Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 12, 2020 | Jun. 28, 2019 | |
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, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 205,000,000 | ||
Entity Common Stock, Shares Outstanding | 25,526,931 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents, including restricted cash of $200 | $ 4,949 | $ 6,838 |
Investment in Eton Pharmaceuticals | 25,200 | 21,420 |
Accounts receivable, net | 2,009 | 1,914 |
Inventories | 3,301 | 1,834 |
Prepaid expenses and other current assets | 1,308 | 837 |
Total current assets | 36,767 | 32,843 |
Property, plant and equipment, net | 5,375 | 6,375 |
Operating lease right-of-use assets | 6,559 | |
Intangible assets, net | 2,337 | 3,059 |
Goodwill | 332 | 2,227 |
TOTAL ASSETS | 59,085 | 49,451 |
Current liabilities | ||
Accounts payable and accrued expenses | 7,702 | 6,250 |
Accrued payroll and related liabilities | 2,117 | 2,283 |
Deferred revenue and customer deposits | 57 | 119 |
Current portion of note payable, net of unamortized debt discount | 1,772 | 2,529 |
Current portion of operating lease obligations | 629 | |
Current portion of finance lease obligations, net of unamortized discount | 7 | 720 |
Total current liabilities | 12,284 | 11,901 |
Operating lease obligations, net of current portion | 6,338 | |
Finance lease obligations, net of current portion and unamortized discount | 26 | |
Accrued expenses, net of current portion | 800 | 800 |
Note payable, net of current portion and unamortized debt discount | 12,219 | 11,999 |
TOTAL LIABILITIES | 31,667 | 24,700 |
Commitments and contingencies | ||
STOCKHOLDERS' EQUITY | ||
Common stock, $0.001 par value, 50,000,000 shares authorized, 25,526,931 and 24,339,610 shares issued and outstanding at December 31, 2019 and 2018, respectively | 26 | 24 |
Additional paid-in capital | 101,728 | 98,938 |
Accumulated deficit | (74,043) | (74,211) |
TOTAL HARROW HEALTH, INC STOCKHOLDERS' EQUITY | 27,711 | 24,751 |
Noncontrolling interests | (293) | |
TOTAL EQUITY | 27,418 | 24,751 |
TOTAL LIABILITIES AND EQUITY | 59,085 | 49,451 |
Surface Pharmaceuticals [Member] | ||
Current assets | ||
Investment | 3,747 | 4,947 |
Melt Pharmaceuticals [Member] | ||
Current assets | ||
Investment | $ 3,968 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Restricted cash | $ 200 | $ 200 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 25,526,931 | 24,339,610 |
Common stock, shares outstanding | 25,526,931 | 24,339,610 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues: | ||
Total revenues | $ 51,165 | $ 41,372 |
Cost of sales | (16,749) | (16,521) |
Gross profit | 34,416 | 24,851 |
Operating expenses: | ||
Selling, general and administrative | 33,096 | 29,243 |
Research and development | 2,083 | 825 |
Impairment of long-lived assets | 4,040 | |
Total operating expenses | 39,219 | 30,068 |
Loss from operations | (4,803) | (5,217) |
Other income (expense): | ||
Interest expense, net | (2,500) | (2,728) |
Loss on sale of assets | (393) | |
Other income, net | 630 | 103 |
Total other income, net | 4,678 | 19,842 |
Income (loss) before income taxes | (125) | 14,625 |
Income tax benefit, net | ||
Total net income (loss) including noncontrolling interests | (125) | 14,625 |
Net loss attributable to noncontrolling interests | 293 | |
Net income attributable to Harrow Health, Inc. | $ 168 | $ 14,625 |
Basic net income per share of common stock | $ 0.01 | $ 0.67 |
Diluted net income per share of common stock | $ 0.01 | $ 0.61 |
Weighted average number of shares of common stock Outstanding, basic | 25,323,159 | 21,917,570 |
Weighted average number of shares of common stock Outstanding, diluted | 26,466,098 | 23,812,045 |
Melt Pharmaceuticals [Member] | ||
Other income (expense): | ||
Investment (loss) gain, net | $ 3,968 | |
Surface Pharmaceuticals [Member] | ||
Other income (expense): | ||
Investment (loss) gain, net | (1,200) | 4,947 |
Eton Pharmaceuticals [Member] | ||
Other income (expense): | ||
Investment (loss) gain, net | 3,780 | 17,913 |
Product Sales, Net [Member] | ||
Revenues: | ||
Total revenues | 51,137 | 41,334 |
License Revenues [Member] | ||
Revenues: | ||
Total revenues | $ 28 | $ 38 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total Harrow Health, Inc. Stockholders' Equity [Member] | Total Noncontrolling Interests [Member] | Total |
Balance at Dec. 31, 2017 | $ 21 | $ 91,430 | $ (88,836) | $ 2,615 | $ 2,615 | |
Balance, shares at Dec. 31, 2017 | 20,623,129 | |||||
Issuance of common stock in connection with: Exercise of warrants | $ 3 | 4,230 | 4,233 | 4,233 | ||
Issuance of common stock in connection with: Exercise of warrants, shares | 3,275,162 | |||||
Issuance of common stock in connection with: Vesting of RSUs, net of tax withholding | ||||||
Issuance of common stock in connection with: Vesting of RSUs, net of tax withholding, shares | 60,000 | |||||
Issuance of common stock in connection with: Sale of stock, net of costs (ATM) | 642 | 642 | 642 | |||
Issuance of common stock in connection with: Sale of stock, net of costs (ATM), shares | 305,619 | |||||
Issuance of common stock in connection with: Stock-based payment for services provided | 150 | 150 | 150 | |||
Issuance of common stock in connection with: Stock-based payment for services provided, shares | 75,700 | |||||
Stock-based compensation expense | 2,486 | 2,486 | 2,486 | |||
Net income (loss) | 14,625 | 14,625 | 14,625 | |||
Balance at Dec. 31, 2018 | $ 24 | 98,938 | (74,211) | 24,751 | 24,751 | |
Balance, shares at Dec. 31, 2018 | 24,339,610 | |||||
Issuance of common stock in connection with: Exercise of warrants | $ 2 | 811 | 813 | 813 | ||
Issuance of common stock in connection with: Exercise of warrants, shares | 1,142,528 | |||||
Issuance of common stock in connection with: Stock-based payment for services provided | 234 | 234 | 234 | |||
Issuance of common stock in connection with: Stock-based payment for services provided, shares | 15,000 | |||||
Issuance of common stock in connection with: Exercise of employee stock options, net of tax withholding | (44) | (44) | (44) | |||
Issuance of common stock in connection with: Exercise of employee stock options, net of tax withholding | 29,793 | |||||
Stock-based compensation expense | 1,789 | 1,789 | 1,789 | |||
Net income (loss) | 168 | 168 | (293) | (125) | ||
Balance at Dec. 31, 2019 | $ 26 | $ 101,728 | $ (74,043) | $ 27,711 | $ (293) | $ 27,418 |
Balance, shares at Dec. 31, 2019 | 25,526,931 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net (loss) income (includes non-controlling interests) | $ (125) | $ 14,625 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization of property, plant and equipment | 1,936 | 1,608 |
Amortization of intangible assets | 209 | 235 |
Amortization of operating lease right-of-use assets | 518 | |
Amortization of debt issuance costs and discount | 512 | 613 |
Loss on sale, impairments and disposal of assets | 4,148 | 393 |
Stock based payment for services provided | 234 | 150 |
Stock-based compensation | 1,789 | 2,486 |
Changes in assets and liabilities, net of impairments and disposals: | ||
Accounts receivable | (95) | (384) |
Inventories | (2,271) | 415 |
Prepaid expenses and other current assets | (471) | (123) |
Accounts payable and accrued expenses | 1,342 | 2,365 |
Accrued payroll and related liabilities | (166) | 1,074 |
Deferred revenue and customer deposits | (62) | 90 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 950 | 687 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Repayment of note receivable | 4 | |
Proceeds on sale and disposal of assets | 4 | |
Investment in patent and trademark assets | (369) | (435) |
Purchases of property, plant and equipment | (1,468) | (1,768) |
NET CASH USED IN INVESTING ACTIVITIES | (1,833) | (2,199) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Payments on finance lease obligations | (743) | (691) |
Payments on Park deferred acquisition obligation | (53) | |
Principal payments on note payable | (750) | |
Payments of costs related to amendment of note payable | (282) | |
Net proceeds from ATM sales of common stock | 642 | |
Net proceeds from exercise of warrants and stock options, net of taxes remitted for RSU's and options | 769 | 4,233 |
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (1,006) | 4,131 |
NET (DECREASE) INCREASE IN, CASH EQUIVALENTS AND RESTRICTED CASH | (1,889) | 2,619 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of year | 6,838 | 4,219 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of year | 4,949 | 6,838 |
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH | ||
Cash and cash equivalents | 4,749 | 6,638 |
Restricted cash | 200 | 200 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | 4,949 | 6,838 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for income taxes | 17 | 4 |
Cash paid for interest | 1,967 | 2,097 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Purchase of property and equipment included in accounts payable | 39 | |
Right-of-use asset obtained in exchange for lease obligation | 753 | |
Eton Pharmaceuticals [Member] | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Investment (gain)/loss | (3,780) | (17,913) |
Surface Pharmaceuticals [Member] | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Investment (gain)/loss | 1,200 | (4,947) |
Melt Pharmaceuticals [Member] | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Investment (gain)/loss | $ (3,968) |
Organization
Organization | 12 Months Ended |
Dec. 31, 2019 | |
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 through its subsidiaries and deconsolidated companies. The Company owns one of the nation’s leading ophthalmology pharmaceutical businesses, ImprimisRx. In addition to wholly owning ImprimisRx, the Company also has equity positions in Eton Pharmaceuticals, Inc. (“Eton”), Surface Pharmaceuticals, Inc. (“Surface”), and Melt Pharmaceuticals, Inc. (“Melt”), all companies that began as subsidiaries of Harrow. More recently, the Company founded drug development subsidiaries Mayfield Pharmaceuticals, Inc. (“Mayfield”), Radley Pharmaceuticals, Inc. (“Radley”), and Stowe Pharmaceuticals, Inc. (“Stowe”). Harrow also owns royalty rights in various drug candidates being developed by Surface, Melt, Radley and Mayfield. The Company intends to continue to create, and hold equity and royalty rights in, new businesses that commercialize drug candidates that are internally developed or otherwise acquired or licensed from third parties. 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, 2019 | |
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 (“GAAP”). The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, as well as Mayfield and Stowe, 70% majority controlled subsidiaries of Harrow as of December 31, 2019. The remaining 30% of Mayfield is owned by Elle Pharmaceutical, LLC (“Elle”), TGV-Health, LLC and its affiliated entities (collectively “TGV”) or other consultants. Mayfield was organized to develop women’s health-focused drug candidates. The remaining 30% of Stowe is owned by TGV. Stowe was organized to develop ophthalmic drug candidates. All inter-company accounts and transactions have been eliminated in consolidation. Harrow consolidates entities in which we have a controlling financial interest. We consolidate subsidiaries in which we hold and/or control, directly or indirectly, more than 50% of the voting rights. 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, renewal periods and discount rates for leases, 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 While there is no assurance, the Company believes cash generated from its operations, along with its existing cash resources, restricted cash and marketable securities of approximately $30,149 at December 31, 2019, 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. Segments The Company’s chief operating decision-maker is its Chief Executive Officer who makes resource allocation decisions and assesses performance based on financial information presented on as operating segments. The Company has identified two operating segments as reportable segments. See Note 18 for more information regarding the Company’s reportable segments. Noncontrolling Interests The Company recognizes any noncontrolling interest as a separate line item in equity in the consolidated financial statements. A noncontrolling interest represents the portion of equity ownership in a less-than-wholly owned subsidiary not attributable to the Company. Generally, any interest that holds less than 50% of the outstanding voting shares is deemed to be a noncontrolling interest; however, there are other factors, such as decision-making rights, that are considered as well. The Company includes the amount of net income (loss) attributable to noncontrolling interests in consolidated net income (loss) on the face of the consolidated statements of operations. The Company provides in the consolidated statements of stockholders’ equity a reconciliation at the beginning and the end of the period of the carrying amount of total equity, equity attributable to the parent, and equity attributable to the noncontrolling interest that separately discloses: (1) net income or loss; (2) transactions with owners acting in their capacity as owners, showing separately contributions from and distributions to owners; and (3) each component of other income or loss. 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, 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 finance 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” below). 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 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 estimated its 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, 2019, the fair market value of Eton’s common stock was $7.20 per share, the closing share price of Eton common stock on that day. In accordance with Accounting Standards Update (“ASU”) 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities Eton and the Company signed licensing agreements for two products developed by the Company whereby the Company assigned the product rights to Eton. Eton would pay the Company a $50 milestone payment upon patent issuance for each product and a royalty fee at a rate of six percent on the net sales of those two products. On December 26, 2017, one of the products had its patent issued and a $50 milestone fee was received by the Company in January 2018. In July 2018, Eton and the Company agreed to cancel the licensing agreement for one of the products and retain the product rights at the Company, in exchange of the Company paying Eton $50. On May 6, 2019, the Company entered into an Asset Purchase Agreement (the “CT-100 Asset Purchase Agreement”) with Eton. Pursuant to the CT-100 Asset Purchase Agreement, Eton sold all of its right, title and interest in CT-100 back to the Company. Pursuant to the CT-100 Asset Purchase Agreement, the Company will make certain payments to Eton upon the achievement of certain development and commercial milestones. In addition, the Company is required to pay Eton a royalty in the low-single digit percentage range worldwide on a country-by-country basis on net sales for a period of the longer of 15 years from the date of the first commercial sale of a product subject to certain conditions. Mark L. Baum, the Company’s Chief Executive Officer is a member of the Eton board of directors. 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 $76 and $270 as of December 31, 2019 and 2018, 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 Melt Pharmaceuticals, Inc. In April 2018, the Company formed Melt as a wholly owned subsidiary. In January and March of 2019, Melt entered into definitive stock purchase agreements (collectively, the “Melt Series A Preferred Stock Agreement”) with certain investors and closed on the purchase and sale of Melt’s Series A Preferred Stock (the “Melt Series A Stock”), totaling approximately $11,400 of proceeds (collectively the “Melt Series A Round”) at a purchase price of $5.00 per share. As a result, the Company lost voting and ownership control of Melt and ceased consolidating Melt’s financial statements. In connection with the Melt Series A Preferred Stock Agreement, Melt also entered into a Registration Rights Agreement and agreed to use commercially reasonable efforts to file, or confidentially submit, a registration statement on Form S-1 with the United States Securities and Exchange Commission by September 30, 2020 relating to an initial public offering of its common stock. At the time of deconsolidation, the Company recorded a gain of $5,810 and adjusted the carrying value in Melt to reflect the increased valuation of Melt and the Company’s new ownership interest in accordance with ASC 810-10-40-4(c), Consolidation The Company owns 3,500,000 common shares (which is approximately 44% of the equity interest as of December 31, 2019) of Melt 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 Melt. Under this method, the Company recognizes earnings and losses of Melt in its consolidated financial statements and adjusts the carrying amount of its investment in Melt accordingly. The Company’s share of earnings and losses are based on the Company’s ownership interest of Melt. Any intra-entity profits and losses are eliminated. During the year ended December 31, 2019, the Company recorded equity in net loss of Melt of $1,842. As of December 31, 2019, the carrying value of the Company’s investment in Melt was $3,968. See Note 4 for more information and related party disclosure regarding Melt. 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, 2019, 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 years ended December 31, 2019 and 2018, the Company recorded equity in net loss of Surface of $1,200 and $373, respectively. As of December 31, 2019, the carrying value of the Company’s investment in Surface was $3,747. See Note 5 for more information and related party disclosure regarding Surface. 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). Park Restructuring In August 2019, the Company’s subsidiary, Park Compounding, Inc. (“Park”), and Noice Rx, LLC (“Noice”) terminated an Asset Purchase Agreement dated July 26, 2019 (the “Park Purchase Agreement”), between the parties. Under the terms of the Park Purchase Agreement, Park had agreed to sell substantially all its assets associated with its non-ophthalmology pharmaceutical compounding business to Noice, including its pharmacy facility and equipment located in Irvine, California. The closing of the sale transaction was dependent on the California State Board of Pharmacy approving of the sale and issuing a temporary pharmacy and sterile license permit to Noice, which did not occur and led to Park ceasing operations at the close of business on August 27, 2019. As a result, the Company restructured its Park business, ceased operations at its Irvine, California-based pharmacy, and facilitated the transition of certain compounded formulations and related equipment from Park to the Company’s New Jersey-based compounded pharmaceutical production facilities (the “Park Restructuring”). As a result of the Park Restructuring, the Company incurred non-cash impairment costs of approximately $3,781 related to assets held at Park, primarily associated with property, plant, equipment, inventory, goodwill and other intangible assets, and $480 in one-time costs related to severance packages and other costs associated with the Park Restructuring during the year ended December 31, 2019. The Company has reduced the Park compounded product formulary to seven base formulations, based on factors including unit order volumes, revenues and gross margin percentages, and ImprimisRx expects to have re-acquired approximately half of Park’s historical revenues during the first quarter of 2020. 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, 2019 and 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, 2019, the fair market value of the Company’s investment in Eton was $25,200. The Company’s financial instruments included cash and cash equivalents, investment in Eton, accounts receivable, accounts payable and accrued expenses, accrued payroll and related liabilities, deferred revenue and customer deposits, notes payable and operating and finance leases. The carrying amount of these financial instruments, except for notes payable and finance 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 notes payable and operating and finance 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. Basic and Diluted Net Income per Common Share Basic net income per common share is computed by dividing income attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted income per share is computed by dividing the income 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 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 stock options, unvested restricted stock units (“RSUs”) and warrants were 4,848,459 and 6,201,355 at December 31, 2019 and 2018, respectively, and are excluded in the calculation of diluted net income per share for the periods presented, because the effect is anti-dilutive for that time period. Included in the basic and diluted net income 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, 2019 and 2018 was 324,303 and 236,693, respectively. The following table shows the computation of basic net income per share of common stock for the years ended December 31, 2019 and 2018: For the For the Year Ended Year Ended December 31, 2019 December 31, 2018 Numerator – net income $ 168 $ 14,625 Denominator – weighted average number of shares outstanding, basic 25,323,159 21,917,570 Net income per share, basic $ 0.01 $ 0.67 For the years end December 31, 2019 and 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 years ended December 31, 2019 and 2018, respectively,consisted of the following: For the Year Ended For the Year Ended December 31, 2019 December 31, 2018 Shares Shares Diluted shares related to: 25,323,159 21,917,570 Warrants 488,498 1,844,272 Stock options 654,441 50,203 Dilutive common equivalent shares 26,466,098 23,812,045 The following table shows the computation of diluted net income per share using the weighted-average number of common shares and dilutive common equivalent shares outstanding for the years ended December 31, 2019 and 2018: For the For the Year Ended Year Ended December 31, 2019 December 31, 2018 Numerator – net income $ 168 $ 14,625 Weighted average number of shares outstanding, basic 25,323,159 21,917,570 Dilutive common equivalents 1,142,939 1,894,475 Denominator – number of shares used for diluted earnings per share computation 26,466,098 23,812,045 Net income per share, diluted $ 0.01 $ 0.61 Recently Adopted Accounting Pronouncements In February 2016, the FASB issued new lease accounting guidance in ASU 2016-02, Leases Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other In August 2018, the FASB issued ASU 2018-13, Changes to Disclosure Requirements for Fair Value Measurements In December 2019, the FASB issued ASU 2019-12, Income Taxes Simplifying the Accounting for Income Taxes |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2019 | |
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 four intellectual property license and related agreements in which the Company has promised to grant a license or sale which provides a customer with the 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, the revenue of which 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 years ended December 31, 2019 and 2018, consists of the following: For the year ended December 31, 2019 2018 Product sales, net $ 51,137 $ 41,334 License revenues 28 38 Total revenues $ 51,165 $ 41,372 Deferred revenue and customer deposits at December 31, 2019 and 2018, were $57 and $119, respectively. All deferred revenue and customer deposit amounts at December 31, 2018 were recognized as revenue during the year ended December 31, 2019. |
Investment in Melt Pharmaceutic
Investment in Melt Pharmaceuticals, Inc. and Agreements - Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment in Melt Pharmaceuticals, Inc. and Agreements - Related Party Transactions | NOTE 4. INVESTMENT IN MELT PHARMACEUTICALS, INC. AND AGREEMENTS - RELATED PARTY TRANSACTIONS In December 2018, the Company entered into an asset purchase agreement with Melt (the “Melt Asset Purchase Agreement”). Pursuant to the terms of the Melt Asset Purchase Agreement, Melt was assigned certain intellectual property and related rights from the Company to develop, formulate, make, sell, and sub-license certain Company conscious sedation and analgesia related formulations (collectively, the “Melt Products”). Under the terms of the Melt Asset Purchase Agreement, Melt is required to make royalty payments to the Company of 5% of net sales of the Melt Products while any patent rights remain outstanding, as well as other conditions. In January and March 2019, the Company entered into the Melt Series A Preferred Stock Agreement, see also Note 2, under the subheading Investment in Melt Pharmaceuticals, Inc In February 2019, the Company and Melt entered into a Management Services Agreement (the “Melt MSA”), whereby the Company provides to Melt certain administrative services and support, including bookkeeping, web services and human resources related activities, and Melt pays the Company a monthly amount of $10. As of December 31, 2019, the Company was due $722 from Melt for reimbursable expenses and amounts due under the Melt MSA and included in prepaid expenses and other current assets on the accompanying consolidated balance sheets. During the year ended December 31, 2019, Melt paid the Company $50. The Company’s Chief Executive Officer, Mark L. Baum, and Chief Medical Officer, Larry Dillaha, are members of the Melt board of directors, and several employees of the Company (including Mr. Baum, Mr. Dillaha and the Company’s Chief Financial Officer, Andrew Boll) entered into consulting agreements and provide consulting services to Melt. The unaudited condensed results of operations information of Melt is summarized below: For the Year Ended December 31, 2019 Revenues, net $ - Loss from operations 4,169 Net loss $ (4,169 ) The unaudited condensed balance sheet information of Melt is summarized below: December 31, 2019 Current assets $ 7,440 Non current assets 13 Total assets $ 7,453 Total liabilities $ 1,656 Total preferred stock and stockholders’ equity 5,797 Total liabilities and stockholders’ equity $ 7,453 |
Investment in Surface Pharmaceu
Investment in Surface Pharmaceuticals, Inc. and Agreements - Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
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 associated with Surface’s drug candidates (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. During the year ended December 31, 2019, the Company was paid $50 from Surface for amounts due under the Surface MSA. There are no amounts due from Surface to the Company as of December 31, 2019. As of December 31, 2019, the Company owned 3,500,000 shares of Surface common stock (approximately 30% of the issued and outstanding equity interests). A Company director, 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) 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 who purchased the Surface Series A Stock. The unaudited condensed results of operations information of Surface is summarized below: For the Year Ended For the Year Ended December 31, 2019 December 31, 2018 Revenues, net $ - $ - Loss from operations 4,000 1,370 Net loss $ (4,000 ) $ (1,370 ) The unaudited condensed balance sheet information of Surface is summarized below: At December 31, At December 31, 2019 2018 Current assets $ 15,942 $ 19,699 Non current assets 47 50 Total assets 15,989 19,749 Total liabilities 619 165 Total stockholders equity 15,370 19,584 Total liabilities and stockholders’ equity $ 15,989 $ 19,749 |
Restricted Cash
Restricted Cash | 12 Months Ended |
Dec. 31, 2019 | |
Restricted Cash [Abstract] | |
Restricted Cash | NOTE 6. RESTRICTED CASH The restricted cash at December 31, 2019 and 2018 consisted of funds held in a money market account. At December 31, 2019 and 2018, the restricted cash was recorded at amortized cost, which approximates fair value. At December 31, 2019 and 2018, 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, 2019 | |
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, 2019 and 2018 was as follows: December 31, 2019 December 31, 2018 Raw materials $ 2,405 $ 1,119 Work in progress 20 6 Finished goods 876 709 Total inventories $ 3,301 $ 1,834 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 December 31, 2018 Prepaid insurance $ 123 $ 328 Other prepaid expenses 358 334 Receivable due from Surface - 50 Receivable due from Melt 722 - Deposits and other current assets 105 125 Total prepaid expenses and other current assets $ 1,308 $ 837 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | NOTE 9. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment at December 31, 2019 and 2018 consisted of the following: December 31, 2019 December 31, 2018 Property, plant and equipment, net: Computer software and hardware $ 1,732 $ 1,662 Furniture and equipment 363 397 Lab and pharmacy equipment 3,164 3,184 Leasehold improvements 5,510 5,496 10,769 10,739 Accumulated depreciation and amortization (5,394 ) (4,364 ) $ 5,375 $ 6,375 The Company recorded depreciation and amortization expense of $1,936 and $1,608 during the years ended December 31, 2019 and 2018, respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | NOTE 10. INTANGIBLE ASSETS AND GOODWILL The Company’s intangible assets at December 31, 2019 consisted of the following: Amortization Net periods Accumulated Carrying (in years) Cost amortization Impairment value Patents 17-19 years $ 1,102 $ (97 ) $ (259 ) $ 746 Licenses 20 years 50 (5 ) - 45 Trademarks Indefinite 340 - - 340 Customer relationships 3-15 years 3,000 (1,165 ) (630 ) 1,205 Trade name 5 years 16 (14 ) (2 ) - Non-competition clause 3-4 years 294 (274 ) (20 ) - State pharmacy licenses 25 years 45 (9 ) (35 ) 1 $ 4,847 $ (1,564 ) $ (946 ) $ 2,337 During the year ended December 31, 2019 the Company incurred impairment charges of $612 related to intangible assets, including customer relationships, trade name, and state pharmacy licenses as a part of the Park Restructuring and $259 of impairment charges related to patents associated with the termination of an asset agreement. Amortization expense for intangible assets for the year ended December 31 was as follows: For the Year Ended For the Year Ended December 31, 2019 December 31, 2018 Patents $ 48 $ 28 Licenses 5 - Customer relationships 151 201 Trade name 1 4 Non-competition clause - 1 State pharmacy licenses 4 2 $ 209 $ 235 Estimated future amortization expense for the Company’s intangible assets at December 31, 2019 is as follows: Years ending December 31, 2020 $ 187 2021 187 2022 187 2023 187 2024 159 Thereafter 1,430 $ 2,337 Changes in the carrying value of the Company’s goodwill during the year ended December 31, 2019 were: Balance at December 31, 2018 $ 2,227 Impairment of Park goodwill (see Note 2) (1,895 ) Balance at December 31, 2019 $ 332 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | NOTE 11. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses at December 31, 2019 and 2018 consisted of the following: December 31, 2019 December 31, 2018 Accounts payable $ 7,409 $ 4,966 Other accrued expenses 49 640 Deferred rent - 388 Accrued interest (see Note 12) 244 256 Accrued exit fee for note payable (see Note 12) 800 800 Total accounts payable and accrued expenses 8,502 7,050 Less: Current portion (7,702 ) (6,250 ) Non-current total accrued expenses $ 800 $ 800 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 12. DEBT SWK Senior Note – 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 could be reduced to four years if certain revenue requirements are not achieved. The SWK Loan is secured by nearly all of the Company’s assets, including its intellectual property rights. Prior to the loan refinance in May 2019 (see below), the SWK Loan was bearing 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 permitted 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 was 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, were previously due and payable on July 19, 2022. The Company is 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 11) in the accompanying consolidated balance sheets as of December 31, 2019 and 2018. 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%. SWK Refinance – May 2019 In May 2019, the Company entered into a joinder and amendment (the “Amendment”) to the SWK Loan and SWK, as lender and collateral agent. A summary of the material changes contained in the Amendment are as follows: ● The interest rate calculation that the loan bears is now equal to the three-month London Inter-Bank Offered Rate (subject to a minimum of 2.00%), plus an applicable margin of 10.00% (the “Margin Rate”); provided that, if, two days prior to a payment date, the Company provides SWK evidence that the Company has achieved a leverage ratio as of such date of less than 4.00:1:00, the Margin Rate shall equal 9.00%; and if the Company has achieved a leverage ratio as of such date of less than 3.00:1:00, the Margin Rate shall equal 7.00%; ● Leverage ratio in the Amendment means, as of any date of determination, the ratio of: (a) indebtedness as of such date to (b) EBITDA (as defined in the SWK Loan), of the Company for the immediately preceding twelve (12) month period, adding-back (i) actual litigation expenses for the immediately preceding twelve (12) month period, minus (ii) actual litigation expenses for the immediately preceding three (3) month period multiplied by four (4); ● The definition of the first amortization date was changed to May 14, 2020, permitting the Company to pay interest only on the principal amount loaned for the next four payments (payments are due on a quarterly basis) following the Amendment; and ● Subject to the satisfaction of certain revenue and market capitalization requirements and conditions, SWK agreed to make available to the Company an additional principal amount of up to $5,000. In addition to the terms described above, the Amendment joined the Company’s recently created subsidiaries to the SWK Loan and added definitions related to excluded subsidiaries that are not considered co-borrowers and are subsidiaries of the Company which the Company believes it will eventually deconsolidate from its financials and lose 50% or more of the equity interests of the subsidiary. Related to the Amendment, the Company incurred expenses related to legal and lender costs of $282 that are included in debt discount and will be amortized over the term of the SWK Loan. At December 31, 2019, future minimum payments under the Company’s note payable were as follows: Amount 2020 $ 3,703 2021 4,121 2022 3,828 2023 7,573 Total minimum payments 19,225 Less: amount representing interest (3,975 ) Notes payable, gross 15,250 Less: unamortized discount (1,259 ) 13,991 Less: current portion, net of unamortized discount (1,772 ) Note payable, net of current portion and unamortized debt discount $ 12,219 For the years ended December 31, 2019 and 2018, debt discount amortization related to the note payable was $495 and $520, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | NOTE 13. LEASES The Company adopted Topic 842 on January 1, 2019. Topic 842 allows the Company to elect a package of practical expedients, which include: (i) an entity need not reassess whether any expired or existing contracts are or contain leases; (ii) an entity need not reassess the lease classification for any expired or existing leases; and (iii) an entity need not reassess any initial direct costs for any existing leases. Another practical expedient allows the Company to use hindsight in determining the lease term when considering lessee options to extend or terminate the lease and to purchase the underlying asset. The Company has elected to utilize the package of practical expedients and has not elected the hindsight methodology in its implementation of Topic 842. The Company elected to adopt this standard using the modified retrospective transition method and recognized a cumulative-effect adjustment to the consolidated balance sheet on the date of adoption. Comparative periods have not been restated. With the adoption of Topic 842, the Company’s consolidated balance sheet now contains the following line items: Right-of-use assets, Operating lease liabilities—short-term and Operating lease liabilities—long-term. The Company determined that it held the following significant operating leases of office and laboratory space as of December 31, 2019 (square footage is not described in thousands): ● An operating lease for 10,200 square feet of office space in San Diego, California that expires in December 2021, with an option to extend the term for a five-year period; ● An operating lease for 4,500 square feet of office and lab space in Irvine, California that expires in December 2020, with an option to extend the term for up to two five-year periods. As part of the Park Restructuring, the Company assessed its obligations under this lease. As of the date of this Annual Report, the Company expects to sublease this space and has determined that there is a practical ability to do so, and as a result did not recognize any impairment costs related to this lease and the Company’s right-to-use asset; ● An operating lease for 25,000 square feet of lab, warehouse and office space in Ledgewood, New Jersey that expires in July 2024, with an option to extend the term for two additional five-year periods; and ● An operating lease for 5,500 square feet of office space in Nashville, Tennessee that expires in December 2024, with an option to extend the term for two additional five-year periods. The extensions within the San Diego, California and Ledgewood, New Jersey operating lease agreements were included within the Company’s calculation of the new lease standard as the Company is reasonably certain it will exercise its option to extend these leases. The extensions within the Nashville lease were not included within the Company’s calculation of the new lease standards as the Company is not reasonably certain it will exercise its option to extend that lease. The Company has elected to not recognize right-of-use assets and lease liabilities arising from short-term leases, which are leases that, at the commencement date, have a lease term of 12 months or less and do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. The previously classified capital leases are now classified as finance leases under the new standard. The Company has determined that the identified finance leases did not contain non-lease components and require no further allocation of the total lease cost. The Company has determined that the identified operating leases did contain non-lease components and elected an accounting policy to combine non-lease and lease components to determine the total lease cost. Additionally, the operating agreements in place did not contain information to determine the rate implicit in the leases. As such, the Company calculated the incremental borrowing rate based on the assumed remaining lease term for each lease in order to calculate the present value of the remaining lease payments. At December 31, 2019, the weighted average incremental borrowing rate and the weighted average remaining lease term for the operating leases held by the Company were 6.3% and 10.21 years, respectively. Upon adoption of Topic 842, the Company recorded a $6,325 increase in operating lease right-of-use assets, a $388 decrease in accounts payable and accrued expenses and a $6,712 increase in operating lease liability. The Company did not record any cumulative effect adjustments to opening stockholders’ equity. In October 2019 the Company signed a new operating lease for 5,500 square feet of office space in Nashville, Tennessee. Upon the execution of the lease, the Company recorded a $753 increase in operating lease right-of-use assets and operating lease liability. As of December 31, 2019, right-of-use assets and liabilities arising from operating leases were $6,559 and $6,967, respectively. During the year ended December 31, 2019, cash paid for amounts included for the operating lease liabilities totaled $905 and the Company recorded operating lease expense of $892 included in selling, general and administrative expenses, respectively. Future lease payments under operating leases as of December 31, 2019 were as follows : Operating Leases 2020 $ 1,095 2021 978 2022 998 2023 1,023 2024 1,023 Thereafter 4,465 Total minimum lease payments 9,582 Less: amount representing interest payments (2,615 ) Total operating lease liabilities 6,967 Less: current portion, operating lease liabilities (629 ) Operating lease liabilities, net of current portion $ 6,338 The Company also has one additional finance lease that is included in its lease accounting but is not considered significant. Future lease payments under non-cancelable finance leases as of December 31, 2019 were as follows : Finance Lease 2020 $ 9 2021 9 2022 9 2023 9 2024 1 Total minimum lease payments 37 Less: amount representing interest payments (4 ) Present value of future minimum lease payments 33 Less: current portion, finance lease obligation (7 ) Finance lease obligation, net of current portion $ 26 At December 31, 2019, the weighted average incremental borrowing rate and the weighted average remaining lease term for the finance leases held by the Company were 6.36% and 4.08 years, respectively. For the year ended December 31, 2019, debt discount amortization related to a finance lease obligation was $17, and included in interest expense, net. For the year ended December 31, 2019, depreciation expense related to the equipment held under the finance lease obligations was $150. For the year ended December, 2019, cash paid and expense recognized for interest expense related to finance lease obligations was $18. Future minimum lease payments under operating leases and future minimum capital lease payments as of December 31, 2018 were as follows: Capital Leases Operating Leases 2019 $ 751 $ 797 2020 - 857 2021 - 742 2022 - 320 2023 - 330 Thereafter - 196 $ 751 $ 3,242 Less: Amounts representing interest (15 ) Less: Amounts representing unamortized discount (16 ) Total obligation under capital leases 720 Less: Current portion of capital leases (720 ) Long term capital lease obligation $ - |
Stockholders' Equity and Stock-
Stockholders' Equity and Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity and Stock-Based Compensation | NOTE 14. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION Common Stock At December 31, 2019 and 2018, the Company had 50,000,000 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, 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 year ended December 31, 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. Issuances During the Year Ended December 31, 2019 In March 2019, the Company issued 15,000 shares of its restricted common stock, with a fair value of $75, as consideration for commission expenses incurred during the year ended December 31, 2018. During the year ended December 31, 2019, the Company issued 27,671 shares of its common stock upon the cashless exercise of 82,929 options to purchase common stock, with exercise prices ranging from $1.70 to $4.17 per share, net of 8,806 shares of common stock withheld for payroll tax withholdings totaling $50. During the year ended December 31, 2019, the Company issued 2,122 shares of its common stock upon the exercise of 2,122 options to purchase common stock, with exercise prices ranging from $1.70 to $3.20 per share, and received net proceeds of $6. During the year ended December 31, 2019, the Company issued 688,473 shares of its common stock upon the cashless exercise of 964,532 warrants to purchase common stock with an exercise price of $1.79 per share. During the year ended December 31, 2019, the Company issued 454,055 shares of its common stock upon the exercise of 454,055 warrants to purchase common stock with an exercise price of $1.79 per share, and received net proceeds of $813. During the year ended December 31, 2019, 87,610 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, 2019 and 2018, 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 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 “Plans”). As of December 31, 2019, the 2017 Plan provides for the issuance of a maximum of 2,000,000 shares of the Company’s common stock. The purpose of the Plans are 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 Plans, 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 Plans are administered by the Compensation Committee of the Company’s Board of Directors. The Company had 1,004,656 shares available for future issuances under the 2017 Plan at December 31, 2019. Stock Options A summary of stock option activity under the Plan for the year ended December 31, 2019 is as follows: Number of shares Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life Aggregate Intrinsic Value Options outstanding - January 1, 2019 2,482,009 $ 5.09 Options granted 362,000 $ 6.19 Options exercised (85,051 ) $ 3.56 Options cancelled/forfeit (102,275 ) $ 4.67 Options outstanding - December 31, 2019 2,656,683 $ 5.31 5.05 $ 7,011 Options exercisable 1,603,530 $ 4.57 5.72 $ 5,552 Options vested and expected to vest 2,558,998 $ 5.26 5.10 $ 6,911 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, 2019, based on the closing price of the Company’s common stock of $7.78 on that date. The intrinsic value of the options exercised in 2019 was $246. During 2019 and 2018, 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 ten years. Vesting terms for options granted in 2019 and 2018 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; and 90% of the shares subject to the option vest and become exercisable on the second month after the grant date and the remaining 10% of the shares subject to the option vest and become exercisable quarterly in equal installments thereafter over the next 11 months. 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: 2019 2018 Weighted-average fair value of options granted $ 3.72 $ 1.42 Expected terms (in years) 5.07 - 7.00 5.77 - 6.11 Expected volatility 64 - 78 % 76 - 126 % Risk-free interest rate 1.83 – 2.68 % 2.05 – 3.00 % Dividend yield - - The following table summarizes information about stock options outstanding and exercisable at December 31, 2019: Weighted Average Weighted Weighted Remaining Average Average Number Contractual Exercise Number Exercise Range of Exercise Prices Outstanding Life in Years Price Exercisable Price $1.47 - $2.60 781,940 6.66 $ 2.05 619,016 $ 2.10 $3.04 - $4.50 458,622 6.09 $ 3.96 440,124 $ 3.98 $5.49 - $6.36 440,350 7.91 $ 6.15 178,619 $ 6.08 $6.64 - $8.99 970,741 1.99 $ 8.01 360,741 $ 8.24 $42.80 5,030 0.62 $ 42.80 5,030 $ 42.80 $1.47 - $42.80 2,656,683 5.05 $ 5.31 1,603,530 $ 4.57 As of December 31, 2019, there was approximately $3,848 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 1.37 years. The stock-based compensation for all stock options was $889 and $1,317 during the years ended December 31, 2019 and 2018, 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, 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 Grants During the Year Ended December 31, 2019 During the year ended December 31, 2019, 185,000 RSUs with a fair market value of $1,139 were issued to certain employees; the RSUs vest in full on the third anniversary of the grant date. During the year ended December 31, 2019, the Company’s board of directors were granted 38,860 RSUs with a fair market value $300 which vests on a quarterly basis, over one year in equal installments, 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, 2019 is as follows: Number of RSUs Weighted Average Grant Date Fair Value RSUs unvested - January 1, 2019 1,275,680 $ 2.16 RSUs granted 223,860 $ 6.43 RSUs vested (87,610 ) $ 3.42 RSUs cancelled/forfeit - RSUs unvested at December 31, 2019 1,411,930 $ 2.76 As of December 31, 2019, the total unrecognized compensation expense related to unvested RSUs was approximately $1,031 which is expected to be recognized over a weighted-average period of 0.3 years, based on estimated vesting schedules. The stock-based compensation for RSUs was $879 and $1,149 during the years ended December 31, 2019 and 2018, respectively. Subsidiary Stock-Based Transactions Surface Pharmaceuticals, Inc. and Melt Pharmaceuticals, Inc. – 2018 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. Mayfield Pharmaceuticals, Inc. - 2019 Mayfield issued 1,000,000 shares of its common stock to Elle in connection with acquisition of certain drug candidate intellectual property and rights in February 2019. Mayfield issued 300,000 shares of its common stock to TGV in connection with acquisition of certain drug candidate intellectual property and rights in July 2019. During the year ended December 31, 2019, the Company recognized $26 in stock-based compensation related to equity instruments granted by Mayfield for 2,450,000 shares of its restricted common stock that vest upon various performance based milestones and service periods to consultants of Mayfield, including Mayfield’s CEO candidate and to Harrow employees, including 725,000 shares to Mark Baum, CEO of the Company, and 362,500 shares to Andrew Boll, CFO of the Company. Stowe Pharmaceuticals, Inc. - 2019 In July 2019, Stowe agreed to issue 1,750,000 shares of its common stock to TGV in connection with acquisition of certain drug candidate intellectual property and rights. 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 Year Ended For the Year Ended December 31, 2019 December 31, 2018 Employees – selling, general and administrative $ 1,464 $ 2,251 Directors – selling, general and administrative 300 235 Consultants - selling general and administrative 259 150 Total $ 2,023 $ 2,636 Warrants From time to time, the Company issues warrants to purchase shares of the Company’s common stock to investors, lenders (see Note 12), 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, 2019 is as follows: Number of Shares Subject to Warrants Outstanding Weighted Avg. Exercise Price Warrants outstanding - January 1, 2019 2,206,973 $ 1.91 Granted - Exercised (1,418,587 ) $ 1.79 Expired (8,000 ) $ 1.79 Warrants outstanding and exercisable - December 31, 2019 780,386 $ 2.12 Weighted average remaining contractual life of the outstanding warrants in years - December 31, 2019 4.53 All warrants outstanding as of December 31, 2019 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 Lender warrants (see Note 12) 7/19/2017 615,386 $ 2.08 615,386 7/19/2024 780,386 $ 2.12 780,386 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 15. 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, 2019 and 2018 are summarized below: December 31, 2019 December 31, 2018 Current: Federal $ - $ - State 8 6 Total current $ 8 $ 6 Deferred: Federal $ 669 $ 3,294 State (148 ) 440 Change in valuation allowance (521 ) (3,734 ) Total deferred 0 0 Income tax provision (benefit) $ 8 $ 6 Income tax expense for the years ended December 31, 2019 and 2018, 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, 2019 December 31, 2018 U.S. federal statutory tax rate 21.00 % 21.00 % Benefit of lower tax brackets 0.00 % 0.00 % State tax benefit, net (6.73 )% 0.04 % Research and development credits 0.00 % (0.14 )% Employee stock-based compensation 3.10 % 0.46 % Loss on debt conversion 0.00 % 0.00 % Capitalization of Subsidiary 0.00 % 0.00 % Change in Rate 0.00 % 0.00 % Other (358.67 )% 0.13 % Valuation allowance 334.57 % (21.93 )% Effective income tax rate (6.73 )% (0.44 )% 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, 2019 December 31, 2018 Deferred tax assets (liabilities): NOLs $ 19,827 $ 19,726 Depreciation and amortization 224 30 Other 640 604 Research and development credits 596 617 Deferred stock compensation 3,533 3,036 Basis Difference in Melt (1,185 ) - Basis Difference in Surface (1,119 ) (1,464 ) Basis Difference in Eton (7,528 ) (6,340 ) Capital Losses 62 - Park stock purchase identifiable intangibles (270 ) (484 ) Limitation Under 163(j) 299 - ASC 842 Lease Liability 2,082 - ASC 842 ROU Asset (1,959 ) - Total deferred tax assets, net 15,202 15,723 Valuation allowance (15,202 ) (15,723 ) 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 $500 and $3,700 during 2019 and 2018, respectively. As of December 31, 2019, the Company had net operating loss carryforwards for federal income tax purposes of approximately $65,874 and federal research and development tax credits of approximately $354. 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, 2019, the Company had net operating loss carryforwards for state income tax purposes of approximately $67,538 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, 2019 and 2018, 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, 2019. A reconciliation of the change in the UTB balance from January 1, 2019 to December 31, 2019 is as follows: Fed & State Tax Balance at January 1, 2019 $ - Additions for tax positions related to current year - Additions/(reductions) for tax positions related to prior years - Balance at December 31, 2019 - Total unrecognized tax benefits as of December 31, 2019 - |
Employee Savings Plan
Employee Savings Plan | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Employee Savings Plan | NOTE 16. 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 $312 and $248 to the plan during the years ended December 31, 2019 and 2018, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 17. COMMITMENTS AND CONTINGENCIES 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. The Court approved the parties’ proposed settlement agreement in the spring of 2019. During the year ended December 31, 2018, the Company accrued $640 for expected damages related to this matter and the proposed settlement amount. As a result of the low claim rate of approximately 1.4%, the Company’s total damages were $571, which was paid in October 2019. This formally resolved all known disputes between the parties. 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 the Company, primarily claiming violations under the federal Lanham Act and California’s Sherman Act. The Court granted in part and denied in part each parties’ motions for summary judgement, resolving all issues except for whether Allergan was entitled to damages related to the Company’s purported Lanham Act violations. The parties went to trial in May 2019 to litigate damages related to the Lanham Act, and a jury found the Company liable for only $49 in lost profit damages, which was accrued as an expense during the period ended December 31, 2019 (see Note 11). In July 2019, the Court entered a permanent injunction, the scope of which is limited to compounded drugs prepared in, dispensed from within, or shipped to the state of California. The injunction requires the Company to: (1) only dispense drugs from a 503(a) facility with a “Valid Prescription Order”; (2) abide by the FDA’s anticipatory compounding guidelines; and (3) only use bulk drug substances identified on a list established by the Secretary of Health and Human Services or FDA’s interim “Category 1” list. The Company believes it was already in compliance with the order, prior to the injunction being ordered. On October 2, 2019, Allergan and the Company filed a joint stipulation to voluntarily dismiss each parties’ respective pending appeals arising out of the lawsuit. No economic consideration was exchanged between the parties related to the filing of the joint stipulation. This formally resolved all known disputes between the parties. 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 Park, by the prescribing healthcare professional. Park filed a response to the accusation and requested a formal hearing. In April 2019, Park agreed to, and the California State Board of Pharmacy approved terms of a settlement agreement (the “Settlement Agreement”) that became effective on May 29, 2019. Pursuant to the terms of the Settlement Agreement, Park was required to, and did, surrender its California pharmacy license by August 27, 2019. This formally resolved all known disputes between the parties. 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 2019, NDS filed a second amended complaint which added a claim related to its purported termination of the APA. In October 2019, NDS voluntarily dismissed all claims related to breach of contract, leaving only claims related to the scope of the post-termination obligations to be litigated. The Company believes the claims are meritless and has previously and will continue to dispute all claims asserted against it and intends to vigorously defend against these allegations. Nonetheless, the Company cannot predict the eventual outcome of this litigation and, 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. We utilize traditional third-party insurance policies with regard to our 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 us as a co-defendant. In September 2018, co-defendant Dr. Kelly filed a cross-complaint against the Company and various entities affiliated with Spectrum Laboratory Products, Inc., Spectrum Chemical Manufacturing Corp. and Spectrum Pharmacy Products, Inc. (collectively “Spectrum”). 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 believes the claims are meritless and has previously and will continue to dispute all claims asserted against it and intends to vigorously defend against 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. Anna Sue Gaukel et al. In June 2019, Anna Sue Gaukel and Lawrence Gaukel served the Company with a lawsuit filed in state court in Idaho against Imprimis Pharmaceuticals, Inc. asserting class action allegations and product liability claims related to Mrs. Gaukel’s doctor’s use of a compounded drug injection in each of her eyes. In June 2019, the Company removed the case to Federal Court and subsequently answered the complaint. On January 24, 2020, the plaintiffs and the Company filed a joint stipulation, and the case was dismissed with prejudice. No economic consideration was exchanged between the parties related to the filing of the joint stipulation. This formally resolved all known disputes between the parties as connected to this matter. 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. Sales and Marketing Agreements During 2017 through 2019, 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 and recorded in additional paid in capital $159 and $42 related to stock-based payments for these agreements during the year ended December 31, 2019 and 2018, respectively, and $2,700 and $1,511 were incurred under these agreements for commission expenses during the years ended December 31, 2019 and 2018, 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. $371 and $245 were accrued in accounts payable and accrued expenses under these agreements during the years ended December 31, 2019 and 2018, respectively, and $846 and $561 were incurred under these agreements as royalty expenses for the years ended December 31, 2019 and 2018, respectively. Mayfield License In July 2019, Mayfield entered into a License Agreement (the “TGV License”) with TGV to acquire intellectual property rights for use in the women’s health field, related to Mayfield’s proprietary drug candidate MAY-66. The TGV License provides that TGV will cooperate with Mayfield in transferring all embodiments of the intellectual property (including know-how) related to the TGV License, assist in obtaining and protecting its patent rights for the acquired intellectual property and that Mayfield will use commercially reasonable efforts to research, develop and commercialize products based on the acquired intellectual property. In connection with the TGV License, Mayfield is obligated to make royalty payments to TGV equal to a low single digit percentage of net sales received by Mayfield in connection with the sale or licensing of any product based on the licensed intellectual property. In addition, Mayfield issued 300,000 shares of its common stock to TGV and is required to make certain milestone payments to TGV over the development of MAY-66 and any related products based on the licensed intellectual property. Stowe License In July 2019, Stowe entered into a License Agreement (the “Stowe License”) with TGV, to acquire intellectual property rights for use in the ophthalmology and otic health field, related to Stowe’s proprietary drug candidate STE-006. The Stowe License provides that TGV will cooperate with Stowe in transferring all embodiments of the intellectual property (including know-how) related to the Stowe License, assist in obtaining and protecting its patent rights for the acquired intellectual property and that Stowe will use commercially reasonable efforts to research, develop and commercialize products based on the acquired intellectual property. In connection with the Stowe License, Stowe is obligated to make royalty payments to TGV equal to a low single digit percentage of net sales received by Stowe in connection with the sale or licensing of any product based on the licensed intellectual property. In addition, Stowe issued 1,750,000 shares of its common stock to TGV and is required to make certain milestone payments to TGV over the development of STE-006 and any related products based on the licensed intellectual property. 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 $63 and $122 in cash during the years ended December 31, 2019 and 2018, respectively, and was due an additional $55 and $15 at December 31, 2019 and 2018, respectively. The Company incurred $103 and $118 for royalty expenses related to the Klarity License Agreement during the years ended December 31, 2019 and 2018, respectively. Injectable Asset Purchase Agreement – Related Party In December 2019, the Company entered into an asset purchase agreement (the “Lindstrom APA”) with Dr. Lindstrom, a member of its Board of Directors. Pursuant to the terms of the Lindstrom APA, the Company acquired certain intellectual property and related rights from Dr. Lindstrom to develop, formulate, make, sell, and sub-license an ophthalmic injectable product (the “Lindstrom Product”). Under the terms of the Lindstrom APA, the Company is required to make royalty payments to Dr. Lindstrom ranging from 2% to 3% of net sales, dependent upon the final formulation and patent protection of the Lindstrom Product sold. In addition, the Company is required to make certain milestone payments to Dr. Lindstrom including an initial payment of $33 upon execution of the Lindstrom APA. Dr. Lindstrom was paid $0 in cash during the year ended December 31, 2019, and was due $40 at December 31, 2019. The Company incurred $40 for royalty expenses related to the Lindstrom Agreement during the year ended December 31, 2019. Presbyopia Asset Purchase Agreement – Related Party In December 2019, the Company entered into an asset purchase agreement (the “Presbyopia APA”) with Dr. Lindstrom, a member of its Board of Directors. Pursuant to the terms of the Presbyopia APA, the Company acquired certain intellectual property and related rights from Dr. Lindstrom to develop, formulate, make, sell, and sub-license an ophthalmic topical product to treat presbyopia (the “Presbyopia Product”). Under the terms of the Presbyopia Product, the Company is required to make royalty payments to Dr. Lindstrom ranging from 2% to 4% of net sales, dependent upon the final formulation and patent protection of the Presbyopia Product sold. Dr. Lindstrom was paid $0 in cash during the year ended December 31, 2019, and was due $0 at December 31, 2019. The Company incurred $0 for royalty expenses related to the Presbyopia APA during the year ended December 31, 2019. |
Segment Information and Concent
Segment Information and Concentrations | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information and Concentrations | NOTE 18. SEGMENT INFORMATION AND CONCENTRATIONS Beginning on January 1, 2019, the Company began evaluating performance of the Company based on operating segments. Segment performance for its two operating segments are based on segment contribution. The Company’s reportable segments consist of (i) its commercial stage pharmaceutical compounding business (Pharmaceutical Compounding), generally including the operations of ImprimisRx and the former Park businesses; and (ii) its start-up operations associated with pharmaceutical drug development business (Pharmaceutical Drug Development). Segment contribution for the 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: ● Selling, general and administrative expenses that result from shared infrastructure, including certain expenses associated with legal matters, public company costs (e.g. investor relations), board of directors and principal executive officers and other like shared expenses. ● 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. ● 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. The Company defines segment net revenues as pharmaceutical compounded drug sales, licenses and other revenue derived from related agreements. Cost of sales within segment contribution includes direct and indirect costs to manufacture formulations and sell products, including active pharmaceutical ingredients, personnel costs, packaging, storage, royalties, shipping and handling costs, manufacturing equipment and tenant improvements depreciation, the write-off of obsolete inventory and other related expenses. Selling, general and administrative expenses consist mainly of personnel-related costs, marketing and promotion costs, distribution costs, professional service costs, insurance, depreciation, facilities costs, transaction costs, and professional services costs which are general in nature and attributable to the segment. Segment net revenues, segment operating expenses and segment contribution information consisted of the following for the year ended December 31, 2019: For the Year Ended December 31, 2019 Pharmaceutical Pharmaceutical Compounding Drug Development Total Net revenues $ 51,165 $ - $ 51,165 Cost of sales (16,749 ) - (16,749 ) Gross profit 34,416 - 34,416 Operating expenses: Selling, general and administrative 24,468 174 24,642 Research and development 1,006 361 1,367 Segment contribution $ 8,942 $ (535 ) $ 8,407 Corporate 8,245 Research and development 716 Amortization 209 Asset sales and impairments, net 4,040 Operating loss $ (4,803 ) The Company categorizes revenues by geographic area based on selling location. All operations are currently located in the U.S.; therefore, total revenues are attributed to the U.S. All long-lived assets at December 31, 2019 and December 31, 2018 are located in the U.S. The Company sells its compounded formulations to a large number of customers. There were no customers who comprised more than 10% of the Company’s total pharmacy sales for the year ended December 31, 2019 and 2018. The Company receives its active pharmaceutical ingredients from three main suppliers. These suppliers collectively accounted for 73% of active pharmaceutical ingredient purchases during the year ended December 31, 2019, and 51% during the year ended December 31, 2018. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 19. SUBSEQUENT EVENTS The Company has performed an evaluation of events occurring subsequent to December 31, 2019 through the filing date of this Annual Report and determined that no subsequent events have occurred that would require recognition in the financial statements or disclosures in the notes thereto. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
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 (“GAAP”). The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, as well as Mayfield and Stowe, 70% majority controlled subsidiaries of Harrow as of December 31, 2019. The remaining 30% of Mayfield is owned by Elle Pharmaceutical, LLC (“Elle”), TGV-Health, LLC and its affiliated entities (collectively “TGV”) or other consultants. Mayfield was organized to develop women’s health-focused drug candidates. The remaining 30% of Stowe is owned by TGV. Stowe was organized to develop ophthalmic drug candidates. All inter-company accounts and transactions have been eliminated in consolidation. Harrow consolidates entities in which we have a controlling financial interest. We consolidate subsidiaries in which we hold and/or control, directly or indirectly, more than 50% of the voting rights. 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, renewal periods and discount rates for leases, 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 While there is no assurance, the Company believes cash generated from its operations, along with its existing cash resources, restricted cash and marketable securities of approximately $30,149 at December 31, 2019, 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. |
Segments | Segments The Company’s chief operating decision-maker is its Chief Executive Officer who makes resource allocation decisions and assesses performance based on financial information presented on as operating segments. The Company has identified two operating segments as reportable segments. See Note 18 for more information regarding the Company’s reportable segments. |
Noncontrolling Interests | Noncontrolling Interests The Company recognizes any noncontrolling interest as a separate line item in equity in the consolidated financial statements. A noncontrolling interest represents the portion of equity ownership in a less-than-wholly owned subsidiary not attributable to the Company. Generally, any interest that holds less than 50% of the outstanding voting shares is deemed to be a noncontrolling interest; however, there are other factors, such as decision-making rights, that are considered as well. The Company includes the amount of net income (loss) attributable to noncontrolling interests in consolidated net income (loss) on the face of the consolidated statements of operations. The Company provides in the consolidated statements of stockholders’ equity a reconciliation at the beginning and the end of the period of the carrying amount of total equity, equity attributable to the parent, and equity attributable to the noncontrolling interest that separately discloses: (1) net income or loss; (2) transactions with owners acting in their capacity as owners, showing separately contributions from and distributions to owners; and (3) each component of other income or loss. |
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, 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 finance 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” below). 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 |
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 estimated its 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, 2019, the fair market value of Eton’s common stock was $7.20 per share, the closing share price of Eton common stock on that day. In accordance with Accounting Standards Update (“ASU”) 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities Eton and the Company signed licensing agreements for two products developed by the Company whereby the Company assigned the product rights to Eton. Eton would pay the Company a $50 milestone payment upon patent issuance for each product and a royalty fee at a rate of six percent on the net sales of those two products. On December 26, 2017, one of the products had its patent issued and a $50 milestone fee was received by the Company in January 2018. In July 2018, Eton and the Company agreed to cancel the licensing agreement for one of the products and retain the product rights at the Company, in exchange of the Company paying Eton $50. On May 6, 2019, the Company entered into an Asset Purchase Agreement (the “CT-100 Asset Purchase Agreement”) with Eton. Pursuant to the CT-100 Asset Purchase Agreement, Eton sold all of its right, title and interest in CT-100 back to the Company. Pursuant to the CT-100 Asset Purchase Agreement, the Company will make certain payments to Eton upon the achievement of certain development and commercial milestones. In addition, the Company is required to pay Eton a royalty in the low-single digit percentage range worldwide on a country-by-country basis on net sales for a period of the longer of 15 years from the date of the first commercial sale of a product subject to certain conditions. Mark L. Baum, the Company’s Chief Executive Officer is a member of the Eton board of directors. |
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 $76 and $270 as of December 31, 2019 and 2018, 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 Melt Pharmaceuticals, Inc. | Investment in Melt Pharmaceuticals, Inc. In April 2018, the Company formed Melt as a wholly owned subsidiary. In January and March of 2019, Melt entered into definitive stock purchase agreements (collectively, the “Melt Series A Preferred Stock Agreement”) with certain investors and closed on the purchase and sale of Melt’s Series A Preferred Stock (the “Melt Series A Stock”), totaling approximately $11,400 of proceeds (collectively the “Melt Series A Round”) at a purchase price of $5.00 per share. As a result, the Company lost voting and ownership control of Melt and ceased consolidating Melt’s financial statements. In connection with the Melt Series A Preferred Stock Agreement, Melt also entered into a Registration Rights Agreement and agreed to use commercially reasonable efforts to file, or confidentially submit, a registration statement on Form S-1 with the United States Securities and Exchange Commission by September 30, 2020 relating to an initial public offering of its common stock. At the time of deconsolidation, the Company recorded a gain of $5,810 and adjusted the carrying value in Melt to reflect the increased valuation of Melt and the Company’s new ownership interest in accordance with ASC 810-10-40-4(c), Consolidation The Company owns 3,500,000 common shares (which is approximately 44% of the equity interest as of December 31, 2019) of Melt 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 Melt. Under this method, the Company recognizes earnings and losses of Melt in its consolidated financial statements and adjusts the carrying amount of its investment in Melt accordingly. The Company’s share of earnings and losses are based on the Company’s ownership interest of Melt. Any intra-entity profits and losses are eliminated. During the year ended December 31, 2019, the Company recorded equity in net loss of Melt of $1,842. As of December 31, 2019, the carrying value of the Company’s investment in Melt was $3,968. See Note 4 for more information and related party disclosure regarding Melt. |
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, 2019, 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 years ended December 31, 2019 and 2018, the Company recorded equity in net loss of Surface of $1,200 and $373, respectively. As of December 31, 2019, the carrying value of the Company’s investment in Surface was $3,747. See Note 5 for more information and related party disclosure regarding Surface. |
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). |
Park Restructuring | Park Restructuring In August 2019, the Company’s subsidiary, Park Compounding, Inc. (“Park”), and Noice Rx, LLC (“Noice”) terminated an Asset Purchase Agreement dated July 26, 2019 (the “Park Purchase Agreement”), between the parties. Under the terms of the Park Purchase Agreement, Park had agreed to sell substantially all its assets associated with its non-ophthalmology pharmaceutical compounding business to Noice, including its pharmacy facility and equipment located in Irvine, California. The closing of the sale transaction was dependent on the California State Board of Pharmacy approving of the sale and issuing a temporary pharmacy and sterile license permit to Noice, which did not occur and led to Park ceasing operations at the close of business on August 27, 2019. As a result, the Company restructured its Park business, ceased operations at its Irvine, California-based pharmacy, and facilitated the transition of certain compounded formulations and related equipment from Park to the Company’s New Jersey-based compounded pharmaceutical production facilities (the “Park Restructuring”). As a result of the Park Restructuring, the Company incurred non-cash impairment costs of approximately $3,781 related to assets held at Park, primarily associated with property, plant, equipment, inventory, goodwill and other intangible assets, and $480 in one-time costs related to severance packages and other costs associated with the Park Restructuring during the year ended December 31, 2019. The Company has reduced the Park compounded product formulary to seven base formulations, based on factors including unit order volumes, revenues and gross margin percentages, and ImprimisRx expects to have re-acquired approximately half of Park’s historical revenues during the first quarter of 2020. |
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, 2019 and 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, 2019, the fair market value of the Company’s investment in Eton was $25,200. The Company’s financial instruments included cash and cash equivalents, investment in Eton, accounts receivable, accounts payable and accrued expenses, accrued payroll and related liabilities, deferred revenue and customer deposits, notes payable and operating and finance leases. The carrying amount of these financial instruments, except for notes payable and finance 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 notes payable and operating and finance 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. |
Basic and Diluted Net Income Per Common Share | Basic and Diluted Net Income per Common Share Basic net income per common share is computed by dividing income attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted income per share is computed by dividing the income 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 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 stock options, unvested restricted stock units (“RSUs”) and warrants were 4,848,459 and 6,201,355 at December 31, 2019 and 2018, respectively, and are excluded in the calculation of diluted net income per share for the periods presented, because the effect is anti-dilutive for that time period. Included in the basic and diluted net income 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, 2019 and 2018 was 324,303 and 236,693, respectively. The following table shows the computation of basic net income per share of common stock for the years ended December 31, 2019 and 2018: For the For the Year Ended Year Ended December 31, 2019 December 31, 2018 Numerator – net income $ 168 $ 14,625 Denominator – weighted average number of shares outstanding, basic 25,323,159 21,917,570 Net income per share, basic $ 0.01 $ 0.67 For the years end December 31, 2019 and 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 years ended December 31, 2019 and 2018, respectively,consisted of the following: For the Year Ended For the Year Ended December 31, 2019 December 31, 2018 Shares Shares Diluted shares related to: 25,323,159 21,917,570 Warrants 488,498 1,844,272 Stock options 654,441 50,203 Dilutive common equivalent shares 26,466,098 23,812,045 The following table shows the computation of diluted net income per share using the weighted-average number of common shares and dilutive common equivalent shares outstanding for the years ended December 31, 2019 and 2018: For the For the Year Ended Year Ended December 31, 2019 December 31, 2018 Numerator – net income $ 168 $ 14,625 Weighted average number of shares outstanding, basic 25,323,159 21,917,570 Dilutive common equivalents 1,142,939 1,894,475 Denominator – number of shares used for diluted earnings per share computation 26,466,098 23,812,045 Net income per share, diluted $ 0.01 $ 0.61 |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the FASB issued new lease accounting guidance in ASU 2016-02, Leases |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other In August 2018, the FASB issued ASU 2018-13, Changes to Disclosure Requirements for Fair Value Measurements In December 2019, the FASB issued ASU 2019-12, Income Taxes Simplifying the Accounting for Income Taxes |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Basic Earnings Per Common Share | The following table shows the computation of basic net income per share of common stock for the years ended December 31, 2019 and 2018: For the For the Year Ended Year Ended December 31, 2019 December 31, 2018 Numerator – net income $ 168 $ 14,625 Denominator – weighted average number of shares outstanding, basic 25,323,159 21,917,570 Net income per share, basic $ 0.01 $ 0.67 |
Schedule of Diluted Common Equivalent Shares | For the years end December 31, 2019 and 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 years ended December 31, 2019 and 2018, respectively,consisted of the following: For the Year Ended For the Year Ended December 31, 2019 December 31, 2018 Shares Shares Diluted shares related to: 25,323,159 21,917,570 Warrants 488,498 1,844,272 Stock options 654,441 50,203 Dilutive common equivalent shares 26,466,098 23,812,045 |
Schedule of Diluted Earnings Per Common Share | The following table shows the computation of diluted net income per share using the weighted-average number of common shares and dilutive common equivalent shares outstanding for the years ended December 31, 2019 and 2018: For the For the Year Ended Year Ended December 31, 2019 December 31, 2018 Numerator – net income $ 168 $ 14,625 Weighted average number of shares outstanding, basic 25,323,159 21,917,570 Dilutive common equivalents 1,142,939 1,894,475 Denominator – number of shares used for diluted earnings per share computation 26,466,098 23,812,045 Net income per share, diluted $ 0.01 $ 0.61 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenue | Revenue disaggregated by revenue source for the years ended December 31, 2019 and 2018, consists of the following: For the year ended December 31, 2019 2018 Product sales, net $ 51,137 $ 41,334 License revenues 28 38 Total revenues $ 51,165 $ 41,372 |
Investment in Melt Pharmaceut_2
Investment in Melt Pharmaceuticals, Inc. and Agreements - Related Party Transactions (Tables) - Melt Pharmaceuticals [Member] | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Condensed Income Statement | The unaudited condensed results of operations information of Melt is summarized below: For the Year Ended December 31, 2019 Revenues, net $ - Loss from operations 4,169 Net loss $ (4,169 ) |
Schedule of Condensed Balance Sheet | The unaudited condensed balance sheet information of Melt is summarized below: December 31, 2019 Current assets $ 7,440 Non current assets 13 Total assets $ 7,453 Total liabilities $ 1,656 Total preferred stock and stockholders’ equity 5,797 Total liabilities and stockholders’ equity $ 7,453 |
Investment in Surface Pharmac_2
Investment in Surface Pharmaceuticals, Inc. and Agreements - Related Party Transactions (Tables) - Surface Pharmaceuticals, Inc [Member] | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Condensed Income Statement | The unaudited condensed results of operations information of Surface is summarized below: For the Year Ended For the Year Ended December 31, 2019 December 31, 2018 Revenues, net $ - $ - Loss from operations 4,000 1,370 Net loss $ (4,000 ) $ (1,370 ) |
Schedule of Condensed Balance Sheet | The unaudited condensed balance sheet information of Surface is summarized below: At December 31, At December 31, 2019 2018 Current assets $ 15,942 $ 19,699 Non current assets 47 50 Total assets 15,989 19,749 Total liabilities 619 165 Total stockholders equity 15,370 19,584 Total liabilities and stockholders’ equity $ 15,989 $ 19,749 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | The composition of inventories as of December 31, 2019 and 2018 was as follows: December 31, 2019 December 31, 2018 Raw materials $ 2,405 $ 1,119 Work in progress 20 6 Finished goods 876 709 Total inventories $ 3,301 $ 1,834 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 December 31, 2018 Prepaid insurance $ 123 $ 328 Other prepaid expenses 358 334 Receivable due from Surface - 50 Receivable due from Melt 722 - Deposits and other current assets 105 125 Total prepaid expenses and other current assets $ 1,308 $ 837 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment at December 31, 2019 and 2018 consisted of the following: December 31, 2019 December 31, 2018 Property, plant and equipment, net: Computer software and hardware $ 1,732 $ 1,662 Furniture and equipment 363 397 Lab and pharmacy equipment 3,164 3,184 Leasehold improvements 5,510 5,496 10,769 10,739 Accumulated depreciation and amortization (5,394 ) (4,364 ) $ 5,375 $ 6,375 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The Company’s intangible assets at December 31, 2019 consisted of the following: Amortization Net periods Accumulated Carrying (in years) Cost amortization Impairment value Patents 17-19 years $ 1,102 $ (97 ) $ (259 ) $ 746 Licenses 20 years 50 (5 ) - 45 Trademarks Indefinite 340 - - 340 Customer relationships 3-15 years 3,000 (1,165 ) (630 ) 1,205 Trade name 5 years 16 (14 ) (2 ) - Non-competition clause 3-4 years 294 (274 ) (20 ) - State pharmacy licenses 25 years 45 (9 ) (35 ) 1 $ 4,847 $ (1,564 ) $ (946 ) $ 2,337 |
Schedule of Amortization Expenses for Intangible Assets | Amortization expense for intangible assets for the year ended December 31 was as follows: For the Year Ended For the Year Ended December 31, 2019 December 31, 2018 Patents $ 48 $ 28 Licenses 5 - Customer relationships 151 201 Trade name 1 4 Non-competition clause - 1 State pharmacy licenses 4 2 $ 209 $ 235 |
Schedule of Estimated Future Amortization Expense | Estimated future amortization expense for the Company’s intangible assets at December 31, 2019 is as follows: Years ending December 31, 2020 $ 187 2021 187 2022 187 2023 187 2024 159 Thereafter 1,430 $ 2,337 |
Schedule of Goodwill | Changes in the carrying value of the Company’s goodwill during the year ended December 31, 2019 were: Balance at December 31, 2018 $ 2,227 Impairment of Park goodwill (see Note 2) (1,895 ) Balance at December 31, 2019 $ 332 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses at December 31, 2019 and 2018 consisted of the following: December 31, 2019 December 31, 2018 Accounts payable $ 7,409 $ 4,966 Other accrued expenses 49 640 Deferred rent - 388 Accrued interest (see Note 12) 244 256 Accrued exit fee for note payable (see Note 12) 800 800 Total accounts payable and accrued expenses 8,502 7,050 Less: Current portion (7,702 ) (6,250 ) Non-current total accrued expenses $ 800 $ 800 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Future Minimum Payments | At December 31, 2019, future minimum payments under the Company’s note payable were as follows: Amount 2020 $ 3,703 2021 4,121 2022 3,828 2023 7,573 Total minimum payments 19,225 Less: amount representing interest (3,975 ) Notes payable, gross 15,250 Less: unamortized discount (1,259 ) 13,991 Less: current portion, net of unamortized discount (1,772 ) Note payable, net of current portion and unamortized debt discount $ 12,219 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of Future Lease Payment Under Operating Leases | Future lease payments under operating leases as of December 31, 2019 were as follows : Operating Leases 2020 $ 1,095 2021 978 2022 998 2023 1,023 2024 1,023 Thereafter 4,465 Total minimum lease payments 9,582 Less: amount representing interest payments (2,615 ) Total operating lease liabilities 6,967 Less: current portion, operating lease liabilities (629 ) Operating lease liabilities, net of current portion $ 6,338 |
Schedule of Future Lease Payment Under Finance Lease | Future lease payments under non-cancelable finance leases as of December 31, 2019 were as follows : Finance Lease 2020 $ 9 2021 9 2022 9 2023 9 2024 1 Total minimum lease payments 37 Less: amount representing interest payments (4 ) Present value of future minimum lease payments 33 Less: current portion, finance lease obligation (7 ) Finance lease obligation, net of current portion $ 26 |
Schedule of Future Minimum Lease Payments Under Operating Lease and Finance Lease | Future minimum lease payments under operating leases and future minimum capital lease payments as of December 31, 2018 were as follows: Capital Leases Operating Leases 2019 $ 751 $ 797 2020 - 857 2021 - 742 2022 - 320 2023 - 330 Thereafter - 196 $ 751 $ 3,242 Less: Amounts representing interest (15 ) Less: Amounts representing unamortized discount (16 ) Total obligation under capital leases 720 Less: Current portion of capital leases (720 ) Long term capital lease obligation $ - |
Stockholders' Equity and Stoc_2
Stockholders' Equity and Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of Stock Option Plan Activity | A summary of stock option activity under the Plan for the year ended December 31, 2019 is as follows: Number of shares Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life Aggregate Intrinsic Value Options outstanding - January 1, 2019 2,482,009 $ 5.09 Options granted 362,000 $ 6.19 Options exercised (85,051 ) $ 3.56 Options cancelled/forfeit (102,275 ) $ 4.67 Options outstanding - December 31, 2019 2,656,683 $ 5.31 5.05 $ 7,011 Options exercisable 1,603,530 $ 4.57 5.72 $ 5,552 Options vested and expected to vest 2,558,998 $ 5.26 5.10 $ 6,911 |
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: 2019 2018 Weighted-average fair value of options granted $ 3.72 $ 1.42 Expected terms (in years) 5.07 - 7.00 5.77 - 6.11 Expected volatility 64 - 78 % 76 - 126 % Risk-free interest rate 1.83 – 2.68 % 2.05 – 3.00 % Dividend yield - - |
Schedule of Stock Option Outstanding and Exercisable | The following table summarizes information about stock options outstanding and exercisable at December 31, 2019: Weighted Average Weighted Weighted Remaining Average Average Number Contractual Exercise Number Exercise Range of Exercise Prices Outstanding Life in Years Price Exercisable Price $1.47 - $2.60 781,940 6.66 $ 2.05 619,016 $ 2.10 $3.04 - $4.50 458,622 6.09 $ 3.96 440,124 $ 3.98 $5.49 - $6.36 440,350 7.91 $ 6.15 178,619 $ 6.08 $6.64 - $8.99 970,741 1.99 $ 8.01 360,741 $ 8.24 $42.80 5,030 0.62 $ 42.80 5,030 $ 42.80 $1.47 - $42.80 2,656,683 5.05 $ 5.31 1,603,530 $ 4.57 |
Schedule of Restricted Stock Units Activity | 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 A summary of the Company’s RSU activity and related information for the year ended December 31, 2019 is as follows: Number of RSUs Weighted Average Grant Date Fair Value RSUs unvested - January 1, 2019 1,275,680 $ 2.16 RSUs granted 223,860 $ 6.43 RSUs vested (87,610 ) $ 3.42 RSUs cancelled/forfeit - RSUs unvested at December 31, 2019 1,411,930 $ 2.76 |
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 Year Ended For the Year Ended December 31, 2019 December 31, 2018 Employees – selling, general and administrative $ 1,464 $ 2,251 Directors – selling, general and administrative 300 235 Consultants - selling general and administrative 259 150 Total $ 2,023 $ 2,636 |
Schedule of Warrants Activity | A summary of warrant activity during the year ended December 31, 2019 is as follows: Number of Shares Subject to Warrants Outstanding Weighted Avg. Exercise Price Warrants outstanding - January 1, 2019 2,206,973 $ 1.91 Granted - Exercised (1,418,587 ) $ 1.79 Expired (8,000 ) $ 1.79 Warrants outstanding and exercisable - December 31, 2019 780,386 $ 2.12 Weighted average remaining contractual life of the outstanding warrants in years - December 31, 2019 4.53 |
Schedule of Warrants Outstanding and Warrants Exercisable | All warrants outstanding as of December 31, 2019 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 Lender warrants (see Note 12) 7/19/2017 615,386 $ 2.08 615,386 7/19/2024 780,386 $ 2.12 780,386 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 and 2018 are summarized below: December 31, 2019 December 31, 2018 Current: Federal $ - $ - State 8 6 Total current $ 8 $ 6 Deferred: Federal $ 669 $ 3,294 State (148 ) 440 Change in valuation allowance (521 ) (3,734 ) Total deferred 0 0 Income tax provision (benefit) $ 8 $ 6 |
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, 2019 December 31, 2018 U.S. federal statutory tax rate 21.00 % 21.00 % Benefit of lower tax brackets 0.00 % 0.00 % State tax benefit, net (6.73 )% 0.04 % Research and development credits 0.00 % (0.14 )% Employee stock-based compensation 3.10 % 0.46 % Loss on debt conversion 0.00 % 0.00 % Capitalization of Subsidiary 0.00 % 0.00 % Change in Rate 0.00 % 0.00 % Other (358.67 )% 0.13 % Valuation allowance 334.57 % (21.93 )% Effective income tax rate (6.73 )% (0.44 )% |
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, 2019 December 31, 2018 Deferred tax assets (liabilities): NOLs $ 19,827 $ 19,726 Depreciation and amortization 224 30 Other 640 604 Research and development credits 596 617 Deferred stock compensation 3,533 3,036 Basis Difference in Melt (1,185 ) - Basis Difference in Surface (1,119 ) (1,464 ) Basis Difference in Eton (7,528 ) (6,340 ) Capital Losses 62 - Park stock purchase identifiable intangibles (270 ) (484 ) Limitation Under 163(j) 299 - ASC 842 Lease Liability 2,082 - ASC 842 ROU Asset (1,959 ) - Total deferred tax assets, net 15,202 15,723 Valuation allowance (15,202 ) (15,723 ) Net deferred tax liabilities $ - $ - |
Schedule of Change in Unrecognized Tax Benefits | A reconciliation of the change in the UTB balance from January 1, 2019 to December 31, 2019 is as follows: Fed & State Tax Balance at January 1, 2019 $ - Additions for tax positions related to current year - Additions/(reductions) for tax positions related to prior years - Balance at December 31, 2019 - Total unrecognized tax benefits as of December 31, 2019 - |
Segment Information and Conce_2
Segment Information and Concentrations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Net Revenues, Segment Operating Expenses and Segment Contribution | Segment net revenues, segment operating expenses and segment contribution information consisted of the following for the year ended December 31, 2019: For the Year Ended December 31, 2019 Pharmaceutical Pharmaceutical Compounding Drug Development Total Net revenues $ 51,165 $ - $ 51,165 Cost of sales (16,749 ) - (16,749 ) Gross profit 34,416 - 34,416 Operating expenses: Selling, general and administrative 24,468 174 24,642 Research and development 1,006 361 1,367 Segment contribution $ 8,942 $ (535 ) $ 8,407 Corporate 8,245 Research and development 716 Amortization 209 Asset sales and impairments, net 4,040 Operating loss $ (4,803 ) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) $ / shares in Units, $ in Thousands | Mar. 03, 2019USD ($) | Jan. 31, 2019USD ($)$ / shares | Nov. 30, 2018USD ($)$ / sharesshares | Jul. 31, 2018USD ($)$ / shares | May 31, 2018USD ($)$ / shares | Jan. 31, 2018USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2019USD ($)Segment$ / sharesshares | Dec. 31, 2018USD ($)shares | Mar. 31, 2019$ / shares |
Consolidation basis, description | We consolidate subsidiaries in which we hold and/or control, directly or indirectly, more than 50% of the voting rights. | |||||||||
Cash resources and restricted investments, marketable securities | $ 30,149 | |||||||||
Number of segments | Segment | 2 | |||||||||
Non-controlling interest description | Generally, any interest that holds less than 50% of the outstanding voting shares is deemed to be a noncontrolling interest; however, there are other factors, such as decision-making rights, that are considered as well. | |||||||||
FDIC insured amount | $ 250 | |||||||||
Accounts receivable, net of allowance for doubtful accounts | $ 76 | $ 270 | ||||||||
Intangible assets estimated useful life | 20 years | |||||||||
Right of use asset | $ 6,559 | |||||||||
Operating and finance leases | $ 6,967 | |||||||||
Restricted Stock Units [Member] | ||||||||||
Number of shares issued | shares | 99,626 | |||||||||
Number of shares vested during the period | shares | 324,303 | 236,693 | ||||||||
Stock Options, Unvested RSUs and Warrants [Member] | ||||||||||
Antidilutive securities | shares | 4,848,459 | 6,201,355 | ||||||||
Minimum [Member] | ||||||||||
Property and equipment estimated useful life | 3 years | |||||||||
Maximum [Member] | ||||||||||
Property and equipment estimated useful life | 5 years | |||||||||
Eton Pharmaceuticals, Inc. [Member] | ||||||||||
Ownership percentage | 19.98% | |||||||||
Gain on deconsolidation amount | $ 5,725 | |||||||||
Net loss on equity | $ 0 | $ 3,507 | ||||||||
Stock price per shares | $ / shares | $ 7.20 | |||||||||
Gain (loss) on investment | $ 3,780 | 21,420 | ||||||||
Fair market value of investments | 25,200 | |||||||||
Payment to acquire patent rights | $ 50 | |||||||||
Eton Pharmaceuticals, Inc. [Member] | Licensing Agreement [Member] | ||||||||||
Milestone payments received | $ 50 | $ 50 | ||||||||
Royalty fee, percentage | 0.06 | |||||||||
Eton Pharmaceuticals, Inc. [Member] | IPO [Member] | ||||||||||
Number of shares issued | shares | 4,140,000 | |||||||||
Stock price per shares | $ / shares | $ 6 | |||||||||
Stock issued during period value | $ 24,800 | |||||||||
Melt Pharmaceuticals, Inc. [Member] | ||||||||||
Ownership percentage | 44.00% | |||||||||
Gain on deconsolidation amount | $ 5,810 | |||||||||
Net loss on equity | $ 1,842 | |||||||||
Number of shares owned | shares | 3,500,000 | |||||||||
Carrying value of investments | $ 3,968 | |||||||||
Melt Pharmaceuticals, Inc. [Member] | Series A Preferred Stock [Member] | ||||||||||
Stock price per shares | $ / shares | $ 5 | $ 5 | ||||||||
Proceeds from issuance of preferred stock | $ 11,400 | $ 11,400 | ||||||||
Surface Pharmaceuticals, Inc [Member] | ||||||||||
Ownership percentage | 30.00% | |||||||||
Gain on deconsolidation amount | $ 5,320 | |||||||||
Net loss on equity | $ 1,200 | $ 373 | ||||||||
Number of shares owned | shares | 3,500,000 | |||||||||
Carrying value of investments | $ 3,747 | |||||||||
Surface Pharmaceuticals, Inc [Member] | Series A Preferred Stock [Member] | ||||||||||
Stock price per shares | $ / shares | $ 3.30 | $ 3.30 | ||||||||
Proceeds from issuance of preferred stock | $ 21,000 | $ 21,000 | ||||||||
Park Compounding, Inc. and Noice Rx, LLC [Member] | ||||||||||
Non-cash impairment costs | 3,781 | |||||||||
Severance packages and other costs | $ 480 | |||||||||
Mayfield Pharmaceuticals, Inc. [Member] | ||||||||||
Ownership percentage | 70.00% | |||||||||
Mayfield Pharmaceuticals, Inc. [Member] | Elle Pharmaceutical, LLC [Member] | ||||||||||
Ownership percentage | 30.00% | |||||||||
Mayfield Pharmaceuticals, Inc. [Member] | TGV-Health, LLC [Member] | ||||||||||
Ownership percentage | 30.00% | |||||||||
Stowe Pharmaceuticals, Inc. [Member] | ||||||||||
Ownership percentage | 70.00% | |||||||||
Stowe Pharmaceuticals, Inc. [Member] | TGV-Health, LLC [Member] | ||||||||||
Ownership percentage | 30.00% |
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, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Numerator - net income | $ 168 | $ 14,625 |
Denominator - weighted average number of shares outstanding, basic | 25,323,159 | 21,917,570 |
Net income per share, basic | $ 0.01 | $ 0.67 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Diluted Common Equivalent Shares (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Dilutive common equivalent shares | 26,466,098 | 23,812,045 |
Stock Options [Member] | ||
Dilutive common equivalent shares | 654,441 | 50,203 |
Warrants [Member] | ||
Dilutive common equivalent shares | 488,498 | 1,844,272 |
Common Stock [Member] | ||
Dilutive common equivalent shares | 25,323,159 | 21,917,570 |
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, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Numerator - net income | $ 168 | $ 14,625 |
Weighted average number of shares outstanding, basic | 25,323,159 | 21,917,570 |
Dilutive common equivalents | 1,142,939 | 1,894,475 |
Denominator - number of shares used for diluted earnings per share computation | 26,466,098 | 23,812,045 |
Net income per share, diluted | $ 0.01 | $ 0.61 |
Revenues (Details Narrative)
Revenues (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Revenue from Contract with Customer [Abstract] | ||
Deferred revenue and customer deposits | $ 57 | $ 119 |
Revenues - Schedule of Disaggre
Revenues - Schedule of Disaggregated Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Total Revenues | $ 51,165 | $ 41,372 |
Product Sales, Net [Member] | ||
Total Revenues | 51,137 | 41,334 |
License Revenues [Member] | ||
Total Revenues | $ 28 | $ 38 |
Investment in Melt Pharmaceut_3
Investment in Melt Pharmaceuticals, Inc. and Agreements - Related Party Transactions (Details Narrative) - Melt Pharmaceuticals, Inc. [Member] - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Feb. 28, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | |
Asset Purchase Agreement [Member] | |||
Royalty payment percentage on net sales | 5.00% | ||
Management Services Agreement [Member] | |||
Administrative expenses | $ 10 | ||
Reimbursable expenses due | $ 722 | ||
Proceeds from related party payments | $ 50 |
Investment in Melt Pharmaceut_4
Investment in Melt Pharmaceuticals, Inc. and Agreements - Related Party Transactions - Schedule of Condensed Income Statement (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues, net | $ 51,165 | $ 41,372 |
Loss from operations | (4,803) | (5,217) |
Net loss | 168 | $ 14,625 |
Melt Pharmaceuticals, Inc. [Member] | ||
Revenues, net | ||
Loss from operations | 4,169 | |
Net loss | $ (4,169) |
Investment in Melt Pharmaceut_5
Investment in Melt Pharmaceuticals, Inc. and Agreements - Related Party Transactions - Schedule of Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | $ 36,767 | $ 32,843 |
Total assets | 59,085 | 49,451 |
Total liabilities | 31,667 | 24,700 |
Total preferred stock and stockholders' equity | 27,711 | 24,751 |
Total liabilities and stockholders' equity | 59,085 | $ 49,451 |
Melt Pharmaceuticals, Inc. [Member] | ||
Current assets | 7,440 | |
Non current assets | 13 | |
Total assets | 7,453 | |
Total liabilities | 1,656 | |
Total preferred stock and stockholders' equity | 5,797 | |
Total liabilities and stockholders' equity | $ 7,453 |
Investment in Surface Pharmac_3
Investment in Surface Pharmaceuticals, Inc. and Agreements - Related Party Transactions (Details Narrative) - Surface Pharmaceuticals, Inc [Member] - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Jan. 31, 2018 | Dec. 31, 2019 | |
Number of shares owned | 3,500,000 | |
Ownership percentage | 30.00% | |
Dr. Lindstrom [Member] | ||
Royalty payment percentage on net sales | 3.00% | |
Two Asset Purchase and License Agreement [Member] | Minimum [Member] | ||
Royalty payment percentage on net sales | 4.00% | |
Two Asset Purchase and License Agreement [Member] | Maximum [Member] | ||
Royalty payment percentage on net sales | 6.00% | |
Management Services Agreement [Member] | ||
Administrative expenses | $ 10 | |
Proceeds from related party payments | $ 50 | |
Reimbursable expenses due |
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, 2019 | Dec. 31, 2018 | |
Revenues, net | $ 51,165 | $ 41,372 |
Loss from operations | (4,803) | (5,217) |
Net loss | 168 | 14,625 |
Surface Pharmaceuticals, Inc [Member] | ||
Revenues, net | ||
Loss from operations | 4,000 | 1,370 |
Net loss | $ (4,000) | $ (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, 2019 | Dec. 31, 2018 |
Current assets | $ 36,767 | $ 32,843 |
Total assets | 59,085 | 49,451 |
Total liabilities | 31,667 | 24,700 |
Total stockholders equity | 27,711 | 24,751 |
Total liabilities and stockholders' equity | 59,085 | 49,451 |
Surface Pharmaceuticals, Inc [Member] | ||
Current assets | 15,942 | 19,699 |
Non current assets | 47 | 50 |
Total assets | 15,989 | 19,749 |
Total liabilities | 619 | 165 |
Total stockholders equity | 15,370 | 19,584 |
Total liabilities and stockholders' equity | $ 15,989 | $ 19,749 |
Restricted Cash (Details Narrat
Restricted Cash (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Restricted Cash [Abstract] | ||
Restricted cash | $ 200 | $ 200 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,405 | $ 1,119 |
Work in progress | 20 | 6 |
Finished goods | 876 | 709 |
Total inventories | $ 3,301 | $ 1,834 |
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, 2019 | Dec. 31, 2018 |
Prepaid insurance | $ 123 | $ 328 |
Other prepaid expenses | 358 | 334 |
Deposits and other current assets | 105 | 125 |
Total prepaid expenses and other current assets | 1,308 | 837 |
Surface Pharmaceuticals, Inc [Member] | ||
Receivable due from related party | 50 | |
Melt Pharmaceuticals, Inc. [Member] | ||
Receivable due from related party | $ 722 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization of property, plant and equipment | $ 1,936 | $ 1,608 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Abstract] | ||
Computer software and hardware | $ 1,732 | $ 1,662 |
Furniture and equipment | 363 | 397 |
Lab and pharmacy equipment | 3,164 | 3,184 |
Leasehold improvements | 5,510 | 5,496 |
Property, plant and equipment, gross | 10,769 | 10,739 |
Accumulated depreciation and amortization | (5,394) | (4,364) |
Property, plant and equipment, Net | $ 5,375 | $ 6,375 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Details Narrative) - Park Compounding, Inc. [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Customer Relationships, Trade Name and State Pharmacy Licenses [Member] | |
Impairment of intangible assets | $ 612 |
Patents [Member] | |
Impairment of intangible assets | $ 259 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Amortization periods (in years) | 20 years | |
Cost | $ 4,847 | |
Accumulated amortization | (1,564) | |
Impairment | (946) | |
Net Carrying value | 2,337 | $ 3,059 |
Patents [Member] | ||
Cost | 1,102 | |
Accumulated amortization | (97) | |
Impairment | (259) | |
Net Carrying value | $ 746 | |
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 | (5) | |
Impairment | ||
Net Carrying value | $ 45 | |
Trademarks [Member] | ||
Amortization periods description | Indefinite | |
Cost | $ 340 | |
Accumulated amortization | ||
Impairment | ||
Net Carrying value | 340 | |
Customer Relationships [Member] | ||
Cost | 3,000 | |
Accumulated amortization | (1,165) | |
Impairment | (630) | |
Net Carrying value | $ 1,205 | |
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 | (14) | |
Impairment | (2) | |
Net Carrying value | ||
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 | (9) | |
Impairment | (35) | |
Net Carrying value | $ 1 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Schedule of Amortization Expenses for Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Amortization of intangible assets | $ 209 | $ 235 |
Patents [Member] | ||
Amortization of intangible assets | 48 | 28 |
Licenses [Member] | ||
Amortization of intangible assets | 5 | |
Customer Relationships [Member] | ||
Amortization of intangible assets | 151 | 201 |
Trade Name [Member] | ||
Amortization of intangible assets | 1 | 4 |
Non-Competition Clause [Member] | ||
Amortization of intangible assets | 1 | |
State Pharmacy Licenses [Member] | ||
Amortization of intangible assets | $ 4 | $ 2 |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill - Schedule of Estimated Future Amortization Expense (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 | $ 187 |
2021 | 187 |
2022 | 187 |
2023 | 187 |
2024 | 159 |
Thereafter | 1,430 |
Intangible assets | $ 2,337 |
Intangible Assets and Goodwil_6
Intangible Assets and Goodwill - Schedule of Goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Beginning balance | $ 2,227 |
Impairment of Park goodwill | (1,895) |
Ending balance | $ 332 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 7,409 | $ 4,966 |
Other accrued expenses | 49 | 640 |
Deferred rent | 388 | |
Accrued interest | 244 | 256 |
Accrued exit fee for note payable | 800 | 800 |
Total accounts payable and accrued expenses | 8,502 | 7,050 |
Less: Current portion | (7,702) | (6,250) |
Non-current total accrued expenses | $ 800 | $ 800 |
Debt (Details Narrative)
Debt (Details Narrative) $ / shares in Units, $ in Thousands | Apr. 30, 2019USD ($) | May 31, 2019USD ($) | Apr. 30, 2019USD ($) | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($) | Aug. 31, 2017$ / sharesshares | Jul. 31, 2017USD ($)$ / sharesshares |
Liability of final fee included in accrued expenses | $ 800 | $ 800 | |||||
Fair value warrant adjustments | 982 | ||||||
Amortization of debt discount | 17 | ||||||
Notes Payable [Member] | |||||||
Amortization of debt discount | $ 495 | $ 520 | |||||
Warrants [Member] | |||||||
Warrant exercise price per share | $ / shares | $ 2.12 | ||||||
Expected Term [Member] | Warrants [Member] | |||||||
Warrant term | 7 years | ||||||
Volatility [Member] | Warrants [Member] | |||||||
Fair value assumptions, measurement input, percentages | 113.5 | ||||||
Dividend Rate [Member] | Warrants [Member] | |||||||
Fair value assumptions, measurement input, percentages | 0 | ||||||
Risk Free Interest Rate [Member] | Warrants [Member] | |||||||
Fair value assumptions, measurement input, percentages | 1.77 | ||||||
Lender Warrants [Member] | |||||||
Warrant to purchase of common stock | shares | 415,586 | ||||||
Warrant exercise price per share | $ / shares | $ 3.08 | ||||||
Warrant term | 7 years | ||||||
SWK Warrants [Member] | |||||||
Warrant to purchase of common stock | shares | 615,386 | ||||||
Warrant exercise price per share | $ / shares | $ 2.08 | ||||||
Fair value assumptions, measurement input, per share | shares | 2.08 | ||||||
London Inter-Bank Offered Rate [Member] | |||||||
Loan bear interest at variable rate | 10.50% | ||||||
Loan bear interest at variable rate, description | Prior to the loan refinance in May 2019 (see below), the SWK Loan was bearing 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%. | ||||||
London Inter-Bank Offered Rate [Member] | Minimum [Member] | |||||||
Loan bear interest at variable rate | 1.50% | ||||||
London Inter-Bank Offered Rate [Member] | Maximum [Member] | |||||||
Loan bear interest at variable rate | 3.00% | ||||||
Term Loan and Security Agreement [Member] | SWK Funding LLC [Member] | |||||||
Debt principal amount | $ 16,000 | ||||||
SWK Loan Agreement [Member] | |||||||
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, were previously due and payable on July 19, 2022. | ||||||
Incurred expense debt | $ 1,282 | $ 1,282 | |||||
Joinder and Amendment [Member] | |||||||
Debt principal amount | $ 5,000 | ||||||
Loan bear interest at variable rate, description | The interest rate calculation that the loan bears is now equal to the three-month London Inter-Bank Offered Rate (subject to a minimum of 2.00%), plus an applicable margin of 10.00% (the "Margin Rate"); provided that, if, two days prior to a payment date, the Company provides the SWK evidence that the Company has achieved a leverage ratio as of such date of less than 4.00:1:00, the Margin Rate shall equal 9.00%; and if the Company has achieved a leverage ratio as of such date of less than 3.00:1:00, the Margin Rate shall equal 7.00% | ||||||
Deconsolidation percentage | 50.00% | ||||||
Legal and lender costs | $ 282 | ||||||
Joinder and Amendment [Member] | London Inter-Bank Offered Rate [Member] | Minimum [Member] | |||||||
Loan bear interest at variable rate | 2.00% | ||||||
Joinder and Amendment [Member] | Margin Rate [Member] | |||||||
Loan bear interest at variable rate | 10.00% |
Debt - Summary of Future Minimu
Debt - Summary of Future Minimum Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Less: current portion, net of unamortized discount | $ (1,772) | $ (2,529) |
Note payable, net of current portion and unamortized debt discount | 12,219 | $ 11,999 |
Note Payable [Member] | ||
2020 | 3,703 | |
2021 | 4,121 | |
2022 | 3,828 | |
2023 | 7,573 | |
Total minimum payments | 19,225 | |
Less: amount representing interest | (3,975) | |
Notes payable, gross | 15,250 | |
Less: unamortized discount | (1,259) | |
Notes payable | 13,991 | |
Less: current portion, net of unamortized discount | (1,772) | |
Note payable, net of current portion and unamortized debt discount | $ 12,219 |
Leases (Details Narrative)
Leases (Details Narrative) $ in Thousands | Jan. 02, 2019USD ($) | Oct. 31, 2019USD ($)ft² | Dec. 31, 2019USD ($)ft² | Dec. 31, 2018USD ($) |
Lease term description | The Company has elected to not recognize right-of-use assets and lease liabilities arising from short-term leases, which are leases that, at the commencement date, have a lease term of 12 months or less and do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. | |||
Weighted average incremental borrowing rate, operating lease | 6.30% | |||
Weighted average remaining lease term, operating lease | 10 years 2 months 16 days | |||
Decrease in accounts payable and accrued expenses | $ 1,342 | $ 2,365 | ||
Operating lease right use of assets | 6,559 | |||
Operating lease liability | 6,967 | |||
Cash paid in operating lease liability | 905 | |||
Operating lease expense | $ 892 | |||
Weighted average incremental borrowing rate, finance lease | 6.36% | |||
Weighted average remaining lease term, finance lease | 4 years 29 days | |||
Debt discount amortization | $ 17 | |||
Depreciation expenses | 150 | |||
Cash paid for interest expenses | $ 18 | |||
Nashville [Member] | ||||
Operating lease space | ft² | 5,500 | |||
Increase in operating lease right-of-use assets | $ 753 | |||
Increase in operating lease liability | $ 753 | |||
ASU- 2016-02 [Member] | ||||
Increase in operating lease right-of-use assets | $ 6,325 | |||
Decrease in accounts payable and accrued expenses | 388 | |||
Increase in operating lease liability | $ 6,712 | |||
ASU- 2016-02 [Member] | San Diego [Member] | ||||
Operating lease space | ft² | 10,200 | |||
Operating lease expires date | Dec. 31, 2021 | |||
Lease term | 5 years | |||
Lease term description | Term for a five-year period | |||
ASU- 2016-02 [Member] | Irvine [Member] | ||||
Operating lease space | ft² | 4,500 | |||
Operating lease expires date | Dec. 31, 2020 | |||
Lease term description | Term for up to two five-year periods | |||
ASU- 2016-02 [Member] | Ledgewood [Member] | ||||
Operating lease space | ft² | 25,000 | |||
Operating lease expires date | Jul. 31, 2024 | |||
Lease term description | Term for two additional five-year periods. | |||
ASU- 2016-02 [Member] | Nashville [Member] | ||||
Operating lease space | ft² | 5,500 | |||
Operating lease expires date | Dec. 31, 2024 | |||
Lease term description | Term for two additional five-year periods. |
Leases - Schedule of Future Lea
Leases - Schedule of Future Lease Payment Under Operating Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
2020 | $ 1,095 | |
2021 | 978 | |
2022 | 998 | |
2023 | 1,023 | |
2024 | 1,023 | |
Thereafter | 4,465 | |
Total minimum lease payments | 9,582 | |
Less: amount representing interest payments | (2,615) | |
Total operating lease liabilities | 6,967 | |
Less: current portion, operating lease liabilities | (629) | |
Operating lease liabilities, net of current portion | $ 6,338 |
Leases - Schedule of Future L_2
Leases - Schedule of Future Lease Payment Under Finance Lease (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
2020 | $ 9 | |
2021 | 9 | |
2022 | 9 | |
2023 | 9 | |
2024 | 1 | |
Total minimum lease payments | 37 | |
Less: amount representing interest payments | (4) | |
Present value of future minimum lease payments | 33 | |
Less: current portion, finance lease obligation | (7) | $ (720) |
Finance lease obligation, net of current portion | $ 26 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments Under Operating Lease and Finance Lease (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
2020 | $ 9 | |
2021 | 9 | |
2022 | 9 | |
2023 | 1 | |
Financing lease payment | 37 | |
Less: Amounts representing unamortized discount | (4) | |
Total obligation under capital leases | 33 | |
Less: Current portion of capital leases | (7) | $ (720) |
Long term capital lease obligation | 26 | |
2019 | 1,095 | |
2020 | 978 | |
2021 | 998 | |
2022 | 1,023 | |
2023 | 1,023 | |
Thereafter | 4,465 | |
Operating lease payment | $ 9,582 | |
Capital Lease [Member] | ||
2019 | 751 | |
2020 | ||
2021 | ||
2022 | ||
2023 | ||
Thereafter | ||
Financing lease payment | 751 | |
Less: Amounts representing interest | (15) | |
Less: Amounts representing unamortized discount | (16) | |
Total obligation under capital leases | 720 | |
Less: Current portion of capital leases | (720) | |
Long term capital lease obligation | ||
Operating Lease [Member] | ||
2019 | 797 | |
2020 | 857 | |
2021 | 742 | |
2022 | 320 | |
2023 | 330 | |
Thereafter | 196 | |
Operating lease payment | $ 3,242 |
Stockholders' Equity and Stoc_3
Stockholders' Equity and Stock-Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Feb. 28, 2018 | Jul. 31, 2019 | Mar. 31, 2019 | Feb. 28, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Jan. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 10, 2018 |
Common stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | |||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Shares issued of restricted common stock, shares | 15,000 | 15,000 | 35,427 | 25,273 | ||||||
Accrued royalty expense | $ 64 | $ 44 | $ 846 | $ 561 | ||||||
Fair value of restricted common stock issued | $ 75 | $ 42 | ||||||||
Options exercise price, minimum | $ 1.47 | |||||||||
Options exercise price, maximum | $ 42.80 | |||||||||
Proceeds from issuance of common stock | $ 642 | |||||||||
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 | $ 1,789 | $ 2,486 | ||||||||
Mayfield Pharmaceuticals, Inc. [Member] | Elle Pharmaceutical, LLC [Member] | ||||||||||
Number of shares issued for acquisition | 1,000,000 | |||||||||
Mayfield Pharmaceuticals, Inc. [Member] | TGV-Gyneconix, LLC [Member] | ||||||||||
Shares issued of restricted common stock, shares | 300,000 | |||||||||
Stowe Pharmaceuticals, Inc. [Member] | TGV-Ophthalnix, LLC [Member] | ||||||||||
Shares issued of restricted common stock, shares | 1,750,000 | |||||||||
2017 Incentive Stock and Awards Plan [Member] | ||||||||||
Maximum number of common stock issuance under the plan | 2,000,000 | |||||||||
Shares available for future issuances | 1,004,656 | |||||||||
Exercise Price $1.70 to $4.17 [Member] | ||||||||||
Options exercise price, minimum | $ 1.47 | |||||||||
Options exercise price, maximum | 2.60 | |||||||||
Exercise Price $1.70 to $3.20 [Member] | ||||||||||
Options exercise price, minimum | 3.04 | |||||||||
Options exercise price, maximum | $ 4.50 | |||||||||
Consultants, Employees and Directors [Member] | ||||||||||
Stock-based compensation | $ 21 | |||||||||
Mark Baum, CEO [Member] | Mayfield Pharmaceuticals, Inc. [Member] | ||||||||||
Number of common stock issued for consultants services | 725,000 | |||||||||
Andrew Boll, CFO [Member] | Mayfield Pharmaceuticals, Inc. [Member] | ||||||||||
Number of common stock issued for consultants services | 362,500 | |||||||||
Restricted Stock Units [Member] | ||||||||||
Shares issued of restricted common stock, shares | 185,000 | |||||||||
Fair value of restricted common stock issued | $ 1,139 | |||||||||
Number of shares issued | 99,626 | |||||||||
Restricted Stock Units [Member] | Andrew R. Boll [Member] | ||||||||||
Shares issued of restricted common stock, shares | 30,000 | |||||||||
Restricted Stock Units [Member] | John P. Saharek [Member] | ||||||||||
Shares issued of restricted common stock, shares | 30,000 | |||||||||
Restricted Stock Units [Member] | Directors [Member] | ||||||||||
Number of shares issued | 87,610 | |||||||||
Restricted Stock Units [Member] | Non Employee Directors [Member] | ||||||||||
Shares issued of restricted common stock, shares | 136,360 | |||||||||
Fair value of restricted common stock issued | $ 300 | |||||||||
Restricted Stock Units [Member] | Board of Directors [Member] | ||||||||||
Shares issued of restricted common stock, shares | 38,860 | |||||||||
Fair value of restricted common stock issued | $ 300 | |||||||||
Stock Option [Member] | ||||||||||
Common stock withheld for payroll tax withholdings | 8,806 | |||||||||
Common stock withheld for payroll tax withholdings, value | $ 50 | |||||||||
Stock Option [Member] | Exercise Price $1.70 to $4.17 [Member] | ||||||||||
Number of shares issued | 27,671 | |||||||||
Number of options exercised | 82,929 | |||||||||
Options exercise price, minimum | $ 1.70 | |||||||||
Options exercise price, maximum | $ 4.17 | |||||||||
Stock Option [Member] | Exercise Price $1.70 to $3.20 [Member] | ||||||||||
Number of shares issued | 2,122 | |||||||||
Number of options exercised | 2,122 | |||||||||
Options exercise price, minimum | $ 1.70 | |||||||||
Options exercise price, maximum | $ 3.20 | |||||||||
Proceeds from issuance of common stock | $ 6 | |||||||||
Stock Option Plan [Member] | ||||||||||
Closing price of common stock price per share | $ 7.78 | |||||||||
Intrinsic value of options exercised | $ 246 | |||||||||
Forfeiture factor, percentage | 10.00% | |||||||||
Unrecognized compensation expense related to unvested stock options granted under the plan | $ 3,848 | |||||||||
Expense expected to recognize over the weighted-average remaining vesting period | 1 year 4 months 13 days | |||||||||
Stock-based compensation | $ 889 | 1,317 | ||||||||
Stock Option Plan [Member] | Employees and Consultant [Member] | Minimum [Member] | ||||||||||
Stock options granted with exercise price contractual terms | 5 years | |||||||||
Stock Option Plan [Member] | Employees and Consultant [Member] | Maximum [Member] | ||||||||||
Stock options granted with exercise price contractual terms | 10 years | |||||||||
Stock options granted vesting terms | Vesting terms for options granted in 2019 and 2018 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; and 90% of the shares subject to the option vest and become exercisable on the second month after the grant date and the remaining 10% of the shares subject to the option vest and become exercisable quarterly in equal installments thereafter over the next 11 months. 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. | |||||||||
Unvested RSUs [Member] | ||||||||||
Unrecognized compensation expense related to unvested stock options granted under the plan | $ 1,031 | |||||||||
Expense expected to recognize over the weighted-average remaining vesting period | 3 months 19 days | |||||||||
Stock-based compensation | $ 879 | $ 1,149 | ||||||||
Restricted Stock [Member] | Mayfield Pharmaceuticals, Inc. [Member] | ||||||||||
Shares issued of restricted common stock, shares | 2,450,000 | |||||||||
Stock-based compensation | $ 26 | |||||||||
Common Stock Warrants [Member] | ||||||||||
Number of shares issued | 2,364,889 | |||||||||
Warrants exercise price | $ 1.79 | $ 1.79 | ||||||||
Proceeds from issuance of warrant | $ 4,233 | |||||||||
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 | 1,576,665 | ||||||||
Common Stock Warrants One [Member] | ||||||||||
Number of shares issued | 688,473 | |||||||||
Warrants exercise price | $ 1.79 | |||||||||
Number of warrants exercised | 964,532 | |||||||||
Common Stock Warrants Two [Member] | ||||||||||
Number of shares issued | 454,055 | |||||||||
Warrants exercise price | $ 1.79 | |||||||||
Proceeds from issuance of warrant | $ 813 | |||||||||
Number of warrants exercised | 454,055 | |||||||||
Amended and Restated Certificate of Incorporation [Member] | Previously Authorized Shares [Member] | ||||||||||
Common stock, shares authorized | 90,000,000 | |||||||||
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 |
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, 2019USD ($)$ / sharesshares | |
Number of shares, Outstanding, Beginning balance | shares | 2,482,009 |
Number of shares, Options granted | shares | 362,000 |
Number of shares, Options exercised | shares | (85,051) |
Number of shares, Options cancelled/forfeited | shares | (102,275) |
Number of shares, Outstanding, Ending balance | shares | 2,656,683 |
Number of shares, Options exercisable | shares | 1,603,530 |
Number of shares, Options vested and expected to vest | shares | 2,558,998 |
Weighted Avg. Exercise Price, Outstanding, Beginning balance | $ / shares | $ 5.09 |
Weighted Avg. Exercise Price, Options granted | $ / shares | 6.19 |
Weighted Avg. Exercise Price, Options exercised | $ / shares | 3.56 |
Weighted Avg. Exercise Price, Options cancelled/forfeited | $ / shares | 4.67 |
Weighted Avg. Exercise Price, Outstanding, Ending balance | $ / shares | 5.31 |
Weighted Avg. Exercise Price, Exercisable Ending Balance | $ / shares | 4.57 |
Weighted Avg. Exercise Price, Vested and expected to vest | $ / shares | $ 5.26 |
Weighted Avg. Remaining Contractual Life, Options outstanding | 5 years 18 days |
Weighted Avg. Remaining Contractual Life, Options exercisable | 5 years 8 months 19 days |
Weighted Avg. Remaining Contractual Life, Options vested and expected to vest | 5 years 1 month 6 days |
Aggregate Intrinsic Value, Options outstanding | $ | $ 7,011 |
Aggregate Intrinsic Value, Options exercisable | $ | 5,552 |
Aggregate Intrinsic Value, Options vested and expected to vest | $ | $ 6,911 |
Stockholders' Equity and Stoc_5
Stockholders' Equity and Stock-Based Compensation - Schedule of Fair Value Assumptions (Details) - Options Granted to Employees [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Weighted-average fair value of options granted | $ 3.72 | $ 1.42 |
Expected volatility, minimum | 64.00% | 76.00% |
Expected volatility, maximum | 78.00% | 126.00% |
Risk-free interest rate, minimum | 1.83% | 2.05% |
Risk-free interest rate, maximum | 2.68% | 3.00% |
Dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Expected terms (in years) | 5 years 26 days | 5 years 9 months 7 days |
Maximum [Member] | ||
Expected terms (in years) | 7 years | 6 years 1 month 9 days |
Stockholders' Equity and Stoc_6
Stockholders' Equity and Stock-Based Compensation - Schedule of Stock Option Outstanding and Exercisable (Details) | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Range of Exercise Prices, minimum | $ 1.47 |
Range of Exercise Prices, maximum | $ 42.80 |
Number of Options Outstanding | shares | 2,656,683 |
Weighted Average Remaining Contractual Life in Years | 5 years 18 days |
Weighted Average Exercise Price | $ 5.31 |
Number Exercisable | shares | 1,603,530 |
Weighted Average Exercisable Exercise Price | $ 4.57 |
Range One [Member] | |
Range of Exercise Prices, minimum | 1.47 |
Range of Exercise Prices, maximum | $ 2.60 |
Number of Options Outstanding | shares | 781,940 |
Weighted Average Remaining Contractual Life in Years | 6 years 7 months 28 days |
Weighted Average Exercise Price | $ 2.05 |
Number Exercisable | shares | 619,016 |
Weighted Average Exercisable Exercise Price | $ 2.10 |
Range Two [Member] | |
Range of Exercise Prices, minimum | 3.04 |
Range of Exercise Prices, maximum | $ 4.50 |
Number of Options Outstanding | shares | 458,622 |
Weighted Average Remaining Contractual Life in Years | 6 years 1 month 2 days |
Weighted Average Exercise Price | $ 3.96 |
Number Exercisable | shares | 440,124 |
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 | 440,350 |
Weighted Average Remaining Contractual Life in Years | 7 years 10 months 28 days |
Weighted Average Exercise Price | $ 6.15 |
Number Exercisable | shares | 178,619 |
Weighted Average Exercisable Exercise Price | $ 6.08 |
Range Four [Member] | |
Range of Exercise Prices, minimum | 6.64 |
Range of Exercise Prices, maximum | $ 8.99 |
Number of Options Outstanding | shares | 970,741 |
Weighted Average Remaining Contractual Life in Years | 1 year 11 months 26 days |
Weighted Average Exercise Price | $ 8.01 |
Number Exercisable | shares | 360,741 |
Weighted Average Exercisable Exercise Price | $ 8.24 |
Range Five [Member] | |
Range of Exercise Prices, maximum | $ 42.80 |
Number of Options Outstanding | shares | 5,030 |
Weighted Average Remaining Contractual Life in Years | 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, 2019 | Dec. 31, 2018 | |
Number of RSUs unvested, Outstanding, Beginning balance | 1,275,680 | 1,298,946 |
Number of RSUs granted | 223,860 | 136,360 |
Number of RSUs vested | (87,610) | (159,626) |
Number of RSUs cancelled/forfeit | ||
Number of RSUs unvested, Outstanding, Ending balance | 1,411,930 | 1,275,680 |
Weighted Average Grant Date Fair Value, Beginning balance | $ 2.16 | $ 2.42 |
Weighted Average Grant Date Fair Value, RSUs granted | 6.43 | 2.20 |
Weighted Average Grant Date Fair Value, RSUs vested | 3.42 | 3.94 |
Weighted Average Grant Date Fair Value, Ending balance | $ 2.76 | $ 2.16 |
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, 2019 | Dec. 31, 2018 | |
Stock based compensation related to equity instruments granted to related parties | $ 2,023 | $ 2,636 |
Employees [Member] | Selling, General and Administrative [Member] | ||
Stock based compensation related to equity instruments granted to related parties | 1,464 | 2,251 |
Directors [Member] | Selling, General and Administrative [Member] | ||
Stock based compensation related to equity instruments granted to related parties | 300 | 235 |
Consultants [Member] | Selling, General and Administrative [Member] | ||
Stock based compensation related to equity instruments granted to related parties | $ 259 | $ 150 |
Stockholders' Equity and Stoc_9
Stockholders' Equity and Stock-based Compensation - Schedule of Warrants Activity (Details) - Warrants [Member] | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Number of Shares Warrants Outstanding, beginning balance | 2,206,973 |
Number of Shares Warrants Outstanding, Granted | |
Number of Shares Warrants Outstanding, Exercised | (1,418,587) |
Number of Shares Warrants Outstanding, Expired | (8,000) |
Number of Shares Warrants Outstanding and Exercisable, ending balance | 780,386 |
Weighted average remaining contractual life of the outstanding warrants in years | 4 years 6 months 10 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 | 1.79 |
Weighted Avg. Exercise Price, Outstanding and Exercisable, ending balance | $ / shares | $ 2.12 |
Stockholders' Equity and Sto_10
Stockholders' Equity and Stock-based Compensation - Schedule of Warrants Outstanding and Warrants Exercisable (Details) | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Warrants [Member] | |
Warrants Outstanding | 780,386 |
Exercise Price | $ / shares | $ 2.12 |
Warrants Exercisable | 780,386 |
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 |
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 | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Deferred tax asset valuation allowance | $ 500 | $ 3,700 |
Federal net operating loss carryforwards | 65,874 | |
Federal research and development tax credits | $ 354 | |
Federal research and development tax credits expiration date | 2026 | |
State net operating loss carryforwards | $ 67,538 | |
State net operating loss expiration date | 2017 | |
State research and development tax credits | $ 305 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Current: Federal | ||
Current: State | 8 | 6 |
Total current | 8 | 6 |
Deferred: Federal | 669 | 3,294 |
Deferred: State | (148) | 440 |
Deferred: Change in valuation allowance | (521) | (3,734) |
Total deferred | 0 | 0 |
Income tax provision (benefit) |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal statutory tax rate | 21.00% | 21.00% |
Benefit of lower tax brackets | 0.00% | 0.00% |
State tax benefit, net | (6.73%) | 0.04% |
Research and development credits | (0.00%) | (0.14%) |
Employee stock-based compensation | 3.10% | 0.46% |
Loss on debt conversion | 0.00% | 0.00% |
Capitalization of Subsidiary | 0.00% | 0.00% |
Change in Rate | 0.00% | 0.00% |
Other | (358.67%) | 0.13% |
Valuation allowance | 334.57% | (21.93%) |
Effective income tax rate | (6.73%) | (0.44%) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
NOLs | $ 19,827 | $ 19,726 |
Depreciation and amortization | 224 | 30 |
Other | 640 | 604 |
Research and development credits | 596 | 617 |
Deferred stock compensation | 3,533 | 3,036 |
Basis Difference in Melt | (1,185) | |
Basis Difference in Surface | (1,119) | (1,464) |
Basis Difference in Eton | (7,528) | (6,340) |
Capital Losses | 62 | |
Park stock purchase identifiable intangibles | (270) | (484) |
Limitation Under 163(j) | 299 | |
ASC 842 Lease Liability | 2,082 | |
ASC 842 ROU Asset | (1,959) | |
Total deferred tax assets, net | 15,202 | 15,723 |
Valuation allowance | (15,202) | (15,723) |
Net deferred tax liabilities |
Income Taxes - Schedule of Chan
Income Taxes - Schedule of Change in Unrecognized Tax Benefits (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Income Tax Disclosure [Abstract] | |
UTB, Beginning balance | |
Additions for tax positions related to current year | |
Additions/(reductions) for tax positions related to prior years | |
UTB, Ending balance |
Employee Savings Plan (Details
Employee Savings Plan (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
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 | $ 312 | $ 248 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | 36 Months Ended | |||||||
Dec. 31, 2019 | Oct. 31, 2019 | Jul. 31, 2019 | May 31, 2019 | Mar. 31, 2018 | Jan. 31, 2018 | Apr. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | |
Business acquisition description | 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. | |||||||||
Accounts payable and accrued expenses | $ 371 | $ 371 | $ 245 | $ 371 | ||||||
Royalty payments | $ 64 | $ 44 | 846 | 561 | ||||||
Allergan USA, Inc. [Member] | ||||||||||
Lost profit damages | $ 49 | |||||||||
Settlement Agreement [Member] | ||||||||||
Accrued damages | $ 640 | |||||||||
Damages low claim rate, percentage | 1.40% | |||||||||
Litigation amount paid | $ 571 | |||||||||
Sales and Marketing Agreements [Member] | ||||||||||
Additional paid in capital and stock based payments | 159 | $ 42 | ||||||||
Commission expense incurred | 2,700 | 1,511 | ||||||||
Sales and Marketing Agreements [Member] | Minimum [Member] | ||||||||||
Commission payments, percentage | 10.00% | |||||||||
Sales and Marketing Agreements [Member] | Maximum [Member] | ||||||||||
Commission payments, percentage | 14.00% | |||||||||
License Agreement [Member] | Richard L. Lindstrom, M.D [Member] | Initial Payment [Member] | ||||||||||
Royalty payments | $ 50 | |||||||||
License Agreement [Member] | Richard L. Lindstrom, M.D [Member] | Second Payment [Member] | ||||||||||
Royalty payments | 50 | |||||||||
Net sales | 50 | |||||||||
License Agreement [Member] | Richard L. Lindstrom, M.D [Member] | Final Payment [Member] | ||||||||||
Royalty payments | 50 | |||||||||
Net sales | $ 100 | |||||||||
License Agreement [Member] | Mayfield Pharmaceuticals, Inc. [Member] | ||||||||||
Number of shares issued | 300,000 | |||||||||
License Agreement [Member] | Stowe Pharmaceuticals, Inc. [Member] | ||||||||||
Number of shares issued | 1,750,000 | |||||||||
Klarity License Agreement [Member] | Richard L. Lindstrom, M.D [Member] | ||||||||||
Royalty payments | 103 | 118 | ||||||||
Royalty payment description | 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. | |||||||||
Milestone payment in cash | $ 63 | 63 | 122 | $ 63 | ||||||
Milestone payments on payables | 28 | $ 15 | ||||||||
Injectable Asset Purchase Agreement [Member] | Richard L. Lindstrom, M.D [Member] | ||||||||||
Royalty payments | 40 | |||||||||
Royalty payment description | The Company is required to make royalty payments to Dr. Lindstrom ranging from 2% to 3% of net sales, dependent upon the final formulation and patent protection of the Lindstrom Product sold. | |||||||||
Milestone payment in cash | $ 0 | 0 | 0 | |||||||
Milestone payments on payables | 40 | |||||||||
Injectable Asset Purchase Agreement [Member] | Richard L. Lindstrom, M.D [Member] | Initial Payment [Member] | ||||||||||
Royalty payments | $ 33 | |||||||||
Presbyopia Asset Purchase Agreement [Member] | Richard L. Lindstrom, M.D [Member] | ||||||||||
Royalty payments | 0 | |||||||||
Royalty payment description | The Company is required to make royalty payments to Dr. Lindstrom ranging from 2% to 4% of net sales, dependent upon the final formulation and patent protection of the Presbyopia Product sold. | |||||||||
Milestone payment in cash | $ 0 | 0 | $ 0 | |||||||
Milestone payments on payables | $ 0 |
Segment Information and Conce_3
Segment Information and Concentrations (Details Narrative) - Segment | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of reportable segment | 2 | |
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 | 73.00% | 51.00% |
Segment Information and Conce_4
Segment Information and Concentrations - Schedule of Segment Net Revenues, Segment Operating Expenses and Segment Contribution (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Total Revenues | $ 51,165 | $ 41,372 |
Cost of sales | (16,749) | (16,521) |
Gross profit | 34,416 | 24,851 |
Selling, general and administrative | 33,096 | 29,243 |
Research and development | 2,083 | 825 |
Segment contribution | 8,407 | |
Amortization | 209 | |
Asset sales and impairments, net | 4,040 | |
Operating loss | (4,803) | $ (5,217) |
Corporate [Member] | ||
Operating loss | 8,245 | |
Research and Development Expense [Member] | ||
Operating loss | 716 | |
Pharmaceutical Compounding [Member] | ||
Total Revenues | 51,165 | |
Cost of sales | (16,749) | |
Gross profit | 34,416 | |
Selling, general and administrative | 24,468 | |
Research and development | 1,006 | |
Segment contribution | 8,942 | |
Pharmaceutical Drug Development [Member] | ||
Total Revenues | ||
Cost of sales | ||
Gross profit | ||
Selling, general and administrative | 174 | |
Research and development | 361 | |
Segment contribution | $ (535) |