Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 09, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-36019 | |
Entity Registrant Name | TONIX PHARMACEUTICALS HOLDING CORP. | |
Entity Central Index Key | 0001430306 | |
Entity Tax Identification Number | 26-1434750 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 26 Main Street | |
Entity Address, Address Line Two | Suite 101 | |
Entity Address, City or Town | Chatham | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07928 | |
City Area Code | (862) | |
Local Phone Number | 799-9155 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | TNXP | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 23,849,341 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 6,914 | $ 120,229 |
Inventory | 13,317 | |
Receivables, net | 1,562 | |
Prepaid expenses and other | 9,544 | 10,548 |
Total current assets | 31,337 | 130,777 |
Property and equipment, net | 94,866 | 93,814 |
Intangible assets, net | 9,982 | 120 |
Goodwill | 965 | |
Operating lease right-to-use assets | 1,081 | 715 |
Other non-current assets | 1,051 | 264 |
Total assets | 139,282 | 225,690 |
Current liabilities: | ||
Accounts payable | 7,799 | 8,068 |
Accrued expenses and other current liabilities | 9,500 | 9,680 |
Lease liability, short term | 434 | 432 |
Total current liabilities | 17,733 | 18,180 |
Lease liability, long term | 716 | 328 |
Total liabilities | 18,449 | 18,508 |
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; 5,000,000 shares authorized Series B Convertible Preferred stock, 0 shares designated as of both September 30, 2023 and December 31, 2022; issued and outstanding - none Series A Convertible Preferred stock, 0 shares designated as of both September 30, 2023 and December 31, 2022; issued and outstanding - none | ||
Common stock, $0.001 par value; 160,000,000 shares authorized; 17,762,341 and 12,368,620 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively and 14,999 shares to be issued as of December 31, 2022 | 18 | 12 |
Additional paid in capital | 694,371 | 677,375 |
Accumulated deficit | (573,336) | (470,038) |
Accumulated other comprehensive loss | (220) | (167) |
Total stockholders’ equity | 120,833 | 207,182 |
Total liabilities and stockholders’ equity | $ 139,282 | $ 225,690 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 160,000,000 | 160,000,000 |
Common stock, issued | 17,762,341 | 12,368,620 |
Common stock, outstanding | 17,762,341 | 12,368,620 |
Common stock, to be issued | 14,999 | |
Series B Preferred Stock [Member] | ||
Preferred stock, designated | 0 | 0 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Series A Preferred Stock [Member] | ||
Preferred stock, designated | 0 | 0 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
REVENUE: | ||||
Product revenue, net | $ 3,989 | $ 3,989 | ||
COSTS AND EXPENSES: | ||||
Cost of revenue | 2,374 | 2,374 | ||
Research and development | 21,050 | 22,201 | 69,535 | 57,202 |
Selling, general and administrative | 8,712 | 7,390 | 23,131 | 22,161 |
Costs and Expenses | 32,136 | 29,591 | 95,040 | 79,363 |
Operating loss | (28,147) | (29,591) | (91,051) | (79,363) |
Interest income, net | 172 | 610 | 1,715 | 825 |
Net loss | (27,975) | (28,981) | (89,336) | (78,538) |
Preferred stock deemed dividend | 4,255 | |||
Net loss available to common stockholders | $ (27,975) | $ (28,981) | $ (89,336) | $ (82,793) |
Net loss per common share, basic | $ (1.83) | $ (4.24) | $ (7.40) | $ (18.58) |
Net loss per common share, diluted | $ (1.83) | $ (4.24) | $ (7.40) | $ (18.58) |
Weighted average common shares outstanding, basic | 15,327,558 | 6,843,099 | 12,079,583 | 4,455,943 |
Weighted average common shares outstanding, diluted | 15,327,558 | 6,843,099 | 12,079,583 | 4,455,943 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Net loss | $ (27,975) | $ (28,981) | $ (89,336) | $ (78,538) |
Other comprehensive loss: | ||||
Foreign currency translation loss | (8) | (17) | (53) | (68) |
Comprehensive loss | $ (27,983) | $ (28,998) | $ (89,389) | $ (78,606) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2021 | $ 3 | $ 578,626 | $ (92) | $ (359,820) | $ 218,717 |
Balance, at beginning (in shares) at Dec. 31, 2021 | 2,634,110 | ||||
Issuance of common stock in January and March 2022 under At-the-market offering, net of transactional expenses of $507 | 8,488 | 8,488 | |||
Issuance of common stock in January and March 2022 under At-the-market offering, net of transactional expenses of $507 (in shares) | 172,276 | ||||
Issuance of common stock under the 2021 Purchase agreement | 4,535 | 4,535 | |||
Issuance of common stock under the 2021 Purchase agreement (in shares) | 110,000 | ||||
Employee stock purchase plan | 40 | 40 | |||
Employee stock purchase plan (in shares) | 646 | ||||
Stock-based compensation | 2,620 | 2,620 | |||
Foreign currency transaction gain | (26) | (26) | |||
Net loss | (26,417) | (26,417) | |||
Ending balance, value at Mar. 31, 2022 | $ 3 | 594,309 | (118) | (386,237) | 207,957 |
Balance, at end (in shares) at Mar. 31, 2022 | 2,917,032 | ||||
Beginning balance, value at Dec. 31, 2021 | $ 3 | 578,626 | (92) | (359,820) | 218,717 |
Balance, at beginning (in shares) at Dec. 31, 2021 | 2,634,110 | ||||
Foreign currency transaction gain | (68) | ||||
Net loss | (78,538) | ||||
Ending balance, value at Sep. 30, 2022 | $ 9 | 667,433 | (160) | (438,358) | 228,924 |
Balance, at end (in shares) at Sep. 30, 2022 | 8,663,464 | ||||
Beginning balance, value at Mar. 31, 2022 | $ 3 | 594,309 | (118) | (386,237) | 207,957 |
Balance, at beginning (in shares) at Mar. 31, 2022 | 2,917,032 | ||||
Issuance of common stock in April, May and June 2022 under At-the-market offering, net of transaction expenses of $1,426 | $ 2 | 42,966 | 42,968 | ||
Issuance of common stock in April, May and June 2022 under At-the-market offering, net of transaction expenses of $1,426 (in shares) | 2,220,699 | ||||
Issuance of common stock under the 2021 Purchase agreement | 1,964 | 1,964 | |||
Issuance of common stock under the 2021 Purchase agreement (in shares) | 65,000 | ||||
Preferred stock dividend | (4,255) | (4,255) | |||
Stock-based compensation | 2,813 | 2,813 | |||
Foreign currency transaction gain | (25) | (25) | |||
Net loss | (23,140) | (23,140) | |||
Ending balance, value at Jun. 30, 2022 | $ 5 | 637,797 | (143) | (409,377) | 228,282 |
Balance, at end (in shares) at Jun. 30, 2022 | 5,202,731 | ||||
Issuance of common stock in July, August and September 2022 under At-the-market offering, net of transactional expenses of $805 | $ 3 | 24,689 | 24,692 | ||
Issuance of common stock in July, August and September 2022 under At-the-market offering, net of transactional expenses of $805 (in shares) | 3,079,176 | ||||
Issuance of common stock under the 2021 Purchase agreement | $ 1 | 2,182 | 2,183 | ||
Issuance of common stock under the 2021 Purchase agreement (in shares) | 281,557 | ||||
Issuance of commitment shares under 2022 Purchase Agreement | |||||
Issuance of commitment shares under 2022 Purchase Agreement (in shares) | 100,000 | ||||
Stock-based compensation | 2,765 | 2,765 | |||
Foreign currency transaction gain | (17) | (17) | |||
Net loss | (28,981) | (28,981) | |||
Ending balance, value at Sep. 30, 2022 | $ 9 | 667,433 | (160) | (438,358) | 228,924 |
Balance, at end (in shares) at Sep. 30, 2022 | 8,663,464 | ||||
Beginning balance, value at Dec. 31, 2022 | $ 12 | 677,375 | (167) | (470,038) | 207,182 |
Balance, at beginning (in shares) at Dec. 31, 2022 | 12,368,620 | ||||
Repurchase of common stock under Share Repurchase Program | $ (3) | (13,962) | (13,965) | ||
Repurchase of common stock under Share Repurchase Program (in shares) | (2,672,044) | ||||
Issuance of common stock under 2022 Purchase agreement | 441 | 441 | |||
Issuance of common stock under 2022 Purchase agreement with Lincoln Park (in shares) | 96,000 | ||||
Issuance of common stock under At-the-market offering, net of transactional expenses of $101 | $ 1 | 1,994 | 1,995 | ||
Issuance of common stock under At-the-market offering, net of transactional expenses of $101 (in shares) | 514,502 | ||||
Employee stock purchase plan | 29 | 29 | |||
Employee stock purchase plan (in shares) | 14,999 | ||||
Stock-based compensation | 2,794 | 2,794 | |||
Foreign currency transaction gain | (44) | (44) | |||
Net loss | (33,005) | (33,005) | |||
Ending balance, value at Mar. 31, 2023 | $ 10 | 682,633 | (211) | (517,005) | 165,427 |
Balance, at end (in shares) at Mar. 31, 2023 | 10,322,077 | ||||
Beginning balance, value at Dec. 31, 2022 | $ 12 | 677,375 | (167) | (470,038) | 207,182 |
Balance, at beginning (in shares) at Dec. 31, 2022 | 12,368,620 | ||||
Foreign currency transaction gain | (53) | ||||
Net loss | (89,336) | ||||
Ending balance, value at Sep. 30, 2023 | $ 18 | 694,371 | (220) | (573,336) | 120,833 |
Balance, at end (in shares) at Sep. 30, 2023 | 17,762,341 | ||||
Beginning balance, value at Mar. 31, 2023 | $ 10 | 682,633 | (211) | (517,005) | 165,427 |
Balance, at beginning (in shares) at Mar. 31, 2023 | 10,322,077 | ||||
Issuance of common stock under At-the-market offering, net of transactional expenses of $36 | $ 1 | 1,028 | 1,029 | ||
Issuance of common stock under At-the-market offering, net of transactional expenses of $36 (in shares) | 440,264 | ||||
Stock-based compensation | 2,364 | 2,364 | |||
Foreign currency transaction gain | (1) | (1) | |||
Net loss | (28,356) | (28,356) | |||
Ending balance, value at Jun. 30, 2023 | $ 11 | 686,025 | (212) | (545,361) | 140,463 |
Balance, at end (in shares) at Jun. 30, 2023 | 10,762,341 | ||||
Issuance of common stock under AGP Financing, net of transactional expenses of $726 | $ 3 | 6,271 | 6,274 | ||
Issuance of common stock under AGP Financing, net of transactional expenses of $726 (in shares) | 2,530,000 | ||||
Issuance of common stock upon exercise of prefunded warrants under AGP Financing | $ 4 | (4) | |||
Issuance of common stock upon exercise of prefunded warrants under AGP Financing (in shares) | 4,470,000 | ||||
Stock-based compensation | 2,079 | 2,079 | |||
Foreign currency transaction gain | (8) | (8) | |||
Net loss | (27,975) | (27,975) | |||
Ending balance, value at Sep. 30, 2023 | $ 18 | $ 694,371 | $ (220) | $ (573,336) | $ 120,833 |
Balance, at end (in shares) at Sep. 30, 2023 | 17,762,341 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||||
Issuance of common stock, transactional expenses | $ 726 | $ 36 | $ 101 | $ 805 | $ 1,426 | $ 507 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (89,336) | $ (78,538) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 3,030 | 417 |
Gain on disposal of property and equipment | (196) | |
Stock-based compensation | 7,237 | 8,198 |
Changes in operating assets and liabilities: | ||
Receivables, net | (1,562) | |
Prepaid expenses and other | 3,334 | (753) |
Accounts payable | 446 | (4,079) |
Operating lease liabilities and ROU asset, net | 24 | 5 |
Accrued expenses and other current liabilities | (2,640) | (1,002) |
Net cash used in operating activities | (79,663) | (75,752) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of a business | (22,174) | |
Disposal of property and equipment | 992 | |
Purchase of property and equipment | (7,457) | (43,476) |
Net cash used in investing activities | (28,639) | (43,476) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from ESPP | 29 | 40 |
Proceeds, net of $0 and $4,255 expenses, from sale of convertible redeemable preferred stock | 27,245 | |
Redemption of convertible redeemable preferred stock | (31,500) | |
Repurchase of common stock | (13,965) | |
Proceeds, net of $863 and $2,738 expenses, from sale of common stock | 9,739 | 84,830 |
Net cash (used in) provided by financing activities | (4,197) | 80,615 |
Effect of currency rate change on cash | (55) | (69) |
Net decrease in cash, cash equivalents and restricted cash | (112,554) | (38,682) |
Cash, cash equivalents and restricted cash beginning of the period | 120,470 | 178,900 |
Cash, cash equivalents and restricted cash end of period | 7,916 | 140,218 |
Non-cash financing and investing activities: | ||
Purchases of property and equipment included in accounts payable and accrued liabilities | 275 | (3,310) |
Preferred stock deemed dividend | $ 4,255 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Common Stock [Member] | ||
Expenses from sale of stock | $ 863 | $ 2,738 |
Redeemable Convertible Preferred Stock [Member] | ||
Expenses from sale of stock | $ 0 | $ 4,255 |
BUSINESS
BUSINESS | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS | NOTE 1 – BUSINESS Tonix Pharmaceuticals Holding Corp., through its wholly owned subsidiary Tonix Pharmaceuticals, Inc. (“Tonix Sub”), is a biopharmaceutical company focused on commercializing, developing, discovering and licensing therapeutics to treat and prevent human disease and alleviate suffering. The therapeutics under development include both small molecules and biologics. Tonix, through its recent acquisition, markets Zembrace® SymTouch® (sumatriptan injection) 3 mg and Tosymra® (sumatriptan nasal spray) 10 mg. Zembrace® SymTouch® and Tosymra®, which were acquired as of June 30, 2023 (See Note 10), are each indicated for the treatment of acute migraine with or without aura in adults. All other drug product and vaccine candidates are still in development, and are not approved or marketed. The condensed consolidated financial statements include the accounts of Tonix Pharmaceuticals Holding Corp. and its wholly owned subsidiaries, Tonix Sub, Krele LLC, Tonix Pharmaceuticals (Canada), Inc., Tonix Medicines, Inc., Jenner LLC, Tonix R&D Center LLC, Tonix Pharma Holdings Limited and Tonix Pharma Limited (collectively hereafter referred to as the “Company” or “Tonix”). All intercompany balances and transactions have been eliminated in consolidation. Going Concern The accompanying financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. The Company has suffered recurring losses from operations and negative cash flows from operating activities. At September 30, 2023, the Company had working capital of approximately $ 13.6 573.3 6.9 The Company believes that its cash resources at September 30, 2023 and the proceeds that it raised from equity offerings in the fourth quarter of 2023 (See Note 20), will not meet its operating and capital expenditure requirements through the fourth quarter of 2023. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company continues to face significant challenges and uncertainties and must obtain additional funding through public and private financing and collaborative arrangements with strategic partners to increase the funds available to fund operations. However, the Company may not be able to raise capital on terms acceptable to the Company, or at all. Without additional funds, it may be forced to delay, scale back or eliminate some of its research and development activities, or other operations and potentially delay product development in an effort to provide sufficient funds to continue operations. If any of these events occurs, its ability to achieve our development and commercialization goals would be adversely affected and the Company may be forced to cease operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES Interim financial statements The unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The condensed consolidated balance sheet as of December 31, 2022 contained herein has been derived from audited financial statements. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of results that may be expected for the year ending December 31, 2023. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on March 13, 2023. Reverse Stock Split On May 9, 2023, the Company filed a Certificate of Change with the Nevada Secretary of State, effective May 10, 2023. Pursuant to the Certificate of Change, the Company effected a 1-for-6.25 Risks and uncertainties The Company’s primary efforts are devoted to conducting research and development of innovative pharmaceutical and biological products to address public health challenges. The Company has experienced net losses and negative cash flows from operations since inception and expects these conditions to continue for the foreseeable future. Further, the Company now has commercial products available for sale, and generates revenue from the sale of its Zembrace® SymTouch® and Tosymra® products, with no assurance that the Company will be able to generate sufficient cash flow to fund operations from its commercial products or products in development if and when approved. In addition, there can be no assurance that the Company’s research and development will be successfully completed or that any product will be approved or commercially viable. Use of estimates The preparation of financial statements in accordance with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include, but are not limited to, provisions for product returns, coupons, rebates, chargebacks, discounts, allowances, inventory realization, the assumptions used in the fair value of stock-based compensation and other equity instruments, the percent of completion of research and development contracts, fair value estimates for assets acquired in business combinations, and assessment of useful lives of acquired intangible assets. Business Combinations The Company accounts for business combinations in accordance with the provisions of ASC 805, Business Combinations and ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. Business combinations are accounted for using the acquisition method, whereby the consideration transferred is allocated to the net assets acquired based on their respective fair values measured on the acquisition date. The difference between the fair value of these assets and the purchase price is recorded as goodwill. Transaction costs other than those associated with the issue of debt or equity securities, and other direct costs of a business combination are not considered part of the business acquisition transaction and are expensed as incurred. Segment Information and Concentrations Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one The Company has two products that each accounted for more than 10% 100% As of September 30, 2023, accounts receivable from four customers accounted for 25% 23% 19% 15% 25% 21% 18% 14% Cash, Cash Equivalents and Restricted Cash The Company considers cash equivalents to be those investments which are highly liquid, readily convertible to cash and have an original maturity of three months or less when purchased. At September 30, 2023 and December 31, 2022, cash equivalents, which consisted of money market funds, amounted to $3.7 $116.3 $244,000 $241,000 $758,000 The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statement of cash flows: September 30, 2023 September 30, 2022 (in thousands) Cash and cash equivalents $ 6,914 $ 139,978 Restricted cash 1,002 240 Total $ 7,916 $ 140,218 Accounts Receivable, net Accounts receivable consists of amounts due from our wholesale and other third-party distributors and pharmacies and have standard payment terms that generally require payment within 30 to 90 days. For certain customers, the accounts receivable for the customer is net of prompt payment or specialty pharmacy discounts. We do not adjust our receivables for the effects of a significant financing component at contract inception if we expect to collect the receivables in one year or less from the time of sale. We provide reserves against accounts receivable for estimated losses that may result from a customer’s inability to pay. Amounts determined to be uncollectible are charged or written-off against the reserve. However, during the period covered by the Transition Services Agreement, the Seller has agreed to collect the accounts receivable on behalf of the Company and net settle within 45 days from each month-end. See note 10 for further details. The Company had no accounts receivable as of any prior period presented other than as of September 30, 2023. As of September 30, 2023 . Concentration of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents, and accounts receivable. We attempt to minimize the risks related to cash and cash equivalents by investing in a broad and diverse range of financial instruments, and we have established guidelines related to credit ratings and maturities intended to safeguard principal balances and maintain liquidity. Concentrations of credit risk with respect to receivables, which are typically unsecured, are somewhat mitigated due to the wide variety of customers using our products, as well as their dispersion across different geographic areas. We monitor the financial performance and creditworthiness of our customers so that we can properly assess and respond to changes in their credit profile. We continue to monitor these conditions and assess their possible impact on our business. Inventories Inventories are recorded at the lower of cost or net realizable value, with cost determined by the weighted average cost method. The Company periodically reviews the composition of inventory in order to identify excess, obsolete, slow-moving or otherwise non-saleable items taking into account anticipated future sales compared with quantities on hand, and the remaining shelf life of goods on hand. If non-saleable items are observed and there are no alternate uses for the inventory, the Company records a write-down to net realizable value in the period that the decline in value is first recognized. Although the Company makes every effort to ensure the accuracy of forecasts of future product demand, any significant unanticipated decreases in demand could have a material impact on the carrying value of inventories and reported operating results. The Company’s reserves were approximately $21,000 Property and equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the asset’s estimated useful life, which ranges from 20 40 15 three years five years shorter of the useful life or term of lease $978,000 $2.8 $252,000 $417,000 Intangible assets, net Intangible assets deemed to have finite lives are carried at acquisition-date fair value less accumulated amortization and impairment, if any. Finite-lived intangible assets consist of developed technology intangible assets acquired in connection with the acquisition of certain products from Upsher Smith Laboratories, LLS (“USL Acquisition”) consummated on June 30, 2023 (See Note 8). The acquired intangible assets are amortized using the straight-line method over the estimated useful lives of the respective assets. Amortization expense for the three months ended September 30, 2023, was $238,000 During the year ended December 31, 2015, the Company purchased certain internet domain rights, which were determined to have an indefinite life. Identifiable intangibles with indefinite lives, which are included in Intangible assets, net on the condensed consolidated balance sheet, are not amortized but are tested for impairment annually or whenever events or changes in circumstances indicate that their carrying amount may be less than fair value. As of September 30, 2023, the Company believed that no impairment existed. Goodwill Goodwill represents the excess of the aggregate purchase price over the fair value of the net tangible and intangible assets acquired in a business combination. Goodwill is reviewed for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the carrying amount of goodwill may be impaired. As of September 30, 2023, the Company has recognized goodwill in connection with the USL Acquisition consummated on June 30, 2023 (See Note 8). Leases The Company determines if an arrangement is, or contains, a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities, current and operating lease liabilities, noncurrent in the Company’s condensed consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the transition date and subsequent lease commencement dates in determining the present value of lease payments. This is the rate the Company would have to pay if borrowing on a collateralized basis over a similar term to each lease. The operating lease ROU asset excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments made under operating leases is recognized on a straight-line basis over the lease term. Convertible Preferred Stock Preferred shares subject to mandatory redemption are classified as liability instruments and are measured at fair value. The Company classifies conditionally redeemable preferred shares, which includes preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control, as temporary equity (“mezzanine”) until such time as the conditions are removed or lapse. Revenue Recognition The Company records and recognizes revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company’s revenues primarily result from contracts with customers, which are generally short-term and have a single performance obligation - the delivery of product. The Company’s performance obligation to deliver products is satisfied at the point in time that the goods are received by the customer, which is when the customer obtains title to and has the risks and rewards of ownership of the products, which is generally upon shipment or delivery to the customer as stipulated by the terms of the sale agreements. The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Our contractual payment terms are typically 30 to 90 days Revenues from product sales, net of gross-to-net deductions, are recorded only to the extent a significant reversal in the amount of cumulative revenue recognized is not probable of occurring and when the uncertainty associated with gross-to-net deductions is subsequently resolved. Taxes assessed by governmental authorities and collected from customers are excluded from product sales. Shipping and handling activities are considered to be fulfillment activities and not a separate performance obligation. Many of the Company’s products sold are subject to a variety of deductions. Revenues are recognized net of estimated rebates and chargebacks, cash discounts, distributor fees, sales return provisions and other related deductions. Deductions to product sales are referred to as gross-to-net deductions and are estimated and recorded in the period in which the related product sales occur. Accruals for these provisions are presented in the consolidated financial statements as reductions to gross sales in determining net sales, and as a contra asset within accounts receivable, net (if settled via credit) and other current liabilities (if paid in cash). Amounts recorded for revenue deductions can result from a complex series of judgements about future events and uncertainties and can rely heavily on estimates and assumptions. The following section briefly describes the nature of the Company’s provisions for variable consideration and how such provisions are estimated: Chargebacks Rebates ● Managed Care Rebates are processed in the quarter following the quarter in which they are earned. The managed care reporting entity submits utilization data after the end of the quarter and the Company processes the payment in accordance with contract terms. All rebates earned but not paid are estimated by the Company according to historical payments trended for market growth assumptions. ● Medicaid and State Agency rebates are based upon historical experience of claims submitted by various states. The Company monitors Medicaid legislative changes to determine what impact such legislation may have on the provision for Medicaid rebates. The accrual of State Agency reserves is based on historical payment rates. There is an approximate three-month lag from the time of product sale until the rebate is paid. ● Tri-Care represents a regionally managed health care program for active duty and retired members, dependents and survivors of the US military. The Tri-Care program supplements health care resources of the US military with civilian health care professionals for greater access and quality healthcare coverage. Through the Tri-Care program, the Company provides pharmaceuticals on a direct customer basis. Prices of pharmaceuticals sold under the Tri-Care program are pre-negotiated and a reserve amount is established to represent the proportionate rebate amount associated with product sales. ● Coverage Gap refers to the Medicare prescription drug program and represents specifically the period between the initial Medicare Part D prescription drug program coverage limit and the catastrophic coverage threshold. Applicable pharmaceutical products sold during this coverage gap timeframe are discounted by the Company. Since the nature of the program is that coverage limits are reset at the beginning of the calendar year; the payments escalate each quarter as the participants reach the coverage limit before reaching the catastrophic coverage threshold. The Company has determined that the cost of this reserve will be viewed as an annual cost. Therefore, the accrual will be incurred evenly during the year with quarterly review of the liability based on payment trends and any revision to the projected annual cost. Prompt-Pay and other Sales Discounts Product Returns Research and Development Costs The Company outsources certain of its research and development efforts and expenses these costs as incurred, including the cost of manufacturing products for testing, as well as licensing fees and costs associated with planning and conducting clinical trials. The value ascribed to patents and other intellectual property acquired has been expensed as research and development costs, as such property is related to particular research and development projects and had no alternative future uses. The Company estimates its expenses resulting from its obligations under contracts with vendors, clinical research organizations and consultants and under clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. The Company accounts for trial expenses according to the timing of various aspects of the trial. The Company determines accrual estimates taking into account discussion with applicable personnel and outside service providers as to the progress or state of consummation of trials, or the services completed. During the course of a clinical trial, the Company adjusts its clinical expense recognition if actual results differ from its estimates. The Company makes estimates of its accrued expenses as of each balance sheet date based on the facts and circumstances known to it at that time. The Company’s clinical trial accruals are dependent upon the timely and accurate reporting of contract research organizations and other third-party vendors. Government Grants From time to time, the Company may enter into arrangements with governmental entities for the purpose of obtaining funding for research and development activities. The Company is reimbursed for costs incurred that are associated with specified research and development activities included in the grant application approved by the government authority. The Company classifies government grants received under these arrangements as a reduction to the related research and development expense in the same period as the relevant expenses are incurred. In August 2022, the Company announced that it received a Cooperative Agreement grant from the National Institute on Drug Abuse (“NIDA”), part of the National Institutes of Health, to support the development of its TNX-1300 product candidate for the treatment of cocaine intoxication. During the three and nine months ended September 30, 2023, we received $0.4 $2.3 Stock-based compensation All stock-based payments to employees and to nonemployees for their services, including grants of restricted stock units (“RSUs”), and stock options, are measured at fair value on the grant date and recognized in the condensed consolidated statements of operations as compensation or other expense over the requisite service period. The Company accounts for share-based awards in accordance with the provisions of the Accounting Standards Codification (“ASC”) 718, Compensation – Stock Compensation. Foreign Currency Translation Operations of the Company’s Canadian subsidiary, Tonix Pharmaceuticals (Canada), Inc., are conducted in local currency, which represents its functional currency. The U.S. dollar is the functional currency of the other foreign subsidiaries. Balance sheet accounts of the Canadian subsidiary were translated from foreign currency into U.S. dollars at the exchange rate in effect at the balance sheet date and income statement accounts were translated at the average rate of exchange prevailing during the period. Translation adjustments resulting from this process were included in accumulated other comprehensive loss on the consolidated condensed balance sheets. Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity of a business during a period from transactions and other events and circumstances from non-owners sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Other comprehensive income (loss) represents foreign currency translation adjustments. Income Taxes Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss and credit carryforwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company records a valuation allowance on its deferred income tax assets if it is not more likely than not that these deferred income tax assets will be realized. The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the condensed consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As of September 30, 2023, the Company has not recorded any unrecognized tax benefits. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. Per Share Data The computation of basic and diluted loss per share for the quarters ended September 30, 2023 and 2022 excludes potentially dilutive securities when their inclusion would be anti-dilutive, or if their exercise prices were greater than the average market price of the common stock during the period. All warrants and preferred stock issued participate on a one-for-one basis with common stock in the distribution of dividends, if and when declared by the Board of Directors, on the Company’s common stock. For purposes of computing EPS, these warrants and preferred stock are considered to participate with common stock in earnings of the Company. Therefore, the Company calculates basic and diluted EPS using the two-class method. Under the two-class method, net income for the period is allocated between common stockholders and participating securities according to dividends declared and participation rights in undistributed earnings. No income was allocated to the warrants and preferred stock for the three and nine months ended September 30, 2023, and 2022, as results of operations were a loss for the periods. Potentially dilutive securities excluded from the computation of basic and diluted net loss per share, as of September 30, 2023 and 2022, are as follows: 2023 2022 Warrants to purchase common stock 7,003,196 3,196 Options to purchase common stock 1,384,264 392,643 Totals 8,387,460 395,839 Recently Adopted Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. The main objective of ASU 2016-13 is to provide financial statement users with more decision-useful information about an entity’s expected credit losses on financial instruments and other commitments to extend credit at each reporting date. To achieve this objective, the amendments in this update replace the incurred loss impairment methodology currently used today with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to develop credit loss estimates. ASU 2016-13 will be effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, using a modified retrospective approach. Early adoption is permitted. The Company adopted ASU 2016-13 and related updates as of January 1, 2023. The adoption of ASU 2016-13 did not impact the Company’s financial position, results of operations or cash flows. |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 3 – INVENTORY The components of inventory consisted of the following as of September 30, 2023: September 30, 2023 December 31, 2022 (in thousands) Raw Materials $ 3,064 $ — Work-in-process 1,565 — Finished Goods 8,709 — 13,338 $ — Less: Inventory reserves (21 ) — Total Inventory $ 13,317 $ — |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 4 – PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of the following (in thousands): September 30, 2023 December 31, 2022 (in thousands) Property and equipment, net: Land $ 8,011 $ 8,011 Land improvements 326 79 Buildings 65,825 65,644 Office furniture and equipment 2,355 1,893 Laboratory equipment 21,506 18,440 Leasehold improvements 34 34 Construction in progress 1,204 1,366 99,261 95,467 Less: Accumulated depreciation and amortization (4,395 ) (1,653 ) $ 94,866 $ 93,814 On October 1, 2021, the Company completed the acquisition of its approximately 45,000 $17.5 $2.1 $13.9 $1.5 On September 28, 2020, the Company completed the purchase of its approximately 45,000 4 $1.2 $2.8 $38.8 $61.6 On December 23, 2020, the Company completed the purchase of its approximately 44 $4.5 During the quarter ended September 30, 2023, property and equipment with a net book value of approximately $0.8 $1 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 5 – GOODWILL AND INTANGIBLE ASSETS The following table provides the gross carrying value of goodwill as follows: Amounts (in thousands) Balance at December 31, 2022 $ — Acquired during the period (see Note 8) 965 Balance at September 30, 2023 $ 965 The following table provides the gross carrying amount and accumulated amortization for each major class of intangible asset: September 30, 2023 December 31, 2022 (in thousands) Intangible assets subject to amortization Developed technology $ 10,100 $ — Less: Accumulated amortization 238 — Total $ 9,862 $ — Intangible assets not subject to amortization Internet domain rights $ 120 $ 120 Total intangible assets, net $ 9,982 $ 120 During the three months ended September 30, 2023, the Company recorded amortization of $238,000 At September 30, 2023, the related amortization for each of the next five years ended December 31 is as follows (in thousands): Year Ending December 31, Remainder of 2023 $ 238 2024 953 2025 953 2026 953 2027 and beyond 6,765 $ 9,862 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 6 – FAIR VALUE MEASUREMENTS Fair value measurements affect the Company’s accounting for certain of its financial assets. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and is measured according to a hierarchy that includes: Level Observable inputs, such as quoted prices in active markets. Level Inputs, other than quoted prices in active markets, that are observable either directly or indirectly. Level 2 assets and liabilities include debt securities with quoted market prices that are traded less frequently than exchange-traded instruments. This category includes U.S. government agency-backed debt securities and corporate-debt securities. Level 3: Unobservable inputs in which there is little or no market data. As of September 30, 2023, and December 31, 2022, the Company used Level 1 quoted prices in active markets to value cash equivalents of $3.7 $116.3 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 7 – STOCKHOLDERS’ EQUITY On May 9, 2023, the Company filed a Certificate of Change with the Nevada Secretary of State, effective May 10, 2023. Pursuant to the Certificate of Change, the Company effected a 1-for-6.25 64,627,246 10,340,506 131,902 1,000,000,000 160,000,000 On October 17, 2023, the Company received a letter from the Listing Qualifications staff of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based upon the closing bid price of the Company’s common stock for the last 30 $1 The Company was initially provided with a 180 180 180 |
TEMPORARY EQUITY
TEMPORARY EQUITY | 9 Months Ended |
Sep. 30, 2023 | |
Temporary Equity | |
TEMPORARY EQUITY | NOTE 8 – TEMPORARY EQUITY On October 26, 2022, the Company closed on an offering (“the October offering”) with certain institutional investors (the “Investors”), pursuant to which the Company issued and sold, in a private placement, 1,400,000 $0.001 100,000 $0.001 $9.50 5 $10.00 $14.3 $6.25 On December 13, 2022, an amendment (the “December Amendment”) to the Company’s Articles of Incorporation, as amended, to increase the Company’s authorized shares of common stock from 24,000,000 160,000,000 Preferred Stock have no voting rights other than the right to vote on the December Amendment and as a class on certain other specified matters the right to cast 2,500 votes per share of Series B Preferred Stock on the December Amendment The holders of Preferred Stock were entitled to dividends, on an as-if converted basis, equal to dividends actually paid, if any, on shares of common stock. The Preferred Stock was convertible, at the option of the holders and, in certain circumstances, by the Company, into shares of common stock at a conversion price of $6.25 105 105 The $14.3 $1.5 105 Since the Preferred Stock had a redemption feature at the option of the holder, it was classified as temporary equity. The Series A Preferred Stock and Series B Preferred Stock was recorded at redemption value $14.7 $1.1 Series A Preferred Stock Series B Preferred Stock Gross Proceeds $ 13,300 $ 950 Less: Preferred stock issuance costs (844 ) (60 ) Plus: Accretion of carrying value to redemption value 2,244 160 Preferred stock subject to possible redemption $ 14,700 $ 1,050 During December 2022, the Company received redemption notices for all outstanding shares of Preferred Stock. The Preferred Stock was redeemed during December 2022 at 105 $10.00 $15.8 On June 24, 2022, the Company closed on an offering (“the Offering”) with certain institutional investors (the “Investors”), pursuant to which the Company issued and sold, in a private placement, 2,500,000 $0.001 500,000 $0.001 $9.50 5 $10.00 $28.5 $25.00 On August 5, 2022, an amendment (the “Amendment”) to the Company’s Articles of Incorporation, as amended, to increase the Company’s authorized shares of common stock from 8,000,000 24,000,000 Preferred Stock have no voting rights other than the right to vote on the Amendment and as a class on certain other specified matters the right to cast 2,500 votes per share of Series B Preferred Stock on the Amendment The holders of Preferred Stock were entitled to dividends, on an as-if converted basis, equal to dividends actually paid, if any, on shares of common stock. The Preferred Stock was convertible, at the option of the holders and, in certain circumstances, by the Company, into shares of common stock at a conversion price of $25.00 105 105 The $28.5 3 105 Since the Preferred Stock had a redemption feature at the option of the holder, it was classified as temporary equity. The Series A Preferred Stock and Series B Preferred Stock was recorded at redemption value of approximately $26.3 $5.2 Series A Preferred Stock Series B Preferred Stock Gross Proceeds $ 23,750 $ 4,750 Less: Preferred stock issuance costs (1,046 ) (209 ) Plus: Accretion of carrying value to redemption value 3,546 709 Preferred stock subject to possible redemption $ 26,250 $ 5,250 During August 2022, the Company received redemption notices for all outstanding shares of Preferred Stock. The Preferred Stock was redeemed during August 2022 at 105 10.00 $31.5 |
REVENUES
REVENUES | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | NOTE 9 – REVENUES Disaggregation of Net Revenues The Company’s net product revenues are summarized below: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Zembrace® Symtouch® $ 3,292 $ — $ 3,292 $ — Tosymra® 697 $ — $ 697 $ — Total product revenues $ 3,989 $ — $ 3,989 $ — Gross-to-Net Sales Accruals We record gross-to-net sales accruals for chargebacks, rebates, sales and other discounts, and product returns, which are all customary to the pharmaceutical industry. Our provision for gross-to-net allowances was $2.5 $0.7 $1.8 |
ASSET PURCHASE AGREEMENT WITH U
ASSET PURCHASE AGREEMENT WITH UPSHER-SMITH | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ASSET PURCHASE AGREEMENT WITH UPSHER-SMITH | NOTE 10 – ASSET PURCHASE AGREEMENT WITH UPSHER-SMITH On June 30, 2023, the Company completed the acquisition of certain assets from Upsher-Smith Laboratories LLC ("USL") related to Zembrace® SymTouch® (sumatriptan injection) 3 mg (“Zembrace”) and Tosymra® (sumatriptan nasal spray) 10 mg (“Tosymra”) products (such businesses collectively, the “Business”) and certain inventory related to the Business for an aggregate purchase price of approximately $26.5 On June 30, 2023, in connection with the USL Acquisition, the Company and USL entered into a Transition Services Agreement (the “Transition Services Agreement”), pursuant to which USL will provide certain transition services to the Company for base fees equal to $100,000 $150,000 $150,000 The Company has assumed certain obligations of Seller, including the payment of quarterly earn-out payments on annual net sales from the Business in the U.S. as follows: for Tosymra, 4% $0 $30 7% $30 $75 9% $75 $100 12% $100 $150 15% $150 3% $0 $30 6% $30 $75 12% $75 $100 16% $100 90% 66.7% In addition, the Company has assumed the obligation to pay an additional 3% 3% 15 years $15 As consideration for acquisition of the Business and certain product-related inventories, the Company paid approximately $23.5 3 The following table summarizes the components of the purchase consideration (in thousands): Preliminary purchase consideration Amount Closing cash consideration $ 22,174 Inventory adjustment payment liability 1,348 Deferred payment liability 3,000 Purchase price to be allocated $ 26,522 The USL Acquisition was accounted for as a business combination using the acquisition method, in accordance with the provisions of ASC 805, Business Combinations Clarifying the Definition of a Business. The following table represents the preliminary allocation of the purchase price to the assets acquired by the Company in the USL Acquisition recognized in the Company’s consolidated balance sheets (in thousands): Preliminary purchase price allocation Amount Inventory $ 13,700 Prepaid expenses and other 1,757 Intangible assets, net 10,100 Goodwill 965 Fair value of assets acquired $ 26,522 The acquired inventory consists of USL’s raw materials, semi-finished goods, and finished goods inventory as of the Closing date. The fair value was determined based on the estimated selling price of the inventory, less the estimated total costs to complete, disposal effort and holding costs. The $ 1 Intangible assets eligible for recognition separate from goodwill were those that satisfied either the contractual or legal criterion or the separability criterion in the accounting guidance. The identifiable intangible assets acquired and their estimated useful lives for amortization are as follows (in thousands): Fair Value Useful Life (years) Developed technology - Tosymra $ 3,400 9 Developed technology - Zembrace 6,700 14 Total $ 10,100 The developed technology intangible assets related to Zembrace and Tosymra includes the value associated with the acquired patents, customer relationships, and trademarks and trade names associated with the technology. The developed technology intangible assets were valued as composite assets under the premise that each asset is reliant on one another to generate cash flow, is not considered separable from the technology, and are assumed to have similar useful lives. The composite intangible assets were valued using a multi-period excess earnings method and are being amortized over their estimated useful lives using the straight-line method of amortization. The key assumptions used in estimating the fair values of intangible assets include forecasted financial information, the weighted average cost of capital, customer retention rates, and certain other assumptions. The fair values assigned to the assets acquired are based on reasonable assumptions and estimates that market participants would use. Actual results may differ from these estimates and assumptions. Supplemental Pro Forma Information The following unaudited pro forma consolidated financial information reflects the results of operations of the Company for the three and nine months ended September 30, 2023 and 2022 as if the USL Acquisition had occurred as of January 1, 2022 and gives effect to transactions that are directly attributable to the acquisition. Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net Product Sales $ 3,989 $ 3,635 $ 11,610 $ 7,612 Net Loss $ (27,072 ) $ (33,698 ) $ (91,252 ) $ (95,073 ) The pro forma information for all periods presented include additional amortization expense related to the fair value of the acquired intangible assets as if such assets were acquired on January 1, 2022. The pro forma financial information for the three and nine months ended September 30, 2022 also reflects an increase in Cost of Sales related to the preliminary acquisition-date fair value adjustment to inventory. This adjustment is not reflected in the three and nine months ended September 30, 2023 as the acquired inventory is expected to be sold within one year from the acquisition date. As described above, in connection with the USL Acquisition, the Company and USL entered into a Transition Services Agreement with the Seller related to providing ongoing services associated with the assets acquired, such as procuring and selling migraine therapy products, providing accounting and billing services and collecting accounts receivable and paying trade payables. The Seller collected and will continue to collect cash on behalf of Tonix for revenue generated by sales of the assets acquired from June 30, 2023 through the transition period and the Seller is obligated to transfer cash generated by such sales to the Buyer. The amount due to USL for reimbursement of services performed under the transition services agreement was $498,000 $4,784,000 $2,724,000 $1,562,000 |
ASSET PURCHASE AGREEMENT WITH H
ASSET PURCHASE AGREEMENT WITH HEALION | 9 Months Ended |
Sep. 30, 2023 | |
Asset Purchase Agreement With Healion | |
ASSET PURCHASE AGREEMENT WITH HEALION | NOTE 11 – ASSET PURCHASE AGREEMENT WITH HEALION On February 2, 2023, the Company entered into an asset purchase agreement (the “Healion Asset Purchase Agreement”) with Healion Bio Inc., (“Healion”) pursuant to which the Company acquired all the pre-clinical infectious disease assets of Healion, including its portfolio of next-generation antiviral technology assets. Healion’s drug portfolio includes a class of broad-spectrum small molecule oral antiviral drug candidates with a novel host-directed mechanism of action, including TNX-3900, formerly known as HB-121. As consideration for entering into the Healion Asset Purchase Agreement, the Company paid $ 1.2 1.2 |
LICENSE AGREEMENT WITH CURIA
LICENSE AGREEMENT WITH CURIA | 9 Months Ended |
Sep. 30, 2023 | |
License Agreement With Curia | |
LICENSE AGREEMENT WITH CURIA | NOTE 12 – LICENSE AGREEMENT WITH CURIA On December 12, 2022, the Company entered into an exclusive license agreement with Curia for the development of three humanized murine mAbs for the treatment or prophylaxis of SARS-CoV-2 infection. We believe that the licensing of these mAbs strengthens our pipeline of next-generation therapeutics to treat COVID-19, which is caused by SARS-CoV-2. As consideration for entering into the License Agreement, we paid a license fee of approximately $ 0.4 |
LICENSE AGREEMENT WITH UNIVERSI
LICENSE AGREEMENT WITH UNIVERSITY OF ALBERTA | 9 Months Ended |
Sep. 30, 2023 | |
License Agreement With University Of Alberta | |
LICENSE AGREEMENT WITH UNIVERSITY OF ALBERTA | NOTE 13 – LICENSE AGREEMENT WITH UNIVERSITY OF ALBERTA On May 18, 2022, the Company entered into an exclusive License Agreement with the University of Alberta focused on identifying and testing broad-spectrum antiviral drugs against future variants of SARS-CoV-2 and other emerging viruses. As consideration for entering into the License Agreement, Tonix paid a low-five digit license fee to University of Alberta. The License Agreement also provides for single-digit royalties and contingent milestone payments. As of September 30, 2023, other than the upfront fee, no milestone payments have been accrued or paid in relation to this agreement. |
LICENSE AGREEMENTS WITH COLUMBI
LICENSE AGREEMENTS WITH COLUMBIA UNIVERSITY | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
LICENSE AGREEMENTS WITH COLUMBIA UNIVERSITY | NOTE 14 – LICENSE AGREEMENTS WITH COLUMBIA UNIVERSITY On February 13, 2023, Tonix exercised an option to obtain an exclusive license from Columbia for the development of a portfolio of both fully human and murine mAbs for the treatment or prophylaxis of SARS-CoV-2 infection, including our TNX-3600 and TNX-4100 product candidates, respectively. The licensed mAbs were developed as part of a research collaboration and option agreement between Tonix and Columbia. |
SALE OF COMMON STOCK
SALE OF COMMON STOCK | 9 Months Ended |
Sep. 30, 2023 | |
Sale Of Common Stock | |
SALE OF COMMON STOCK | NOTE 15 – SALE OF COMMON STOCK July 2023 Financing On July 27, 2023, the Company sold 2,530,000 4,470,000 7,000,000 $1.00 $1.00 $0.9999 The Company incurred offering expenses of approximately $0.7 $0.5 $6.3 2022 Lincoln Park Transaction On August 16, 2022, the Company entered into an equity line of credit with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which Lincoln Park agreed to purchase up to $50,000,000 100,000 $1,000,000 During the three and nine months ended September 30, 2023, the Company sold 0 0.1 $0 $0.4 During the nine months ended September 30, 2022, no Purchase Agreement with Lincoln Park On December 3, 2021, the Company entered into a purchase agreement (the “Purchase Agreement with Lincoln Park”) and a registration rights agreement (the “Lincoln Park Registration Rights Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”). Pursuant to the terms of the Purchase Agreement with Lincoln Park, Lincoln Park agreed to purchase from the Company up to $ 80,000,000 Pursuant to the terms of the Purchase Agreement with Lincoln Park, at the time the Company signed the Purchase Agreement with Lincoln Park and the Lincoln Park Registration Rights Agreement, the Company issued 14,546 1.6 During the nine months ended September 30, 2022, the Company sold 0.5 8.7 Under applicable rules of the NASDAQ Global Market, the Company could not issue or sell more than 19.99 0.5 million 0.4 At-the-Market Offerings On April 8, 2020, the Company entered into a sales agreement with AGP pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $ 320 3 During the three and nine months ended September 30, 2023, the Company sold approximately 0 1 0 3 5.5 76.2 Stock Repurchases During the first quarter of 2023, the Company has repurchased 2,512,044 12.5 2.75 8.61 12.5 0.3 In January 2023, the Board of Directors approved a new 2023 share repurchase program pursuant to which the Company may repurchase up to an additional $ 12.5 160,000 7.12 1.1 The timing and amount of any shares repurchased will be determined based on the Company’s evaluation of market conditions and other factors and the New Share Repurchase Program may be discontinued or suspended at any time. Repurchases will be made in accordance with the rules and regulations promulgated by the Securities and Exchange Commission and certain other legal requirements to which the Company may be subject. Repurchases may be made, in part, under a Rule 10b5-1 plan, which allows stock repurchases when the Company might otherwise be precluded from doing so. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 16 – STOCK-BASED COMPENSATION On May 1, 2020, the Company’s stockholders approved the Tonix Pharmaceuticals Holding Corp. Amended and Restated 2020 Stock Incentive Plan (“Amended and Restated 2020 Plan”). Under the terms of the Amended and Restated 2020 Plan, the Company may issue (1) stock options (incentive and nonstatutory), (2) restricted stock, (3) stock appreciation rights (“SARs”), (4) RSUs, (5) other stock-based awards, and (6) cash-based awards. The Amended and Restated 2020 Plan initially provided for the issuance of up to 50,000 20 st 110 100 ten years 1,062,874 General A summary of the stock option activity and related information for the Plans for the nine months ended September 30, 2023 is as follows: Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2022 392,643 $ 334.08 8.70 $ — Grants 1,019,130 4.64 Exercised — — Forfeitures or expirations (27,509 ) 453.81 Outstanding at September 30, 2023 1,384,264 $ 89.09 9.01 $ — Exercisable at September 30, 2023 248,656 $ 392.48 7.78 $ The weighted average fair value of options granted during the three and nine months ended September 2023 was $ 0.84 3.99 0 32.81 The Company measures the fair value of stock options on the date of grant, based on the Black Scholes option pricing model using certain assumptions discussed below, and the closing market price of the Company’s common stock on the date of the grant. The fair value of the award is measured on the grant date. One-third 1/36th ten years one-year one year The assumptions used in the valuation of stock options granted during the nine months ended September 30, 2023 and 2022 were as follows: Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Risk-free interest rate 3.42 4.35 % 1.67 3.05 % Expected term of option 5.0 10 5.5 10 Expected stock price volatility 122.19 142.72 % 120.32 133.22 % Expected dividend yield 0.0 0.0 The risk-free interest rate is based on the yield of Daily U.S. Treasury Yield Curve Rates with terms equal to the expected term of the options as of the grant date. The expected term of options is determined using the simplified method, as provided in an SEC Staff Accounting Bulletin, and the expected stock price volatility is based on the Company’ historical stock price volatility. Stock-based compensation expense relating to options granted of $ 2.1 1.4 0.7 2.7 2 0.7 Stock-based compensation expense relating to options granted of $ 7.2 5 2.2 8.1 5.9 2.2 As of September 30, 2023, the Company had approximately $ 8.2 1.74 Employee Stock Purchase Plans On May 6, 2022, the Company’s stockholders approved the Tonix Pharmaceuticals Holdings Corp. 2022 Employee Stock Purchase Plan. (the "2022 ESPP"), which was replaced by the Tonix Pharmaceuticals Holdings Corp. 2023 Employee Stock Purchase Plan (the “2023 ESPP”, and together with the 2022 ESPP, the “ESPP Plans”), which was approved by the Company's stockholders on May 5, 2023. The 2023 ESPP allows eligible employees to purchase up to an aggregate of 800,000 85 800,000 The ESPP Plans are considered compensatory plans with the related compensation cost expensed over the six-month offering period. For the three months ended September 30, 2023 and 2022, $34,000 $46,000 $34,000 $46,000 646 40,000 30,000 14,999 29,000 14,000 32,000 |
STOCK WARRANTS
STOCK WARRANTS | 9 Months Ended |
Sep. 30, 2023 | |
Stock Warrants | |
STOCK WARRANTS | NOTE 17 – STOCK WARRANTS The following table summarizes information with respect to outstanding warrants to purchase common stock of the Company at September 30, 2023: Exercise Number Expiration Price Outstanding Date $ 1.00 7,000,000 August 2028 $ 100.00 125 November 2024 $ 114.00 618 February 2025 $ 7,000.00 2,453 December 2023 7,003,196 In connection with the July 2023 Financing, the Company issued 4,470,000 $0.0001 7,000,000 $1.00 five years No warrants were exercised during either of the nine months ended September 30, 2023, and 2022. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
LEASES | NOTE 18 – LEASES The Company has various operating lease agreements, which are primarily for office space. These agreements frequently include one or more renewal options and require the Company to pay for utilities, taxes, insurance and maintenance expense. No lease agreement imposes a restriction on the Company’s ability to engage in financing transactions or enter into further lease agreements. At September 30, 2023, the Company has right-of-use assets of $ 1.1 1.1 0.7 0.4 At September 30, 2023, future minimum lease payments for operating leases with non-cancelable terms of more than one year were as follows (in thousands): Year Ending December 31, 2023 $ 107 2024 460 2025 299 2026 142 2027 and beyond 246 1,254 Included interest (104 ) $ 1,150 During the nine months ended September 30, 2023, the Company entered into new operating leases and lease amendments, resulting in the Company recognizing an additional operating lease liability of approximately $ 898,000 898,000 During the nine months ended September 30, 2022, the Company entered into new operating leases and lease amendments, resulting in the Company recognizing an additional operating lease liability of approximately $ 386,000 386,000 Other information related to leases is as follows: Operating lease expense was $ 0.1 Operating lease expense was $ 0.4 Other information related to leases is as follows: Cash paid for amounts included in the measurement of lease liabilities: Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Operating cash flow from operating leases (in thousands) $ 434 $ 447 Weighted Average Remaining Lease Term Operating leases 3.50 2.33 Weighted Average Discount Rate Operating leases 4.63 % 2.26 % |
COMMITMENTS
COMMITMENTS | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | NOTE 19 – COMMITMENTS Contractual agreements The Company has entered into contracts with various contract research organizations with outstanding commitments aggregating approximately $ 33.4 Defined contribution plan The Company has a qualified defined contribution plan (the “401(k) Plan”) pursuant to Section 401(k) of the Code, whereby all eligible employees may participate. Participants may elect to defer a percentage of their annual pretax compensation to the 401(k) Plan, subject to defined limitations. The Company is required to make contributions to the 401(k) Plan equal to 100 six three 200,000 700,000 122,000 428,000 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 20 – SUBSEQUENT EVENTS On September 28, 2023, the Company sold 4,050,000 4,950,000 9,000,000 0.50 five years 9,000,000 0.50 one year $0.50 0.4999 The Company incurred offering expenses of approximately $ 0.5 0.3 4.0 On October 17, 2023, the Company received a letter from the Listing Qualifications staff of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, the Company no longer met the requirement to maintain a minimum bid price of $1 In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided a period of 180 180 180 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Interim financial statements | Interim financial statements The unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The condensed consolidated balance sheet as of December 31, 2022 contained herein has been derived from audited financial statements. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of results that may be expected for the year ending December 31, 2023. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on March 13, 2023. |
Reverse Stock Split | Reverse Stock Split On May 9, 2023, the Company filed a Certificate of Change with the Nevada Secretary of State, effective May 10, 2023. Pursuant to the Certificate of Change, the Company effected a 1-for-6.25 |
Risks and uncertainties | Risks and uncertainties The Company’s primary efforts are devoted to conducting research and development of innovative pharmaceutical and biological products to address public health challenges. The Company has experienced net losses and negative cash flows from operations since inception and expects these conditions to continue for the foreseeable future. Further, the Company now has commercial products available for sale, and generates revenue from the sale of its Zembrace® SymTouch® and Tosymra® products, with no assurance that the Company will be able to generate sufficient cash flow to fund operations from its commercial products or products in development if and when approved. In addition, there can be no assurance that the Company’s research and development will be successfully completed or that any product will be approved or commercially viable. |
Use of estimates | Use of estimates The preparation of financial statements in accordance with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include, but are not limited to, provisions for product returns, coupons, rebates, chargebacks, discounts, allowances, inventory realization, the assumptions used in the fair value of stock-based compensation and other equity instruments, the percent of completion of research and development contracts, fair value estimates for assets acquired in business combinations, and assessment of useful lives of acquired intangible assets. |
Business Combinations | Business Combinations The Company accounts for business combinations in accordance with the provisions of ASC 805, Business Combinations and ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. Business combinations are accounted for using the acquisition method, whereby the consideration transferred is allocated to the net assets acquired based on their respective fair values measured on the acquisition date. The difference between the fair value of these assets and the purchase price is recorded as goodwill. Transaction costs other than those associated with the issue of debt or equity securities, and other direct costs of a business combination are not considered part of the business acquisition transaction and are expensed as incurred. |
Segment Information and Concentrations | Segment Information and Concentrations Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one The Company has two products that each accounted for more than 10% 100% As of September 30, 2023, accounts receivable from four customers accounted for 25% 23% 19% 15% 25% 21% 18% 14% |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The Company considers cash equivalents to be those investments which are highly liquid, readily convertible to cash and have an original maturity of three months or less when purchased. At September 30, 2023 and December 31, 2022, cash equivalents, which consisted of money market funds, amounted to $3.7 $116.3 $244,000 $241,000 $758,000 The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statement of cash flows: September 30, 2023 September 30, 2022 (in thousands) Cash and cash equivalents $ 6,914 $ 139,978 Restricted cash 1,002 240 Total $ 7,916 $ 140,218 |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable consists of amounts due from our wholesale and other third-party distributors and pharmacies and have standard payment terms that generally require payment within 30 to 90 days. For certain customers, the accounts receivable for the customer is net of prompt payment or specialty pharmacy discounts. We do not adjust our receivables for the effects of a significant financing component at contract inception if we expect to collect the receivables in one year or less from the time of sale. We provide reserves against accounts receivable for estimated losses that may result from a customer’s inability to pay. Amounts determined to be uncollectible are charged or written-off against the reserve. However, during the period covered by the Transition Services Agreement, the Seller has agreed to collect the accounts receivable on behalf of the Company and net settle within 45 days from each month-end. See note 10 for further details. The Company had no accounts receivable as of any prior period presented other than as of September 30, 2023. As of September 30, 2023 . |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents, and accounts receivable. We attempt to minimize the risks related to cash and cash equivalents by investing in a broad and diverse range of financial instruments, and we have established guidelines related to credit ratings and maturities intended to safeguard principal balances and maintain liquidity. Concentrations of credit risk with respect to receivables, which are typically unsecured, are somewhat mitigated due to the wide variety of customers using our products, as well as their dispersion across different geographic areas. We monitor the financial performance and creditworthiness of our customers so that we can properly assess and respond to changes in their credit profile. We continue to monitor these conditions and assess their possible impact on our business. |
Inventories | Inventories Inventories are recorded at the lower of cost or net realizable value, with cost determined by the weighted average cost method. The Company periodically reviews the composition of inventory in order to identify excess, obsolete, slow-moving or otherwise non-saleable items taking into account anticipated future sales compared with quantities on hand, and the remaining shelf life of goods on hand. If non-saleable items are observed and there are no alternate uses for the inventory, the Company records a write-down to net realizable value in the period that the decline in value is first recognized. Although the Company makes every effort to ensure the accuracy of forecasts of future product demand, any significant unanticipated decreases in demand could have a material impact on the carrying value of inventories and reported operating results. The Company’s reserves were approximately $21,000 |
Property and equipment | Property and equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the asset’s estimated useful life, which ranges from 20 40 15 three years five years shorter of the useful life or term of lease $978,000 $2.8 $252,000 $417,000 |
Intangible assets, net | Intangible assets, net Intangible assets deemed to have finite lives are carried at acquisition-date fair value less accumulated amortization and impairment, if any. Finite-lived intangible assets consist of developed technology intangible assets acquired in connection with the acquisition of certain products from Upsher Smith Laboratories, LLS (“USL Acquisition”) consummated on June 30, 2023 (See Note 8). The acquired intangible assets are amortized using the straight-line method over the estimated useful lives of the respective assets. Amortization expense for the three months ended September 30, 2023, was $238,000 During the year ended December 31, 2015, the Company purchased certain internet domain rights, which were determined to have an indefinite life. Identifiable intangibles with indefinite lives, which are included in Intangible assets, net on the condensed consolidated balance sheet, are not amortized but are tested for impairment annually or whenever events or changes in circumstances indicate that their carrying amount may be less than fair value. As of September 30, 2023, the Company believed that no impairment existed. |
Goodwill | Goodwill Goodwill represents the excess of the aggregate purchase price over the fair value of the net tangible and intangible assets acquired in a business combination. Goodwill is reviewed for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the carrying amount of goodwill may be impaired. As of September 30, 2023, the Company has recognized goodwill in connection with the USL Acquisition consummated on June 30, 2023 (See Note 8). |
Leases | Leases The Company determines if an arrangement is, or contains, a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities, current and operating lease liabilities, noncurrent in the Company’s condensed consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the transition date and subsequent lease commencement dates in determining the present value of lease payments. This is the rate the Company would have to pay if borrowing on a collateralized basis over a similar term to each lease. The operating lease ROU asset excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments made under operating leases is recognized on a straight-line basis over the lease term. |
Convertible Preferred Stock | Convertible Preferred Stock Preferred shares subject to mandatory redemption are classified as liability instruments and are measured at fair value. The Company classifies conditionally redeemable preferred shares, which includes preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control, as temporary equity (“mezzanine”) until such time as the conditions are removed or lapse. |
Revenue Recognition | Revenue Recognition The Company records and recognizes revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company’s revenues primarily result from contracts with customers, which are generally short-term and have a single performance obligation - the delivery of product. The Company’s performance obligation to deliver products is satisfied at the point in time that the goods are received by the customer, which is when the customer obtains title to and has the risks and rewards of ownership of the products, which is generally upon shipment or delivery to the customer as stipulated by the terms of the sale agreements. The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Our contractual payment terms are typically 30 to 90 days Revenues from product sales, net of gross-to-net deductions, are recorded only to the extent a significant reversal in the amount of cumulative revenue recognized is not probable of occurring and when the uncertainty associated with gross-to-net deductions is subsequently resolved. Taxes assessed by governmental authorities and collected from customers are excluded from product sales. Shipping and handling activities are considered to be fulfillment activities and not a separate performance obligation. Many of the Company’s products sold are subject to a variety of deductions. Revenues are recognized net of estimated rebates and chargebacks, cash discounts, distributor fees, sales return provisions and other related deductions. Deductions to product sales are referred to as gross-to-net deductions and are estimated and recorded in the period in which the related product sales occur. Accruals for these provisions are presented in the consolidated financial statements as reductions to gross sales in determining net sales, and as a contra asset within accounts receivable, net (if settled via credit) and other current liabilities (if paid in cash). Amounts recorded for revenue deductions can result from a complex series of judgements about future events and uncertainties and can rely heavily on estimates and assumptions. The following section briefly describes the nature of the Company’s provisions for variable consideration and how such provisions are estimated: Chargebacks Rebates ● Managed Care Rebates are processed in the quarter following the quarter in which they are earned. The managed care reporting entity submits utilization data after the end of the quarter and the Company processes the payment in accordance with contract terms. All rebates earned but not paid are estimated by the Company according to historical payments trended for market growth assumptions. ● Medicaid and State Agency rebates are based upon historical experience of claims submitted by various states. The Company monitors Medicaid legislative changes to determine what impact such legislation may have on the provision for Medicaid rebates. The accrual of State Agency reserves is based on historical payment rates. There is an approximate three-month lag from the time of product sale until the rebate is paid. ● Tri-Care represents a regionally managed health care program for active duty and retired members, dependents and survivors of the US military. The Tri-Care program supplements health care resources of the US military with civilian health care professionals for greater access and quality healthcare coverage. Through the Tri-Care program, the Company provides pharmaceuticals on a direct customer basis. Prices of pharmaceuticals sold under the Tri-Care program are pre-negotiated and a reserve amount is established to represent the proportionate rebate amount associated with product sales. ● Coverage Gap refers to the Medicare prescription drug program and represents specifically the period between the initial Medicare Part D prescription drug program coverage limit and the catastrophic coverage threshold. Applicable pharmaceutical products sold during this coverage gap timeframe are discounted by the Company. Since the nature of the program is that coverage limits are reset at the beginning of the calendar year; the payments escalate each quarter as the participants reach the coverage limit before reaching the catastrophic coverage threshold. The Company has determined that the cost of this reserve will be viewed as an annual cost. Therefore, the accrual will be incurred evenly during the year with quarterly review of the liability based on payment trends and any revision to the projected annual cost. Prompt-Pay and other Sales Discounts Product Returns |
Research and Development Costs | Research and Development Costs The Company outsources certain of its research and development efforts and expenses these costs as incurred, including the cost of manufacturing products for testing, as well as licensing fees and costs associated with planning and conducting clinical trials. The value ascribed to patents and other intellectual property acquired has been expensed as research and development costs, as such property is related to particular research and development projects and had no alternative future uses. The Company estimates its expenses resulting from its obligations under contracts with vendors, clinical research organizations and consultants and under clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. The Company accounts for trial expenses according to the timing of various aspects of the trial. The Company determines accrual estimates taking into account discussion with applicable personnel and outside service providers as to the progress or state of consummation of trials, or the services completed. During the course of a clinical trial, the Company adjusts its clinical expense recognition if actual results differ from its estimates. The Company makes estimates of its accrued expenses as of each balance sheet date based on the facts and circumstances known to it at that time. The Company’s clinical trial accruals are dependent upon the timely and accurate reporting of contract research organizations and other third-party vendors. |
Government Grants | Government Grants From time to time, the Company may enter into arrangements with governmental entities for the purpose of obtaining funding for research and development activities. The Company is reimbursed for costs incurred that are associated with specified research and development activities included in the grant application approved by the government authority. The Company classifies government grants received under these arrangements as a reduction to the related research and development expense in the same period as the relevant expenses are incurred. In August 2022, the Company announced that it received a Cooperative Agreement grant from the National Institute on Drug Abuse (“NIDA”), part of the National Institutes of Health, to support the development of its TNX-1300 product candidate for the treatment of cocaine intoxication. During the three and nine months ended September 30, 2023, we received $0.4 $2.3 |
Stock-based compensation | Stock-based compensation All stock-based payments to employees and to nonemployees for their services, including grants of restricted stock units (“RSUs”), and stock options, are measured at fair value on the grant date and recognized in the condensed consolidated statements of operations as compensation or other expense over the requisite service period. The Company accounts for share-based awards in accordance with the provisions of the Accounting Standards Codification (“ASC”) 718, Compensation – Stock Compensation. |
Foreign Currency Translation | Foreign Currency Translation Operations of the Company’s Canadian subsidiary, Tonix Pharmaceuticals (Canada), Inc., are conducted in local currency, which represents its functional currency. The U.S. dollar is the functional currency of the other foreign subsidiaries. Balance sheet accounts of the Canadian subsidiary were translated from foreign currency into U.S. dollars at the exchange rate in effect at the balance sheet date and income statement accounts were translated at the average rate of exchange prevailing during the period. Translation adjustments resulting from this process were included in accumulated other comprehensive loss on the consolidated condensed balance sheets. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity of a business during a period from transactions and other events and circumstances from non-owners sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Other comprehensive income (loss) represents foreign currency translation adjustments. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss and credit carryforwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company records a valuation allowance on its deferred income tax assets if it is not more likely than not that these deferred income tax assets will be realized. The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the condensed consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As of September 30, 2023, the Company has not recorded any unrecognized tax benefits. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. |
Per Share Data | Per Share Data The computation of basic and diluted loss per share for the quarters ended September 30, 2023 and 2022 excludes potentially dilutive securities when their inclusion would be anti-dilutive, or if their exercise prices were greater than the average market price of the common stock during the period. All warrants and preferred stock issued participate on a one-for-one basis with common stock in the distribution of dividends, if and when declared by the Board of Directors, on the Company’s common stock. For purposes of computing EPS, these warrants and preferred stock are considered to participate with common stock in earnings of the Company. Therefore, the Company calculates basic and diluted EPS using the two-class method. Under the two-class method, net income for the period is allocated between common stockholders and participating securities according to dividends declared and participation rights in undistributed earnings. No income was allocated to the warrants and preferred stock for the three and nine months ended September 30, 2023, and 2022, as results of operations were a loss for the periods. Potentially dilutive securities excluded from the computation of basic and diluted net loss per share, as of September 30, 2023 and 2022, are as follows: 2023 2022 Warrants to purchase common stock 7,003,196 3,196 Options to purchase common stock 1,384,264 392,643 Totals 8,387,460 395,839 |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. The main objective of ASU 2016-13 is to provide financial statement users with more decision-useful information about an entity’s expected credit losses on financial instruments and other commitments to extend credit at each reporting date. To achieve this objective, the amendments in this update replace the incurred loss impairment methodology currently used today with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to develop credit loss estimates. ASU 2016-13 will be effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, using a modified retrospective approach. Early adoption is permitted. The Company adopted ASU 2016-13 and related updates as of January 1, 2023. The adoption of ASU 2016-13 did not impact the Company’s financial position, results of operations or cash flows. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statement of cash flows: | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statement of cash flows: September 30, 2023 September 30, 2022 (in thousands) Cash and cash equivalents $ 6,914 $ 139,978 Restricted cash 1,002 240 Total $ 7,916 $ 140,218 |
Potentially dilutive securities excluded from the computation of basic and diluted net loss per share, as of September 30, 2023 and 2022, are as follows: | Potentially dilutive securities excluded from the computation of basic and diluted net loss per share, as of September 30, 2023 and 2022, are as follows: 2023 2022 Warrants to purchase common stock 7,003,196 3,196 Options to purchase common stock 1,384,264 392,643 Totals 8,387,460 395,839 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
The components of inventory consisted of the following as of September 30, 2023: | The components of inventory consisted of the following as of September 30, 2023: September 30, 2023 December 31, 2022 (in thousands) Raw Materials $ 3,064 $ — Work-in-process 1,565 — Finished Goods 8,709 — 13,338 $ — Less: Inventory reserves (21 ) — Total Inventory $ 13,317 $ — |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment, net consisted of the following (in thousands): | Property and equipment, net consisted of the following (in thousands): September 30, 2023 December 31, 2022 (in thousands) Property and equipment, net: Land $ 8,011 $ 8,011 Land improvements 326 79 Buildings 65,825 65,644 Office furniture and equipment 2,355 1,893 Laboratory equipment 21,506 18,440 Leasehold improvements 34 34 Construction in progress 1,204 1,366 99,261 95,467 Less: Accumulated depreciation and amortization (4,395 ) (1,653 ) $ 94,866 $ 93,814 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
The following table provides the gross carrying value of goodwill as follows: | The following table provides the gross carrying value of goodwill as follows: Amounts (in thousands) Balance at December 31, 2022 $ — Acquired during the period (see Note 8) 965 Balance at September 30, 2023 $ 965 |
The following table provides the gross carrying amount and accumulated amortization for each major class of intangible asset: | The following table provides the gross carrying amount and accumulated amortization for each major class of intangible asset: September 30, 2023 December 31, 2022 (in thousands) Intangible assets subject to amortization Developed technology $ 10,100 $ — Less: Accumulated amortization 238 — Total $ 9,862 $ — Intangible assets not subject to amortization Internet domain rights $ 120 $ 120 Total intangible assets, net $ 9,982 $ 120 |
At September 30, 2023, the related amortization for each of the next five years ended December 31 is as follows (in thousands): | At September 30, 2023, the related amortization for each of the next five years ended December 31 is as follows (in thousands): Year Ending December 31, Remainder of 2023 $ 238 2024 953 2025 953 2026 953 2027 and beyond 6,765 $ 9,862 |
TEMPORARY EQUITY (Tables)
TEMPORARY EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Temporary Equity | |
The Series A Preferred Stock and Series B Preferred Stock was recorded at redemption value | Since the Preferred Stock had a redemption feature at the option of the holder, it was classified as temporary equity. The Series A Preferred Stock and Series B Preferred Stock was recorded at redemption value $14.7 $1.1 Series A Preferred Stock Series B Preferred Stock Gross Proceeds $ 13,300 $ 950 Less: Preferred stock issuance costs (844 ) (60 ) Plus: Accretion of carrying value to redemption value 2,244 160 Preferred stock subject to possible redemption $ 14,700 $ 1,050 Since the Preferred Stock had a redemption feature at the option of the holder, it was classified as temporary equity. The Series A Preferred Stock and Series B Preferred Stock was recorded at redemption value of approximately $26.3 $5.2 Series A Preferred Stock Series B Preferred Stock Gross Proceeds $ 23,750 $ 4,750 Less: Preferred stock issuance costs (1,046 ) (209 ) Plus: Accretion of carrying value to redemption value 3,546 709 Preferred stock subject to possible redemption $ 26,250 $ 5,250 |
REVENUES (Tables)
REVENUES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
The Company’s net product revenues are summarized below: | The Company’s net product revenues are summarized below: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Zembrace® Symtouch® $ 3,292 $ — $ 3,292 $ — Tosymra® 697 $ — $ 697 $ — Total product revenues $ 3,989 $ — $ 3,989 $ — |
ASSET PURCHASE AGREEMENT WITH_2
ASSET PURCHASE AGREEMENT WITH UPSHER-SMITH (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
The following table summarizes the components of the purchase consideration (in thousands): | As consideration for acquisition of the Business and certain product-related inventories, the Company paid approximately $23.5 3 The following table summarizes the components of the purchase consideration (in thousands): Preliminary purchase consideration Amount Closing cash consideration $ 22,174 Inventory adjustment payment liability 1,348 Deferred payment liability 3,000 Purchase price to be allocated $ 26,522 |
The following table represents the preliminary allocation of the purchase price to the assets acquired by the Company in the USL Acquisition recognized in the Company’s consolidated balance sheets (in thousands): | The following table represents the preliminary allocation of the purchase price to the assets acquired by the Company in the USL Acquisition recognized in the Company’s consolidated balance sheets (in thousands): Preliminary purchase price allocation Amount Inventory $ 13,700 Prepaid expenses and other 1,757 Intangible assets, net 10,100 Goodwill 965 Fair value of assets acquired $ 26,522 |
The identifiable intangible assets acquired and their estimated useful lives for amortization are as follows (in thousands): | Intangible assets eligible for recognition separate from goodwill were those that satisfied either the contractual or legal criterion or the separability criterion in the accounting guidance. The identifiable intangible assets acquired and their estimated useful lives for amortization are as follows (in thousands): Fair Value Useful Life (years) Developed technology - Tosymra $ 3,400 9 Developed technology - Zembrace 6,700 14 Total $ 10,100 |
The following unaudited pro forma consolidated financial information reflects the results of operations of the Company for the three and nine months ended September 30, 2023 and 2022 as if the USL Acquisition had occurred as of January 1, 2022 and gives effect to transactions that are directly attributable to the acquisition. | The following unaudited pro forma consolidated financial information reflects the results of operations of the Company for the three and nine months ended September 30, 2023 and 2022 as if the USL Acquisition had occurred as of January 1, 2022 and gives effect to transactions that are directly attributable to the acquisition. Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net Product Sales $ 3,989 $ 3,635 $ 11,610 $ 7,612 Net Loss $ (27,072 ) $ (33,698 ) $ (91,252 ) $ (95,073 ) |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
A summary of the stock option activity and related information for the Plans for the nine months ended September 30, 2023 is as follows: | A summary of the stock option activity and related information for the Plans for the nine months ended September 30, 2023 is as follows: Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2022 392,643 $ 334.08 8.70 $ — Grants 1,019,130 4.64 Exercised — — Forfeitures or expirations (27,509 ) 453.81 Outstanding at September 30, 2023 1,384,264 $ 89.09 9.01 $ — Exercisable at September 30, 2023 248,656 $ 392.48 7.78 $ |
The assumptions used in the valuation of stock options granted during the nine months ended September 30, 2023 and 2022 were as follows: | The assumptions used in the valuation of stock options granted during the nine months ended September 30, 2023 and 2022 were as follows: Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Risk-free interest rate 3.42 4.35 % 1.67 3.05 % Expected term of option 5.0 10 5.5 10 Expected stock price volatility 122.19 142.72 % 120.32 133.22 % Expected dividend yield 0.0 0.0 |
STOCK WARRANTS (Tables)
STOCK WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Stock Warrants | |
The following table summarizes information with respect to outstanding warrants to purchase common stock of the Company at September 30, 2023: | The following table summarizes information with respect to outstanding warrants to purchase common stock of the Company at September 30, 2023: Exercise Number Expiration Price Outstanding Date $ 1.00 7,000,000 August 2028 $ 100.00 125 November 2024 $ 114.00 618 February 2025 $ 7,000.00 2,453 December 2023 7,003,196 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
At September 30, 2023, future minimum lease payments for operating leases with non-cancelable terms of more than one year were as follows (in thousands): | At September 30, 2023, future minimum lease payments for operating leases with non-cancelable terms of more than one year were as follows (in thousands): Year Ending December 31, 2023 $ 107 2024 460 2025 299 2026 142 2027 and beyond 246 1,254 Included interest (104 ) $ 1,150 |
Other information related to leases is as follows: | Other information related to leases is as follows: Cash paid for amounts included in the measurement of lease liabilities: Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Operating cash flow from operating leases (in thousands) $ 434 $ 447 Weighted Average Remaining Lease Term Operating leases 3.50 2.33 Weighted Average Discount Rate Operating leases 4.63 % 2.26 % |
BUSINESS (Details Narrative)
BUSINESS (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Working capital | $ 13,600 | ||
Accumulated deficit | (573,336) | $ (470,038) | |
Cash and cash equivalents | $ 6,914 | $ 120,229 | $ 139,978 |
The following table provides a
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statement of cash flows: (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 6,914 | $ 120,229 | $ 139,978 | |
Restricted cash | 1,002 | 240 | ||
Total | $ 7,916 | $ 120,470 | $ 140,218 | $ 178,900 |
Potentially dilutive securities
Potentially dilutive securities excluded from the computation of basic and diluted net loss per share, as of September 30, 2023 and 2022, are as follows: (Details) - shares | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Totals | 8,387,460 | 395,839 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Totals | 7,003,196 | 3,196 |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Totals | 1,384,264 | 392,643 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 USD ($) | May 09, 2023 | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) Segment | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Product Information [Line Items] | |||||||
Number of Operating Segments | Segment | 1 | ||||||
Money market funds | $ 3,700 | $ 3,700 | $ 3,700 | $ 116,300 | |||
Restricted cash | 244 | 244 | 244 | 241 | |||
Restricted cash held by vendors in escrow accounts | 758 | 758 | 758 | ||||
Inventory reserves | $ 21 | 21 | 21 | ||||
Depreciation and amortization expense | 978 | $ 252 | $ 2,800 | $ 417 | |||
Amortization of Intangible Assets | 238 | ||||||
Contractual payment terms | 30 to 90 days | ||||||
Government grants | $ 400 | $ 2,300 | |||||
Land Improvements and Lab Equipment [Member] | |||||||
Product Information [Line Items] | |||||||
Estimated useful life of property and equipment | 15 years | 15 years | 15 years | ||||
Computer Equipment [Member] | |||||||
Product Information [Line Items] | |||||||
Estimated useful life of property and equipment | 3 years | 3 years | 3 years | ||||
Furniture and All Other Equipment [Member] | |||||||
Product Information [Line Items] | |||||||
Estimated useful life of property and equipment | 5 years | 5 years | 5 years | ||||
Leasehold Improvements [Member] | |||||||
Product Information [Line Items] | |||||||
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration] | Useful Life, Shorter of Lease Term or Asset Utility [Member] | Useful Life, Shorter of Lease Term or Asset Utility [Member] | Useful Life, Shorter of Lease Term or Asset Utility [Member] | ||||
Minimum [Member] | Building [Member] | |||||||
Product Information [Line Items] | |||||||
Estimated useful life of property and equipment | 20 years | 20 years | 20 years | ||||
Maximum [Member] | Building [Member] | |||||||
Product Information [Line Items] | |||||||
Estimated useful life of property and equipment | 40 years | 40 years | 40 years | ||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer 1 [Member] | |||||||
Product Information [Line Items] | |||||||
Concentration Risk, Percentage | 25% | 25% | |||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer 2 [Member] | |||||||
Product Information [Line Items] | |||||||
Concentration Risk, Percentage | 21% | 21% | |||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer 3 [Member] | |||||||
Product Information [Line Items] | |||||||
Concentration Risk, Percentage | 18% | 18% | |||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer 4 [Member] | |||||||
Product Information [Line Items] | |||||||
Concentration Risk, Percentage | 14% | 14% | |||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer 1 [Member] | |||||||
Product Information [Line Items] | |||||||
Concentration Risk, Percentage | 25% | ||||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer 2 [Member] | |||||||
Product Information [Line Items] | |||||||
Concentration Risk, Percentage | 23% | ||||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer 3 [Member] | |||||||
Product Information [Line Items] | |||||||
Concentration Risk, Percentage | 19% | ||||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer 4 [Member] | |||||||
Product Information [Line Items] | |||||||
Concentration Risk, Percentage | 15% | ||||||
Product 1 [Member] | Revenue Benchmark [Member] | Product Concentration Risk [Member] | Minimum [Member] | |||||||
Product Information [Line Items] | |||||||
Concentration Risk, Percentage | 10% | 10% | |||||
Product 2 [Member] | Revenue Benchmark [Member] | Product Concentration Risk [Member] | Minimum [Member] | |||||||
Product Information [Line Items] | |||||||
Concentration Risk, Percentage | 10% | 10% | |||||
Products 1 and 2 [Member] | Revenue Benchmark [Member] | Product Concentration Risk [Member] | |||||||
Product Information [Line Items] | |||||||
Concentration Risk, Percentage | 100% | 100% | |||||
Common Stock [Member] | |||||||
Product Information [Line Items] | |||||||
Reverse stock split | 1-for-6.25 |
The components of inventory con
The components of inventory consisted of the following as of September 30, 2023: (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw Materials | $ 3,064 | |
Work-in-process | 1,565 | |
Finished Goods | 8,709 | |
Inventory gross | 13,338 | |
Less: Inventory reserves | (21) | |
Total Inventory | $ 13,317 |
Property and equipment, net con
Property and equipment, net consisted of the following (in thousands): (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 99,261 | $ 95,467 |
Less: Accumulated depreciation and amortization | (4,395) | (1,653) |
Property and equipment, net | 94,866 | 93,814 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 8,011 | 8,011 |
Land Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 326 | 79 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 65,825 | 65,644 |
Office Furniture And Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 2,355 | 1,893 |
Laboratory Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 21,506 | 18,440 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 34 | 34 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 1,204 | $ 1,366 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details Narrative) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 27 Months Ended | ||||
Oct. 01, 2021 USD ($) ft² | Dec. 23, 2020 USD ($) a | Sep. 28, 2020 USD ($) ft² | Sep. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Property, Plant and Equipment [Line Items] | ||||||||
Property and equipment | $ 94,866,000 | $ 94,866,000 | $ 93,814,000 | $ 93,814,000 | ||||
Proceeds from sale of property and equipment | 992,000 | |||||||
Sold Property and Equipment [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Property and equipment | 800,000 | $ 800,000 | ||||||
Proceeds from sale of property and equipment | $ 1,000,000 | |||||||
MARYLAND | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Area of facility | ft² | 45,000 | |||||||
Facility purchase | $ 17,500,000 | |||||||
MARYLAND | Land [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Facility purchase | 2,100,000 | |||||||
MARYLAND | Building [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Facility purchase | 13,900,000 | |||||||
MARYLAND | Office Furniture and Equipment and Laboratory Equipment [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Facility purchase | $ 1,500,000 | |||||||
MASSACHUSETTS | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Area of facility | ft² | 45,000 | |||||||
Facility purchase | $ 4,000,000 | |||||||
Costs incurred | $ 38,800,000 | |||||||
Total costs incurred | $ 61,600,000 | |||||||
MASSACHUSETTS | Land [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Facility purchase | 1,200,000 | |||||||
MASSACHUSETTS | Building [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Facility purchase | $ 2,800,000 | |||||||
MONTANA | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Area of facility | a | 44 | |||||||
Facility purchase | $ 4,500,000 |
The following table provides th
The following table provides the gross carrying value of goodwill as follows: (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Balance at December 31, 2022 | |
Acquired during the period (see Note 8) | 965 |
Balance at September 30, 2023 | $ 965 |
The following table provides _2
The following table provides the gross carrying amount and accumulated amortization for each major class of intangible asset: (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Intangible assets subject to amortization | ||
Developed technology | $ 10,100 | |
Less: Accumulated amortization | 238 | |
Total | 9,862 | |
Intangible assets not subject to amortization | ||
Internet domain rights | 120 | 120 |
Total intangible assets, net | $ 9,982 | $ 120 |
At September 30, 2023, the rela
At September 30, 2023, the related amortization for each of the next five years ended December 31 is as follows (in thousands): (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Year Ending December 31, | ||
Remainder of 2023 | $ 238 | |
2024 | 953 | |
2025 | 953 | |
2026 | 953 | |
2027 and beyond | 6,765 | |
$ 9,862 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) $ in Thousands | 3 Months Ended |
Sep. 30, 2023 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Amortization of Intangible Assets | $ 238 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details Narrative) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents - fair value | $ 3.7 | $ 116.3 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - $ / shares | Oct. 17, 2023 | May 09, 2023 | Sep. 30, 2023 | May 07, 2023 | Dec. 31, 2022 | Dec. 13, 2022 | Dec. 11, 2022 | Aug. 05, 2022 | Aug. 03, 2022 |
Class of Stock [Line Items] | |||||||||
Common stock shares authorized | 160,000,000 | 160,000,000 | 1,000,000,000 | 160,000,000 | 160,000,000 | 24,000,000 | 24,000,000 | 8,000,000 | |
Subsequent Event [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Period of business days of non-compliance with minimum bid requirement | 30 days | ||||||||
Nasdaq minimum bid requirement | $ 1 | ||||||||
Period to regain compiance with minimum bid requirement | 180 days | ||||||||
Additional period to regain compiance with minimum bid requirement | 180 days | ||||||||
Common Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Stockholders equity, reverse stock split | 1-for-6.25 | ||||||||
Conversion of stock, shares converted | 64,627,246 | ||||||||
Common stock exchanged | 10,340,506 | ||||||||
Additional shares issue | 131,902 |
The Series A Preferred Stock an
The Series A Preferred Stock and Series B Preferred Stock was recorded at redemption value (Details) - USD ($) $ in Thousands | Oct. 26, 2022 | Jun. 24, 2022 |
Series A Preferred Stock [Member] | ||
Gross Proceeds | $ 13,300 | $ 23,750 |
Preferred stock issuance costs | (844) | (1,046) |
Accretion of carrying value to redemption value | 2,244 | 3,546 |
Preferred stock subject to possible redemption | 14,700 | 26,250 |
Series B Preferred Stock [Member] | ||
Gross Proceeds | 950 | 4,750 |
Preferred stock issuance costs | (60) | (209) |
Accretion of carrying value to redemption value | 160 | 709 |
Preferred stock subject to possible redemption | $ 1,050 | $ 5,250 |
TEMPORARY EQUITY (Details Narra
TEMPORARY EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | ||||||||||
Dec. 13, 2022 | Oct. 26, 2022 | Aug. 05, 2022 | Jun. 24, 2022 | Dec. 31, 2022 | Aug. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | May 09, 2023 | May 07, 2023 | Dec. 11, 2022 | Aug. 03, 2022 | |
Common stock, authorized | 160,000,000 | 24,000,000 | 160,000,000 | 160,000,000 | 160,000,000 | 1,000,000,000 | 24,000,000 | 8,000,000 | ||||
Escrow deposit | $ 758 | |||||||||||
Redemption amount | $ 31,500 | |||||||||||
Series A Preferred Stock [Member] | ||||||||||||
Number of shares issued | 1,400,000 | 2,500,000 | ||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||||||||||
Preferred stock subject to possible redemption | $ 14,700 | $ 26,250 | ||||||||||
Series B Preferred Stock [Member] | ||||||||||||
Number of shares issued | 100,000 | 500,000 | ||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||||||||||
Preferred stock voting rights | the right to cast 2,500 votes per share of Series B Preferred Stock on the December Amendment | the right to cast 2,500 votes per share of Series B Preferred Stock on the Amendment | ||||||||||
Preferred stock subject to possible redemption | $ 1,050 | $ 5,250 | ||||||||||
Redeemable Convertible Preferred Stock [Member] | ||||||||||||
Price per share | $ 9.50 | $ 9.50 | ||||||||||
Percentage of issue discount | 5% | 5% | ||||||||||
Stated value per share | $ 10 | $ 10 | $ 10 | $ 10 | ||||||||
Proceeds from issuance of convertible preferred stock | $ 14,300 | $ 28,500 | ||||||||||
Conversion price | $ 6.25 | $ 25 | ||||||||||
Preferred stock voting rights | Preferred Stock have no voting rights other than the right to vote on the December Amendment and as a class on certain other specified matters | Preferred Stock have no voting rights other than the right to vote on the Amendment and as a class on certain other specified matters | ||||||||||
Temporary equity redemption price percentage | 105% | 105% | 105% | 105% | ||||||||
Escrow deposit | $ 14,300 | $ 28,500 | ||||||||||
Escrow deposit for original Issue discount | $ 1,500 | $ 3,000 | ||||||||||
Redemption amount | $ 15,800 | $ 31,500 |
The Company_s net product reven
The Company’s net product revenues are summarized below: (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total product revenues | $ 3,989 | $ 3,989 | ||
Zembrace Symtouch [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total product revenues | 3,292 | 3,292 | ||
Tosymra [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total product revenues | $ 697 | $ 697 |
REVENUES (Details Narrative)
REVENUES (Details Narrative) - Gross-to-net Sales Allowance [Member] $ in Millions | Sep. 30, 2023 USD ($) |
Disaggregation of Revenue [Line Items] | |
Gross-to-net allowances | $ 2.5 |
Accounts Receivable [Member] | |
Disaggregation of Revenue [Line Items] | |
Gross-to-net allowances | 0.7 |
Accrued Liabilities [Member] | |
Disaggregation of Revenue [Line Items] | |
Gross-to-net allowances | $ 1.8 |
The following table summarizes
The following table summarizes the components of the purchase consideration (in thousands): (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | |||
Closing cash consideration | $ 22,174 | ||
Upsher-Smith Laboratories, LLC [Member] | |||
Business Acquisition [Line Items] | |||
Closing cash consideration | $ 22,174 | ||
Inventory adjustment payment liability | 1,348 | ||
Deferred payment liability | 3,000 | ||
Purchase price to be allocated | $ 26,522 |
The following table represents
The following table represents the preliminary allocation of the purchase price to the assets acquired by the Company in the USL Acquisition recognized in the Company’s consolidated balance sheets (in thousands): (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 965 | ||
Upsher-Smith Laboratories, LLC [Member] | |||
Business Acquisition [Line Items] | |||
Inventory | $ 13,700 | ||
Prepaid expenses and other | 1,757 | ||
Intangible assets, net | 10,100 | ||
Goodwill | 965 | ||
Fair value of assets acquired | $ 26,522 |
The identifiable intangible ass
The identifiable intangible assets acquired and their estimated useful lives for amortization are as follows (in thousands): (Details) - Upsher-Smith Laboratories, LLC [Member] $ in Thousands | Jun. 30, 2023 USD ($) |
Business Acquisition [Line Items] | |
Fair Value | $ 10,100 |
Developed technology - Tosymra [Member] | |
Business Acquisition [Line Items] | |
Fair Value | $ 3,400 |
Useful Life (years) | 9 years |
Developed technology - Zembrace [Member] | |
Business Acquisition [Line Items] | |
Fair Value | $ 6,700 |
Useful Life (years) | 14 years |
The following unaudited pro for
The following unaudited pro forma consolidated financial information reflects the results of operations of the Company for the three and nine months ended September 30, 2023 and 2022 as if the USL Acquisition had occurred as of January 1, 2022 and gives e (Details) - Upsher-Smith Laboratories, LLC [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | ||||
Net Product Sales | $ 3,989 | $ 3,635 | $ 11,610 | $ 7,612 |
Net Loss | $ (27,072) | $ (33,698) | $ (91,252) | $ (95,073) |
ASSET PURCHASE AGREEMENT WITH_3
ASSET PURCHASE AGREEMENT WITH UPSHER-SMITH (Details Narrative) - USD ($) | Jun. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 965,000 | ||
Upsher-Smith Laboratories, LLC [Member] | |||
Business Acquisition [Line Items] | |||
Purchase price to be allocated | $ 26,522,000 | ||
Transition services monthly base fees, first six months | 100,000 | ||
Transition services monthly base fees, months seven through nine | 150,000 | ||
Transition services additional monthly fees | 150,000 | ||
Closing cash consideration | 23,500,000 | ||
Deferred payment liability | 3,000,000 | ||
Goodwill | 965,000 | ||
Rceivables collected | 4,784,000 | ||
Liabilities paid | 2,724,000 | ||
Net amount receivable | 1,562,000 | ||
Upsher-Smith Laboratories, LLC [Member] | Transition Services [Member] | |||
Business Acquisition [Line Items] | |||
Amount due for transition services agreement | $ 498,000 | ||
Upsher-Smith Laboratories, LLC [Member] | Tosymra [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out payment percentage reduction upon entry of generic product | 66.70% | ||
Additional royalty percentage | 3% | ||
Additional royalty percentage for U.S. patent | 3% | ||
Additional royalty payment period | 15 years | ||
Upsher-Smith Laboratories, LLC [Member] | Tosymra [Member] | Earn-Out Range 1 [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out payment percentage | 4% | ||
Upsher-Smith Laboratories, LLC [Member] | Tosymra [Member] | Earn-Out Range 1 [Member] | Minimum [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out net sales | $ 0 | ||
Upsher-Smith Laboratories, LLC [Member] | Tosymra [Member] | Earn-Out Range 1 [Member] | Maximum [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out net sales | $ 30,000,000 | ||
Upsher-Smith Laboratories, LLC [Member] | Tosymra [Member] | Earn-Out Range 2 [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out payment percentage | 7% | ||
Upsher-Smith Laboratories, LLC [Member] | Tosymra [Member] | Earn-Out Range 2 [Member] | Minimum [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out net sales | $ 30,000,000 | ||
Upsher-Smith Laboratories, LLC [Member] | Tosymra [Member] | Earn-Out Range 2 [Member] | Maximum [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out net sales | $ 75,000,000 | ||
Upsher-Smith Laboratories, LLC [Member] | Tosymra [Member] | Earn-Out Range 3 [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out payment percentage | 9% | ||
Upsher-Smith Laboratories, LLC [Member] | Tosymra [Member] | Earn-Out Range 3 [Member] | Minimum [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out net sales | $ 75,000,000 | ||
Upsher-Smith Laboratories, LLC [Member] | Tosymra [Member] | Earn-Out Range 3 [Member] | Maximum [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out net sales | $ 100,000,000 | ||
Upsher-Smith Laboratories, LLC [Member] | Tosymra [Member] | Earn-Out Range 4 [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out payment percentage | 12% | ||
Upsher-Smith Laboratories, LLC [Member] | Tosymra [Member] | Earn-Out Range 4 [Member] | Minimum [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out net sales | $ 100,000,000 | ||
Upsher-Smith Laboratories, LLC [Member] | Tosymra [Member] | Earn-Out Range 4 [Member] | Maximum [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out net sales | $ 150,000,000 | ||
Upsher-Smith Laboratories, LLC [Member] | Tosymra [Member] | Earn-Out Range 5 [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out payment percentage | 15% | ||
Upsher-Smith Laboratories, LLC [Member] | Tosymra [Member] | Earn-Out Range 5 [Member] | Minimum [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out net sales | $ 150,000,000 | ||
Upsher-Smith Laboratories, LLC [Member] | Tosymra [Member] | Sales Milestones [Member] | |||
Business Acquisition [Line Items] | |||
Maximum payment for sales milestones | $ 15,000,000 | ||
Upsher-Smith Laboratories, LLC [Member] | Zembrace Symtouch [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out payment percentage reduction upon entry of generic product | 90% | ||
Upsher-Smith Laboratories, LLC [Member] | Zembrace Symtouch [Member] | Earn-Out Range 1 [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out payment percentage | 3% | ||
Upsher-Smith Laboratories, LLC [Member] | Zembrace Symtouch [Member] | Earn-Out Range 1 [Member] | Minimum [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out net sales | $ 0 | ||
Upsher-Smith Laboratories, LLC [Member] | Zembrace Symtouch [Member] | Earn-Out Range 1 [Member] | Maximum [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out net sales | $ 30,000,000 | ||
Upsher-Smith Laboratories, LLC [Member] | Zembrace Symtouch [Member] | Earn-Out Range 2 [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out payment percentage | 6% | ||
Upsher-Smith Laboratories, LLC [Member] | Zembrace Symtouch [Member] | Earn-Out Range 2 [Member] | Minimum [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out net sales | $ 30,000,000 | ||
Upsher-Smith Laboratories, LLC [Member] | Zembrace Symtouch [Member] | Earn-Out Range 2 [Member] | Maximum [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out net sales | $ 75,000,000 | ||
Upsher-Smith Laboratories, LLC [Member] | Zembrace Symtouch [Member] | Earn-Out Range 3 [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out payment percentage | 12% | ||
Upsher-Smith Laboratories, LLC [Member] | Zembrace Symtouch [Member] | Earn-Out Range 3 [Member] | Minimum [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out net sales | $ 75,000,000 | ||
Upsher-Smith Laboratories, LLC [Member] | Zembrace Symtouch [Member] | Earn-Out Range 3 [Member] | Maximum [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out net sales | $ 100,000,000 | ||
Upsher-Smith Laboratories, LLC [Member] | Zembrace Symtouch [Member] | Earn-Out Range 4 [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out payment percentage | 16% | ||
Upsher-Smith Laboratories, LLC [Member] | Zembrace Symtouch [Member] | Earn-Out Range 4 [Member] | Minimum [Member] | |||
Business Acquisition [Line Items] | |||
Earm-out net sales | $ 100,000,000 |
ASSET PURCHASE AGREEMENT WITH_4
ASSET PURCHASE AGREEMENT WITH HEALION (Details Narrative) - Healion Bio Inc. [Member] - Asset Purchase Agreement [Member] $ in Millions | Feb. 02, 2023 USD ($) |
Asset Acquisition [Line Items] | |
Consideration paid | $ 1.2 |
Research and development costs | $ 1.2 |
LICENSE AGREEMENT WITH CURIA (D
LICENSE AGREEMENT WITH CURIA (Details Narrative) $ in Millions | Dec. 13, 2022 USD ($) |
License Agreement [Member] | Curia [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Consideration paid | $ 0.4 |
SALE OF COMMON STOCK (Details N
SALE OF COMMON STOCK (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Aug. 01, 2023 | Jul. 27, 2023 | Aug. 16, 2022 | Dec. 03, 2021 | Apr. 08, 2020 | Sep. 30, 2022 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Class of Stock [Line Items] | |||||||||||
Number of shares issued, value | $ 1,029,000 | ||||||||||
Repurchase of common stock | $ 13,965,000 | ||||||||||
2022 Share Repurchase Program [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Shares repurchased | 2,512,044 | ||||||||||
Share repurchase authorized amount | $ 12,500,000 | ||||||||||
Repurchase of common stock | 12,500,000 | ||||||||||
Stock repurchase agreement expense | $ 300,000 | ||||||||||
2022 Share Repurchase Program [Member] | Minimum [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Price per share | $ 2.75 | ||||||||||
2022 Share Repurchase Program [Member] | Maximum [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Price per share | $ 8.61 | ||||||||||
2023 Share Repurchase Program [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Shares repurchased | 160,000 | ||||||||||
Share repurchase authorized amount | $ 12,500,000 | ||||||||||
Price per share | $ 7.12 | ||||||||||
Repurchase of common stock | $ 1,100,000 | ||||||||||
Sales Agreement [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued | 2,530,000 | ||||||||||
Stock offering expenses | $ 700,000 | ||||||||||
Placement agent fees | 500,000 | ||||||||||
Proceeds from equity offerings | $ 6,300,000 | ||||||||||
Sales Agreement [Member] | Alliance Global Partners [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued | 0 | 1,000,000 | 5,500,000 | ||||||||
Proceeds from equity offerings | $ 0 | $ 3,000,000 | $ 76,200,000 | ||||||||
Offering price per agreement | $ 320,000,000 | ||||||||||
Commission to agent | 3% | ||||||||||
Sales Agreement [Member] | Pre-Funded Warrants [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares for common warramts | 4,470,000 | ||||||||||
Exercise price | $ 0.0001 | ||||||||||
Price per share | $ 0.9999 | ||||||||||
Sales Agreement [Member] | Common Warrants [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares for common warramts | 7,000,000 | ||||||||||
Exercise price | $ 1 | ||||||||||
Price per share | $ 1 | ||||||||||
Purchase Agreement with Lincoln Park 2022 [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued | 0 | 100,000 | 0 | ||||||||
Proceeds from equity offerings | $ 0 | $ 400,000 | |||||||||
Purchase Agreement with Lincoln Park 2022 [Member] | Lincoln Park Capital Fund, LLC [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued | 100,000 | ||||||||||
Commitment to purchase shares under agreement | $ 50,000,000 | ||||||||||
Number of shares issued, value | $ 1,000,000 | ||||||||||
Purchase Agreement with Lincoln Park [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued | 400,000 | 500,000 | |||||||||
Proceeds from equity offerings | $ 8,700,000 | ||||||||||
Percentage of issuance by issuer of common stock | 19.99% | ||||||||||
Maximum number of shares issued wIthout shareholder approval | 500,000 | ||||||||||
Purchase Agreement with Lincoln Park [Member] | Lincoln Park Capital Fund, LLC [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued | 14,546 | ||||||||||
Commitment to purchase shares under agreement | $ 80,000,000 | ||||||||||
Number of shares issued, value | $ 1,600,000 |
A summary of the stock option a
A summary of the stock option activity and related information for the Plans for the nine months ended September 30, 2023 is as follows: (Details) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Share-Based Payment Arrangement [Abstract] | |
Outstanding at beginning | shares | 392,643 |
Outstanding at beginning | $ / shares | $ 334.08 |
Weighted average remaining contractual term | 8 years 8 months 12 days |
Grants | shares | 1,019,130 |
Grants | $ / shares | $ 4.64 |
Forfeitures or expirations | shares | (27,509) |
Forfeitures or expirations | $ / shares | $ 453.81 |
Outstanding at end | shares | 1,384,264 |
Outstanding at end | $ / shares | $ 89.09 |
Weighted average remaining contractual term | 9 years 3 days |
Exercisable at end | shares | 248,656 |
Exercisable at end | $ / shares | $ 392.48 |
Exercisable at end | 7 years 9 months 10 days |
The assumptions used in the val
The assumptions used in the valuation of stock options granted during the nine months ended September 30, 2023 and 2022 were as follows: (Details) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Risk-free interest rate - Minimum | 3.42% | 1.67% |
Risk-free interest rate - Maximum | 4.35% | 3.05% |
Expected stock price volatility - minimum | 122.19% | 120.32% |
Expected stock price volatility - maximum | 142.72% | 133.22% |
Expected dividend yield | 0% | 0% |
Minimum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected term of option | 5 years | 5 years 6 months |
Maximum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected term of option | 10 years | 10 years |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
May 03, 2019 | Jan. 31, 2023 | Jan. 31, 2022 | Sep. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | May 01, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Weighted average grant date fair value of options (in dollars per share) | $ 0.84 | $ 0 | $ 3.99 | $ 32.81 | ||||||
Share-Based Payment Arrangement, Option [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Expiration period | 10 years | |||||||||
Stock-based compensation expense | $ 2,100,000 | $ 2,700,000 | $ 7,200,000 | $ 8,100,000 | ||||||
Unrecognized compensation cost | 8,200,000 | $ 8,200,000 | ||||||||
Unrecognized compensation cost, recognition period | 1 year 8 months 26 days | |||||||||
Share-Based Payment Arrangement, Option [Member] | General and Administrative Expense [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Stock-based compensation expense | 1,400,000 | 2,000,000 | $ 5,000,000 | 5,900,000 | ||||||
Share-Based Payment Arrangement, Option [Member] | Research and Development Expense [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Stock-based compensation expense | $ 700,000 | 700,000 | $ 2,200,000 | 2,200,000 | ||||||
Share-Based Payment Arrangement, Option [Member] | Director [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Vesting period | 1 year | |||||||||
Share-Based Payment Arrangement, Option [Member] | Executive Officer [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Service period | 1 year | |||||||||
Share-Based Payment Arrangement, Option [Member] | Share-Based Payment Arrangement, Tranche One [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Vesting percentage | 33.33% | |||||||||
Share-Based Payment Arrangement, Option [Member] | Share-Based Payment Arrangement, Tranche Two [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Vesting percentage | 2.78% | |||||||||
Amended and Restated 2020 Plan [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Number of shares authorized | 50,000 | |||||||||
Percentage of additional shares authorized | 20% | |||||||||
Percent of fair value of common stock at grant date | 100% | |||||||||
Expiration period | 10 years | |||||||||
Number of shares available for future grants | 1,062,874 | 1,062,874 | ||||||||
Amended and Restated 2020 Plan [Member] | 10% or more Shareholder [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Percent of fair value of common stock at grant date | 110% | |||||||||
2023 Employee Stock Purchase Plan [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Number of shares authorized | 800,000 | |||||||||
Percent of fair value of common stock at grant date | 85% | |||||||||
Number of shares available for future grants | 800,000 | 800,000 | ||||||||
Accrued expenses | $ 32,000 | $ 32,000 | ||||||||
Employee Stock Purchase Plan [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Stock-based compensation expense | $ 34,000 | $ 46,000 | $ 34,000 | $ 46,000 | ||||||
2020 Employee Stock Purchase Plan [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Employee stock purchase plan (in shares) | 646 | |||||||||
Transfer to additional paid in capital | $ 40,000 | |||||||||
ESPP withholdings returned to employees | $ 30,000 | |||||||||
2022 Employee Stock Purchase Plan [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Employee stock purchase plan (in shares) | 14,999 | |||||||||
Transfer to additional paid in capital | $ 29,000 | |||||||||
ESPP withholdings returned to employees | $ 14,000 |
The following table summarize_2
The following table summarizes information with respect to outstanding warrants to purchase common stock of the Company at September 30, 2023: (Details) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Class of Warrant or Right [Line Items] | |
Number outstanding | 7,003,196 |
Warrant One [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 1 |
Number outstanding | 7,000,000 |
Expiration date | 2028-08 |
Warrant Two [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 100 |
Number outstanding | 125 |
Expiration date | 2024-11 |
Warrant Three [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 114 |
Number outstanding | 618 |
Expiration date | 2025-02 |
Warrant Four [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 7,000 |
Number outstanding | 2,453 |
Expiration date | 2023-12 |
STOCK WARRANTS (Details Narrati
STOCK WARRANTS (Details Narrative) - Sales Agreement [Member] | Jul. 27, 2023 $ / shares shares |
Pre-Funded Warrants [Member] | |
Class of Warrant or Right [Line Items] | |
Number of shares for common warramts | shares | 4,470,000 |
Exercise price | $ / shares | $ 0.0001 |
Common Warrants [Member] | |
Class of Warrant or Right [Line Items] | |
Number of shares for common warramts | shares | 7,000,000 |
Exercise price | $ / shares | $ 1 |
Warrants term | 5 years |
At September 30, 2023, future m
At September 30, 2023, future minimum lease payments for operating leases with non-cancelable terms of more than one year were as follows (in thousands): (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Leases | |
2023 | $ 107 |
2024 | 460 |
2025 | 299 |
2026 | 142 |
2027 and beyond | 246 |
1,254 | |
Included interest | (104) |
$ 1,150 |
Other information related to le
Other information related to leases is as follows: (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Leases | ||
Operating cash flow from operating leases | $ 434 | $ 447 |
Weighted average remaining lease term operating leases | 3 years 6 months | 2 years 3 months 29 days |
Weighted average discount rate operating leases | 4.63% | 2.26% |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Other Commitments [Line Items] | |||||
Right-of-use assets, net | $ 1,081 | $ 1,081 | $ 715 | ||
Total lease liability | 1,150 | 1,150 | |||
Lease liability, net of current portion | 716 | 716 | 328 | ||
Lease liability, current | 434 | 434 | $ 432 | ||
Operating lease expense | 100 | $ 100 | 400 | $ 400 | |
New Operating Lease [Member] | |||||
Other Commitments [Line Items] | |||||
Right-of-use assets, net | 898 | 386 | 898 | 386 | |
Total lease liability | $ 898 | $ 386 | $ 898 | $ 386 |
COMMITMENTS (Details Narrative)
COMMITMENTS (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Defined Contribution Plan [Member] | ||||
Other Commitments [Line Items] | ||||
Employer matching contribution | 100% | |||
Maximum annual contributions per employee | 6% | |||
Maximum annual contributions per employer | 3% | |||
Administrative expenses | $ 200 | $ 122 | $ 700 | $ 428 |
Research Organizations [Member] | ||||
Other Commitments [Line Items] | ||||
Outstanding commitments | $ 33,400 | $ 33,400 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | Oct. 17, 2023 | Oct. 03, 2023 | Aug. 01, 2023 | Jul. 27, 2023 |
Sales Agreement [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of shares issued | 2,530,000 | |||
Stock offering expenses | $ 0.7 | |||
Placement agent fees | 0.5 | |||
Proceeds from equity offerings | $ 6.3 | |||
Sales Agreement [Member] | Pre-Funded Warrants [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of shares for common warramts | 4,470,000 | |||
Exercise price | $ 0.0001 | |||
Price per share | $ 0.9999 | |||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Nasdaq minimum bid requirement | $ 1 | |||
Period to regain compiance with minimum bid requirement | 180 days | |||
Additional period to regain compiance with minimum bid requirement | 180 days | |||
Subsequent Event [Member] | Sales Agreement [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of shares issued | 4,050,000 | |||
Stock offering expenses | $ 0.5 | |||
Placement agent fees | 0.3 | |||
Proceeds from equity offerings | $ 4 | |||
Subsequent Event [Member] | Sales Agreement [Member] | Pre-Funded Warrants [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of shares for common warramts | 4,950,000 | |||
Price per share | $ 0.4999 | |||
Subsequent Event [Member] | Sales Agreement [Member] | Common Warrants Series A [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of shares for common warramts | 9,000,000 | |||
Exercise price | $ 0.50 | |||
Warrants term | 5 years | |||
Price per share | $ 0.4999 | |||
Subsequent Event [Member] | Sales Agreement [Member] | Common Warrants Series B [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of shares for common warramts | 9,000,000 | |||
Exercise price | $ 0.50 | |||
Warrants term | 1 year | |||
Price per share | $ 0.50 |