of the Company’s investment in Surface was $4,947. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is stated at cost less accumulated depreciation and amortization. Depreciation and amortization is calculated using the straight-line method over the estimated useful life of the asset. Leasehold improvements and capital lease equipment are amortized over the estimated useful life or remaining lease term, whichever is shorter. Computer software and hardware and furniture and equipment are depreciated over three to five years. |
Business Combinations | Business Combinations The Company accounts for business combinations by recognizing the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at their fair values on the acquisition date. The purchase price allocation process requires management to make significant estimates and assumptions, especially with respect to intangible assets, estimated contingent consideration payments and pre-acquisition contingencies. Examples of critical estimates in valuing certain of the intangible assets the Company has acquired or may acquire in the future include but are not limited to: ● future expected cash flows from product sales, support agreements, consulting contracts, other customer contracts, and acquired developed technologies and patents; and ● discount rates utilized in valuation estimates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. Additionally, any change in the fair value of the acquisition-related contingent consideration subsequent to the acquisition date, including changes from events after the acquisition date, such as changes in our estimates of relevant revenue or other targets, will be recognized in earnings in the period of the estimated fair value change. A change in fair value of the acquisition-related contingent consideration or the occurrence of events that cause results to differ from our estimates or assumptions could have a material effect on the consolidated financial position, statements of operations or cash flows in the period of the change in the estimate. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Patents and trademarks are recorded at cost and capitalized at a time when the future economic benefits of such patents and trademarks become more certain. At that time, the Company capitalizes third-party legal costs and filing fees associated with obtaining and prosecuting claims related to its patents and trademarks. Once the patents have been issued, the Company amortizes these costs over the shorter of the legal life of the patent or its estimated economic life, generally 20 years, using the straight-line method. Trademarks are an indefinite life intangible asset and are assessed for impairment based on future projected cash flows as further described below. The Company reviews its goodwill and indefinite-lived intangible assets for impairment as of January 1 of each year and when an event or a change in circumstances indicates the fair value of a reporting unit may be below its carrying amount. Events or changes in circumstances considered as impairment indicators include but are not limited to the following: ● significant underperformance of the Company’s business relative to expected operating results; ● significant adverse economic and industry trends; ● significant decline in the Company’s market capitalization for an extended period of time relative to net book value; and ● expectations that a reporting unit will be sold or otherwise disposed. The goodwill impairment test consists of a two-step process as follows: Step 1. The Company compares the fair value of each reporting unit to its carrying amount, including the existing goodwill. The fair value of each reporting unit is determined using a discounted cash flow valuation analysis. The carrying amount of each reporting unit is determined by specifically identifying and allocating the assets and liabilities to each reporting unit based on headcount, relative revenues or other methods as deemed appropriate by management. If the carrying amount of a reporting unit exceeds its fair value, an indication exists that the reporting unit’s goodwill may be impaired and the Company then performs the second step of the impairment test. If the fair value of a reporting unit exceeds its carrying amount, no further analysis is required. Step 2. If further analysis is required, the Company compares the implied fair value of the reporting unit’s goodwill, determined by allocating the reporting unit’s fair value to all of its assets and its liabilities in a manner similar to a purchase price allocation, to its carrying amount. If the carrying amount of the reporting unit’s goodwill exceeds its fair value, an impairment loss will be recognized in an amount equal to the excess. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, such as property, plant and equipment, purchased intangibles subject to amortization and patents and trademarks, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the consolidated balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposal group classified as held-for-sale would be presented separately in the appropriate asset and liability sections of the consolidated balance sheet, if material (See Note 9). |
Third Party Billing and Collection Agreements | Third Party Billing and Collection Agreements In connection with its acquisition of Park, the Company entered into a billing and collection agreement with a third party to assist in the billing and collection of workers’ compensation claims. Under the terms of the agreement, the Company is obligated to pay a fixed fee to the third party equal to 55% of the amounts billed and collected under the workers’ compensation claims. The Company accrues for such fees in accounts payable and accrued expenses in the accompanying consolidated balance sheets. Total billing and collection management expense under this agreement for the years ended December 31, 2018 and 2017 was $1 and $0, respectively, and is included in selling and marketing expenses in the accompanying consolidated statements of operations. The amount due under the agreement as of December 31, 2018 and 2017 was $25 and $41, respectively. |
Deferred Rent | Deferred Rent The Company accounts for rent expense related to its operating leases by determining total minimum rent payments on the leases over their respective periods and recognizing the rent expense on a straight-line basis. The difference between the actual amount paid and the amount recorded as rent expense in each fiscal year and interim periods within each fiscal year is recorded as an adjustment to deferred rent (see Note 18). |
Fair Value Measurements | Fair Value Measurements Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability. GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The established fair value hierarchy prioritizes the use of inputs used in valuation methodologies into the following three levels: ● Level 1: Applies to assets or liabilities for which there are quoted prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and must be used to measure fair value whenever available. ● Level 2: Applies to assets or liabilities for which there are significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. ● Level 3: Applies to assets or liabilities for which there are significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. For example, Level 3 inputs would relate to forecasts of future earnings and cash flows used in a discounted future cash flows method. At December 31, 2017, the Company did not have any financial assets or liabilities that are measured on a recurring basis. At December 31, 2018, the Company measured its investment in Eton on a recurring basis. The Company’s investment in Eton is classified as Level 1 as the fair value is determined using quoted market prices in active markets for the same securities. As of December 31, 2018, the fair market value of the Company’s investment in Eton was $21,420. The Company’s financial instruments included cash and cash equivalents, restricted short-term investments, investment in Eton, accounts receivable, accounts payable and accrued expenses, accrued payroll and related liabilities, deferred revenue and customer deposits, deferred acquisition obligations, notes payable and capital leases. The carrying amount of these financial instruments, except for deferred acquisition obligations, notes payable and capital leases, approximates fair value due to the short-term maturities of these instruments. The Company’s restricted short-term investments are carried at amortized cost, which approximates fair value. Based on borrowing rates currently available to the Company, the carrying values of the deferred acquisition obligations, notes payable and capital leases, approximate their respective fair values. |
Stock-Based Compensation | Stock-Based Compensation All stock-based payments to employees, directors and consultants, including grants of stock options, warrants, restricted stock units (“RSUs”) and restricted stock, are recognized in the consolidated financial statements based upon their estimated fair values. The Company uses the Black-Scholes-Merton option pricing model and Monte Carlo Simulation to estimate the fair value of stock-based awards. The estimated fair value is determined at the date of grant. The financial statement effect of forfeitures is estimated at the time of grant and revised, if necessary, if the actual effect differs from those estimates. The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows FASB guidance. The measurement date for the estimated fair value of the equity instruments issued is the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the estimated fair value of the equity instrument is primarily recognized over the term of the consulting agreement. According to FASB guidance, an asset acquired in exchange for the issuance of fully vested, nonforfeitable equity instruments should not be presented or classified as an offset to equity on the grantor’s balance sheet once the equity instrument is granted for accounting purposes. Accordingly, the Company records the estimated fair value of nonforfeitable equity instruments issued for future consulting services as prepaid stock-based consulting expenses in its consolidated balance sheets. |
Basic and Diluted Net Income (Loss) Per Common Share | Basic and Diluted Net Income (Loss) per Common Share Basic net income (loss) per common share is computed by dividing income (loss) attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share is computed by dividing the income (loss) attributable to common stockholders for the period by the weighted average number of common and common equivalent shares, such as stock options and warrants, outstanding during the period. Basic and diluted net income (loss) per share is computed using the weighted average number of shares of common stock outstanding during the period. Common stock equivalents (using the treasury stock or “if converted” method) from deferred acquisition obligations, convertible note payable, stock options, unvested restricted stock units (“RSUs”) and warrants were 6,201,355 and 9,980,454 at December 31, 2018 and 2017, respectively, and, for the year ended December 31, 2017 are excluded from the calculation of diluted net (loss) per share for the period presented, because the effect is anti-dilutive for that time period. Included in the basic and diluted net income (loss) per share calculation were RSUs awarded to directors that had vested, but the issuance and delivery of the shares are deferred until the director resigns. The number of shares underlying vested RSUs at December 31, 2018 and 2017 was 236,693 and 137,067, respectively. The following table shows the computation of basic net income (loss) per share of common stock for the years ended December 31, 2018 and 2017: For the For the Year Ended Year Ended December 31, 2018 December 30, 2017 Numerator – net income (loss) $ 14,625 $ (11,985 ) Denominator – weighted average number of shares outstanding, basic 21,917,570 20,027,712 Net income (loss) per share, basic $ 0.67 $ (0.60 ) For the year end December 31, 2018, the Company computed diluted net income per share using the weighted-average number of common shares and dilutive common equivalent shares outstanding during that period. Diluted common equivalent shares for the year ended December 31, 2018, consisted of the following: For the Year Ended December 31, 2018 Shares Diluted shares related to: 21,917,570 Warrants 1,844,272 Restricted stock units - Stock options 50,203 Dilutive common equivalent shares 23,812,045 The following table shows the computation of diluted net income (loss) per share using the weighted-average number of common shares and dilutive common equivalent shares outstanding for the years ended December 31, 2018 and 2017: For the For the Year Ended Year Ended December 31, 2018 December 30, 2017 Numerator – net income (loss) $ 14,625 $ (11,985 ) Weighted average number of shares outstanding, basic 21,917,570 20,027,712 Dilutive common equivalents 1,894,475 - Denominator – number of shares used for diluted earnings per share computation 23,812,045 20,027,712 Net income (loss) per share, diluted $ 0.61 $ (0.60 ) |
Reclassification | Reclassification Certain amounts in the 2017 consolidated financial statements have been reclassified to conform to the classifications used to prepare the 2018 consolidated financial statements. These reclassifications had no material impact on the Company’s financial position, results of operations, or cash flow as previously reported. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers The new standard became effective for the Company beginning January 1, 2018 and permits two methods of adoption: the full retrospective method, which requires the standard to be applied to each prior period presented, or the modified retrospective method, which requires the cumulative effect of adoption to be recognized as an adjustment to opening retained earnings in the period of adoption. The Company adopted the standard using the modified retrospective method. There was no effect for any adjustments to retained earnings upon adoption of the standard on January 1, 2018. Adoption of the new standard resulted in additional revenue-related disclosures in the footnotes to the Company’s consolidated financial statements (see Note 3). In January 2016, the FASB issued ASU 2016-01 , which requires that investments in equity securities (excluding equity method investments) be measured at fair value with changes in fair value recognized in net earnings. Under previous guidelines, changes in fair value of available-for-sale equity securities are recorded in other comprehensive income. The Company adopted ASU 2016-01 as of January 1, 2018. As of that date, a the Company did not have any investments in equity securities (at January 1, 2018) that were not equity method investments. In January 2017, the FASB issued ASU 2017-01, Business Combinations, Clarifying the Definition of a Business In August 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Classification Restricted Cash In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation: Scope of Modification Accounting In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued new lease accounting guidance in ASU No. 2016-02, Leases In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Basic Earnings Per Common Share | The following table shows the computation of basic net income (loss) per share of common stock for the years ended December 31, 2018 and 2017: For the For the Year Ended Year Ended December 31, 2018 December 30, 2017 Numerator – net income (loss) $ 14,625 $ (11,985 ) Denominator – weighted average number of shares outstanding, basic 21,917,570 20,027,712 Net income (loss) per share, basic $ 0.67 $ (0.60 ) |
Schedule of Diluted Common Equivalent Shares | For the year end December 31, 2018, the Company computed diluted net income per share using the weighted-average number of common shares and dilutive common equivalent shares outstanding during that period. Diluted common equivalent shares for the year ended December 31, 2018, consisted of the following: For the Year Ended December 31, 2018 Shares Diluted shares related to: 21,917,570 Warrants 1,844,272 Restricted stock units - Stock options 50,203 Dilutive common equivalent shares 23,812,045 |
Schedule of Diluted Earnings Per Common Share | The following table shows the computation of diluted net income (loss) per share using the weighted-average number of common shares and dilutive common equivalent shares outstanding for the years ended December 31, 2018 and 2017: For the For the Year Ended Year Ended December 31, 2018 December 30, 2017 Numerator – net income (loss) $ 14,625 $ (11,985 ) Weighted average number of shares outstanding, basic 21,917,570 20,027,712 Dilutive common equivalents 1,894,475 - Denominator – number of shares used for diluted earnings per share computation 23,812,045 20,027,712 Net income (loss) per share, diluted $ 0.61 $ (0.60 ) |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenue | Revenue disaggregated by revenue source for the year ended December 31, 2018 and 2017, consists of the following: For the year ended December 31, 2018 2017 Product sales, net $ 41,334 $ 26,684 License revenues 38 90 Total revenues $ 41,372 $ 26,774 |
Investment in Surface Pharmac_2
Investment in Surface Pharmaceuticals, Inc. and Agreements - Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Condensed Income Statement | The unaudited condensed results of operations information of Surface is summarized below: For the Year Ended December 31, 2018 Revenues, net $ - Loss from operations 1,370 Net loss $ (1,370 ) |
Schedule of Condensed Balance Sheet | The unaudited condensed balance sheet information of Surface is summarized below: At December 31, 2018 Current assets $ 19,699 Non current assets 50 Total assets 19,749 Total liabilities 165 Total stockholders equity 19,584 Total liabilities and stockholders’ equity $ 19,749 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | The composition of inventories as of December 31, 2018 and 2017 was as follows: December 31, 2018 December 31, 2017 Raw materials $ 1,119 $ 956 Work in progress 6 - Finished goods 709 1,293 Total inventories $ 1,834 $ 2,249 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following: December 31, 2018 December 31, 2017 Prepaid insurance $ 328 $ 164 Other prepaid expenses 334 426 Receivable due from Surface 50 - Deposits and other current assets 125 124 Total prepaid expenses and other current assets $ 837 $ 714 |
Asset Sales and Note Receivab_2
Asset Sales and Note Receivable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Asset Sales And Note Receivable | |
Schedule of Assets Sales and Note Receivable | Assets sold during the year ended December 31, 2017 consisted of the following: December 31, 2017 Inventories $ 413 Furniture and equipment 226 639 Loss on asset sale (127 ) Assets sold $ 512 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment at December 31, 2018 and 2017 consisted of the following: December 31, 2018 December 31, 2017 Property, plant and equipment, net: Computer software and hardware $ 1,662 $ 1,239 Furniture and equipment 397 377 Lab and pharmacy equipment 3,184 2,545 Leasehold improvements 5,496 4,810 10,739 8,971 Accumulated depreciation and amortization (4,364 ) (2,756 ) $ 6,375 $ 6,215 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The Company’s intangible assets at December 31, 2018 consisted of the following: Amortization periods Accumulated Net (in years) Cost amortization Impairment Carrying value Patents 17-19 years $ 755 $ (49 ) $ - $ 706 Licenses 20 years 50 - - 50 Trademarks Indefinite 320 - - 320 Customer relationships 3-15 years 2,998 (1,014 ) (15 ) 1,969 Trade name 5 years 16 (13 ) (1 ) 2 Non-competition clause 3-4 years 294 (274 ) (20 ) - State pharmacy licenses 25 years 45 (5 ) (28 ) 12 $ 4,478 $ (1,355 ) $ (64 ) $ 3,059 |
Schedule of Amortization Expenses for Intangible Assets | Amortization expense for intangible assets for the year ended December 31 was as follows: For the For the Year Ended Year Ended December 31, 2018 December 31, 2017 Patents $ 28 $ 15 Licenses - - Customer relationships 201 257 Trade name 4 3 Non-competition clause 1 87 State pharmacy licenses 2 2 $ 235 $ 364 |
Schedule of Estimated Future Amortization Expense | Estimated future amortization expense for the Company’s intangible assets at December 31, 2018 is as follows: Years ending December 31, 2019 $ 244 2020 242 2021 242 2022 242 Thereafter 2,089 $ 3,059 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses at December 31, 2018 and 2017 consisted of the following: December 31, 2018 December 31, 2017 Accounts payable $ 5,606 $ 3,241 Deferred rent 388 388 Accrued interest (see Note 13) 256 256 Accrued exit fee for note payable (see Note 13) 800 800 Total accounts payable and accrued expenses 7,050 4,685 Less: Current portion (6,250 ) (3,885 ) Non-current total accrued expenses $ 800 $ 800 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Summary of Notes Payable | Notes payable at December 31, 2018 were as follows: December 31, 2018 SWK note $ 16,000 Less: Discount on note (1,472 ) Less: Current portion (2,529 ) Long-term portion $ 11,999 |
Summary of Future Minimum Payments | Future minimum payments under notes payable outstanding at December 31, 2018 are as follows: Amount 2019 $ 5,018 2020 4,402 2021 4,033 2022 7,410 Total minimum payments 20,863 Less: amount representing interest (4,863 ) Notes payable, gross 16,000 Less: unamortized discount (1,472 ) Less: current portion, net of unamortized discount (2,529 ) Note payable, net of current portion and unamortized debt discount $ 11,999 |
Capital Lease Obligation (Table
Capital Lease Obligation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Schedule of Future Payment Under Capital Lease | At December 31, 2018, future payments under the Company’s capital lease were as follows: Amount 2019 $ 751 Total minimum lease payments 751 Less: amount representing interest payments (15 ) Present value of future minimum lease payment 736 Less: unamortized discount (16 ) 720 Less: current portion, net of unamortized discount (720 ) Capital lease obligation net of current portion and unamortized discount $ - |
Stockholders' Equity and Stoc_2
Stockholders' Equity and Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Stock Option Plan Activity | A summary of stock option activity under the Plan for the year ended December 31, 2018 is as follows: Number of shares Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life Aggregate Intrinsic Value Options outstanding - January 1, 2018 2,259,979 $ 5.50 Options granted 296,500 $ 1.80 Options exercised - $ - Options cancelled/forfeit (74,470 ) $ 4.29 Options outstanding - December 31, 2018 2,482,009 $ 5.10 5.51 $ 3,990 Options exercisable 1,337,780 $ 4.94 6.22 $ 3,525 Options vested and expected to vest 2,368,925 $ 5.09 5.53 $ 3,805 |
Schedule of Fair Value Assumptions | The table below illustrates the fair value per share determined using the Black-Scholes-Merton option pricing model with the following assumptions used for valuing options granted to employees: 2018 2017 Weighted-average fair value of options granted $ 1.42 $ 2.04 Expected terms (in years) 5.77 - 6.11 5.81 - 6.11 Expected volatility 76 - 126 % 112 - 117 % Risk-free interest rate 2.05 - 3.00 % 1.77 - 2.01 % Dividend yield - - The table below illustrates the fair value per share determined by the Black-Scholes-Merton option pricing model with the following assumptions used for valuing warrants granted during the year ended December 31, 2017 related to loan agreements: 2017 Weighted-average fair value of warrants granted $ 1.70 Expected terms (in years) 7.00 Expected volatility 113.5 % Risk-free interest rate 1.77 % Dividend yield - |
Schedule of Shares Outstanding and Exercisable | The following table summarizes information about stock options outstanding and exercisable at December 31, 2018: Weighted Average Weighted Weighted Remaining Average Average Range of Number Contractual Exercise Number Exercise Exercise Prices Outstanding Life in Years Price Exercisable Price $1.47 - $2.60 837,375 7.74 $ 2.04 420,774 $ 2.16 $3.04 - $4.50 536,622 6.97 $ 3.96 415,784 $ 3.98 $5.49 - $6.36 99,350 4.52 $ 5.97 97,784 $ 5.97 $6.64 - $8.99 1,003,632 2.98 $ 7.98 398,408 $ 8.16 $42.80 5,030 1.62 $ 42.80 5,030 $ 42.80 $1.47 - $42.80 2,482,009 5.51 $ 5.10 1,337,780 $ 4.94 |
Schedule of Restricted Stock Units Activity | A summary of the Company’s RSU activity and related information for the year ended December 31, 2017 is as follows: Number of RSUs Weighted Average Grant Date Fair Value RSUs unvested - January 1, 2017 1,292,876 $ 2.43 RSUs granted 62,892 3.18 RSUs vested (56,822 ) 3.94 RSUs cancelled/forfeit - RSUs unvested at December 31, 2017 1,298,946 $ 2.42 A summary of the Company’s RSU activity and related information for the year ended December 31, 2018 is as follows: Number of RSUs Weighted Average Grant Date Fair Value RSUs unvested - January 1, 2018 1,298,946 $ 2.42 RSUs granted 136,360 2.20 RSUs vested (159,626 ) 3.94 RSUs cancelled/forfeit - RSUs unvested at December 31, 2018 1,275,680 $ 2.16 |
Schedule of Stock Based Compensation Granted to Employees Directors Consultants | The Company recorded stock-based compensation (including issuance of common stock for services and accrual for stock-based compensation) related to equity instruments granted to employees, directors and consultants as follows: For the For the Year Ended Year Ended December 31, 2018 December 31, 2017 Employees - selling and marketing $ 82 $ 449 Employees - general and administrative 2,169 2,229 Directors - general and administrative 235 205 Consultants - selling and marketing 150 60 Total $ 2,636 $ 2,943 |
Schedule of Warrants Activity | A summary of warrant activity during the year ended December 31, 2018 is as follows: Number of Shares Subject to Warrants Outstanding Weighted Avg. Exercise Price Warrants outstanding - January 1, 2018 6,264,215 $ 1.91 Granted - Exercised (3,941,554 ) 1.79 Expired (115,688 ) 6.94 Warrants outstanding and exercisable - December 31, 2018 2,206,973 $ 1.91 Weighted average remaining contractual life of the outstanding warrants in years - December 31, 2018 2.60 |
Schedule of Warrants Outstanding and Warrants Exercisable | All warrants outstanding as of December 31, 2018 are included in the following table: Warrants Outstanding Warrants Exercisable Warrants Exercise Warrants Expiration Warrant Series Issue Date Outstanding Price Exercisable Date Lender warrants 5/11/2015 125,000 $ 1.79 125,000 5/11/2025 Settlement warrants 8/16/2016 40,000 $ 3.75 40,000 8/16/2021 PIPE Investor and Placement Agent Warrants 12/27/2016 1,426,587 $ 1.79 1,426,587 12/27/2019 Lender warrants (see Note 13) 7/19/2017 615,386 $ 2.08 615,386 7/19/2024 2,206,973 $ 1.91 2,206,973 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The Company is subject to taxation in the United States, California, New Jersey, Texas and Pennsylvania. The provision for income taxes for the years ended December 31, 2018 and 2017 are summarized below: December 31, 2018 December 31, 2017 Current: Federal $ - $ - State 6 5 Total current $ 6 $ 5 Deferred: Federal $ 3,294 $ 6,474 State 440 (283 ) Change in valuation allowance (3,734 ) (7,126 ) Total deferred - (935 ) Income tax provision (benefit) $ 6 $ (931 ) |
Schedule of Income Tax Reconciliation | A reconciliation of income taxes computed by applying the statutory U.S. income tax rate to the Company’s loss before income taxes to the income tax provision is as follows: December 31, 2018 December 31, 2017 U.S. federal statutory tax rate 21.00 % 35.00 % Benefit of lower tax brackets 0.00 % (1.00 )% State tax benefit, net 0.04 % 1.60 % Research and development credits (0.14 )% 0.00 % Employee stock-based compensation 0.46 % (0.84 )% Loss on debt conversion 0.00 % (2.39 )% Change in Rate 0.00 % (62.97 )% Other 0.13 % 3.04 % Valuation allowance (21.93 )% 34.82 % Effective income tax rate (0.44 )% 7.27 % |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows: December 31, 2018 December 31, 2017 Deferred tax assets (liabilities): NOL’s $ 19,726 $ 17,405 Depreciation and amortization 30 58 Other 602 351 Research & development credits 617 596 Deferred stock compensation 3,036 2,534 Basis Difference in Surface (1,464 ) - Basis Difference in Eton (6,340 ) (985 ) Park stock purchase identifiable intangibles (484 ) (501 ) Total deferred tax assets, net 15,723 19,457 Valuation allowance (15,723 ) (19,457 ) Net deferred tax liabilities $ - $ - |
Schedule of Change in Unrecognized Tax Benefits | A reconciliation of the change in the UTB balance from January 1, 2018 to December 31, 2017 is as follows: Fed & State Tax Balance at January 1, 2018 $ - Additions for tax positions related to current year - Additions/(reductions) for tax positions related to prior years - Balance at December 31, 2018 - Total unrecognized tax benefits as of December 31, 2018 $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Payments Under Leases | The following represents future annual minimum lease payments, as of December 31, 2018: 2019 $ 797 2020 857 2021 742 2022 320 2023 330 2024 196 Total $ 3,242 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Schedule of Operating Segment | For periods beginning on and after January 1, 2019, results of operations, including segment net revenues, segment operating expenses and segment contribution, the Company expects to present segment information in a format similar to the table below: Pharmaceutical Pharmaceutical Compounding Drug Development Total Net revenues $ $ $ Cost of sales Gross profit Operating expenses: Selling, general and administrative Research and development Segment contribution Corporate Research and development Amortization Asset sales and impairments, net Operating loss $ |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Nov. 30, 2018 | Jul. 31, 2018 | May 31, 2018 | Jun. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Loss from operations | $ (5,217) | $ (12,163) | ||||
Accumulated deficit | (74,211) | (88,836) | ||||
Net cash used in operating activities | 687 | (8,803) | ||||
Cash resources and restricted investments, marketable securities | 28,258 | |||||
FDIC insured amount | 250 | |||||
Stock issed during period value | 2,940 | |||||
Accounts receivable, net of allowance for doubtful accounts | $ 270 | $ 275 | ||||
Intangible assets estimated useful life | 20 years | |||||
Antidilutive securities | 22,539,793 | 20,027,712 | ||||
Restricted cash | $ 200 | $ 200 | ||||
Right of use asset | 2,106 | |||||
Lease liability | $ 2,624 | |||||
Restricted Stock Units [Member] | ||||||
Number of shares issued | 99,626 | |||||
Number of shares vested during the period | 236,693 | 137,067 | ||||
Deferred Acquisition Obligations, Convertible Note Payable, Stock Options, Unvested RSUs and Warrants [Member] | ||||||
Antidilutive securities | 6,201,355 | 9,980,454 | ||||
Billing and Collection Agreement [Member] | Third Party [Member] | ||||||
Percentage of billing and collection amount | 55.00% | |||||
Billing and collection management expense | $ 1 | $ 0 | ||||
Due to related party | $ 25 | 41 | ||||
Minimum [Member] | ||||||
Property and equipment estimated useful life | 3 years | |||||
Maximum [Member] | ||||||
Property and equipment estimated useful life | 5 years | |||||
Surface Series A Stock [Member] | ||||||
Proceeds from issuance of preferred stock | $ 21,000 | $ 21,000 | ||||
Eton Pharmaceuticals, Inc. [Member] | ||||||
Gain on deconsolidation amount | $ 5,725 | |||||
Investment gain loss | $ 3,507 | $ 2,218 | ||||
Ownership percentage | 19.98% | |||||
Share purchase price | $ 6.12 | |||||
Gain on investment | $ 17,913 | |||||
Loss on investment | 3,507 | |||||
Fair market value of investments | $ 21,420 | |||||
Number of shares owned | 3,500,000 | |||||
Eton Pharmaceuticals, Inc. [Member] | IPO [Member] | ||||||
Number of shares issued | 4,140,000 | |||||
Stock issed price per shares | $ 6 | |||||
Stock issed during period value | $ 24,800 | |||||
Surface Pharmaceuticals Inc [Member] | ||||||
Loss from operations | $ 1,370 | |||||
Gain on deconsolidation amount | $ 5,320 | |||||
Ownership percentage | 30.00% | |||||
Gain on investment | $ 4,947 | |||||
Loss on investment | 373 | |||||
Fair market value of investments | $ 4,947 | |||||
Number of shares owned | 3,500,000 | |||||
Surface Pharmaceuticals Inc [Member] | Surface Series A Stock [Member] | ||||||
Share purchase price | $ 3.30 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Basic Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Numerator - net income (loss) | $ 14,625 | $ (11,985) |
Denominator - weighted average number of shares outstanding, basic | 21,917,570 | 20,027,712 |
Net loss per share, basic | $ 0.67 | $ (0.60) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Diluted Common Equivalent Shares (Details) | 12 Months Ended |
Dec. 31, 2018shares | |
Dilutive common equivalent shares | 23,812,045 |
Stock Option [Member] | |
Dilutive common equivalent shares | 50,203 |
Restricted Stock Units [Member] | |
Dilutive common equivalent shares | |
Warrant [Member] | |
Dilutive common equivalent shares | 1,844,272 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Numerator - net income (loss) | $ 14,625 | $ (11,985) |
Weighted average number of shares outstanding, basic | 21,917,570 | 20,027,712 |
Dilutive common equivalents | 1,894,475 | |
Denominator - number of shares used for diluted earnings per share computation | 23,812,045 | 20,027,712 |
Net income (loss) per share, diluted | $ 0.61 | $ (0.60) |
Revenues (Details Narrative)
Revenues (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Revenue from Contract with Customer [Abstract] | ||
Deferred revenue and customer deposits | $ 119 | $ 29 |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregated Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Total Revenues | $ 41,372 | $ 26,774 |
Product Sales, Net [Member] | ||
Total Revenues | 41,334 | 26,684 |
License Revenues [Member] | ||
Total Revenues | $ 38 | $ 90 |
Investment in Eton Pharmaceut_2
Investment in Eton Pharmaceuticals, Inc. and Agreements - Related Party Transactions (Details Narrative) - Eton Pharmaceuticals, Inc. [Member] - USD ($) $ / shares in Units, $ in Thousands | May 02, 2017 | May 31, 2017 | Dec. 31, 2018 |
Number of shares owned | 3,500,000 | ||
Share purchase price | $ 6.12 | ||
Carry value of investments | $ 21,420 | ||
Ownership percentage | 19.98% | ||
Eton License Agreements [Member] | |||
Royalty payment percentage on net sales | 6.00% | ||
Royalty payment percentage on net sales patent claims not issued | 3.00% | ||
Payment on issuances of patent | $ 50 | ||
Proceeds from sale of equity securities | $ 10,000 | ||
Management Services Agreement [Member] | |||
Monthly payment | $ 10 | ||
Amount paid for services | $ 40 |
Investment in Surface Pharmac_3
Investment in Surface Pharmaceuticals, Inc. and Agreements - Related Party Transactions (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Jan. 31, 2018 | Dec. 31, 2018 | |
Surface Pharmaceuticals Inc [Member] | ||
Number of shares owned | 3,500,000 | |
Ownership percentage | 30.00% | |
Surface Pharmaceuticals Inc [Member] | Dr. Lindstrom [Member] | ||
Royalty payment percentage on net sales | 3.00% | |
Surface License Agreements [Member] | ||
Royalty payment description | Surface is required to make royalty payments to the Company of four to six percent (4%-6%) of net sales of the Surface Products while any patent rights remain outstanding. | |
Proceeds from the sale of equity securities | $ 10,000 | |
Management Services Agreement [Member] | Surface Pharmaceuticals Inc [Member] | ||
Administrative expenses | $ 10 | |
Reimbursable expenses due | $ 50 |
Investment in Surface Pharmac_4
Investment in Surface Pharmaceuticals, Inc. and Agreements - Related Party Transactions - Schedule of Condensed Income Statement (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues, net | $ 41,372 | $ 26,774 |
Loss from operations | (5,217) | (12,163) |
Net loss | 14,625 | $ (11,985) |
Surface Pharmaceuticals Inc [Member] | ||
Revenues, net | ||
Loss from operations | 1,370 | |
Net loss | $ (1,370) |
Investment in Surface Pharmac_5
Investment in Surface Pharmaceuticals, Inc. and Agreements - Related Party Transactions - Schedule of Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets | $ 32,843 | $ 8,806 | |
Total assets | 49,451 | 23,917 | |
Total liabilities | 24,700 | 21,302 | |
Total stockholders' equity | 24,751 | 2,615 | $ 6,432 |
Total liabilities and stockholders' equity | 49,451 | $ 23,917 | |
Surface Pharmaceuticals Inc [Member] | |||
Current assets | 19,699 | ||
Non current assets | 50 | ||
Total assets | 19,749 | ||
Total liabilities | 165 | ||
Total stockholders' equity | 19,584 | ||
Total liabilities and stockholders' equity | $ 19,749 |
Restricted Cash (Details Narrat
Restricted Cash (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Cash and Cash Equivalents [Abstract] | ||
Restricted cash | $ 200 | $ 200 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,119 | $ 956 |
Work in progress | 6 | |
Finished goods | 709 | 1,293 |
Total inventories | $ 1,834 | $ 2,249 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid insurance | $ 328 | $ 164 |
Other prepaid expenses | 334 | 426 |
Receivable due from Surface | 50 | |
Deposits and other current assets | 125 | 124 |
Total prepaid expenses and other current assets | $ 837 | $ 714 |
Asset Sales and Note Receivab_3
Asset Sales and Note Receivable (Details Narrative) - USD ($) $ in Thousands | Jun. 27, 2017 | Jun. 30, 2017 | Feb. 28, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Feb. 28, 2018 |
Loss on sale of assets | $ 393 | $ 354 | ||||
Pharmacy Solutions Central, LLC [Member] | ||||||
Payment to closing cash amount | $ 410 | |||||
Debt interest rate | 6.00% | |||||
Debt monthly payment | $ 10 | |||||
Debt annual principal payment | 462 | |||||
Pharmacy Solutions Central, LLC [Member] | December 31, 2017 [Member] | ||||||
Debt monthly payment | 365 | |||||
Imprimis TX [Member] | ||||||
Loss on sale of assets | 173 | |||||
Asset Purchase Agreement [Member] | ||||||
Note due amount | 397 | |||||
Loss on sale of assets | $ 393 | 69 | ||||
Loss from sale of equipment | $ 60 | |||||
Loss on equipment | $ 52 | |||||
Asset Purchase Agreement [Member] | Pharmacy Solutions Central, LLC [Member] | ||||||
Total purchase price | 450 | |||||
Payment to closing cash amount | $ 40 | |||||
Stock Purchase Agreement [Member] | Livernois [Member] | ||||||
Sale of stock percentage | 100.00% | |||||
Payment of consideration amount | $ 10 | |||||
Lease obligation | $ 113 |
Asset Sales and Note Receivab_4
Asset Sales and Note Receivable - Schedule of Assets Sales and Note Receivable (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Asset Sales And Note Receivable | |
Inventories | $ 413 |
Furniture and equipment | 226 |
Asset held for sale | 639 |
Loss on asset sale | (127) |
Assets sold | $ 512 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization of property, plant and equipment | $ 1,608 | $ 1,401 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Abstract] | ||
Computer software and hardware | $ 1,662 | $ 1,239 |
Furniture and equipment | 397 | 377 |
Lab and pharmacy equipment | 3,184 | 2,545 |
Leasehold improvements | 5,496 | 4,810 |
Property, plant and equipment, gross | 10,739 | 8,971 |
Accumulated depreciation and amortization | (4,364) | (2,756) |
Property, plant and equipment, Net | $ 6,375 | $ 6,215 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Schedule of Intangible Assets (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Amortization periods (in years) | 20 years |
Cost | $ 4,478 |
Accumulated amortization | (1,355) |
Impairment | (64) |
Net Carrying value | 3,059 |
Patents [Member] | |
Cost | 755 |
Accumulated amortization | (49) |
Impairment | |
Net Carrying value | $ 706 |
Patents [Member] | Minimum [Member] | |
Amortization periods (in years) | 17 years |
Patents [Member] | Maximum [Member] | |
Amortization periods (in years) | 19 years |
Licenses [Member] | |
Amortization periods (in years) | 20 years |
Cost | $ 50 |
Accumulated amortization | |
Impairment | |
Net Carrying value | $ 50 |
Trademarks [Member] | |
Amortization periods description | Indefinite |
Cost | $ 320 |
Accumulated amortization | |
Impairment | |
Net Carrying value | 320 |
Customer Relationships [Member] | |
Cost | 2,998 |
Accumulated amortization | (1,014) |
Impairment | (15) |
Net Carrying value | $ 1,969 |
Customer Relationships [Member] | Minimum [Member] | |
Amortization periods (in years) | 3 years |
Customer Relationships [Member] | Maximum [Member] | |
Amortization periods (in years) | 15 years |
Trade Name [Member] | |
Amortization periods (in years) | 5 years |
Cost | $ 16 |
Accumulated amortization | (13) |
Impairment | (1) |
Net Carrying value | 2 |
Non-Competition Clause [Member] | |
Cost | 294 |
Accumulated amortization | (274) |
Impairment | (20) |
Net Carrying value | |
Non-Competition Clause [Member] | Minimum [Member] | |
Amortization periods (in years) | 3 years |
Non-Competition Clause [Member] | Maximum [Member] | |
Amortization periods (in years) | 4 years |
State Pharmacy Licenses [Member] | |
Amortization periods (in years) | 25 years |
Cost | $ 45 |
Accumulated amortization | (5) |
Impairment | (28) |
Net Carrying value | $ 12 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Schedule of Amortization Expenses for Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Amortization of intangible assets | $ 235 | $ 364 |
Patents [Member] | ||
Amortization of intangible assets | 28 | 15 |
Licenses [Member] | ||
Amortization of intangible assets | ||
Customer Relationships [Member] | ||
Amortization of intangible assets | 201 | 257 |
Trade Name [Member] | ||
Amortization of intangible assets | 4 | 3 |
Non-Competition Clause [Member] | ||
Amortization of intangible assets | 1 | 87 |
State Pharmacy Licenses [Member] | ||
Amortization of intangible assets | $ 2 | $ 2 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2019 | $ 244 | |
2020 | 242 | |
2021 | 242 | |
2022 | 242 | |
Thereafter | 2,089 | |
Intangible assets | $ 3,059 | $ 2,860 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 5,606 | $ 3,241 |
Deferred rent | 388 | 388 |
Accrued interest | 256 | 256 |
Accrued exit fee for note payable | 800 | 800 |
Total accounts payable and accrued expenses | 7,050 | 4,685 |
Less: Current portion | (6,250) | (3,885) |
Non-current total accrued expenses | $ 800 | $ 800 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Aug. 31, 2017 | Jul. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Principal amount of loan | $ 23,459 | |||||
Percentage of loan agreement prepayment fee | 1.00% | |||||
Loan due date | May 11, 2021 | |||||
Loss on extinguishment | $ (884) | |||||
Liability of final fee included in accrued expenses | 800 | 800 | ||||
Fair value warrant adjustments | $ 982 | |||||
Fair value assumptions, measurement input, per share | $ 2.08 | |||||
Amortization of debt discount | $ 520 | $ 811 | ||||
Warrant [Member] | ||||||
Warrant exercise price per share | $ 1.91 | |||||
Expected Term [Member] | Warrant [Member] | ||||||
Fair value assumptions, measurement input, term | 7 years | |||||
Volatility [Member] | Warrant [Member] | ||||||
Fair value assumptions, measurement input, percentages | 113.50% | |||||
Dividend Rate [Member] | Warrant [Member] | ||||||
Fair value assumptions, measurement input, percentages | 0.00% | |||||
Risk Free Interest Rate [Member] | Warrant [Member] | ||||||
Fair value assumptions, measurement input, percentages | 1.77% | |||||
Lender Warrants [Member] | ||||||
Warrant to purchase of common stock | 415,586 | |||||
Warrant exercise price per share | $ 3.08 | |||||
Warrant term | 7 years | |||||
SWK Warrants [Member] | ||||||
Warrant to purchase of common stock | 615,386 | |||||
Warrant exercise price per share | $ 2.08 | |||||
London Inter-Bank Offered Rate [Member] | ||||||
Loan bear interest | 10.50% | |||||
Maximum [Member] | London Inter-Bank Offered Rate [Member] | ||||||
Loan bear interest | 3.00% | |||||
Minimum [Member] | London Inter-Bank Offered Rate [Member] | ||||||
Loan bear interest | 1.50% | |||||
Loan Agreement [Member] | Life Sciences Alternative Funding LLC [Member] | ||||||
Principal amount of loan | $ 10,000 | $ 10,000 | ||||
Loan bear interest | 12.50% | 12.50% | ||||
Loans bear interest rate description | The term loan bore interest at a fixed per-annum rate of 12.5% and allowed for 2% of the interest to be paid-in-kind until December 2016. The Loan Agreement included a final fee of 5% of the aggregate principal amount of the term loan and prepayment fees of up to 1% of the principal balance were due on January 1, 2019. | The term loan bore interest at a fixed per-annum rate of 12.5% and allowed for 2% of the interest to be paid-in-kind until December 2016. The Loan Agreement included a final fee of 5% of the aggregate principal amount of the term loan and prepayment fees of up to 1% of the principal balance were due on January 1, 2019. | ||||
Percentage of loan agreement final fee | 5.00% | 5.00% | ||||
Loan due date | Jan. 1, 2019 | Jan. 1, 2019 | ||||
Warrant to purchase of common stock | 125,000 | 125,000 | ||||
Debt principal amount | $ 13,332 | |||||
Incurred expense debt | $ 1,066 | |||||
Loan Agreement [Member] | Life Sciences Alternative Funding LLC [Member] | Maximum [Member] | ||||||
Percentage of loan agreement prepayment fee | 1.00% | |||||
SWK Loan Agreement [Member] | ||||||
Debt principal amount | $ 16,000 | |||||
Loan agreement term | 5 years | |||||
Repayment of debt | $ 750 | |||||
Debt due date description | All amounts owed under the SWK Loan Agreement, including a final fee equal to 5% of the aggregate principal amount loaned thereunder, will be due and payable on July 19, 2022. The Company may elect to prepay all, but not less than all, of the amounts owed under the SWK Loan Agreement prior to the maturity date at any time after July 19, 2019. | |||||
Incurred expense debt | $ 1,282 | |||||
LSAF Loan [Member] | ||||||
Debt principal amount | $ 13,999 |
Debt - Summary of Notes Payable
Debt - Summary of Notes Payable (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Less: Discount on notes | $ (16) | |
Less: Current portion | (2,529) | |
Long-term portion | 11,999 | $ 14,008 |
Notes Payable [Member] | ||
SWK note | 16,000 | |
Less: Discount on notes | (1,472) | |
Less: Current portion | (2,529) | |
Long-term portion | $ 11,999 |
Debt - Summary of Future Minimu
Debt - Summary of Future Minimum Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Total minimum payments | $ 23,459 | |
Less: unamortized discount | (16) | |
Less: current portion, net of unamortized discount | (2,529) | |
Note payable, net of current portion and unamortized debt discount | 11,999 | $ 14,008 |
Note Payable [Member] | ||
2019 | 5,018 | |
2020 | 4,402 | |
2021 | 4,033 | |
2022 | 7,410 | |
Total minimum payments | 20,863 | |
Less: amount representing interest | (4,863) | |
Notes payable, gross | 16,000 | |
Less: unamortized discount | (1,472) | |
Less: current portion, net of unamortized discount | (2,529) | |
Note payable, net of current portion and unamortized debt discount | $ 11,999 |
Capital Lease Obligation (Detai
Capital Lease Obligation (Details Narrative) - USD ($) $ in Thousands | Aug. 09, 2016 | Dec. 31, 2018 | Dec. 31, 2017 |
Property and equipment purchase price | $ 1,768 | $ 772 | |
Debt discount amortization | 520 | 811 | |
Capital leases of equipment | 2,070 | 2,070 | |
Capital leases of accumulated depreciation | 729 | 444 | |
Lease Agreement [Member] | |||
Property and equipment purchase price | $ 2,000 | 2,000 | |
Lease monthly payments | $ 64 | ||
Lease future payment | 300 | ||
Lease incurred expenses | $ 67 | ||
Capital lease future minimum payments percentage | 16.80% | ||
Debt discount amortization | $ 93 | $ 167 |
Capital Lease Obligation - Sche
Capital Lease Obligation - Schedule of Future Payment Under Capital Lease (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Leases [Abstract] | ||
2019 | $ 751 | |
Total minimum lease payments | 751 | |
Less: amount representing interest payments | (15) | |
Present value of future minimum lease payment | 736 | |
Less: unamortized discount | (16) | |
Present value of future net minimum lease payments | 720 | |
Less: current portion, net of unamortized discount | (720) | $ (598) |
Capital lease obligation net of current portion and unamortized discount | $ 720 |
Stockholders' Equity and Stoc_3
Stockholders' Equity and Stock-based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Feb. 28, 2018 | Dec. 31, 2018 | Mar. 31, 2018 | Jan. 31, 2018 | Apr. 30, 2017 | Mar. 31, 2017 | Nov. 30, 2015 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jul. 10, 2018 |
Common stock, shares authorized | 50,000,000 | 50,000,000 | 90,000,000 | ||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Proceeds from issuance of warrant | $ 4,233 | $ 179 | |||||||||
Shares issued of restricted common stock, shares | 15,000 | 35,427 | 25,273 | ||||||||
Accrued royalty expense | $ 64 | $ 44 | |||||||||
Fair value of restricted common stock issued | $ 42 | ||||||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | ||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Preferred stock, shares issued | |||||||||||
Preferred stock, shares outstanding | |||||||||||
Stock-based compensation | $ 2,486 | $ 2,943 | |||||||||
2017 Incentive Stock and Awards Plan [Member] | |||||||||||
Maximum number of common stock issuance under the plan | 2,000,000 | 2,000,000 | |||||||||
Number of shares available for sales | 1,572,640 | 1,572,640 | |||||||||
Restricted Stock [Member] | |||||||||||
Number of shares issued investor relations related services | 25,000 | ||||||||||
Number of shares issued investor relations related services, value | $ 60 | ||||||||||
Number of common stock issued for warrant exercises | 100,000 | ||||||||||
Proceeds from issuance of warrant | $ 179 | ||||||||||
Warrants exercise price | $ 1.79 | ||||||||||
Restricted Stock Units [Member] | |||||||||||
Number of shares issued | 99,626 | ||||||||||
Shares issued of restricted common stock, shares | 56,822 | ||||||||||
Stock Option Plan [Member] | |||||||||||
Closing price of common stock price per share | $ 5.69 | $ 5.69 | |||||||||
Forfeiture factor, percentage | 10.00% | ||||||||||
Unrecognized compensation expense related to unvested stock options granted under the plan | $ 1,888 | $ 1,888 | |||||||||
Expense expected to recognize over the weighted-average remaining vesting period | 1 year 10 months 25 days | ||||||||||
Stock-based compensation | $ 1,317 | $ 1,672 | |||||||||
Unvested RSUs [Member] | |||||||||||
Unrecognized compensation expense related to unvested stock options granted under the plan | $ 441 | $ 441 | |||||||||
Expense expected to recognize over the weighted-average remaining vesting period | 1 month 6 days | ||||||||||
Stock-based compensation | $ 1,149 | $ 1,211 | |||||||||
Andrew R. Boll [Member] | Restricted Stock Units [Member] | |||||||||||
Shares issued of restricted common stock, shares | 30,000 | ||||||||||
John P. Saharek [Member] | Restricted Stock Units [Member] | |||||||||||
Shares issued of restricted common stock, shares | 30,000 | ||||||||||
Employees and Consultants [Member] | Stock Option Plan [Member] | |||||||||||
Stock options granted vesting terms | Vesting terms for options granted in 2018 and 2017 to employees and consultants typically included one of the following vesting schedules: 25% of the shares subject to the option vest and become exercisable on the first anniversary of the grant date and the remaining 75% of the shares subject to the option vest and become exercisable quarterly in equal installments thereafter over three years; quarterly vesting over three years. Certain option awards provide for accelerated vesting if there is a change in control (as defined in the Plan) and in the event of certain modifications to the option award agreement. | ||||||||||
Employees and Consultants [Member] | Stock Option Plan [Member] | Minimum [Member] | |||||||||||
Stock options granted with exercise price contractual terms | 5 years | ||||||||||
Employees and Consultants [Member] | Stock Option Plan [Member] | Maximum [Member] | |||||||||||
Stock options granted with exercise price contractual terms | 10 years | ||||||||||
Non Employee Directors [Member] | Restricted Stock Units [Member] | |||||||||||
Shares issued of restricted common stock, shares | 136,360 | 62,892 | |||||||||
Fair value of restricted common stock issued | $ 300 | $ 200 | |||||||||
Stock options granted vesting terms | These RSUs vest in equal quarterly installments over a one-year period subject to the director's continued service at the vesting date, but the issuance and delivery of these shares are deferred until the director resigns. | ||||||||||
Consultants, Employees and Directors [Member] | |||||||||||
Stock-based compensation | $ 21 | ||||||||||
Common Stock Warrants [Member] | |||||||||||
Number of shares issued | 2,364,889 | ||||||||||
Proceeds from issuance of warrant | $ 4,233 | ||||||||||
Warrants exercise price | $ 1.79 | $ 1.79 | |||||||||
Common Stock Warrant One [Member] | |||||||||||
Number of shares issued | 910,273 | ||||||||||
Warrants exercise price | $ 1.79 | $ 1.79 | |||||||||
Number of warrants exercised | 1,576,665 | ||||||||||
Amended and Restated Certificate of Incorporation [Member] | Previously Authorized Shares [Member] | |||||||||||
Common stock, shares authorized | 90,000,000 | ||||||||||
Securities Purchase Agreements [Member] | Two Accredited Investors [Member] | |||||||||||
Number of shares issued | 1,312,500 | ||||||||||
Price per share | $ 2.40 | ||||||||||
Net proceeds of registered offering | $ 2,940 | ||||||||||
Gross proceeds, percentage | 6.00% | ||||||||||
Sales Agreement [Member] | |||||||||||
Number of shares sold under the agreement | 305,619 | ||||||||||
Proceeds from sale of common stock approximately | $ 642 | ||||||||||
Sales commission and offering expenses | $ 20 | ||||||||||
Sales Agreement [Member] | Cantor Fitzgerald & Co [Member] | |||||||||||
Cash commission, percentage | 3.00% | ||||||||||
Number of shares sold under the agreement | 557,714 | ||||||||||
Proceeds from sale of common stock approximately | $ 1,124 | ||||||||||
Sales commission and offering expenses | $ 35 |
Stockholders' Equity and Stoc_4
Stockholders' Equity and Stock-based Compensation - Schedule of Stock Option Plan Activity (Details) - Stock Option Plan [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Number of shares, Outstanding, Beginning balance | shares | 2,259,979 |
Number of shares, Options granted | shares | 296,500 |
Number of shares, Options exercised | shares | |
Number of shares, Options cancelled/forfeit | shares | (74,470) |
Number of shares, Outstanding, Ending balance | shares | 2,482,009 |
Number of shares, Options exercisable | shares | 1,337,780 |
Number of shares, Options vested and expected to vest | shares | 2,368,925 |
Weighted Avg. Exercise Price, Outstanding, Beginning balance | $ / shares | $ 5.50 |
Weighted Avg. Exercise Price, Options granted | $ / shares | 1.80 |
Weighted Avg. Exercise Price, Options exercised | $ / shares | |
Weighted Avg. Exercise Price, Options cancelled/forfeit | $ / shares | 4.29 |
Weighted Avg. Exercise Price, Outstanding, Ending balance | $ / shares | 5.10 |
Weighted Avg. Exercise Price, Exercisable Ending Balance | $ / shares | 4.94 |
Weighted Avg. Exercise Price, Vested and expected to vest | $ / shares | $ 5.09 |
Weighted Avg. Remaining Contractual Life, Options outstanding | 5 years 6 months 3 days |
Weighted Avg. Remaining Contractual Life, Options exercisable | 6 years 2 months 19 days |
Weighted Avg. Remaining Contractual Life, Options vested and expected to vest | 5 years 6 months 10 days |
Aggregate Intrinsic Value, Options outstanding | $ | $ 3,990 |
Aggregate Intrinsic Value, Options exercisable | $ | 3,525 |
Aggregate Intrinsic Value, Options vested and expected to vest | $ | $ 3,805 |
Stockholders' Equity and Stoc_5
Stockholders' Equity and Stock-based Compensation - Schedule of Fair Value Assumptions (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Warrant [Member] | ||
Weighted-average fair value of options granted | $ 1.70 | |
Expected terms (in years) | 7 years | |
Expected volatility | 113.50% | |
Risk-free interest rate | 1.77% | |
Dividend yield | ||
Options Granted to Employees [Member] | ||
Weighted-average fair value of options granted | $ 1.42 | $ 2.04 |
Expected volatility, minimum | 76.00% | 112.00% |
Expected volatility, maximum | 126.00% | 117.00% |
Risk-free interest rate, minimum | 2.05% | 1.77% |
Risk-free interest rate, maximum | 3.00% | 2.01% |
Dividend yield | ||
Options Granted to Employees [Member] | Minimum [Member] | ||
Expected terms (in years) | 5 years 9 months 7 days | 5 years 9 months 22 days |
Options Granted to Employees [Member] | Maximum [Member] | ||
Expected terms (in years) | 6 years 1 month 9 days | 6 years 1 month 9 days |
Stockholders' Equity and Stoc_6
Stockholders' Equity and Stock-based Compensation - Schedule of Shares Outstanding and Exercisable (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Range of Exercise Prices, minimum | $ 1.47 |
Range of Exercise Prices, maximum | $ 42.80 |
Number of Options Outstanding | shares | 2,482,009 |
Weighted Average Remaining Contractual Life in Years | 5 years 6 months 3 days |
Weighted Average Exercise Price | $ 5.10 |
Number Exercisable | shares | 1,337,780 |
Weighted Average Exercisable Exercise Price | $ 4.94 |
Range One [Member] | |
Range of Exercise Prices, minimum | 1.47 |
Range of Exercise Prices, maximum | $ 2.60 |
Number of Options Outstanding | shares | 837,375 |
Weighted Average Remaining Contractual Life in Years | 7 years 8 months 26 days |
Weighted Average Exercise Price | $ 2.04 |
Number Exercisable | shares | 420,774 |
Weighted Average Exercisable Exercise Price | $ 2.16 |
Range Two [Member] | |
Range of Exercise Prices, minimum | 3.04 |
Range of Exercise Prices, maximum | $ 4.50 |
Number of Options Outstanding | shares | 536,622 |
Weighted Average Remaining Contractual Life in Years | 6 years 11 months 19 days |
Weighted Average Exercise Price | $ 3.96 |
Number Exercisable | shares | 415,784 |
Weighted Average Exercisable Exercise Price | $ 3.98 |
Range Three [Member] | |
Range of Exercise Prices, minimum | 5.49 |
Range of Exercise Prices, maximum | $ 6.36 |
Number of Options Outstanding | shares | 99,350 |
Weighted Average Remaining Contractual Life in Years | 4 years 6 months 7 days |
Weighted Average Exercise Price | $ 5.97 |
Number Exercisable | shares | 97,784 |
Weighted Average Exercisable Exercise Price | $ 5.97 |
Range Four [Member] | |
Range of Exercise Prices, minimum | 6.64 |
Range of Exercise Prices, maximum | $ 8.99 |
Number of Options Outstanding | shares | 1,003,632 |
Weighted Average Remaining Contractual Life in Years | 2 years 11 months 23 days |
Weighted Average Exercise Price | $ 7.98 |
Number Exercisable | shares | 398,408 |
Weighted Average Exercisable Exercise Price | $ 8.16 |
Range Five [Member] | |
Range of Exercise Prices, minimum | $ 42.80 |
Number of Options Outstanding | shares | 5,030 |
Weighted Average Remaining Contractual Life in Years | 1 year 7 months 13 days |
Weighted Average Exercise Price | $ 42.80 |
Number Exercisable | shares | 5,030 |
Weighted Average Exercisable Exercise Price | $ 42.80 |
Stockholders' Equity and Stoc_7
Stockholders' Equity and Stock-based Compensation - Schedule of Restricted Stock Units Activity (Details) - Restricted Stock Units [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of RSUs unvested, Outstanding, Beginning balance | 1,298,946 | 1,292,876 |
Number of RSUs granted | 136,360 | 62,892 |
Number of RSUs vested | (159,626) | (56,822) |
Number RSUs cancelled/forfeit | ||
Number of RSUs unvested, Outstanding, Ending balance | 1,275,680 | 1,298,946 |
Weighted Average Grant Date Fair Value, Beginning balance | $ 2.42 | $ 2.43 |
Weighted Average Grant Date Fair Value, RSUs granted | 2.20 | 3.18 |
Weighted Average Grant Date Fair Value, RSUs vested | 3.94 | 3.94 |
Weighted Average Grant Date Fair Value, Ending balance | $ 2.16 | $ 2.42 |
Stockholders' Equity and Stoc_8
Stockholders' Equity and Stock-based Compensation - Schedule of Stock Based Compensation Granted to Employees Directors Consultants (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stock based compensation related to equity instruments granted to related parties | $ 2,636 | $ 2,943 |
Employees [Member] | Selling and Marketing [Member] | ||
Stock based compensation related to equity instruments granted to related parties | 82 | 449 |
Employees [Member] | General and Administrative [Member] | ||
Stock based compensation related to equity instruments granted to related parties | 2,169 | 2,229 |
Directors [Member] | General and Administrative [Member] | ||
Stock based compensation related to equity instruments granted to related parties | 235 | 205 |
Consultants [Member] | Selling and Marketing [Member] | ||
Stock based compensation related to equity instruments granted to related parties | $ 150 | $ 60 |
Stockholders' Equity and Stoc_9
Stockholders' Equity and Stock-based Compensation - Schedule of Warrants Activity (Details) - Warrant [Member] | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Number of Shares Subject to Warrants, Outstanding, beginning balance | 6,264,215 |
Number of Shares Subject to Warrants Outstanding, Granted | |
Number of Shares Subject to Warrants Outstanding, Exercised | (3,941,554) |
Number of Shares Subject to Warrants Outstanding, Expired | (115,688) |
Number of Shares Subject to Warrants, Outstanding, ending balance | 2,206,973 |
Weighted average remaining contractual life of the outstanding warrants in years | 2 years 7 months 6 days |
Weighted avg. Exercise Price, outstanding, beginning balance | $ / shares | $ 1.91 |
Weighted avg. Exercise Price, exercised | $ / shares | 1.79 |
Weighted avg. Exercise Price, expired | $ / shares | 6.94 |
Weighted avg. Exercise Price, outstanding and exercisable, ending balance | $ / shares | $ 1.91 |
Stockholders' Equity and Sto_10
Stockholders' Equity and Stock-based Compensation - Schedule of Warrants Outstanding and Warrants Exercisable (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Warrant [Member] | |
Warrants Outstanding | 2,206,973 |
Exercise Price | $ / shares | $ 1.91 |
Warrants Exercisable | 2,206,973 |
Lender Warrants [Member] | |
Issue Date | May 11, 2015 |
Warrants Outstanding | 125,000 |
Exercise Price | $ / shares | $ 1.79 |
Warrants Exercisable | 125,000 |
Expiration Date | May 11, 2025 |
Settlement Warrants [Member] | |
Issue Date | Aug. 16, 2016 |
Warrants Outstanding | 40,000 |
Exercise Price | $ / shares | $ 3.75 |
Warrants Exercisable | 40,000 |
Expiration Date | Aug. 16, 2021 |
PIPE Investor and Placement Agent Warrants [Member] | |
Issue Date | Dec. 27, 2016 |
Warrants Outstanding | 1,426,587 |
Exercise Price | $ / shares | $ 1.79 |
Warrants Exercisable | 1,426,587 |
Expiration Date | Dec. 27, 2019 |
Lender Warrants One [Member] | |
Issue Date | Jul. 19, 2017 |
Warrants Outstanding | 615,386 |
Exercise Price | $ / shares | $ 2.08 |
Warrants Exercisable | 615,386 |
Expiration Date | Jul. 19, 2024 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | Dec. 27, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax asset valuation allowance | $ 8,059 | $ 3,700 | $ 7,100 |
Federal net operating loss carryforwards | $ 67,463 | ||
Federal research and development tax credits expiration date | 2026 | ||
Federal research and development tax credits | $ 375 | ||
State net operating loss carryforwards | $ 64,629 | ||
State net operating loss expiration date | 2017 | ||
State research and development tax credits | $ 305 | ||
Corporate tax rate, percentage | 0.00% | (62.97%) | |
Minimum [Member] | Tax Reform [Member] | |||
Corporate tax rate, percentage | 21.00% |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Current: Federal | ||
Current: State | 6 | 5 |
Total current | 6 | 5 |
Deferred: Federal | 3,294 | 6,474 |
Deferred: State | 440 | (283) |
Deferred: Change in valuation allowance | (3,734) | (7,126) |
Total deferred | (935) | |
Income tax provision (benefit) | $ (935) |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal statutory tax rate | 21.00% | 35.00% |
Benefit of lower tax brackets | 0.00% | (1.00%) |
State tax benefit, net | 0.04% | 1.60% |
Research and development credits | (0.14%) | (0.00%) |
Employee stock based compensation | 0.46% | (0.84%) |
Loss on debt conversion | 0.00% | (2.39%) |
Change in Rate | 0.00% | (62.97%) |
Other | 0.13% | 3.04% |
Valuation allowance | (21.93%) | 34.82% |
Effective income tax rate | (0.44%) | 7.27% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
NOL's | $ 19,726 | $ 17,405 |
Depreciation and amortization | 30 | 58 |
Other | 602 | 351 |
Research & development credits | 617 | 596 |
Deferred stock compensation | 3,036 | 2,534 |
Basis Difference in Surface | (1,464) | |
Basis Difference in Eton | (6,340) | (985) |
Park stock purchase identifiable intangibles | (484) | (501) |
Total deferred tax assets, net | 15,723 | 19,457 |
Valuation allowance | (15,723) | (19,457) |
Net deferred tax liabilities |
Income Taxes - Schedule of Chan
Income Taxes - Schedule of Change in Unrecognized Tax Benefits (Details) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Income Tax Disclosure [Abstract] | |
UTB, Beginning balance | |
Additions for tax positions related to current year | |
Additions/(reductions) for tax positions related to prior years | |
UTB, Ending balance |
Employee Savings Plan (Details
Employee Savings Plan (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | ||
Percentage of salary deposits in tax deferred investment account | 100.00% | 100.00% |
Percentage of contributions made by the company | 4.00% | 4.00% |
Contributions by the company | $ 248 | $ 288 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) $ in Thousands | May 31, 2017USD ($)ft² | Mar. 31, 2018USD ($) | Jan. 31, 2018USD ($) | Apr. 30, 2017USD ($) | Feb. 28, 2015USD ($)ft² | Jan. 31, 2015USD ($)ft² | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2018ft² | Jul. 31, 2017ft² | May 31, 2014ft² |
Lease agreement for office space (square feet) | ft² | 10,200 | ||||||||||
Operating lease, monthly rental | $ 725 | $ 649 | |||||||||
Operating lease, rent increase percentage | 3.00% | ||||||||||
Accrued expenses | 800 | 800 | |||||||||
Royalty payments | $ 64 | $ 44 | |||||||||
Stock based payments | 2,486 | 2,943 | |||||||||
Accounts payable and accrued expenses | 245 | 108 | |||||||||
Incurred royalty expenses | 561 | 153 | |||||||||
February 2019 [Member] | |||||||||||
Damages in lawsuit | 640 | ||||||||||
February 2019 [Member] | Maximum [Member] | |||||||||||
Damages in lawsuit | $ 1,400 | ||||||||||
Lease Agreement [Member] | |||||||||||
Lease agreement for office space (square feet) | ft² | 8,600 | 9,400 | 7,000 | 7,565 | |||||||
Operating lease, monthly rental | $ 25 | ||||||||||
Operating lease, rent increase percentage | 3.75% | ||||||||||
Operating lease expiry | Jul. 31, 2024 | Dec. 31, 2021 | |||||||||
Operating lease expiration, description | extended 10 additional years beyond the stated expiration date. | extend the lease through December 31, 2027. | |||||||||
Amended Lease Agreement [Member] | |||||||||||
Lease agreement for office space (square feet) | ft² | 2,635 | ||||||||||
Operating lease, monthly rental | $ 29 | ||||||||||
Commercial Lease Agreement [Member] | |||||||||||
Lease agreement for office space (square feet) | ft² | 4,500 | ||||||||||
Operating lease, monthly rental | $ 10 | ||||||||||
Operating lease, rent increase percentage | 3.00% | ||||||||||
Operating lease expiry | Dec. 31, 2020 | ||||||||||
Operating lease expiration, description | extended 10 additional years beyond the stated expiration date. | ||||||||||
Settlement Agreement [Member] | |||||||||||
Accrued expenses | $ 640 | ||||||||||
Klarity License Agreement [Member] | Richard L. Lindstrom, M.D [Member] | |||||||||||
Royalty payment description | The Company is required to make royalty payments to Dr. Lindstrom ranging from 3% to 6% of net sales, dependent upon the final formulation of the Klarity Product sold. | ||||||||||
License Agreement [Member] | |||||||||||
Royalty payments | 118 | 183 | |||||||||
License Agreement [Member] | Richard L. Lindstrom, M.D [Member] | |||||||||||
Royalty payments | 15 | 19 | |||||||||
License Agreement [Member] | Initial Payment [Member] | Richard L. Lindstrom, M.D [Member] | |||||||||||
Royalty payments | $ 50 | ||||||||||
License Agreement [Member] | Second Payment [Member] | Richard L. Lindstrom, M.D [Member] | |||||||||||
Royalty payments | 50 | ||||||||||
Net sales | 50 | ||||||||||
License Agreement [Member] | Final Payment [Member] | Richard L. Lindstrom, M.D [Member] | |||||||||||
Royalty payments | 50 | 122 | 50 | ||||||||
Net sales | $ 100 | ||||||||||
Sales and Marketing Agreements [Member] | |||||||||||
Stock based payments | 42 | ||||||||||
Commission expense incurred | $ 1,511 | $ 183 | |||||||||
Sales and Marketing Agreements [Member] | Maximum [Member] | |||||||||||
Commission payments, percentage | 14.00% | 14.00% | |||||||||
Sales and Marketing Agreements [Member] | Minimum [Member] | |||||||||||
Commission payments, percentage | 10.00% | 10.00% |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Payments Under Leases (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 797 |
2020 | 857 |
2021 | 742 |
2022 | 320 |
2023 | 330 |
2024 | 196 |
Total | $ 3,242 |
Segment Information and Conce_2
Segment Information and Concentrations (Details Narrative) - Segment | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of reportable segment | 1 | |
Maximum percentage of sales derived from large number of customer | 10.00% | 10.00% |
Three Main Suppliers [Member] | ||
Percentage of drug and chemical purchases from three main suppliers | 51.00% | 68.00% |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 2 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Jan. 31, 2018 | Mar. 12, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net proceeds from issuance of common stock | $ 642 | $ 1,124 | |||
Payments for Royalty | $ 64 | $ 44 | |||
Subsequent Event [Member] | |||||
Number of shares issued | 52,000 | ||||
Common stock issued exercise price per share | $ 1.79 | ||||
Net proceeds from issuance of common stock | $ 93 | ||||
Subsequent Event [Member] | May Asset Purchase Agreement [Member] | Elle Pharmaceutical, LLC [Member] | |||||
Payment to asset purchase | $ 25 | ||||
Royalty percentage | 7.50% | ||||
Subsequent Event [Member] | Elle Royalty Agreement [Member] | Mayfield Pharmaceutical, LLC [Member] | |||||
Payments for Royalty | $ 175 | ||||
Gross proceeds from royalty | $ 10,000 | ||||
Subsequent Event [Member] | May Asset Purchase And Elle Royalty Agreement [Member] | Mayfield Pharmaceutical, LLC [Member] | |||||
Number of shares issued | 1,000,000 | ||||
Subsequent Event [Member] | Cashless Warrants Exercise [Member] | |||||
Number of shares issued | 293,984 | ||||
Common stock issued exercise price per share | $ 1.79 | ||||
Number of warrants exercised | 419,800 |
Subsequent Events - Schedule of
Subsequent Events - Schedule of Operating Segment (Details) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | |
Mar. 12, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Total revenues | $ 41,372 | $ 26,774 | |
Cost of sales | (16,521) | (13,505) | |
Gross profit | 24,851 | 13,269 | |
Selling, general and administrative | 29,243 | 25,019 | |
Research and development | 825 | 413 | |
Operating loss | $ (5,217) | $ (12,163) | |
Subsequent Event [Member] | |||
Total revenues | |||
Cost of sales | |||
Gross profit | |||
Selling, general and administrative | |||
Research and development | |||
Corporate | |||
Amortization | |||
Asset sales and impairments, net | |||
Operating loss | |||
Subsequent Event [Member] | Corporate [Member] | |||
Segment contribution | |||
Subsequent Event [Member] | Research and Development Expense [Member] | |||
Segment contribution | |||
Pharmaceutical Compounding [Member] | Subsequent Event [Member] | |||
Selling, general and administrative | |||
Research and development | |||
Pharmaceutical Drug Development [Member] | Subsequent Event [Member] | |||
Selling, general and administrative | |||
Research and development |