Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 07, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 001-38738 | ||
Entity Registrant Name | ETON PHARMACEUTICALS, INC. | ||
Entity Central Index Key | 0001710340 | ||
Entity Tax Identification Number | 37-1858472 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 21925 W. Field Parkway | ||
Entity Address, Address Line Two | Suite 235 | ||
Entity Address, City or Town | Deer Park | ||
Entity Address, State or Province | IL | ||
Entity Address, Postal Zip Code | 60010-7278 | ||
City Area Code | (847) | ||
Local Phone Number | 787-7361 | ||
Title of 12(b) Security | Common Stock, $0.001 par value | ||
Trading Symbol | ETON | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Elected Not To Use the Extended Transition Period | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 108.8 | ||
Entity Common Stock, Shares Outstanding | 24,626,004 | ||
Documents Incorporated by Reference [Text Block] | Portions of the registrant’s definitive proxy statement for its 2022 Annual Meeting of Stockholders, which the registrant intends to file pursuant to Regulation 14A with the Securities and Exchange Commission not later than 120 days after the registrant’s fiscal year ended December 31, 2021, are incorporated by reference into Part III of this Annual Report on Form 10-K. | ||
ICFR Auditor Attestation Flag | false | ||
Auditor Firm ID | 170 | ||
Auditor Name | KMJ Corbin & Company LLP | ||
Auditor Location | Irvine, California |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 14,406 | $ 21,295 |
Accounts receivable, net | 5,471 | 48 |
Inventories | 550 | 1,242 |
Prepaid expenses and other current assets | 3,177 | 2,116 |
Total current assets | 23,604 | 24,701 |
Property and equipment, net | 115 | 811 |
Intangible assets, net | 3,621 | 575 |
Operating lease right-of-use assets, net | 104 | 192 |
Other long-term assets, net | 21 | 40 |
Total assets | 27,465 | 26,319 |
Current liabilities: | ||
Accounts payable | 1,774 | 2,344 |
PPP loan, current portion | 280 | |
Current portion of long-term debt | 1,418 | |
Accrued liabilities | 1,366 | 1,170 |
Total current liabilities | 4,558 | 3,794 |
Long-term debt, net of discount and including accrued fees | 5,262 | 6,532 |
Long-term portion of PPP and EIDL loans | 231 | |
Operating lease liabilities, net of current portion | 15 | 99 |
Total liabilities | 9,835 | 10,656 |
Stockholders’ equity | ||
Common stock, $0.001 par value; 50,000,000 shares authorized; 24,626,004 and 24,312,808 shares issued and outstanding at December 31, 2021 and 2020, respectively | 25 | 24 |
Additional paid-in capital | 111,718 | 107,797 |
Accumulated deficit | (94,113) | (92,158) |
Total stockholders’ equity | 17,630 | 15,663 |
Total liabilities and stockholders’ equity | $ 27,465 | $ 26,319 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 24,626,004 | 24,312,808 |
Common stock, shares outstanding | 24,626,004 | 24,312,808 |
Statements of Operations
Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues: | |||
Total net revenues | $ 21,832 | $ 39 | $ 959 |
Cost of Sales: | |||
Total cost of sales | 2,623 | 286 | 453 |
Gross profit (loss) | 19,209 | (247) | 506 |
Operating expenses: | |||
Research and development | 6,235 | 14,104 | 11,555 |
General and administrative | 14,469 | 12,760 | 7,552 |
Total operating expenses | 20,704 | 26,864 | 19,107 |
Loss from operations | (1,495) | (27,111) | (18,601) |
Other income (expense): | |||
Interest and other income (expense), net | (1,006) | (859) | 281 |
Gain on PPP loan forgiveness | 365 | ||
Gain on equipment sale | 181 | ||
Loss before income tax expense | (1,955) | (27,970) | (18,320) |
Income tax expense | |||
Net loss | $ (1,955) | $ (27,970) | $ (18,320) |
Net loss per share, basic and diluted | $ (0.08) | $ (1.33) | $ (1.03) |
Weighted average number of common shares outstanding, basic and diluted | 25,207,299 | 21,010,058 | 17,760,761 |
Licensing Revenue [Member] | |||
Revenues: | |||
Total net revenues | $ 19,000 | $ 500 | |
Cost of Sales: | |||
Total cost of sales | 1,500 | ||
Product [Member] | |||
Revenues: | |||
Total net revenues | 2,832 | 39 | 459 |
Cost of Sales: | |||
Total cost of sales | $ 1,123 | $ 286 | $ 453 |
Statements of Stockholders' Equ
Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2018 | $ 18 | $ 72,153 | $ (45,868) | $ 26,303 |
Balance, shares at Dec. 31, 2018 | 17,607,928 | |||
Stock-based compensation | 1,888 | 1,888 | ||
Stock-based compensation, shares | ||||
Stock option exercises | 214 | 214 | ||
Stock option exercises, shares | 167,622 | |||
Employee stock purchase plan | 239 | 239 | ||
Employee stock purchase plan, shares | 44,885 | |||
Stock warrant exercises | ||||
Stock warrant exercises, shares | 57,051 | |||
Relative fair value of warrants to purchase common stock issued in connection with debt | 226 | 226 | ||
Net loss | (18,320) | (18,320) | ||
Ending balance, value at Dec. 31, 2019 | $ 18 | 74,720 | (64,188) | 10,550 |
Balance, shares at Dec. 31, 2019 | 17,877,486 | |||
Stock-based compensation | 2,576 | 2,576 | ||
Stock-based compensation, shares | 15,190 | |||
Stock option exercises | 255 | 255 | ||
Stock option exercises, shares | 194,878 | |||
Proceeds from sales of common stock, net of offering costs | $ 6 | 28,776 | 28,782 | |
Proceeds from sales of common stock, net of offering costs, shares | 5,820,000 | |||
Issuance of common stock for product candidate licensing rights | 1,264 | 1,264 | ||
Issuance of common stock for product candidate licensing rights, shares | 379,474 | |||
Employee stock purchase plan | 112 | 112 | ||
Employee stock purchase plan, shares | 25,780 | |||
Relative fair value of warrants to purchase common stock issued in connection with debt | 94 | 94 | ||
Net loss | (27,970) | (27,970) | ||
Ending balance, value at Dec. 31, 2020 | $ 24 | 107,797 | (92,158) | 15,663 |
Balance, shares at Dec. 31, 2020 | 24,312,808 | |||
Stock-based compensation | 3,381 | 3,381 | ||
Stock-based compensation, shares | ||||
Stock option exercises | $ 1 | 338 | 339 | |
Stock option exercises, shares | 144,233 | |||
Proceeds from sales of common stock, net of offering costs, shares | 94,808 | |||
Common stock issued related to restricted stock units | ||||
Common stock issued related to restricted stock units, shares | 25,000 | |||
Employee stock purchase plan | 202 | 202 | ||
Employee stock purchase plan, shares | 49,155 | |||
Stock warrant exercises | ||||
Stock warrant exercises, shares | 94,808 | |||
Relative fair value of warrants to purchase common stock issued in connection with debt | ||||
Net loss | (1,955) | (1,955) | ||
Ending balance, value at Dec. 31, 2021 | $ 25 | $ 111,718 | $ (94,113) | $ 17,630 |
Balance, shares at Dec. 31, 2021 | 24,626,004 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | |||
Net loss | $ (1,955) | $ (27,970) | $ (18,320) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Stock-based compensation | 3,381 | 2,576 | 1,888 |
Common stock issued for product candidate licensing rights | 1,264 | ||
Depreciation and amortization | 462 | 651 | 447 |
Debt discount amortization | 148 | 121 | 16 |
Gain on forgiveness of PPP loan | (365) | ||
Gain on sale of equipment | (181) | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | (5,423) | 425 | (473) |
Inventories | 692 | (862) | (380) |
Prepaid expenses and other assets | (1,026) | (20) | (1,361) |
Accounts payable | (570) | 1,769 | (377) |
Accrued liabilities | 116 | (300) | 534 |
Net cash used in operating activities | (4,721) | (22,346) | (18,026) |
Cash used in investing activities | |||
Proceeds from sale of equipment | 700 | ||
Purchases of property and equipment | (9) | (50) | (1,096) |
Purchase of product licensing rights | (3,250) | (750) | |
Net cash used in investing activities | (2,559) | (50) | (1,846) |
Cash flows from financing activities | |||
Proceeds from issuance of long-term debt, net of issuance costs | 1,965 | 4,750 | |
Proceeds from sales of common stock, net of offering costs | 28,782 | ||
Proceeds from PPP and EIDL loans | 511 | ||
EIDL loan payoff | (150) | ||
Proceeds from employee stock purchase plan and stock option exercises | 541 | 367 | 453 |
Net cash provided by financing activities | 391 | 31,625 | 5,203 |
Change in cash and cash equivalents | (6,889) | 9,229 | (14,669) |
Cash and cash equivalents at beginning of year | 21,295 | 12,066 | 26,735 |
Cash and cash equivalents at end of year | 14,406 | 21,295 | 12,066 |
Supplemental disclosures of cash flow information | |||
Cash paid for interest | 815 | 797 | |
Cash paid for income taxes | |||
Supplemental disclosures of non-cash investing and financing activities: | |||
Relative fair value of common stock warrants issued in connection with debt | 94 | 226 | |
Right-of-use assets obtained in exchange for lease liabilities | $ 195 |
Company Overview
Company Overview | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Company Overview | Note 1 — Company Overview Eton Pharmaceuticals, Inc. (“Eton” or the “Company”) was incorporated as a Delaware “C” corporation on April 27, 2017 and was initially set up as a wholly-owned subsidiary of Harrow Health, Inc. (“Harrow”, fka Imprimis Pharmaceuticals, Inc.). In June 2017, the Company raised $ 20,055 21,960 4,750 1,965 7,756 21,026 7.00 Eton is a specialty pharmaceutical company focused on developing, acquiring, and commercializing innovative products. Eton is primarily focused on hospital injectable and rare disease products. The Company seeks to improve the formula, delivery system, or safety of existing molecules in order to address unmet patient needs. Eton pursues what it perceives to be low-risk product candidates where existing published literature, historical clinical trials, or physician usage has established safety and/or efficacy of the molecule, thereby reducing the incremental clinical burden required for the Company to bring the product to patients. The Company’s Biorphen® product was approved by the FDA in October 2019 and sales commenced for this product at the end of 2019. Eton’s EM-100 product was sold to Bausch Health and the product was approved by the FDA in September 2020. Bausch Health launched this product under the name of Alaway® Preservative Free in January 2021 and Eton receives royalties from the sale of the product. The Company acquired the licensing rights to Alkindi Sprinkle and this product was approved by the FDA in October 2020 and launched in December 2020. The Company entered into a co-promotion agreement with Tolmar Pharmaceuticals in November 2021 whereby Tolmar will promote Alkindi Sprinkle through its 60+ person salesforce in exchange for a royalty on net sales. In addition, the Company launched Carglumic Acid tablets in December 2021 as the first and only FDA-approved generic version of Carbaglu®. |
Liquidity Considerations
Liquidity Considerations | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity Considerations | Note 2 — Liquidity Considerations As of December 31, 2021, the Company had an accumulated deficit of $ 94,113 4,721 . To date, the Company has generated revenues from six products and expects further growth in 2022 and beyond in accordance with additional market penetration from these products plus revenues from licensing and additional products where it anticipates FDA approval. The Company currently believes its existing cash and cash equivalents of $ 14,406 as of December 31, 2021 augmented by the $ 5,000 milestone payment received in January 2022 for the commercial launch of EPRONTIA™ (Topiramate oral solution) by Azurity Pharmaceuticals (“Azurity”), will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next twelve months from the date of issuance of these financial statements. This estimate is based on the Company’s current assumptions, including assumptions relating to estimated sales and its ability to manage its spending. The Company could use its available capital resources sooner than currently expected. Accordingly, the Company could seek to obtain additional capital through equity financings, the issuance of debt or other arrangements. However, there can be no assurance that the Company will be able to raise additional capital if needed or under acceptable terms, if at all. The sale of additional equity may dilute existing stockholders and newly issued shares may contain senior rights and preferences compared to currently outstanding common shares. The Company’s existing long-term debt obligation contains covenants and limits the Company’s ability to pay dividends or make other distributions to stockholders. If the Company experiences delays in product sales growth and completing its product development and obtaining regulatory approval for its other product candidates and is unable to obtain such additional financing, operations would need to be scaled back or discontinued. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 3 — Summary of Significant Accounting Policies Basis of Presentation The Company has prepared the accompanying financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, provisions for uncollectible receivables, chargebacks and sales returns, valuation of inventories, useful lives of assets and the impairment of property and equipment, the accrual of research and development expenses and the valuation of common stock, stock options and warrants. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates or assumptions. Segment Information The Company operates the business on the basis of a single Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. All cash and cash equivalents are held in U.S. financial institutions or invested in short-term U.S. treasury bills. Cash equivalents consist of an interest-bearing checking account and a U.S. treasury bill. From time to time, amounts deposited with its bank exceed federally insured limits. The Company believes the associated credit risk to be minimal. Accounts Receivable Accounts receivable are recorded at the invoiced amount and are non-interest bearing. Accounts receivable are recorded net of allowances for doubtful accounts, cash discounts for prompt payment, distribution fees, chargebacks and returns and allowances. The total for these reserves amounted to $ 96 71 Inventories The Company values its inventories at the lower of cost or net realizable value using the first-in, first-out method of valuation. The Company reviews its inventories for potential excess or obsolete issues on an ongoing basis and will record a write-down if an impairment is identified. Inventories at December 31, 2021 and 2020 consist solely of purchased finished goods. At December 31, 2021, inventories are shown net of a slow-moving reserve for its Biorphen product of $ 1,414 1,414 623 Property and Equipment Property and equipment are stated at cost. Depreciation of property and equipment is computed utilizing the straight-line method based on the following estimated useful lives. Computer hardware and software is depreciated over three years five years estimated useful lives or the remaining lease term Maintenance and repairs are charged to expense as incurred, while renewals and improvements are capitalized. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 3 — Summary of Significant Accounting Policies (continued) Intangible Assets The Company capitalizes payments it makes for licensed products when the payment is based on FDA approval for the product and the cost is recoverable based on expected future cash flows from the product. The cost is amortized on a straight-line basis over the estimated useful life of the product commencing on the approval date in accordance with Accounting Standards Codification (“ASC”) 350 — Intangibles - Goodwill and Other. A $ 750 payment related to the approval of the Company’s Biorphen product in 2019 has been capitalized and that cost is being amortized over five years . A $ 3,250 payment related to the approval of the Company’s Carglumic Acid product in December 2021 has been capitalized and that cost is being amortized over ten years. The intangible assets, net on the Company’s balance sheet reflected $ 379 and $ 175 of accumulated amortization as of December 31, 2021 and 2020, respectively. The Company recorded amortization expense of $ 204 , $ 150 and $ 25 for the years ended December 31, 2021, 2020 and 2019, respectively, and will record amortization expense of $ 475 per year for these intangible assets for 2022 through 2023 and then $ 450 in 2024 when the Biorphen asset will be fully amortized. For 2025 through 2030, the Company will incur amortization expense of $ 325 and then $ 271 in 2031 when the Carglumic Acid asset will be fully amortized. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the Company’s statements of operations for the amount by which the carrying amount of the asset exceeds the fair value of the asset. No Debt Issuance Costs and Debt Discount and Detachable Debt-Related Warrants Costs incurred to issue debt are deferred and recorded as a reduction to the debt balance in the accompanying balance sheets. The Company amortizes debt issuance costs over the expected term of the related debt using the effective interest method. Debt discounts relate to the relative fair value of warrants issued in conjunction with the debt and are also recorded as a reduction to the debt balance and accreted over the expected term of the debt to interest expense using the effective interest method. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 3 — Summary of Significant Accounting Policies (continued) Leases The Company accounts for leases in accordance with ASC Topic 842 — Leases. The Company reviews all relevant facts and circumstances of a contract to determine if it is a lease whereby the terms of the agreement convey the right to control the direct use and receive substantially all of the economic benefits of an identified asset for a period of time in exchange for consideration. The associated right-of-use assets and lease liabilities are recognized at lease commencement. The Company measures lease liabilities based on the present value of the lease payments over the lease term discounted using the rate it would pay on a loan with the equivalent payments and term for the lease. The Company does not include the impact for lease term options that would extend or terminate the lease unless it is reasonably certain that it will exercise any such options. The Company accounts for the lease components separately from non-lease components for its operating leases. The Company measures right-of-use assets based on the corresponding lease liabilities adjusted for (i) any prepayments made to the lessor at or before the commencement date, (ii) initial direct costs it incurs, and (iii) any incentives under the lease. In addition, the Company evaluates the recoverability of its right-of-use assets for possible impairment in accordance with its long-lived assets policy. Operating leases are reflected on the balance sheets as operating lease right-of-use assets, current accrued liabilities and long-term operating lease liabilities. The Company does no The Company commences recognizing operating lease expense when the lessor makes the underlying asset available for use by the Company and the operating lease expense is recognized on a straight-line basis. Variable lease payments are expensed as incurred. The Company does not recognize right-of-use assets or lease liabilities for leases with a term of twelve months or less; such lease costs are recorded in the statements of operations on a straight-line basis over the lease term. Patent Costs All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the successful award of a patent and the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses. Concentrations of Credit Risk, Sources of Supply and Significant Customers The Company is subject to credit risk for its cash and cash equivalents which are invested in money market funds and U.S. treasury bills from time to time. The Company maintains its cash and cash equivalent balances with one major commercial bank and the deposits held with the financial institution exceed the amount of insurance provided on such deposits and is exposed to credit risk in the event of a default by the financial institutions holding its cash and cash equivalents to the extent recorded on the balance sheets. The Company is dependent on third-party suppliers for its products and product candidates. In particular, the Company relies, and expects to continue to rely, on a small number of suppliers to manufacture key chemicals, approved products and process its product candidates as part of its development programs. These programs could be adversely affected by a significant interruption in the manufacturing process. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 3 — Summary of Significant Accounting Policies (continued) The Company is also subject to credit risk from its accounts receivable related to product sales as it extends credit based on an evaluation of the customer’s financial condition, and collateral is not required. Management monitors its exposure to accounts receivable by periodically evaluating the collectability of the account receivable based on a variety of factors including the length of time the receivables are past due, the financial health of the customer and historical experience. Based upon the review of these factors, the Company recorded no allowance for doubtful accounts at December 31, 2021 or 2020. The accounts receivable balance at December 31, 2021 and 2020 and product sales revenue recognized during the year ended December 31, 2021 and 2020 consist of sales to and amounts due from AmerisourceBergen Corporation, Cardinal Health Services and McKesson Corporation for sales of the Company’s Biorphen product. The December 31, 2021 accounts receivable balance and sales in 2021 also include a $ 5,000 milestone from Azurity, in accordance with the Eprontia™ (topiramate oral solution) product, amounts due from AnovoRx for sales of the Company’s Alkindi Sprinkle product and its Carglumic Acid product, which launched in December 2021. Revenue Recognition for Contracts with Customers The Company accounts for contracts with its customers in accordance with ASC 606 — Revenue from Contracts with Customers. ASC 606 applies to all contracts with customers, except for contracts that are within the scope of other standards. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Arrangements that include rights to additional goods or services that are exercisable at a customer’s discretion are generally considered options. The Company assesses whether these options provide a material right to the customer and, if so, they are considered performance obligations. The exercise of a material right is accounted for as a contract modification for accounting purposes. The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) each performance obligation is satisfied at a point in time or over time, and if over time this is based on the use of an output or input method. Any amounts received prior to revenue recognition will be recorded as deferred revenue. Amounts expected to be recognized as revenue within the twelve months following the balance sheet date will be classified as current portion of deferred revenue in the Company’s balance sheets. Amounts not expected to be recognized as revenue within the twelve months following the balance sheet date are classified as long-term deferred revenue, net of current portion. Milestone Payments Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 3 — Summary of Significant Accounting Policies (continued) Royalties – Significant Financing Component – The Company sells Biorphen in the U.S. to wholesale pharmaceutical distributors, who then sell the product to hospitals and other end-user customers. Sales to wholesalers are made pursuant to purchase orders subject to the terms of a master agreement, and delivery of individual shipments of Biorphen represent performance obligations under each purchase order. The Company uses a third-party logistics (“3PL”) vendor to process and fulfill orders and has concluded it is the principal in the sales to wholesalers because it controls access to the 3PL vendor services rendered and directs the 3PL vendor activities. The Company has no significant obligations to wholesalers to generate pull-through sales. In addition, the Company sells its Alkindi Sprinkle and Carglumic Acid product to one pharmacy distributor customer which provides order fulfilment and inventory storage/distribution services. Selling prices initially billed to wholesalers are subject to discounts for prompt payment and subsequent chargebacks when the wholesalers sell Biorphen at negotiated discounted prices to members of certain group purchasing organizations (“GPOs”) and government programs. In addition, the Company pays fees to wholesalers for their distribution services, inventory reporting and chargeback processing. The Company pays GPOs fees for administrative services and for access to GPO members and concluded the benefits received in exchange for these fees are not distinct from its sales of Biorphen, and accordingly it applies these amounts to reduce revenues. Wholesalers also have rights to return unsold product nearing or past the expiration date. Because of the shelf life of Biorphen and the Company’s lengthy return period, there may be a significant period of time between when the product is shipped and when it issues credits on returned product. For its Alkindi Sprinkle and Carglumic Acid products, the Company bills at the initial product list price which are subject to offsets for patient co-pay assistance and potential state Medicaid reimbursements which are recorded as a reduction of net revenues at the date of sale/shipment. The Company estimates the transaction price when it receives each purchase order taking into account the expected reductions of the selling price initially billed to the wholesaler/distributor arising from all of the above factors. The Company has developed estimates for future returns and chargebacks of Biorphen and the impact of the other discounts and fees it pays while Alkindi Sprinkle and Carglumic Acid sales to its distributor are not subject to returns. When estimating these adjustments to the transaction price, the Company reduces it sufficiently to be able to assert that it is probable that there will be no significant reversal of revenue when the ultimate adjustment amounts are known. The Company recognizes revenue from Biorphen product sales and related cost of sales upon product delivery to the wholesaler location. At that time, the wholesalers take control of the product as they take title, bear the risk of loss of ownership, and have an enforceable obligation to pay the Company. They also have the ability to direct sales of product to their customers on terms and at prices they negotiate. Although wholesalers have product return rights, the Company does not believe they have a significant incentive to return the product. The Company stores its Alkindi Sprinkle and Carglumic Acid inventory at its pharmacy distributor customer location and sales are recorded when stock is pulled and shipped to fulfill specific patient orders. Upon recognition of revenue from product sales, the estimated amounts of credit for product returns, chargebacks, distribution fees, prompt payment discounts, state Medicaid and GPO fees are included in sales reserves, accrued liabilities and net of accounts receivable. The Company monitors actual product returns, chargebacks, discounts and fees subsequent to the sale. If these amounts end up differing from its estimates, it will make adjustments to these allowances, which are applied to increase or reduce product sales revenue and earnings in the period of adjustment. In addition, the Company anticipates it will receive revenues from product licensing agreements where it has contracted for milestone payments and royalties from products it has developed or for which it has acquired the rights to a product developed by a third party. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 3 — Summary of Significant Accounting Policies (continued) Cost of Product Sales Cost of product sales consists of the profit-sharing and royalty fees with the Company’s product licensing and development partners, the purchase costs for finished products from third-party manufacturers and freight and handling/storage costs from the Company’s 3PL logistics service providers. The cost of sales for profit-sharing and royalty fees and costs for purchased finished products and the associated inbound freight expense is recorded when the associated product sale revenue is recognized in accordance with the terms of shipment to customers while outbound freight and handling/storage fees charged by the 3PL service provider are expensed as they are incurred. Cost of sales also reflects any write-downs or reserve adjustments for the Company’s inventories. Research and Development Expenses Research and development (“R&D”) expenses include both internal R&D activities and external contracted services. Internal R&D activity expenses include salaries, benefits and stock-based compensation and other costs to support the Company’s R&D operations. External contracted services include product development efforts such as certain product licensor milestone payments, clinical trial activities, manufacturing and control-related activities and regulatory costs. R&D expenses are charged to operations as incurred. The Company reviews and accrues R&D expenses based on services performed and relies upon estimates of those costs applicable to the stage of completion of each project. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. Upfront payments and milestone payments made for the licensing of technology for products that are not yet approved by the FDA are expensed as R&D in the period in which they are incurred. Nonrefundable advance payments for goods or services to be received in the future for use in R&D activities are recorded as prepaid expenses and are expensed as the related goods are delivered or the services are performed. Earnings (Loss) Per Share Basic net loss per common share is computed by dividing net loss attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders for the period by the weighted average number of common and common equivalent shares, such as Series A Preferred, unvested restricted stock, stock options and warrants that are outstanding during the period. Common stock equivalents are excluded from the computation when their inclusion would be anti-dilutive. No such adjustments were made for 2021, 2020 or 2019 as the Company reported a net loss for the years ended December 31, 2021, 2020 and 2019 and including the effects of common stock equivalents in the diluted earnings per share calculation would have been anti-dilutive (see Note 9). Basic weighted average shares for the year ended December 31, 2021 include 600,000 0.01 Stock-Based Compensation The Company accounts for stock-based compensation under the provisions of ASC — 718 Compensation — Stock Compensation. The guidance under ASC 718 requires companies to estimate the fair value of the stock-based compensation awards on the date of grant and record expense over the related service periods, which are generally the vesting period of the equity awards. The Company estimates the fair value of stock-based option awards using the Black-Scholes-Merton option-pricing model (“BSM”). The BSM requires the input of subjective assumptions, including the expected stock price volatility, the calculation of expected term, forfeitures and the fair value of the underlying common stock on the date of grant, among other inputs. The risk-free interest rate was determined from the implied yields for zero-coupon U.S. government issues with a remaining term approximating the expected life of the options or warrants. Dividends on common stock are assumed to be zero for the BSM valuation of the stock options. The expected term of stock options granted is based on vesting periods and the contractual life of the options. Expected volatilities are based on comparable companies’ historical volatility along with a limited weighting included for the Company’s own volatility, which management believes represents the most accurate basis for estimating expected future volatility under the current conditions. The Company accounts for forfeitures as they occur. The Company uses the closing common stock price on the date of grant for the fair value of the common stock. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 3 — Summary of Significant Accounting Policies (continued) Income Taxes As part of the process of preparing the Company’s financial statements, the Company must estimate the actual current tax liabilities and assess temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within the balance sheets. The Company must assess the likelihood that the deferred tax assets will be recovered from future taxable income and, to the extent the Company believes that recovery is not likely, a valuation allowance must be established. To the extent the Company establishes a valuation allowance or increase or decrease to this allowance in a period, the impact will be included in income tax expense in the statements of operations. As of December 31, 2021 and 2020, the Company has established a 100 The Company accounts for income taxes under the provisions of ASC 740 - Income Taxes. As of December 31, 2021 and 2020, there were no unrecognized tax benefits included in the balance sheets that would, if recognized, affect the effective tax rate. The Company’s practice is to recognize interest and penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties in its balance sheets at December 31, 2021 or 2020, and has not recognized interest and penalties in the statements of operations for the years ended December 31, 2021, 2020 and 2019. As of December 31, 2021, the Company is subject to taxation in the United States and certain individual states – primarily Illinois and Tennessee. The Company’s tax losses from 2017 through 2021 are subject to examination by the federal and state tax authorities due to the carryforward of unutilized net operating losses (“NOLs”). Current accounting standards include guidance on the accounting for uncertainty in income taxes recognized in the financial statements. Such standards also prescribe a recognition threshold and measurement model for the financial statement recognition of a tax position taken, or expected to be taken, and provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company believes that the ultimate deductibility of all tax positions is highly certain, although there is uncertainty about the timing of such deductibility. As a result, no liability for uncertain tax positions was recorded as of December 31, 2021 or 2020. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 3 — Summary of Significant Accounting Policies (continued) Fair Value Measurements We measure certain of our assets and liabilities at fair value. Fair value represents 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. Fair value accounting requires characterization of the inputs used to measure fair value into a three-level fair value hierarchy as follows: Level 1 Level 2 Level 3 Fair value measurements are classified based on the lowest level of input that is significant to the measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the assets and liabilities and their placement within the fair value hierarchy levels. The determination of the fair values stated below takes into account the market for the Company’s financials, assets and liabilities, the associated credit risk and other factors as required. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. The Company’s financial instruments included cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, PPP loan and long-term debt obligation. The carrying amounts of these financial instruments, except for the PPP loan and long-term debt obligation, approximate their fair values due to the short-term maturities of these instruments. Based on borrowing rates currently available to the Company, the carrying value of the PPP loan and long-term debt obligation approximate their respective fair values. Impact of New Accounting Pronouncements There were no new accounting pronouncements issued by the FASB during the current period that would apply to the Company and have a material impact on its financial position or results of operations. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 4 – Property and Equipment Property and equipment consist of the following: Schedule of Property and Equipment December 31, 2021 December 31, 2020 Computer hardware and software $ 157 $ 182 Furniture and fixtures 106 143 Equipment 132 994 Leasehold improvements 71 184 Construction in progress — — Property and equipment, gross 466 1,503 Less: accumulated depreciation and amortization (351 ) (692 ) Property and equipment, net $ 115 $ 811 Depreciation and amortization expense for the years ended December 31, 2021, 2020 and 2019 was $ 155 347 283 519 Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) |
Debt
Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Note 5 – Debt SWK Loan On November 13, 2019, the Company entered into a credit agreement (the “SWK Credit Agreement”) with SWK Holdings Corporation (“SWK”) which provided for up to $ 10,000 5,000 5,000 2,000 3,000 2,000 10.0 2.0 2.0 5.0 The Company is required to maintain a minimum cash balance of $ 3,000 In connection with the initial $ 5,000 51,239 5.86 51,239 226 5.75 seven 95 0 1.8 In connection with the additional $ 2,000 18,141 6.62 18,141 94 6.85 seven 95 0 0.4 These warrants (the “SWK Warrants”) are exercisable immediately and have a term of seven years from the date of issuance. The SWK Warrants are subject to a cashless exercise feature, with the exercise price and number of shares issuable upon exercise subject to change in connection with stock splits, dividends, reclassifications and other conditions. The Company recorded interest expense of $ 1,042 884 98 148 121 16 134 48 Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 5 – Debt (continued) The table below reflects the future annual payments for the SWK loan principal and interest as of December 31, 2021. Schedule of Future Payments of Long Term Debt Amount 2022 $ 2,202 2023 1,756 2024 5,300 Total payments 9,258 Less: amount representing interest (2,258 ) Loan payable, gross 7,000 Less: current portion of long-term debt (1,418 ) Less: unamortized discount (320 ) Long-term debt, net of unamortized discount $ 5,262 PPP loan On May 4, 2020, the Company received $ 361 4 365 EIDL loan On July 21, 2020, the Company received $ 150 6 Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Common Stock | Note 6 — Common Stock The Company has 50,000,000 0.001 In March and April 2020, the Company entered into securities purchase agreements with various investors and sold an aggregate of 2,600,000 3.00 7,756 In March 2020, the Company issued 379,474 1,264 In October 2020, the Company issued 3,220,000 7.00 21,026 For the years ended December 31, 2021 and 2020, the Company issued 144,233 and 194,878 shares, respectively, of its common stock resulting from stock option exercises under its 2018 Equity Incentive Plan (see Note 8). For the years ended December 31, 2021 and 2020, the Company issued 49,155 and 25,780 shares, respectively, under the Company’s Employee Stock Purchase Program (“ESPP”). In April 2020, the Company issued 15,190 shares of its common stock as an RSA to a new employee. This RSA vested 25 % every three months and was 100 % vested in April 2021. In April 2021, the Company issued 25,000 shares of its common stock to a member of its board of directors upon his retirement from the board in connection with previously vested restricted stock units (“RSUs”). During 2021, there were 135,650 warrants exercised (all on a cashless basis) resulting in 94,808 shares of common stock being issued by the Company. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) |
Common Stock Warrants
Common Stock Warrants | 12 Months Ended |
Dec. 31, 2021 | |
Common Stock Warrants | |
Common Stock Warrants | Note 7 — Common Stock Warrants Listed below is a summary of warrants outstanding as of December 31, 2021: Summary of Warrants Outstanding Description of Warrants No. of Shares Exercise Price Business Advisory Warrants – 2017 600,000 $ 0.01 Placement Agent Warrants – 2017 Preferred Stock Offering 471,446 $ 3.00 Placement Agent Warrants - IPO 414,000 $ 7.50 SWK Warrants – Debt (Tranche #1) 51,239 $ 5.86 SWK Warrants – Debt (Tranche #2) 18,141 $ 6.62 Total 1,554,826 $ 3.18 The holders of these warrants or their permitted transferees, are entitled to rights with respect to the registration under the Securities Act of their shares that are converted to common stock, including demand registration rights and piggyback registration rights. These rights are provided under the terms of a registration rights agreement between the Company and the investors. A rollforward of the warrants outstanding is listed in the table below: Summary of Rollforward of The Warrants Outstanding No. of Shares Balance as of the beginning of the year 1,690,476 Exercise of Placement Agent Warrants – 2017 Preferred Stock Offering (135,650 ) Balance as of the end of the year 1,554,826 There were 135,650 94,808 no 806 |
Share-Based Payment Awards
Share-Based Payment Awards | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Payment Awards | Note 8 — Share-Based Payment Awards The Company’s board of directors and stockholders approved the Eton Pharmaceuticals, Inc. 2017 Equity Incentive Plan in May 2017 (the “2017 Plan”), which authorized the issuance of up to 5,000,000 537,306 Shares that are expired, terminated, surrendered or canceled without having been fully exercised will be available for future awards under the 2018 Plan. In addition, the 2018 Plan provides that commencing January 1, 2019 and through January 1, 2028, the share reserve will be increased by 4 704,317 17,607,928 715,099 17,877,486 972,512 24,312,808 Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 8 — Share-Based Payment Awards (continued) In April 2020, the Company issued 15,190 25 100 To date, all stock options issued have been non-qualified stock options and the exercise prices were set at the fair value for the shares at the dates of grant. Options generally have a ten 50,000 five years For the years ended December 31, 2021, 2020, and 2019, the Company’s total stock-based compensation expense was $ 3,381 2,576 1,888 2,838 2,295 1,574 543 281 314 A summary of stock option activity is as follows: Summary of Stock Option Activity Shares Weighted Average Exercise Weighted Average Remaining Aggregate Intrinsic Options outstanding as of January 1, 2021 2,824,500 $ 4.05 8.3 $ 11,525 Issued 1,017,098 8.31 Exercised (144,233 ) 2.35 Forfeited/Cancelled (183,646 ) 6.63 Options outstanding as of December 31, 2021 3,513,719 $ 5.22 7.9 $ 2,711 Options exercisable at December 31, 2021 2,096,630 $ 4.37 7.3 $ 2,257 Options vested and expected to vest at December 31, 2021 3,463,719 $ 5.27 7.9 $ 2,565 The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had strike prices lower than the fair value of the Company’s common stock at December 31. The intrinsic value of the options exercised during 2021 was $ 682 There were 144,233 339 The assumptions used to calculate the fair value of options granted during the years ended December 31, 2021, 2020, and 2019 under the BSM were as follows: Schedule of Assumptions Used to Calculate Fair Value of Options Granted December 31, 2021 December 31, 2020 December 31, 2019 Expected dividends — % — % — % Expected volatility 70 80 % 95 % 90 % Risk-free interest rate 0.9 1.4 % 0.4 0.7 % 1.9 2.5 % Expected term 6.0 5.9 5.9 Weighted average fair value $ 5.64 $ 3.06 $ 5.54 Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 8 — Share-Based Payment Awards (continued) Expected Term — The Company has opted to use the “simplified method” for estimating the expected term of options granted to employees and directors, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option (generally 10 years). The expected term of options granted to non-employees equals the contractual life of the options. Expected Volatility — Due to the Company’s limited operating history and a lack of Company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards. The Company has also applied some limited weighting to its own volatility. Risk-Free Interest Rate — The risk-free rate assumption is based on the U.S. Treasury instruments with maturities similar to the expected term of the Company’s stock options. Expected Dividend — The Company has not issued any dividends in its history and does not expect to issue dividends over the life of the options and therefore has estimated the dividend yield to be zero Fair value of Common Stock —The Company uses the closing stock price on the date of grant for the fair value of the common stock. A summary of activity for RSAs is as follows: Summary of Activity for Restricted Stock Awards Restricted Stock Awards Number of shares Unvested as of January 1, 2021 7,595 Issued — Vested (7,595 ) Forfeited/Cancelled — Unvested as of December 31, 2021 — The grant date fair value per share for the RSA issued in 2020 was $ 3.95 No 30 30 66 As of December 31, 2021, there was a total of $ 6,025 Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 8 — Share-Based Payment Awards (continued) In December 2018, the Company’s board of directors adopted an initial offering of the Company’s common stock under the Company’s ESPP. The Company’s ESPP provides for an initial reserve of 150,000 The initial offering began on December 17, 2018 and ended on December 10, 2019. The initial offering consisted of two purchase periods, with the first purchase period ended on June 10, 2019 and the second purchase period ended on December 10, 2019. The terms of the ESPP permit employees of the Company to use payroll deductions to purchase stock at a price per share that is at least the lesser of (1) 85% of the fair market value of a share of common stock on the first date of an offering or (2) 85% of the fair market value of a share of common stock on the date of purchase. After the initial offering period, subsequent twelve-month offering periods automatically commence over the term of the ESPP on the day that immediately follows the conclusion of the preceding offering, each consisting of two purchase periods approximately six months in duration ending on or around June 10 and December 10 each year, subject to a restart feature if the Company’s stock price drops at the end of a six-month period within the twelve-month offering period The Company recorded an expense of $ 73 71 112 2.50 2.32 2.56 205 115 22 18 |
Basic and Diluted Net Loss per
Basic and Diluted Net Loss per Common Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Loss per Common Share | Note 9 — Basic and Diluted Net Loss per Common Share Basic and diluted net loss per share is computed using the weighted average number of shares of common stock outstanding during the period. Common stock equivalents (using the treasury stock and “if converted” method) from stock options, unvested RSAs and RSUs, and warrants at December 31, 2021, 2020 and 2019 were 4,286,687 3,371,489 3,590,465 The following table shows the computation of basic and diluted net loss per common share: Computation of Basic and Diluted Net Loss Per Common Share Year ended December 31, Year ended December 31, Year ended Net loss $ (1,955 ) $ (27,970 ) $ (18,320 ) Weighted average common shares outstanding (basic and diluted) 25,207,299 21,010,058 17,760,761 Net loss per common share (basic and diluted) $ (0.08 ) $ (1.33 ) $ (1.03 ) Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 10 — Related Party Transactions Harrow Harrow was issued 3,500,000 shares of the Company’s common stock at the formation of the Company at the $ 0.001 par value per share price as the paid-in-capital contribution from Harrow. In April 2021, Harrow sold 1,518,000 shares of the Eton common stock it owned in an underwritten public offering. As of December 31, 2021, Harrow owned 1,982,000 shares of Eton’s common shares which represents 8.0 On May 6, 2019, the Company entered into an Asset Purchase Agreement (the “CT-100 Asset Purchase Agreement”) with Harrow. Pursuant to the CT-100 Asset Purchase Agreement, the Company sold all of its right, title and interest in CT-100 to Harrow, including any such product that incorporates or utilizes its intellectual property rights (a “Product” or, collectively, “Products”). Pursuant to the CT-100 Asset Purchase Agreement, Harrow will make certain payments to the Company upon the achievement of certain development and commercial milestones. In addition, Harrow is required to pay the Company a royalty in the low-single digit percentage range worldwide on a country-by-country basis on net sales for a period of the longer of 15 years from the date of the first commercial sale of a product in a particular country or the time that a valid intellectual property claim on such Product remains in force in the applicable country. The CT-100 Asset Purchase Agreement also contains customary representations, warranties, covenants and indemnities by the parties. To date, there have not been any sales of the CT-100 product and therefore no earned royalties to the Company for this product. Additionally, the Chief Executive Officer of Harrow was a member of the Company’s board of directors until March 17, 2021 when he retired from service with the board. The Company issued 25,000 In late March 2021, the Company closed its laboratory operation in Lake Zurich, Illinois and in May 2021 it reached an agreement for Imprimis Pharmaceuticals, a subsidiary of Harrow, to purchase its lab equipment for $ 700 181 Chief Executive Officer The CEO has a partial interest in a company that the Company has partnered with for its EM-100 product as described below. The Company acquired the exclusive rights to sell the EM-100 product in the United States pursuant to a sales and marketing agreement (the “Eyemax Agreement”) dated August 11, 2017 between the Company and Eyemax LLC (“Eyemax”), an entity affiliated with the Company’s CEO. The Company also held a right of first refusal to obtain the exclusive license rights for geographic areas outside of the United States. Pursuant to the Eyemax Agreement, the Company was responsible for all costs of testing and FDA approval of the product, other than the FDA filing fee which was paid by Eyemax. The Company was also to be responsible for commercializing the product in the United States at its expense. The Company paid Eyemax $ 250 250 500 10 The Eyemax Agreement was for an initial term of 10 Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 10 — Related Party Transactions (continued) On February 18, 2019, the Company entered into an Amended and Restated Agreement with Eyemax amending the Sales Agreement (the “Amended Agreement”). Pursuant to the Amended Agreement, Eyemax sold the Company all of its right, title and interest in EM-100, including any such product that incorporates or utilizes Eyemax’s intellectual property rights. Under the Amended Agreement, the Company assumed certain liabilities of Eyemax under its Exclusive Development & Supply Agreement with Excelvision SAS dated as of July 11, 2013, as amended (the “Excelvision Agreement”), with respect to certain territories and arising during certain time periods. Pursuant to the Amended Agreement, the Company paid Eyemax two milestone payments: (i) one milestone payment for $ 250 500 2,000 1,735 Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
Leases | Note 11 — Leases The Company recognizes a right-of-use (“ROU”) asset and a lease liability on the balance sheet for substantially all leases, including operating leases, and separates lease components from non-lease components related to its office space lease. On January 12, 2018, the Company signed an amended lease agreement to lease additional office space adjacent to its current corporate office space in Deer Park, Illinois. The amended lease was scheduled to expire at the end of March 2021. In October 2020, the Company renewed its office lease for a two-year period through March 31, 2023 195 195 The Company does not have any lease contracts that contain: (1) an option to extend that the Company is reasonably certain to exercise, (2) an option to terminate that the Company is reasonably certain to exercise, or (3) an option to extend (or not to terminate) in which exercise of the option is controlled by the lessor. Additionally, the Company does not have any leases with residual value guarantees or material restrictive covenants. Lease liabilities and their corresponding right-of-use assets have been recorded based on the present value of the future lease payments over the expected lease term. One of the Company’s lease agreements contains provisions for escalating rent payments over the term of the lease. The Company’s leases do not contain readily determinable implicit discount rates, and therefore, the Company was required to use its incremental borrowing rate of 7.8 5.4 For the years ended December 31, 2021, 2020 and 2019, the Company recorded $ 113 139 140 The Company’s operating lease cost as presented in the “Research and Development” and “General and Administrative” captions in the statements of operations was $ 9 , $ 55 and $ 55 and $ 86 , $ 84 and $ 85 for the years ended December 31, 2021, 2020 and 2019, respectively. Cash paid for amounts included in the measurement of operating lease liabilities was $ 83 and $ 131 for years ended December 31, 2021 and 2020, respectively. The ROU asset amortization for years ended December 31, 2021, 2020 and 2019 was $ 88 , $ 129 and $ 121 , respectively, and is reflected in depreciation and amortization in the Company’s statements of cash flows. As of December 31, 2021, the weighted-average remaining lease term was 1.25 years, and the weighted-average discount rate was 5.4 %. The table below presents the lease-related assets and liabilities recorded on the balance sheet as of December 31, 2021: Schedule of Lease-related Assets and Liabilities Assets Classification Operating lease right-of-use assets Operating lease right-of-use assets, net $ 104 Total leased assets $ 104 Liabilities Operating lease liabilities, current Accrued liabilities $ 84 Operating lease liabilities, noncurrent Operating lease liabilities, net of current portion 15 Total operating lease liabilities $ 99 The Company’s future annual lease commitments as of December 31, 2021 are as indicated below: Schedule of Future Lease Commitments Total 2022 2023 Thereafter Undiscounted lease payments $ 102 $ 87 $ 15 $ — Less: Imputed interest (3 ) Total lease liabilities $ 99 Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 12 – Income Taxes The provision for income taxes for the Company consists of the following for the years ended December 31, 2021, 2020 and 2019: Schedule of Provision for Income Taxes Year ended Year ended Year ended December 31, December 31, December 31, 2021 2020 2019 Current: Federal $ — $ — $ — State — — — Total current expense — — — Deferred: Federal 460 6,020 3,961 State 185 2,151 1,415 Change in valuation allowance (645 ) (8,171 ) (5,376 ) Total deferred expense — — — Total provision $ — $ — $ — Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of the Company’s deferred tax assets as of December 31, 2021 and 2020 are as follows: Schedule of Deferred Tax Assets December 31, December 31, 2021 2020 Net operating losses $ 15,871 $ 16,250 Stock-based expenses 2,135 1,257 Accruals and other 542 396 Total deferred tax assets 18,548 17,903 Valuation allowance (18,548 ) (17,903 ) Net deferred tax assets $ — $ — Based on the uncertainty of future taxable income at this time management believes a 100 % valuation reserve for the $ 18,548 and $ 17,903 deferred tax assets at December 31, 2021 and 2020, respectively, is appropriate. A reconciliation of the statutory federal tax rate to effective tax rate is shown below: Schedule of Reconciliation of Statutory Federal Tax Rate Year ended December 31 Year ended December 31, Year ended 2021 2020 2019 Benefit at statutory rate (21.0 )% (21.0 )% (21.0 )% Permanent items (primarily warrants and stock compensation) (2.5 ) (0.5 ) (0.6 ) State tax benefit (9.5 ) (7.7 ) (7.7 ) Federal rate change — — — Other items — — — Establishment of valuation allowance 33.0 29.2 29.3 Income tax expense — % — % — % Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 12 – Income Taxes (continued) The Company has a federal and state NOL carryforward of $ 55,675 as of December 31, 2021. Under the Tax Act, federal NOLs incurred in taxable years ending after December 31, 2017 in the amount of $ 50,023 may be carried forward indefinitely, but the deductibility of federal NOLs generated in tax years beginning before December 31, 2017 in the amount of $ 5,652 will expire in 2037. The state NOL carry forward will begin to expire in 2029. In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50 |
Employee Savings Plan
Employee Savings Plan | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Employee Savings Plan | Note 13 - Employee Savings Plan The Company established an employee savings plan pursuant to Section 401(k) of the Internal Revenue Code, effective January 1, 2018. The plan allows participating employees to deposit into tax deferred investment accounts up to 100 4 154 117 113 Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 14 — Commitments and Contingencies Legal The Company is subject to legal proceedings and claims that may arise in the ordinary course of business. The Company is not aware of any pending or threatened litigation matters at this time that may have a material impact on the operations of the Company. License and Product Development Agreements The Company has entered into various agreements in addition to those discussed above which are described below. The Company acquired the exclusive rights to sell the Cysteine injection product in the United States pursuant to a sales and marketing agreement dated November 17, 2017 with an unaffiliated third party (the “Sales Agreement”). Pursuant to the Sales Agreement, the licensor is responsible for obtaining FDA approval, at its expense, and the Company is responsible for commercializing the product in the United States at its expense. The Company was to pay the third party 50 62.5 10 On February 8, 2019, the Company entered into an Exclusive Licensing and Supply Agreement (the “ET-202 License Agreement”) with Sintetica SA (“Sintetica”) for marketing rights in the United States to Biorphen® which is used for the treatment of clinically important hypotension resulting primarily from vasodilation in the setting of anesthesia. The product was submitted to the FDA for review and subsequently received FDA approval on October 21, 2019. Pursuant to the terms of the ET-202 License Agreement, the Company is responsible for marketing activities and Sintetica is responsible for development, manufacturing, and the regulatory activities related to approval. The Company paid Sintetica a licensing payment of $ 2,000 750 5 500 50 50 On February 8, 2019, the Company also entered into an Exclusive Licensing and Supply Agreement (the “ET-203 License Agreement”) with Sintetica for marketing rights in the United States to ephedrine HCl (brand name Rezipres®), an injectable product candidate for use in the hospital setting. Pursuant to the terms of the ET-203 License Agreement, the Company will be responsible for marketing activities and Sintetica will be responsible for development, manufacturing, and regulatory activities related to obtaining regulatory approval. The Company paid Sintetica a licensing payment of $ 1,000 600 750 5 500 50 50 ten-year Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 14 — Commitments and Contingencies (continued) The three oral solution pediatric neurology product candidates discussed below, Topiramate, Zonisamide and Lamotrigine were developed by the Company and its various product candidate development partners and the Company subsequently sold all its rights and interests in these three products to Azurity in 2021. The Company has recognized $ 17,000 25,000 During the years ended December 31, 2021, 2020 and 2019, the Company worked with Tulex Pharmaceuticals, Inc. (“Tulex”) as a third-party contract manufacturer to develop an oral solution for Topiramate (fka ET-101) which targets a neurological condition. The Company subsequently filed the product with the FDA in October 2020 and paid a $ 1,438 5,000 On January 23, 2019, the Company entered into a Licensing and Supply Agreement (the “Agreement”) with LMW for Zonisamide oral liquid, a development stage product candidate (“ET-104”). Pursuant to the terms of the Agreement, the Company was to be responsible for regulatory and marketing activities. LMW will be responsible for development and manufacturing of ET-104. The Company paid the licensor $ 350 350 325 325 650 500 10,000 35 10 On June 12, 2019, the Company entered into an Exclusive Licensing and Supply Agreement (the “ET-105 License Agreement”) with Aucta Pharmaceuticals, Inc. (“Aucta”) for marketing rights in the United States to Lamotrigine, an oral suspension product candidate for use as an adjunct therapy for partial seizures, primary generalized tonic-clonic seizures, and generalized seizures of Lennox-Gastaut syndrome in patients two years of age and older. Pursuant to the terms of the ET-105 License Agreement, the Company was to be responsible for marketing activities and Aucta will be responsible for development, manufacturing, and regulatory activities related to obtaining regulatory approval. The Company paid Aucta a licensing payment of $ 2,000 in August 2019 upon receiving an acceptance for review letter from the FDA and will pay $ 2,450 upon FDA approval and commercial sales of the product candidate and another $ 1,000 upon issuance of an Orange-book listed patent. If Aucta successfully completes a Lamotrigine product line extension product, Eton will pay $ 1,500 upon FDA acceptance of the product filing, $ 1,500 upon FDA approval and commercial sales of the extension product candidate and $ 450 3,000 based on commercial success of the product, including: ● $ 1,000 when net sales exceed $10 million in a calendar year ● $ 2,000 when net sales exceed $20 million in a calendar year Azurity will assume royalty or profit share obligations owed to development partners as well as additional milestone payments based on sales volume targets. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 14 — Commitments and Contingencies (continued) On March 27, 2020, the Company entered into an Exclusive Licensing and Supply Agreement (the “Alkindi License Agreement”) with Diurnal for marketing Alkindi Sprinkle in the United States. Alkindi Sprinkle’s New Drug Application (NDA) was approved by the FDA on September 29, 2020 as a replacement therapy for pediatric adrenal insufficiency (AI), including congenital adrenal hyperplasia (CAH) in patients from birth to less than 17 years of age. For the initial licensing milestone fee, the Company paid Diurnal $ 3,500 379,474 1,264 3.33 4,764 2,500 On June 15, 2021, the Company acquired U.S. and Canadian rights to Crossject’s ZENEO® hydrocortisone needleless autoinjector, which is under development as a rescue treatment for adrenal crisis. The Company expects to submit the New Drug Application (NDA) to the FDA in 2023 and plans to request orphan drug designation. The Company paid Crossject $ 500 4,500 6,000 10 On October 28, 2021, the Company acquired the U.S. marketing rights to Carglumic Acid Tablets. The product’s Abbreviated New Drug Application (“ANDA”), which is owned by Novitium Pharma, was approved by the FDA on October 12, 2021. The product is an AB-rated, substitutable generic version of Carbaglu®. The Company paid $ 3,250 50 Indemnification As permitted under Delaware law and in accordance with the Company’s Amended and Restated Bylaws, the Company is required to indemnify its officers and directors for certain events or occurrences while the officer or director is or was serving in such capacity. The Company is also party to indemnification agreements with its directors and officers. The Company believes the fair value of the indemnification rights and agreements is minimal. Accordingly, the Company has not recorded any liabilities for these indemnification rights and agreements as of December 31, 2021 or 2020. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company has prepared the accompanying financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, provisions for uncollectible receivables, chargebacks and sales returns, valuation of inventories, useful lives of assets and the impairment of property and equipment, the accrual of research and development expenses and the valuation of common stock, stock options and warrants. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates or assumptions. |
Segment Information | Segment Information The Company operates the business on the basis of a single |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. All cash and cash equivalents are held in U.S. financial institutions or invested in short-term U.S. treasury bills. Cash equivalents consist of an interest-bearing checking account and a U.S. treasury bill. From time to time, amounts deposited with its bank exceed federally insured limits. The Company believes the associated credit risk to be minimal. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded at the invoiced amount and are non-interest bearing. Accounts receivable are recorded net of allowances for doubtful accounts, cash discounts for prompt payment, distribution fees, chargebacks and returns and allowances. The total for these reserves amounted to $ 96 71 |
Inventories | Inventories The Company values its inventories at the lower of cost or net realizable value using the first-in, first-out method of valuation. The Company reviews its inventories for potential excess or obsolete issues on an ongoing basis and will record a write-down if an impairment is identified. Inventories at December 31, 2021 and 2020 consist solely of purchased finished goods. At December 31, 2021, inventories are shown net of a slow-moving reserve for its Biorphen product of $ 1,414 1,414 623 |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation of property and equipment is computed utilizing the straight-line method based on the following estimated useful lives. Computer hardware and software is depreciated over three years five years estimated useful lives or the remaining lease term Maintenance and repairs are charged to expense as incurred, while renewals and improvements are capitalized. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 3 — Summary of Significant Accounting Policies (continued) |
Intangible Assets | Intangible Assets The Company capitalizes payments it makes for licensed products when the payment is based on FDA approval for the product and the cost is recoverable based on expected future cash flows from the product. The cost is amortized on a straight-line basis over the estimated useful life of the product commencing on the approval date in accordance with Accounting Standards Codification (“ASC”) 350 — Intangibles - Goodwill and Other. A $ 750 payment related to the approval of the Company’s Biorphen product in 2019 has been capitalized and that cost is being amortized over five years . A $ 3,250 payment related to the approval of the Company’s Carglumic Acid product in December 2021 has been capitalized and that cost is being amortized over ten years. The intangible assets, net on the Company’s balance sheet reflected $ 379 and $ 175 of accumulated amortization as of December 31, 2021 and 2020, respectively. The Company recorded amortization expense of $ 204 , $ 150 and $ 25 for the years ended December 31, 2021, 2020 and 2019, respectively, and will record amortization expense of $ 475 per year for these intangible assets for 2022 through 2023 and then $ 450 in 2024 when the Biorphen asset will be fully amortized. For 2025 through 2030, the Company will incur amortization expense of $ 325 and then $ 271 in 2031 when the Carglumic Acid asset will be fully amortized. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the Company’s statements of operations for the amount by which the carrying amount of the asset exceeds the fair value of the asset. No |
Debt Issuance Costs and Debt Discount and Detachable Debt-Related Warrants | Debt Issuance Costs and Debt Discount and Detachable Debt-Related Warrants Costs incurred to issue debt are deferred and recorded as a reduction to the debt balance in the accompanying balance sheets. The Company amortizes debt issuance costs over the expected term of the related debt using the effective interest method. Debt discounts relate to the relative fair value of warrants issued in conjunction with the debt and are also recorded as a reduction to the debt balance and accreted over the expected term of the debt to interest expense using the effective interest method. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 3 — Summary of Significant Accounting Policies (continued) |
Leases | Leases The Company accounts for leases in accordance with ASC Topic 842 — Leases. The Company reviews all relevant facts and circumstances of a contract to determine if it is a lease whereby the terms of the agreement convey the right to control the direct use and receive substantially all of the economic benefits of an identified asset for a period of time in exchange for consideration. The associated right-of-use assets and lease liabilities are recognized at lease commencement. The Company measures lease liabilities based on the present value of the lease payments over the lease term discounted using the rate it would pay on a loan with the equivalent payments and term for the lease. The Company does not include the impact for lease term options that would extend or terminate the lease unless it is reasonably certain that it will exercise any such options. The Company accounts for the lease components separately from non-lease components for its operating leases. The Company measures right-of-use assets based on the corresponding lease liabilities adjusted for (i) any prepayments made to the lessor at or before the commencement date, (ii) initial direct costs it incurs, and (iii) any incentives under the lease. In addition, the Company evaluates the recoverability of its right-of-use assets for possible impairment in accordance with its long-lived assets policy. Operating leases are reflected on the balance sheets as operating lease right-of-use assets, current accrued liabilities and long-term operating lease liabilities. The Company does no The Company commences recognizing operating lease expense when the lessor makes the underlying asset available for use by the Company and the operating lease expense is recognized on a straight-line basis. Variable lease payments are expensed as incurred. The Company does not recognize right-of-use assets or lease liabilities for leases with a term of twelve months or less; such lease costs are recorded in the statements of operations on a straight-line basis over the lease term. |
Patent Costs | Patent Costs All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the successful award of a patent and the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses. |
Concentrations of Credit Risk, Sources of Supply and Significant Customers | Concentrations of Credit Risk, Sources of Supply and Significant Customers The Company is subject to credit risk for its cash and cash equivalents which are invested in money market funds and U.S. treasury bills from time to time. The Company maintains its cash and cash equivalent balances with one major commercial bank and the deposits held with the financial institution exceed the amount of insurance provided on such deposits and is exposed to credit risk in the event of a default by the financial institutions holding its cash and cash equivalents to the extent recorded on the balance sheets. The Company is dependent on third-party suppliers for its products and product candidates. In particular, the Company relies, and expects to continue to rely, on a small number of suppliers to manufacture key chemicals, approved products and process its product candidates as part of its development programs. These programs could be adversely affected by a significant interruption in the manufacturing process. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 3 — Summary of Significant Accounting Policies (continued) The Company is also subject to credit risk from its accounts receivable related to product sales as it extends credit based on an evaluation of the customer’s financial condition, and collateral is not required. Management monitors its exposure to accounts receivable by periodically evaluating the collectability of the account receivable based on a variety of factors including the length of time the receivables are past due, the financial health of the customer and historical experience. Based upon the review of these factors, the Company recorded no allowance for doubtful accounts at December 31, 2021 or 2020. The accounts receivable balance at December 31, 2021 and 2020 and product sales revenue recognized during the year ended December 31, 2021 and 2020 consist of sales to and amounts due from AmerisourceBergen Corporation, Cardinal Health Services and McKesson Corporation for sales of the Company’s Biorphen product. The December 31, 2021 accounts receivable balance and sales in 2021 also include a $ 5,000 milestone from Azurity, in accordance with the Eprontia™ (topiramate oral solution) product, amounts due from AnovoRx for sales of the Company’s Alkindi Sprinkle product and its Carglumic Acid product, which launched in December 2021. |
Revenue Recognition for Contracts with Customers | Revenue Recognition for Contracts with Customers The Company accounts for contracts with its customers in accordance with ASC 606 — Revenue from Contracts with Customers. ASC 606 applies to all contracts with customers, except for contracts that are within the scope of other standards. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Arrangements that include rights to additional goods or services that are exercisable at a customer’s discretion are generally considered options. The Company assesses whether these options provide a material right to the customer and, if so, they are considered performance obligations. The exercise of a material right is accounted for as a contract modification for accounting purposes. The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) each performance obligation is satisfied at a point in time or over time, and if over time this is based on the use of an output or input method. Any amounts received prior to revenue recognition will be recorded as deferred revenue. Amounts expected to be recognized as revenue within the twelve months following the balance sheet date will be classified as current portion of deferred revenue in the Company’s balance sheets. Amounts not expected to be recognized as revenue within the twelve months following the balance sheet date are classified as long-term deferred revenue, net of current portion. Milestone Payments Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 3 — Summary of Significant Accounting Policies (continued) Royalties – Significant Financing Component – The Company sells Biorphen in the U.S. to wholesale pharmaceutical distributors, who then sell the product to hospitals and other end-user customers. Sales to wholesalers are made pursuant to purchase orders subject to the terms of a master agreement, and delivery of individual shipments of Biorphen represent performance obligations under each purchase order. The Company uses a third-party logistics (“3PL”) vendor to process and fulfill orders and has concluded it is the principal in the sales to wholesalers because it controls access to the 3PL vendor services rendered and directs the 3PL vendor activities. The Company has no significant obligations to wholesalers to generate pull-through sales. In addition, the Company sells its Alkindi Sprinkle and Carglumic Acid product to one pharmacy distributor customer which provides order fulfilment and inventory storage/distribution services. Selling prices initially billed to wholesalers are subject to discounts for prompt payment and subsequent chargebacks when the wholesalers sell Biorphen at negotiated discounted prices to members of certain group purchasing organizations (“GPOs”) and government programs. In addition, the Company pays fees to wholesalers for their distribution services, inventory reporting and chargeback processing. The Company pays GPOs fees for administrative services and for access to GPO members and concluded the benefits received in exchange for these fees are not distinct from its sales of Biorphen, and accordingly it applies these amounts to reduce revenues. Wholesalers also have rights to return unsold product nearing or past the expiration date. Because of the shelf life of Biorphen and the Company’s lengthy return period, there may be a significant period of time between when the product is shipped and when it issues credits on returned product. For its Alkindi Sprinkle and Carglumic Acid products, the Company bills at the initial product list price which are subject to offsets for patient co-pay assistance and potential state Medicaid reimbursements which are recorded as a reduction of net revenues at the date of sale/shipment. The Company estimates the transaction price when it receives each purchase order taking into account the expected reductions of the selling price initially billed to the wholesaler/distributor arising from all of the above factors. The Company has developed estimates for future returns and chargebacks of Biorphen and the impact of the other discounts and fees it pays while Alkindi Sprinkle and Carglumic Acid sales to its distributor are not subject to returns. When estimating these adjustments to the transaction price, the Company reduces it sufficiently to be able to assert that it is probable that there will be no significant reversal of revenue when the ultimate adjustment amounts are known. The Company recognizes revenue from Biorphen product sales and related cost of sales upon product delivery to the wholesaler location. At that time, the wholesalers take control of the product as they take title, bear the risk of loss of ownership, and have an enforceable obligation to pay the Company. They also have the ability to direct sales of product to their customers on terms and at prices they negotiate. Although wholesalers have product return rights, the Company does not believe they have a significant incentive to return the product. The Company stores its Alkindi Sprinkle and Carglumic Acid inventory at its pharmacy distributor customer location and sales are recorded when stock is pulled and shipped to fulfill specific patient orders. Upon recognition of revenue from product sales, the estimated amounts of credit for product returns, chargebacks, distribution fees, prompt payment discounts, state Medicaid and GPO fees are included in sales reserves, accrued liabilities and net of accounts receivable. The Company monitors actual product returns, chargebacks, discounts and fees subsequent to the sale. If these amounts end up differing from its estimates, it will make adjustments to these allowances, which are applied to increase or reduce product sales revenue and earnings in the period of adjustment. In addition, the Company anticipates it will receive revenues from product licensing agreements where it has contracted for milestone payments and royalties from products it has developed or for which it has acquired the rights to a product developed by a third party. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 3 — Summary of Significant Accounting Policies (continued) |
Cost of Product Sales | Cost of Product Sales Cost of product sales consists of the profit-sharing and royalty fees with the Company’s product licensing and development partners, the purchase costs for finished products from third-party manufacturers and freight and handling/storage costs from the Company’s 3PL logistics service providers. The cost of sales for profit-sharing and royalty fees and costs for purchased finished products and the associated inbound freight expense is recorded when the associated product sale revenue is recognized in accordance with the terms of shipment to customers while outbound freight and handling/storage fees charged by the 3PL service provider are expensed as they are incurred. Cost of sales also reflects any write-downs or reserve adjustments for the Company’s inventories. |
Research and Development Expenses | Research and Development Expenses Research and development (“R&D”) expenses include both internal R&D activities and external contracted services. Internal R&D activity expenses include salaries, benefits and stock-based compensation and other costs to support the Company’s R&D operations. External contracted services include product development efforts such as certain product licensor milestone payments, clinical trial activities, manufacturing and control-related activities and regulatory costs. R&D expenses are charged to operations as incurred. The Company reviews and accrues R&D expenses based on services performed and relies upon estimates of those costs applicable to the stage of completion of each project. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. Upfront payments and milestone payments made for the licensing of technology for products that are not yet approved by the FDA are expensed as R&D in the period in which they are incurred. Nonrefundable advance payments for goods or services to be received in the future for use in R&D activities are recorded as prepaid expenses and are expensed as the related goods are delivered or the services are performed. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic net loss per common share is computed by dividing net loss attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders for the period by the weighted average number of common and common equivalent shares, such as Series A Preferred, unvested restricted stock, stock options and warrants that are outstanding during the period. Common stock equivalents are excluded from the computation when their inclusion would be anti-dilutive. No such adjustments were made for 2021, 2020 or 2019 as the Company reported a net loss for the years ended December 31, 2021, 2020 and 2019 and including the effects of common stock equivalents in the diluted earnings per share calculation would have been anti-dilutive (see Note 9). Basic weighted average shares for the year ended December 31, 2021 include 600,000 0.01 |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation under the provisions of ASC — 718 Compensation — Stock Compensation. The guidance under ASC 718 requires companies to estimate the fair value of the stock-based compensation awards on the date of grant and record expense over the related service periods, which are generally the vesting period of the equity awards. The Company estimates the fair value of stock-based option awards using the Black-Scholes-Merton option-pricing model (“BSM”). The BSM requires the input of subjective assumptions, including the expected stock price volatility, the calculation of expected term, forfeitures and the fair value of the underlying common stock on the date of grant, among other inputs. The risk-free interest rate was determined from the implied yields for zero-coupon U.S. government issues with a remaining term approximating the expected life of the options or warrants. Dividends on common stock are assumed to be zero for the BSM valuation of the stock options. The expected term of stock options granted is based on vesting periods and the contractual life of the options. Expected volatilities are based on comparable companies’ historical volatility along with a limited weighting included for the Company’s own volatility, which management believes represents the most accurate basis for estimating expected future volatility under the current conditions. The Company accounts for forfeitures as they occur. The Company uses the closing common stock price on the date of grant for the fair value of the common stock. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 3 — Summary of Significant Accounting Policies (continued) |
Income Taxes | Income Taxes As part of the process of preparing the Company’s financial statements, the Company must estimate the actual current tax liabilities and assess temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within the balance sheets. The Company must assess the likelihood that the deferred tax assets will be recovered from future taxable income and, to the extent the Company believes that recovery is not likely, a valuation allowance must be established. To the extent the Company establishes a valuation allowance or increase or decrease to this allowance in a period, the impact will be included in income tax expense in the statements of operations. As of December 31, 2021 and 2020, the Company has established a 100 The Company accounts for income taxes under the provisions of ASC 740 - Income Taxes. As of December 31, 2021 and 2020, there were no unrecognized tax benefits included in the balance sheets that would, if recognized, affect the effective tax rate. The Company’s practice is to recognize interest and penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties in its balance sheets at December 31, 2021 or 2020, and has not recognized interest and penalties in the statements of operations for the years ended December 31, 2021, 2020 and 2019. As of December 31, 2021, the Company is subject to taxation in the United States and certain individual states – primarily Illinois and Tennessee. The Company’s tax losses from 2017 through 2021 are subject to examination by the federal and state tax authorities due to the carryforward of unutilized net operating losses (“NOLs”). Current accounting standards include guidance on the accounting for uncertainty in income taxes recognized in the financial statements. Such standards also prescribe a recognition threshold and measurement model for the financial statement recognition of a tax position taken, or expected to be taken, and provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company believes that the ultimate deductibility of all tax positions is highly certain, although there is uncertainty about the timing of such deductibility. As a result, no liability for uncertain tax positions was recorded as of December 31, 2021 or 2020. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS ( in thousands, except share and per share amounts) Note 3 — Summary of Significant Accounting Policies (continued) |
Fair Value Measurements | Fair Value Measurements We measure certain of our assets and liabilities at fair value. Fair value represents 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. Fair value accounting requires characterization of the inputs used to measure fair value into a three-level fair value hierarchy as follows: Level 1 Level 2 Level 3 Fair value measurements are classified based on the lowest level of input that is significant to the measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the assets and liabilities and their placement within the fair value hierarchy levels. The determination of the fair values stated below takes into account the market for the Company’s financials, assets and liabilities, the associated credit risk and other factors as required. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. The Company’s financial instruments included cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, PPP loan and long-term debt obligation. The carrying amounts of these financial instruments, except for the PPP loan and long-term debt obligation, approximate their fair values due to the short-term maturities of these instruments. Based on borrowing rates currently available to the Company, the carrying value of the PPP loan and long-term debt obligation approximate their respective fair values. |
Impact of New Accounting Pronouncements | Impact of New Accounting Pronouncements There were no new accounting pronouncements issued by the FASB during the current period that would apply to the Company and have a material impact on its financial position or results of operations. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following: Schedule of Property and Equipment December 31, 2021 December 31, 2020 Computer hardware and software $ 157 $ 182 Furniture and fixtures 106 143 Equipment 132 994 Leasehold improvements 71 184 Construction in progress — — Property and equipment, gross 466 1,503 Less: accumulated depreciation and amortization (351 ) (692 ) Property and equipment, net $ 115 $ 811 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Future Payments of Long Term Debt | The table below reflects the future annual payments for the SWK loan principal and interest as of December 31, 2021. Schedule of Future Payments of Long Term Debt Amount 2022 $ 2,202 2023 1,756 2024 5,300 Total payments 9,258 Less: amount representing interest (2,258 ) Loan payable, gross 7,000 Less: current portion of long-term debt (1,418 ) Less: unamortized discount (320 ) Long-term debt, net of unamortized discount $ 5,262 |
Common Stock Warrants (Tables)
Common Stock Warrants (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Common Stock Warrants | |
Summary of Warrants Outstanding | Listed below is a summary of warrants outstanding as of December 31, 2021: Summary of Warrants Outstanding Description of Warrants No. of Shares Exercise Price Business Advisory Warrants – 2017 600,000 $ 0.01 Placement Agent Warrants – 2017 Preferred Stock Offering 471,446 $ 3.00 Placement Agent Warrants - IPO 414,000 $ 7.50 SWK Warrants – Debt (Tranche #1) 51,239 $ 5.86 SWK Warrants – Debt (Tranche #2) 18,141 $ 6.62 Total 1,554,826 $ 3.18 |
Summary of Rollforward of The Warrants Outstanding | A rollforward of the warrants outstanding is listed in the table below: Summary of Rollforward of The Warrants Outstanding No. of Shares Balance as of the beginning of the year 1,690,476 Exercise of Placement Agent Warrants – 2017 Preferred Stock Offering (135,650 ) Balance as of the end of the year 1,554,826 |
Share-Based Payment Awards (Tab
Share-Based Payment Awards (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | A summary of stock option activity is as follows: Summary of Stock Option Activity Shares Weighted Average Exercise Weighted Average Remaining Aggregate Intrinsic Options outstanding as of January 1, 2021 2,824,500 $ 4.05 8.3 $ 11,525 Issued 1,017,098 8.31 Exercised (144,233 ) 2.35 Forfeited/Cancelled (183,646 ) 6.63 Options outstanding as of December 31, 2021 3,513,719 $ 5.22 7.9 $ 2,711 Options exercisable at December 31, 2021 2,096,630 $ 4.37 7.3 $ 2,257 Options vested and expected to vest at December 31, 2021 3,463,719 $ 5.27 7.9 $ 2,565 |
Schedule of Assumptions Used to Calculate Fair Value of Options Granted | The assumptions used to calculate the fair value of options granted during the years ended December 31, 2021, 2020, and 2019 under the BSM were as follows: Schedule of Assumptions Used to Calculate Fair Value of Options Granted December 31, 2021 December 31, 2020 December 31, 2019 Expected dividends — % — % — % Expected volatility 70 80 % 95 % 90 % Risk-free interest rate 0.9 1.4 % 0.4 0.7 % 1.9 2.5 % Expected term 6.0 5.9 5.9 Weighted average fair value $ 5.64 $ 3.06 $ 5.54 |
Summary of Activity for Restricted Stock Awards | A summary of activity for RSAs is as follows: Summary of Activity for Restricted Stock Awards Restricted Stock Awards Number of shares Unvested as of January 1, 2021 7,595 Issued — Vested (7,595 ) Forfeited/Cancelled — Unvested as of December 31, 2021 — |
Basic and Diluted Net Loss pe_2
Basic and Diluted Net Loss per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Loss Per Common Share | The following table shows the computation of basic and diluted net loss per common share: Computation of Basic and Diluted Net Loss Per Common Share Year ended December 31, Year ended December 31, Year ended Net loss $ (1,955 ) $ (27,970 ) $ (18,320 ) Weighted average common shares outstanding (basic and diluted) 25,207,299 21,010,058 17,760,761 Net loss per common share (basic and diluted) $ (0.08 ) $ (1.33 ) $ (1.03 ) |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
Schedule of Lease-related Assets and Liabilities | The table below presents the lease-related assets and liabilities recorded on the balance sheet as of December 31, 2021: Schedule of Lease-related Assets and Liabilities Assets Classification Operating lease right-of-use assets Operating lease right-of-use assets, net $ 104 Total leased assets $ 104 Liabilities Operating lease liabilities, current Accrued liabilities $ 84 Operating lease liabilities, noncurrent Operating lease liabilities, net of current portion 15 Total operating lease liabilities $ 99 |
Schedule of Future Lease Commitments | The Company’s future annual lease commitments as of December 31, 2021 are as indicated below: Schedule of Future Lease Commitments Total 2022 2023 Thereafter Undiscounted lease payments $ 102 $ 87 $ 15 $ — Less: Imputed interest (3 ) Total lease liabilities $ 99 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The provision for income taxes for the Company consists of the following for the years ended December 31, 2021, 2020 and 2019: Schedule of Provision for Income Taxes Year ended Year ended Year ended December 31, December 31, December 31, 2021 2020 2019 Current: Federal $ — $ — $ — State — — — Total current expense — — — Deferred: Federal 460 6,020 3,961 State 185 2,151 1,415 Change in valuation allowance (645 ) (8,171 ) (5,376 ) Total deferred expense — — — Total provision $ — $ — $ — |
Schedule of Deferred Tax Assets | The significant components of the Company’s deferred tax assets as of December 31, 2021 and 2020 are as follows: Schedule of Deferred Tax Assets December 31, December 31, 2021 2020 Net operating losses $ 15,871 $ 16,250 Stock-based expenses 2,135 1,257 Accruals and other 542 396 Total deferred tax assets 18,548 17,903 Valuation allowance (18,548 ) (17,903 ) Net deferred tax assets $ — $ — |
Schedule of Reconciliation of Statutory Federal Tax Rate | A reconciliation of the statutory federal tax rate to effective tax rate is shown below: Schedule of Reconciliation of Statutory Federal Tax Rate Year ended December 31 Year ended December 31, Year ended 2021 2020 2019 Benefit at statutory rate (21.0 )% (21.0 )% (21.0 )% Permanent items (primarily warrants and stock compensation) (2.5 ) (0.5 ) (0.6 ) State tax benefit (9.5 ) (7.7 ) (7.7 ) Federal rate change — — — Other items — — — Establishment of valuation allowance 33.0 29.2 29.3 Income tax expense — % — % — % |
Company Overview (Details Narra
Company Overview (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||
Oct. 31, 2020 | Aug. 31, 2020 | Apr. 30, 2020 | Mar. 31, 2020 | Nov. 30, 2019 | Nov. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Start-up capital | $ 20,055 | |||||||||
Proceeds from loan offering | $ 1,965 | $ 4,750 | $ 1,965 | $ 4,750 | ||||||
Proceeds from sale of shares of common stock | $ 7,756 | $ 7,756 | $ 28,782 | |||||||
IPO [Member] | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Net cash proceeds from initial public offering | $ 21,026 | $ 21,960 | ||||||||
Common stock share price per share | $ 7 |
Liquidity Considerations (Detai
Liquidity Considerations (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Subsequent Event [Line Items] | ||||
Retained Earnings (Accumulated Deficit) | $ 94,113 | $ 92,158 | ||
Net Cash Provided by (Used in) Operating Activities | 4,721 | 22,346 | $ 18,026 | |
Cash and Cash Equivalents, at Carrying Value | $ 14,406 | $ 21,295 | ||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Milestone payment received | $ 5,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2021USD ($)Segment$ / sharesshares | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Number of reportable segments | Segment | 1 | ||
Accounts receivable reserves | $ 96,000 | $ 71,000 | |
Inventory Write-down | 1,414,000 | ||
Inventory Valuation Reserves | 1,414,000 | 623,000 | |
Payments to Acquire Intangible Assets | $ 3,250,000 | $ 750,000 | |
[custom:ProductLicensingRightsAmortizedDescription] | cost is being amortized over five years | ||
[custom:PaymentRelatedToCapitalized] | $ 3,250,000 | ||
Finite-Lived Intangible Assets, Accumulated Amortization | 379,000 | 175,000 | |
Amortization of Intangible Assets | 204,000 | 150,000 | 25,000 |
Impairment of long-lived assets | 0 | 0 | $ 0 |
Finance lease | 0 | $ 0 | |
Accounts Receivable, Sale | $ 5,000,000 | ||
Percentage for valuation reserve against deferred tax assets | 100.00% | 100.00% | |
Vested Warrant [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Weighted average number of shares outstanding, basic | shares | 600,000 | ||
Earnings Per Share, Basic | $ / shares | $ 0.01 | ||
Biorphen [Member] | 2022 Through 2023 [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Finite-Lived Intangible Assets, Net | $ 475 | ||
Biorphen [Member] | 2024 [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Finite-Lived Intangible Assets, Net | 450,000 | ||
Carglumic Acid [Member] | 2025 through 2030 [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Finite-Lived Intangible Assets, Net | 325,000 | ||
Carglumic Acid [Member] | 2031 [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Finite-Lived Intangible Assets, Net | $ 271,000 | ||
Computer Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives for property and equipment | 3 years | ||
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives for property and equipment | 5 years | ||
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives for property and equipment, description | estimated useful lives or the remaining lease term |
Schedule of Property and Equipm
Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Abstract] | ||
Computer hardware and software | $ 157 | $ 182 |
Furniture and fixtures | 106 | 143 |
Equipment | 132 | 994 |
Leasehold improvements | 71 | 184 |
Construction in progress | ||
Property and equipment, gross | 466 | 1,503 |
Less: accumulated depreciation and amortization | (351) | (692) |
Property and equipment, net | $ 115 | $ 811 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expense | $ 155 | $ 347 | $ 283 |
Net book value | $ 519 |
Schedule of Future Payments of
Schedule of Future Payments of Long Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
2022 | $ 2,202 | |
2023 | 1,756 | |
2024 | 5,300 | |
Total payments | 9,258 | |
Less: amount representing interest | (2,258) | |
Loan payable, gross | 7,000 | |
Less: current portion of long-term debt | (1,418) | |
Less: unamortized discount | (320) | |
Long-term debt, net of unamortized discount | $ 5,262 | $ 6,532 |
Debt (Details Narrative)
Debt (Details Narrative) $ / shares in Units, $ in Thousands | May 20, 2021USD ($) | Aug. 11, 2020USD ($)$ / shares | Jul. 21, 2020USD ($) | May 04, 2020USD ($) | Nov. 13, 2019USD ($) | Jul. 31, 2021USD ($) | Aug. 31, 2020USD ($)shares | Nov. 30, 2019USD ($) | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($) | Sep. 30, 2021shares | Aug. 31, 2021$ / shares |
Debt Instrument [Line Items] | |||||||||||||
Borrowing amount | $ 2,000 | $ 2,000 | |||||||||||
Warrants issued to purchase common stock | shares | 1,554,826 | 1,690,476 | |||||||||||
Warrants exercise price | $ / shares | $ 3.18 | ||||||||||||
Interest expenses | $ 1,042 | $ 884 | $ 98 | ||||||||||
Debt discount amortization | 148 | 121 | 16 | ||||||||||
Accrued interest | 134 | 48 | |||||||||||
Proceeds from loan | 511 | ||||||||||||
Gain on debt extinguishment | 365 | ||||||||||||
PPP Loan [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest expenses | $ 4 | ||||||||||||
Proceeds from loan | $ 361 | ||||||||||||
Gain on debt extinguishment | $ 365 | ||||||||||||
EIDL Loan [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest expenses | $ 6 | ||||||||||||
Proceeds from loan | $ 150 | ||||||||||||
Warrant [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Borrowing amount | $ 2,000 | ||||||||||||
Warrants issued to purchase common stock | shares | 18,141 | 51,239 | 51,239 | ||||||||||
Warrants exercise price | $ / shares | $ 5.86 | $ 6.62 | |||||||||||
Warrants, fair value | $ 94 | $ 226 | |||||||||||
Warrants expiration term | 7 years | ||||||||||||
Warrant [Member] | Measurement Input, Exercise Price [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Warrants exercise price | $ / shares | $ 6.85 | $ 5.75 | |||||||||||
Warrant [Member] | Measurement Input, Option Volatility [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Warrant measurement input | 95 | 95 | |||||||||||
Warrant [Member] | Measurement Input, Expected Dividend Rate [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Warrant measurement input | 0 | 0 | |||||||||||
Warrant [Member] | Measurement Input, Risk Free Interest Rate [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Warrant measurement input | 0.4 | 1.8 | |||||||||||
Warrant [Member] | Measurement Input, Expected Term [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Warrants expiration term | 7 years | ||||||||||||
Food and Drug Administration's [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Borrowing amount | 3,000 | ||||||||||||
SWK Credit Agreement [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Borrowing amount | $ 5,000 | ||||||||||||
Proceeds amount | $ 5,000 | ||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | ||||||||||||
Debt Instrument, Description | The Company is required to maintain a minimum cash balance of $3,000, only pay interest on the debt until February 2022 and then pay 5.5% of the loan principal balance commencing on February 15, 2022 and then every three months thereafter until November 13, 2024 at which time the remaining principal balance is due. Borrowings under the SWK Credit Agreement are secured by the Company’s assets. The SWK Credit Agreement contains customary default provisions and covenants which include limits on additional indebtedness. In March 2020, SWK provided a waiver for the Company to obtain loans with the Small Business Association. In February 2021, the Company notified SWK that it will not require additional borrowing capacity under the SWK Credit Agreement and terminated the additional borrowing capacity with SWK. | ||||||||||||
Minimum cash balance | $ 3,000 | ||||||||||||
SWK Credit Agreement [Member] | Unused lines of Credit [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.00% | ||||||||||||
SWK Credit Agreement [Member] | London Interbank Offered Rate (LIBOR) Swap Rate [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ||||||||||||
SWK Credit Agreement [Member] | Stated LIBOR Floor Rate [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.00% | ||||||||||||
SWK Credit Agreement [Member] | Food and Drug Administration's [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Proceeds amount | $ 5,000 | ||||||||||||
SWK Credit Agreement [Member] | Maximum [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Borrowing amount | $ 10,000 |
Common Stock (Details Narrative
Common Stock (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Apr. 30, 2021 | Oct. 31, 2020 | Apr. 30, 2020 | Mar. 31, 2020 | Nov. 30, 2018 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Subsidiary, Sale of Stock [Line Items] | ||||||||
Common stock, shares authorized | 50,000,000 | 50,000,000 | ||||||
Common stock, par value | $ 0.001 | $ 0.001 | ||||||
Value of common stock shares issued | $ 28,782 | |||||||
Warrant [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Number of stock issued for exercise of stock warrants | 135,650 | |||||||
Common Stock [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Number of common stock shares issued | 94,808 | 5,820,000 | ||||||
Value of common stock shares issued | $ 6 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 144,233 | 194,878 | 167,622 | |||||
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture | 15,190 | |||||||
Number of stock issued for exercise of stock warrants | 94,808 | |||||||
Employee Stock Purchase Plan [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 49,155 | 25,780 | ||||||
RSA To New Employee [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture | 15,190 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 100.00% | 25.00% | ||||||
Board of Directors [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Number of common stock shares issued | 25,000 | |||||||
2018 Equity Incentive Plan [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 144,233 | 194,878 | ||||||
IPO [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Number of common stock shares issued | 3,220,000 | |||||||
Common stock share price per share | $ 7 | |||||||
Net cash proceeds from initial public offering | $ 21,026 | $ 21,960 | ||||||
Diurnal Limited [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Number of common stock shares issued | 379,474 | |||||||
Value of common stock shares issued | $ 1,264 | |||||||
Securities Purchase Agreements [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Sale of stock, number of shares issued in transaction | 2,600,000 | 2,600,000 | ||||||
Sale of stock, price per share | $ 3 | $ 3 | ||||||
Proceeds from sale of stock, consideration received on transaction | $ 7,756 | $ 7,756 |
Summary of Warrants Outstanding
Summary of Warrants Outstanding (Details) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
No. of Shares | 1,554,826 | 1,690,476 |
Exercise Price | $ 3.18 | |
Business Advisory Warrants 2017 [Member] | ||
No. of Shares | 600,000 | |
Exercise Price | $ 0.01 | |
Placement Agent Warrants - 2017 Preferred Stock Offering [Member] | ||
No. of Shares | 471,446 | |
Exercise Price | $ 3 | |
Placement Agent Warrants - IPO [Member] | ||
No. of Shares | 414,000 | |
Exercise Price | $ 7.50 | |
SWK Warrants Debt (Tranche #1) [Member] | ||
No. of Shares | 51,239 | |
Exercise Price | $ 5.86 | |
SWK Warrants Debt (Tranche #2) [Member] | ||
No. of Shares | 18,141 | |
Exercise Price | $ 6.62 |
Summary of Rollforward of The W
Summary of Rollforward of The Warrants Outstanding (Details) | 12 Months Ended |
Dec. 31, 2021shares | |
Common Stock Warrants | |
Balance as of the beginning of the year | 1,690,476 |
Exercise of Placement Agent Warrants - 2017 Preferred Stock Offering | (135,650) |
Balance as of the end of the year | 1,554,826 |
Common Stock Warrants (Details
Common Stock Warrants (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Exercise of Placement Agent Warrant | 135,650 | |
Warrant exercised | $ 806,000 | $ 0 |
Common Stock [Member] | ||
Common stock issued | 94,808 | 5,820,000 |
Summary of Stock Option Activit
Summary of Stock Option Activity (Details) - Equity Option [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($)$ / sharesshares | |
Offsetting Assets [Line Items] | |
Shares, Options Outstanding, Beginning Balance | shares | 2,824,500 |
Weighted Average Exercise Price, Options Outstanding, Beginning Balance | $ / shares | $ 4.05 |
Weighted Average Remaining Contractual Term, Options Outstanding, Beginning Balance | 8 years 3 months 18 days |
Aggregate Intrinsic Value, Options Outstanding, Beginning Balance | $ | $ 11,525 |
Shares, Issued | shares | 1,017,098 |
Weighted Average Exercise Price, Issued | $ / shares | $ 8.31 |
Shares, Exercised | shares | (144,233) |
Weighted Average Exercise Price, Exercised | $ / shares | $ 2.35 |
Shares, Forfeited/Cancelled | shares | (183,646) |
Weighted Average Exercise Price, Forfeited/Cancelled | $ / shares | $ 6.63 |
Shares, Options Outstanding, Ending Balance | shares | 3,513,719 |
Weighted Average Exercise Price, Options Outstanding, Ending Balance | $ / shares | $ 5.22 |
Weighted Average Remaining Contractual Term, Options Outstanding, Ending Balance | 7 years 10 months 24 days |
Aggregate Intrinsic Value, Options Outstanding, Ending Balance | $ | $ 2,711 |
Shares, Options Exercisable, Ending Balance | shares | 2,096,630 |
Weighted Average Exercise Price, Options Exercisable, Ending Balance | $ / shares | $ 4.37 |
Weighted Average Remaining Contractual Term, Options Exercisable, Ending Balance | 7 years 3 months 18 days |
Aggregate Intrinsic Value, Options Exercisable, Ending Balance | $ | $ 2,257 |
Shares, Options Vested and Expected to Vest, Ending Balance | shares | 3,463,719 |
Weighted Average Exercise Price, Options Vested and Expected to Vest, Ending Balance | $ / shares | $ 5.27 |
Weighted Average Remaining Contractual Term, Options Vested and Expected to Vest, Ending Balance | 7 years 10 months 24 days |
Aggregate Intrinsic Value, Options Vested and Expected to Vest, Ending Balance | $ | $ 2,565 |
Schedule of Assumptions Used to
Schedule of Assumptions Used to Calculate Fair Value of Options Granted (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |||
Expected dividends | |||
Expected volatility, minimum | 70.00% | ||
Expected volatility, maximum | 80.00% | ||
Expected volatility | 95.00% | 90.00% | |
Risk-free interest rate, minimum | 0.90% | 0.40% | 1.90% |
Risk-free interest rate, maximum | 1.40% | 0.70% | 2.50% |
Expected term | 6 years | 5 years 10 months 24 days | 5 years 10 months 24 days |
Weighted average fair value | $ 5.64 | $ 3.06 | $ 5.54 |
Summary of Activity for Restric
Summary of Activity for Restricted Stock Awards (Details) - RSAs [Member] | 12 Months Ended |
Dec. 31, 2021shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares, Unvested, Outstanding, Beginning Balance | 7,595 |
Number of Shares, Issued | |
Number of Shares, Vested | (7,595) |
Number of Shares, Forfeited/Cancelled | |
Number of Shares, Unvested, Outstanding, Ending Balance |
Share-Based Payment Awards (Det
Share-Based Payment Awards (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||
Apr. 30, 2021 | Apr. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 02, 2021 | Jan. 02, 2020 | Jan. 02, 2019 | Dec. 31, 2018 | May 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock, shares outstanding | 24,626,004 | 24,312,808 | ||||||||
Stock-based compensation expense | $ 3,381 | $ 2,576 | $ 1,888 | |||||||
Proceeds from stock option exercised | $ 541 | $ 367 | $ 453 | |||||||
Expected dividends | ||||||||||
Employees contribution amount | $ 154 | $ 117 | $ 113 | |||||||
General and Administrative Expense [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock-based compensation expense | 2,838 | 2,295 | 1,574 | |||||||
Research and Development Expense [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock-based compensation expense | $ 543 | $ 281 | $ 314 | |||||||
Common Stock [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock-based compensation, shares | 15,190 | |||||||||
Stock option exercises, shares | 144,233 | 194,878 | 167,622 | |||||||
Stock Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock option intrinsic value | $ 682 | |||||||||
Stock option exercises, shares | 144,233 | |||||||||
Proceeds from stock option exercised | $ 339 | |||||||||
Equity Option [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock options expiration period | 10 years | |||||||||
Restricted Stock Awards (RSAs) [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Weighted average grant date fair value, restricted stock | $ 0 | $ 3.95 | $ 0 | |||||||
Fair value of restricted stock, vested | $ 30 | $ 30 | $ 66 | |||||||
Non Vested Stock Option Awards And Restricted Awards [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Unrecognized compensation costs | $ 6,025 | |||||||||
RSA To New Employee [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock-based compensation, shares | 15,190 | |||||||||
Restricted stock vested percentage | 100.00% | 25.00% | ||||||||
Product Consultant [Member] | Common Stock [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock options expiration period | 5 years | |||||||||
Number of stock options issued to purchase common stock | 50,000 | |||||||||
2017 Equity Incentive Plan [Member] | Maximum [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based compensation arrangement by share-based payment award, number of shares authorized | 5,000,000 | |||||||||
2018 Equity Incentive Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based compensation arrangement, shares available for future issuance | 537,306 | |||||||||
Share reserve increased | 972,512 | 715,099 | 704,317 | |||||||
Common stock, shares outstanding | 24,312,808 | 17,877,486 | 17,607,928 | |||||||
Stock option exercises, shares | 144,233 | 194,878 | ||||||||
2018 Equity Incentive Plan [Member] | January 1, 2019 and Through January 1, 2028 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Percentage for total number of shares outstanding | 4.00% | |||||||||
2018 Employee Stock Purchase Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based compensation arrangement, shares available for future issuance | 150,000 | |||||||||
Stock-based compensation expense | $ 73 | $ 71 | $ 112 | |||||||
Share based compensation for initial shares reserve, description | The Company’s ESPP provides for an initial reserve of 150,000 shares and this reserve is automatically increased on January 1 of each year by the lesser of 1% of the outstanding common shares at December 31 of the preceding year or 150,000 shares, subject to reduction at the discretion of the Company’s board of directors | |||||||||
Description for deductions to purchase stock at price per share | The terms of the ESPP permit employees of the Company to use payroll deductions to purchase stock at a price per share that is at least the lesser of (1) 85% of the fair market value of a share of common stock on the first date of an offering or (2) 85% of the fair market value of a share of common stock on the date of purchase. After the initial offering period, subsequent twelve-month offering periods automatically commence over the term of the ESPP on the day that immediately follows the conclusion of the preceding offering, each consisting of two purchase periods approximately six months in duration ending on or around June 10 and December 10 each year, subject to a restart feature if the Company’s stock price drops at the end of a six-month period within the twelve-month offering period | |||||||||
Weighted average grant date fair value issued | $ 2.50 | $ 2.32 | $ 2.56 | |||||||
Employees contribution amount | $ 205 | $ 115 | ||||||||
Accrued liabilities for remaining employee contributions | $ 22 | $ 18 |
Computation of Basic and Dilute
Computation of Basic and Diluted Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |||
Net loss | $ (1,955) | $ (27,970) | $ (18,320) |
Weighted average common shares outstanding (basic and diluted) | 25,207,299 | 21,010,058 | 17,760,761 |
Net loss per common share (basic and diluted) | $ (0.08) | $ (1.33) | $ (1.03) |
Basic and Diluted Net Loss pe_3
Basic and Diluted Net Loss per Common Share (Details Narrative) - shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |||
Anti-dilutive securities excluded from calculation of diluted net loss per share | 4,286,687 | 3,371,489 | 3,590,465 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Feb. 18, 2019 | Jan. 23, 2019 | Nov. 17, 2017 | Aug. 11, 2017 | May 31, 2021 | Apr. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 30, 2021 |
Related Party Transaction [Line Items] | ||||||||||
Common Stock, Shares, Issued | 24,626,004 | 24,312,808 | ||||||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | ||||||||
Proceeds from Sale of Machinery and Equipment | $ 700,000 | |||||||||
Payment of research and development expense | 6,235,000 | $ 14,104,000 | $ 11,555,000 | |||||||
Credit agreement term | 10 years | 10 years | ||||||||
Imprimis Pharmaceuticals [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Proceeds from Sale of Machinery and Equipment | $ 700,000 | |||||||||
Gain on sale of lab equipment | $ 181,000 | |||||||||
Eyemax [Member] | Amended and Restated Agreement [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Sale of product expense | $ 2,000,000 | 1,735,000 | ||||||||
Eyemax [Member] | One Milestone [Member] | Amended and Restated Agreement [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Related party transaction | 250,000 | |||||||||
Eyemax [Member] | Two Milestone [Member] | Amended and Restated Agreement [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Related party transaction | $ 500,000 | |||||||||
Harrow Health Inc [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Common Stock, Shares, Issued | 1,518,000 | 3,500,000 | ||||||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | |||||||||
Shares owned | $ 1,982,000 | |||||||||
Ownership percentage | 8.00% | |||||||||
Harrow Health Inc [Member] | Chief Executive Officer [Member] | Restricted Stock [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of restricted common stock issued for services | 25,000 | |||||||||
Eyemax [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Related party transaction | $ 250,000 | |||||||||
Payment of research and development expense | 250,000 | |||||||||
Sale of product expense | $ 500,000 | |||||||||
Percentage of royalty fee | 10.00% | |||||||||
Related party transaction, description | The Eyemax Agreement was for an initial term of 10 years from the date of the Eyemax Agreement, subject to successive two-year renewals unless the Company elected to terminate the Eyemax Agreement | |||||||||
Credit agreement term | 10 years |
Schedule of Lease-related Asset
Schedule of Lease-related Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Oct. 31, 2020 |
Total leased assets | $ 104 | $ 192 | $ 195 |
Operating lease liabilities, noncurrent | 15 | $ 99 | |
Operating Lease Right-of-use Assets [Member] | |||
Total leased assets | 104 | ||
Accrued Liabilities [Member] | |||
Operating lease liabilities, current | 84 | ||
Operating Lease Liabilities Net of Current [Member] | |||
Operating lease liabilities, noncurrent | 15 | ||
Operating Lease Liability [Member] | |||
Total operating lease liabilities | $ 99 | $ 195 |
Schedule of Future Lease Commit
Schedule of Future Lease Commitments (Details) - Operating Lease Liability [Member] - USD ($) $ in Thousands | Dec. 31, 2021 | Oct. 31, 2020 |
Undiscounted lease payments | $ 102 | |
2022 | 87 | |
2023 | 15 | |
Thereafter | ||
Less: Imputed interest | (3) | |
Total lease liabilities | $ 99 | $ 195 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Lease renewed description | In October 2020, the Company renewed its office lease for a two-year period through March 31, 2023 | |||
Rights to use of assets | $ 195 | $ 104 | $ 192 | |
Incremental borrowing rate | 7.80% | |||
Estimated discount rate percentage | 5.40% | |||
Lease rent expense | $ 113 | 139 | $ 140 | |
Operating Lease, Payments | 83 | 131 | ||
Operating Lease, Right-of-Use Asset, Amortization Expense | $ 88 | 129 | 121 | |
Operating Lease, Weighted Average Remaining Lease Term | 1 year 3 months | |||
Operating Lease, Weighted Average Discount Rate, Percent | 5.40% | |||
Research and Development Expense [Member] | ||||
Operating Lease, Cost | $ 9 | 55 | 55 | |
General and Administrative Expense [Member] | ||||
Operating Lease, Cost | 86 | $ 84 | $ 85 | |
Operating Lease Liability [Member] | ||||
Operating lease liabilities | $ 195 | $ 99 |
Schedule of Provision for Incom
Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Federal | |||
State | |||
Total current expense | |||
Federal | 460 | 6,020 | 3,961 |
State | 185 | 2,151 | 1,415 |
Change in valuation allowance | (645) | (8,171) | (5,376) |
Total deferred expense | |||
Total provision |
Schedule of Deferred Tax Assets
Schedule of Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Net operating losses | $ 15,871 | $ 16,250 |
Stock-based expenses | 2,135 | 1,257 |
Accruals and other | 542 | 396 |
Total deferred tax assets | 18,548 | 17,903 |
Valuation allowance | (18,548) | (17,903) |
Net deferred tax assets |
Schedule of Reconciliation of S
Schedule of Reconciliation of Statutory Federal Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Benefit at statutory rate | (21.00%) | (21.00%) | (21.00%) |
Permanent items (primarily warrants and stock compensation) | (2.50%) | (0.50%) | (0.60%) |
State tax benefit | (9.50%) | (7.70%) | (7.70%) |
Federal rate change | |||
Other items | |||
Establishment of valuation allowance | 33.00% | 29.20% | 29.30% |
Income tax expense |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2017 | |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |||
[custom:PercentageForValuationReserveAgainstDeferredTaxAssets] | 100.00% | 100.00% | |
Deferred Tax Assets, Gross | $ 18,548 | $ 17,903 | |
Operating Loss Carryforwards | $ 55,675 | $ 5,652 | |
Net operating loss carryforward expiration | expire in 2029. | ||
Minimum [Member] | |||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |||
Equity ownership percentage | 50.00% | ||
After December 31, 2017 [Member] | |||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |||
Operating Loss Carryforwards | $ 50,023 |
Employee Savings Plan (Details
Employee Savings Plan (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |||
Percentage for tax deferred investment | 100.00% | ||
Percentage for matching contribution | 4.00% | ||
Employee saving plan for matching contribution | $ 154 | $ 117 | $ 113 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Oct. 28, 2021 | Jun. 15, 2021 | Mar. 26, 2020 | Jun. 12, 2019 | Feb. 08, 2019 | Jan. 23, 2019 | Nov. 17, 2017 | Jul. 31, 2021 | Oct. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Product Liability Contingency [Line Items] | |||||||||||||
Percentage of net profits payments | 50.00% | 50.00% | |||||||||||
Litigation related product profit, percentage | 62.50% | ||||||||||||
Credit agreement term | 10 years | 10 years | |||||||||||
Revenue recognized | $ 17,000,000 | ||||||||||||
Additional milestone revenues | 25,000,000 | ||||||||||||
Payments for development | 6,235,000 | $ 14,104,000 | $ 11,555,000 | ||||||||||
Stock Issued During Period, Value, New Issues | 28,782,000 | ||||||||||||
Payments for licensing rights | $ 3,250 | ||||||||||||
Tulex Pharmaceuticals [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Payment of filing fee | $ 1,438,000 | ||||||||||||
Tulex Pharmaceuticals Inc [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Milestone payment amount | 5,000,000 | ||||||||||||
Diurnal Limited [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Proceeds from sales of common stock, net of offering costs, shares | 379,474 | ||||||||||||
Stock Issued During Period, Value, New Issues | $ 1,264,000 | ||||||||||||
Payment for obtaining product orphan drug | 2,500,000 | ||||||||||||
Exclusive License and Supply Agreement (ET-202 ) [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Payment of milestone fee | $ 600,000 | ||||||||||||
Exclusive License and Supply Agreement (ET-202 ) [Member] | Upon FDA Approval [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Payment of licensing | $ 750,000 | $ 750,000 | |||||||||||
Exclusive License and Supply Agreement (ET-202 ) [Member] | Sintetica [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Payment of licensing | $ 2,000,000 | ||||||||||||
Percentage of net sales as marketing fees | 5.00% | ||||||||||||
Proceeds from licensing | $ 500,000 | ||||||||||||
Percentage for additional profit | 50.00% | ||||||||||||
Exclusive License and Supply Agreement (ET-203) [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Percentage for additional profit | 50.00% | ||||||||||||
Exclusive License and Supply Agreement (ET-203) [Member] | Sintetica [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Payment of licensing | $ 1,000,000 | ||||||||||||
Percentage of net sales as marketing fees | 5.00% | ||||||||||||
Proceeds from licensing | $ 500,000 | ||||||||||||
Percentage for additional profit | 50.00% | ||||||||||||
License and Supply Agreement (ET-203) [Member] | Licensor [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Credit agreement term | 10 years | ||||||||||||
Licensing and Supply Agreement [Member] | Licensor [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Percentage of net profits payments | 35.00% | ||||||||||||
Payments for development | $ 350,000 | ||||||||||||
Licensing and Supply Agreement [Member] | Upon FDA Approval [Member] | Licensor [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Payments for development | 325,000 | ||||||||||||
Licensing and Supply Agreement [Member] | Upon Successful Bioequivalence Study [Member] | Licensor [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Payments for development | 350,000 | ||||||||||||
Licensing and Supply Agreement [Member] | Upon FDA Acceptance [Member] | Licensor [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Payments for development | 325,000 | ||||||||||||
Licensing and Supply Agreement [Member] | Upon Issuance of Patent Covering [Member] | Licensor [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Payments for development | 650,000 | ||||||||||||
Licensing and Supply Agreement [Member] | Product Sales [Member] | Licensor [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Payments for development | 500,000 | ||||||||||||
Licensing and Supply Agreement [Member] | Calendar Year [Member] | Licensor [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Payments for development | $ 10,000,000 | ||||||||||||
Exclusive License and Supply Agreement (ET-105 ) [Member] | Aucta Pharmaceuticals, Inc [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Payment of licensing | $ 2,000,000 | ||||||||||||
Exclusive License and Supply Agreement (ET-105 ) [Member] | Aucta Pharmaceuticals, Inc [Member] | Maximum [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Milestone payment amount | 3,000,000 | ||||||||||||
Exclusive License and Supply Agreement (ET-105 ) [Member] | Azurity Pharmaceuticals, Inc. [Member] | Intellectual Property [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Payment of licensing | 450,000 | ||||||||||||
Exclusive License and Supply Agreement (ET-105 ) [Member] | Upon FDA Approval [Member] | Aucta Pharmaceuticals, Inc [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Payment of licensing | 2,450,000 | ||||||||||||
Exclusive License and Supply Agreement (ET-105 ) [Member] | Upon Issuance of Orange-book Listed Patent [Member] | Aucta Pharmaceuticals, Inc [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Payment of licensing | 1,000,000 | ||||||||||||
Exclusive License and Supply Agreement (ET-105 ) [Member] | Upon FDA Acceptance of Product Filing [Member] | Aucta Pharmaceuticals, Inc [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Payment of licensing | 1,500,000 | ||||||||||||
Exclusive License and Supply Agreement (ET-105 ) [Member] | Upon FDA Approval and Commercial Sales [Member] | Aucta Pharmaceuticals, Inc [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Payment of licensing | $ 1,500,000 | ||||||||||||
Exclusive License and Supply Agreement (ET-105 ) [Member] | Sales Exceed $10 Million [Member] | Aucta Pharmaceuticals, Inc [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Milestone payment description | 1,000 when net sales exceed $10 million in a calendar year | ||||||||||||
Exclusive License and Supply Agreement (ET-105 ) [Member] | Sales Exceed $20 Million [Member] | Aucta Pharmaceuticals, Inc [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Milestone payment description | 2,000 when net sales exceed $20 million in a calendar year | ||||||||||||
Exclusive License and Supply Agreement [Member] | Diurnal Limited [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Cash paid for licensing milestone fee | $ 3,500,000 | ||||||||||||
Proceeds from sales of common stock, net of offering costs, shares | 379,474 | ||||||||||||
Stock Issued During Period, Value, New Issues | $ 1,264,000 | ||||||||||||
Shares Issued, Price Per Share | $ 3.33 | ||||||||||||
Aggregate value of licensing milestone amount included in research and development expense | $ 4,764,000 | ||||||||||||
Distribution and Promotion License Agreement [Member] | Crossject S.A. [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Payments for development | $ 500,000 | ||||||||||||
Sale on royalty | 10.00% | ||||||||||||
Distribution and Promotion License Agreement [Member] | Crossject S.A. [Member] | Maximum [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Cash paid for licensing milestone fee | $ 6,000,000 | ||||||||||||
Distribution and Promotion License Agreement [Member] | Upon FDA Acceptance of Product Filing [Member] | Crossject S.A. [Member] | |||||||||||||
Product Liability Contingency [Line Items] | |||||||||||||
Payments for development | $ 4,500,000 |