Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 02, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-00100 | |
Entity Registrant Name | THERAPEUTICSMD, INC. | |
Entity Central Index Key | 0000025743 | |
Entity Tax Identification Number | 87-0233535 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 951 Yamato Road | |
Entity Address, Address Line Two | Suite 220 | |
Entity Address, City or Town | Boca Raton | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33431 | |
City Area Code | 561 | |
Local Phone Number | 961-1900 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | TXMD | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 272,812,271 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash | $ 79,633,675 | $ 160,829,713 |
Accounts receivable, net of allowance for doubtful accounts of $857,176 and $904,040, respectively | 24,059,095 | 24,395,958 |
Inventory, net | 9,932,304 | 11,860,716 |
Other current assets | 8,819,239 | 11,329,793 |
Total current assets | 122,444,313 | 208,416,180 |
Fixed assets, net | 1,969,929 | 2,507,775 |
Other Assets: | ||
License rights, net | 36,959,305 | 39,221,308 |
Intangible assets, net | 5,537,885 | 5,258,211 |
Right of use assets | 9,975,725 | 10,109,154 |
Other assets | 403,643 | 473,009 |
Total other assets | 52,876,558 | 55,061,682 |
Total assets | 177,290,800 | 265,985,637 |
Current Liabilities: | ||
Accounts payable | 16,109,638 | 19,181,212 |
Other current liabilities | 31,220,484 | 33,823,613 |
Total current liabilities | 47,330,122 | 53,004,825 |
Long-Term Liabilities: | ||
Long-term debt | 237,051,202 | 194,634,643 |
Operating lease liability | 8,907,995 | 9,145,049 |
Other long-term liabilities | 35,000 | |
Total long-term liabilities | 245,994,197 | 203,779,692 |
Total liabilities | 293,324,319 | 256,784,517 |
Stockholders' (Deficit) Equity: | ||
Preferred stock - par value $0.001; 10,000,000 shares authorized; no shares issued and outstanding | ||
Common stock - par value $0.001; 600,000,000 and 350,000,000 shares authorized: 272,812,271 and 271,177,076 issued and outstanding, respectively | 272,812 | 271,177 |
Additional paid-in capital | 720,551,488 | 704,351,222 |
Accumulated deficit | (836,857,819) | (695,421,279) |
Total stockholders' (deficit) equity | (116,033,519) | 9,201,120 |
Total liabilities and stockholders' (deficit) equity | $ 177,290,800 | $ 265,985,637 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 857,176 | $ 904,040 |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 600,000,000 | 350,000,000 |
Common Stock, Shares, Issued | 272,812,271 | 271,177,076 |
Common Stock, Shares, Outstanding | 272,812,271 | 271,177,076 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Total revenue, net | $ 19,342,805 | $ 23,719,741 | $ 42,294,495 | $ 33,745,257 |
Cost of goods sold | 3,278,609 | 1,444,308 | 10,394,145 | 3,455,995 |
Gross profit | 16,064,196 | 22,275,433 | 31,900,350 | 30,289,262 |
Operating expenses: | ||||
Sales, general, and administrative | 38,751,250 | 45,126,986 | 144,018,899 | 121,378,519 |
Research and development | 2,027,195 | 4,077,738 | 8,038,056 | 15,359,988 |
Depreciation and amortization | 258,787 | 141,959 | 777,338 | 363,956 |
Total operating expenses | 41,037,232 | 49,346,683 | 152,834,293 | 137,102,463 |
Operating loss | (24,973,036) | (27,071,250) | (120,933,943) | (106,813,201) |
Other (expense) income | ||||
Loss on extinguishment of debt | (10,057,632) | |||
Miscellaneous income | 41,405 | 703,662 | 465,745 | 1,878,980 |
Interest expense | (7,679,443) | (5,599,005) | (20,968,342) | (11,717,632) |
Total other expense, net | (7,638,038) | (4,895,343) | (20,502,597) | (19,896,284) |
Loss before income taxes | (32,611,074) | (31,966,593) | (141,436,540) | (126,709,485) |
Provision for income taxes | ||||
Net loss | $ (32,611,074) | $ (31,966,593) | $ (141,436,540) | $ (126,709,485) |
Loss per share, basic and diluted: | ||||
Net loss per share, basic and diluted | $ (0.12) | $ (0.13) | $ (0.52) | $ (0.53) |
Weighted average number of common shares outstanding, basic and diluted | 272,564,635 | 241,261,299 | 271,968,981 | 241,163,994 |
Product [Member] | ||||
Total revenue, net | $ 17,342,805 | $ 8,213,341 | $ 40,294,495 | $ 18,238,857 |
License [Member] | ||||
Total revenue, net | $ 2,000,000 | $ 15,506,400 | $ 2,000,000 | $ 15,506,400 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2018 | $ 240,463 | $ 616,559,938 | $ (519,276,280) | $ 97,524,121 |
Beginning balance, shares at Dec. 31, 2018 | 240,462,439 | |||
Shares issued for exercise of options and warrants, net | $ 759 | 99,348 | 100,107 | |
Shares issued for exercise of options and warrants, net (in shares) | 759,401 | |||
Share-based compensation | 2,575,369 | 2,575,369 | ||
Net loss | (39,506,375) | (39,506,375) | ||
Ending balance, value at Mar. 31, 2019 | $ 241,222 | 619,234,655 | (558,782,655) | 60,693,222 |
Ending balance, shares at Mar. 31, 2019 | 241,221,840 | |||
Beginning balance, value at Dec. 31, 2018 | $ 240,463 | 616,559,938 | (519,276,280) | 97,524,121 |
Beginning balance, shares at Dec. 31, 2018 | 240,462,439 | |||
Net loss | (126,709,485) | |||
Ending balance, value at Sep. 30, 2019 | $ 241,277 | 624,515,559 | (645,985,765) | (21,228,929) |
Ending balance, shares at Sep. 30, 2019 | 241,277,076 | |||
Beginning balance, value at Mar. 31, 2019 | $ 241,222 | 619,234,655 | (558,782,655) | 60,693,222 |
Beginning balance, shares at Mar. 31, 2019 | 241,221,840 | |||
Share-based compensation | 2,637,264 | 2,637,264 | ||
Net loss | (55,236,517) | (55,236,517) | ||
Ending balance, value at Jun. 30, 2019 | $ 241,222 | 621,871,919 | (614,019,172) | 8,093,969 |
Ending balance, shares at Jun. 30, 2019 | 241,221,840 | |||
Shares issued for exercise of options and warrants, net | $ 55 | 8,494 | 8,549 | |
Shares issued for exercise of options and warrants, net (in shares) | 55,236 | |||
Share-based compensation | 2,635,146 | 2,635,146 | ||
Net loss | (31,966,593) | (31,966,593) | ||
Ending balance, value at Sep. 30, 2019 | $ 241,277 | 624,515,559 | (645,985,765) | (21,228,929) |
Ending balance, shares at Sep. 30, 2019 | 241,277,076 | |||
Beginning balance, value at Dec. 31, 2019 | $ 271,177 | 704,351,222 | (695,421,279) | $ 9,201,120 |
Beginning balance, shares at Dec. 31, 2019 | 271,177,076 | 271,177,076 | ||
Shares issued for exercise of options and warrants, net | $ 351 | 71,758 | $ 72,109 | |
Shares issued for exercise of options and warrants, net (in shares) | 350,666 | |||
Share-based compensation | 2,366,453 | 2,366,453 | ||
Net loss | (56,848,802) | (56,848,802) | ||
Ending balance, value at Mar. 31, 2020 | $ 271,678 | 706,789,283 | (752,270,081) | (45,209,120) |
Ending balance, shares at Mar. 31, 2020 | 271,677,742 | |||
Issuance of shares from release of restricted stock | $ 150 | (150) | ||
Issuance of shares from release of restricted stock (in shares) | 150,000 | |||
Beginning balance, value at Dec. 31, 2019 | $ 271,177 | 704,351,222 | (695,421,279) | $ 9,201,120 |
Beginning balance, shares at Dec. 31, 2019 | 271,177,076 | 271,177,076 | ||
Net loss | $ (141,436,540) | |||
Ending balance, value at Sep. 30, 2020 | $ 272,812 | 720,551,488 | (836,857,819) | $ (116,033,519) |
Ending balance, shares at Sep. 30, 2020 | 272,812,271 | 272,812,271 | ||
Beginning balance, value at Mar. 31, 2020 | $ 271,678 | 706,789,283 | (752,270,081) | $ (45,209,120) |
Beginning balance, shares at Mar. 31, 2020 | 271,677,742 | |||
Shares issued for exercise of options and warrants, net | $ 313 | 93,762 | 94,075 | |
Shares issued for exercise of options and warrants, net (in shares) | 313,638 | |||
Share-based compensation | 3,002,826 | 3,002,826 | ||
Net loss | (51,976,664) | (51,976,664) | ||
Ending balance, value at Jun. 30, 2020 | $ 272,294 | 709,885,568 | (804,246,745) | (94,088,883) |
Ending balance, shares at Jun. 30, 2020 | 272,294,380 | |||
Issuance of shares from release of restricted stock | $ 303 | (303) | ||
Issuance of shares from release of restricted stock (in shares) | 303,000 | |||
Shares issued for exercise of options and warrants, net | $ 518 | 104,976 | 105,494 | |
Shares issued for exercise of options and warrants, net (in shares) | 517,891 | |||
Share-based compensation | 3,132,765 | 3,132,765 | ||
Net loss | (32,611,074) | (32,611,074) | ||
Ending balance, value at Sep. 30, 2020 | $ 272,812 | 720,551,488 | (836,857,819) | $ (116,033,519) |
Ending balance, shares at Sep. 30, 2020 | 272,812,271 | 272,812,271 | ||
Warrant granted in relation to Financing Agreement | $ 7,428,179 | $ 7,428,179 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (141,436,540) | $ (126,709,485) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation of fixed assets | 576,459 | 223,750 |
Amortization of intangible assets | 200,879 | 140,206 |
Write off of patent and trademark costs | 584,509 | 78,864 |
Write off of deferred financing fees | 275,379 | |
Non-cash operating lease expense | 1,050,940 | 711,836 |
(Recovery of) provision for doubtful accounts | (46,864) | 95,097 |
Lease impairment | 81,309 | |
Inventory obsolesence reserve | 5,744,464 | |
Loss on extinguishment of debt | 10,057,632 | |
Share-based compensation | 8,502,044 | 7,859,357 |
Amortization of intellectual property license fee | 2,262,002 | 15,998 |
Amortization of deferred financing fees | 1,370,118 | 582,829 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 383,727 | (4,354,890) |
Inventory | (3,816,053) | (7,265,174) |
Other assets | 2,003,079 | (1,128,515) |
Accounts payable | (3,071,574) | 1,389,665 |
Other current liabilities | (3,812,919) | 3,402,511 |
Net cash used in operating activities | (129,149,041) | (114,900,319) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Patent costs | (1,065,062) | (1,068,542) |
Purchase of fixed assets | (38,613) | (2,089,413) |
Security deposit | 35,000 | (20,420) |
Net cash used in investing activities | (1,068,675) | (3,178,375) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from exercise of options and warrants | 271,678 | 108,656 |
Repayment of the Credit Agreement | (81,660,719) | |
Proceeds from the Financing Agreement | 50,000,000 | 200,000,000 |
Payment of deferred financing fees | (1,250,000) | (6,652,270) |
Net cash provided by financing activities | 49,021,678 | 111,795,667 |
Decrease in cash | (81,196,038) | (6,283,027) |
Cash, beginning of period | 160,829,713 | 161,613,077 |
Cash, end of period | 79,633,675 | 155,330,050 |
Supplemental disclosure of noncash investing and financing activities | ||
Warrant granted in relation to Financing Agreement | 7,428,179 | |
Amount accrued for intellectual property license | 20,000,000 | |
Supplemental disclosure of cash flow information | ||
Interest paid | $ 19,172,847 | $ 12,446,792 |
NOTE 1 _ THE COMPANY
NOTE 1 – THE COMPANY | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NOTE 1 – THE COMPANY | NOTE 1 – THE COMPANY TherapeuticsMD, Inc., a Nevada corporation, or TherapeuticsMD or the Company, has three ® ® ® ® ® ® Nature of Business We are a women’s healthcare company with a mission of creating and commercializing innovative products to support the lifespan of women from pregnancy prevention through menopause. At TherapeuticsMD, we combine entrepreneurial spirit, clinical expertise, and business leadership to develop and commercialize health solutions that enable new standards of care for women. Our solutions range from a patient-controlled, long-lasting contraceptive to advanced hormone therapy pharmaceutical products. We also manufacture and distribute branded and generic prescription prenatal vitamins under the vitaMedMD and BocaGreenMD brands. Our portfolio of products focused on women’s health allows us to efficiently leverage our sales and marketing plan to grow our recently approved products. During 2018, the U.S. Food and Drug Administration, or FDA, approval of our pharmaceutical products has transitioned our company from predominately focused on conducting research and development to one focused on commercializing our pharmaceutical products. In July 2018, we launched our FDA-approved product, IMVEXXY (estradiol vaginal inserts) for the treatment of moderate-to-severe dyspareunia (vaginal pain associated with sexual activity), a symptom of vulvar and vaginal atrophy, or VVA, due to menopause. In April 2019, we launched our FDA-approved product BIJUVA (estradiol and progesterone) capsules, our hormone therapy combination of bio-identical 17ß-estradiol and bio-identical progesterone in a single, oral softgel capsule, for the treatment of moderate-to-severe vasomotor symptoms, or VMS, due to menopause in women with a uterus. In October 2019, we began a test and learn market introduction for our FDA-approved product ANNOVERA (segesterone acetate and ethinyl estradiol vaginal system), the first and only annual patient-controlled, procedure-free, reversible prescription contraceptive option for women. Although we expected to commence the full commercial launch of ANNOVERA in the first quarter of 2020, as a result of the uncertainty surrounding the COVID-19 pandemic, we paused the commercial launch of ANNOVERA and deferred sales and marketing initiatives into subsequent quarters as the pandemic began to negatively affect our revenue growth. We resumed the launch of ANNOVERA on July 1, 2020. On July 30, 2018, we entered into an exclusive license agreement, or the Population Council License Agreement, with the Population Council, Inc., or the Population Council, to commercialize ANNOVERA in the U.S. In addition, on July 30, 2018, we entered into a license and supply agreement, or the Knight License Agreement, with Knight Therapeutics Inc., or Knight, pursuant to which we granted Knight an exclusive license to commercialize IMVEXXY and BIJUVA in Canada and Israel. On June 6, 2019, we entered into an exclusive license and supply agreement, or the Theramex License Agreement, with Theramex HQ UK Limited, or Theramex, to commercialize BIJUVA and IMVEXXY outside of the U.S., excluding Canada and Israel, or the Theramex Territory. |
NOTE 2 _ BASIS OF PRESENTATION
NOTE 2 – BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NOTE 2 – BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | NOTE 2 – BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Interim Financial Statements The accompanying unaudited interim consolidated financial statements of TherapeuticsMD, Inc., which include our wholly owned subsidiaries, should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission, or the SEC, from which we derived the accompanying consolidated balance sheet as of December 31, 2019. The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, since they are interim statements, the accompanying unaudited interim consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements. The accompanying unaudited interim consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of our management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year or any other interim period in the future. Risks and Uncertainties We continue to be subject to risks and uncertainties as a result of the COVID-19 pandemic. The extent of the future impact of the COVID-19 pandemic on our business continues to be highly uncertain and difficult to predict. We continue to provide an uninterrupted supply of our portfolio of products for patients. We have sufficient inventory of finished product to meet anticipated demand in the near future. Additionally, we currently do not foresee any interruption in our ability to continue to manufacture additional product to be used beyond this period and have sufficient active pharmaceutical ingredients on hand for the continued manufacture of our products. Since the early phase of the COVID-19 pandemic, we have been using substantial virtual options to ensure business continuity. Our vitaCare Prescription Services patient model assists patients in obtaining easy and convenient access to their prescriptions for products at a retail pharmacy of their choice, including via home delivery retail pharmacy options. We have also partnered with independent community pharmacies and multiple third-party online pharmacies and telemedicine providers that focus on contraception or menopause to ensure patients have real-time access to both diagnosis and treatment. We continue to support prescribers’ needs with samples and product materials through our sales force. If access is restricted, we have mailing options in place for these materials. We also have business continuity plans and infrastructure in place that allows for virtual detailing. As part of our response to the COVID-19 pandemic, we implemented measures to reduce marketing expenses for 2020. We also implemented cost saving measures, which included negotiating lower fees or suspending services from third party vendors; implementing a company-wide hiring restriction; delaying or cancelling non-critical information technology projects; and eliminating non-essential travel, entertainment, meeting, and event expenses. The full impact of the COVID-19 pandemic continues to evolve. However, we remain committed to the execution of our corporate goals, despite the ongoing COVID-19 pandemic, as demonstrated in part by the increase of our third quarter 2020 product revenues as compared to our second quarter 2020 product revenues. As of the date of issuance of these consolidated financial statements, the future extent to which the COVID-19 pandemic may continue to materially impact our financial condition, liquidity, or results of operations remains uncertain. We are continuing to assess the effect the COVID-19 pandemic on our operations by monitoring the spread of COVID-19 and the various actions implemented to combat the virus throughout the world. Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of any economic recession or depression that has occurred or may occur in the future. While we currently believe that our COVID-19 contingency plan has the ability to mitigate the effect of the COVID-19 pandemic on our business, the severity of the impact of the COVID-19 pandemic on our business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic, the duration of “social distancing” orders, the ability of our sales force to access healthcare providers to promote our products, increases in unemployment, which could reduce access to commercial health insurance for our patients, thus limiting payer coverage for our products, and the impact of the pandemic on our global supply chain, all of which are uncertain. Our future results of operations and liquidity could be materially adversely affected by delays in payments of outstanding receivable amounts beyond normal payment terms, supply chain disruptions, uncertain demand, and the impact of any initiatives or programs that we may undertake to address financial and operations challenges that we may face. Liquidity and Going Concern As of the filing date of this Quarterly Report on Form 10-Q, our cash balance was above the $ 60 million 60 million 45 million 60 million In order to address our projected capital needs, we are pursuing various equity financing and other alternatives including the sale of a controlling interest in vitaCare Prescription Services for which we commended a sale process and received initial indications of interest. The equity financing alternatives may include the private placement of equity, equity-linked, or other similar instruments or obligations with one or more investors, lenders, or other institutional counterparties or an underwritten public equity or equity-linked securities offering. Our ability to sell equity securities may be limited by market conditions. To the extent that we raise additional capital through the sale of such securities, the ownership interests of our existing stockholders will be diluted, and the terms of these new securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders. Along with considering additional financings, we have reviewed numerous potential scenarios in connection with the impact of COVID-19 on our business including the impact of the recent steps we have taken to reduce our operating expenses in response. Based on our analysis, we believe that our existing cash reserves along with potential proceeds from the sale of certain non-core assets of the Company and proceeds from potential future financings, if available to us, would be sufficient to meet our cash needs arising in the ordinary course of business for the next twelve months from the date of this Quarterly Report on Form 10-Q. However, if we are unsuccessful with future financings and if the successful commercialization of IMVEXXY, BIJUVA, or ANNOVERA is delayed, or the continued impact of the COVID-19 pandemic on our business is worse than we anticipate, our existing cash reserves would be insufficient to maintain compliance with the Financing Agreement covenants or satisfy our liquidity requirements until we are able to successfully commercialize IMVEXXY, BIJUVA, and ANNOVERA. The presence of these projected factors in conjunction with the uncertainty of the capital markets raises substantial doubt about the Company's ability to continue as a going concern for the next twelve months from the issuance of these financial statements. The accompanying unaudited consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Recently Issued Accounting Pronouncements In August 2018, the Financial Accounting Standards Board, or the FASB, issued Accounting Standards Update, or ASU, 2018-13 which eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some disclosure requirements. The FASB developed the amendments to Accounting Standards Codification, or ASC, 820 as part of its broader disclosure framework project, which aims to improve the effectiveness of disclosures in the notes to financial statements by focusing on requirements that clearly communicate the most important information to users of the financial statements. The new guidance is effective for all entities for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. An entity is permitted to early adopt either the entire standard or only the provisions that eliminate or modify requirements. We adopted this standard on January 1, 2020, and the adoption did not have a material effect on our disclosures. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The amendments in this update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected based on historical experience, current conditions, and reasonable supportable forecasts. The amendments in this update are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted no sooner than the first quarter of 2019. A modified retrospective approach is required for all investments, except debt securities for which an other-than-temporary impairment had been recognized prior to the effective date, which will require a prospective transition approach and should be applied either prospectively or retrospectively depending on the nature of the disclosure. The adoption of ASU 2016-13 requires expanded quantitative and qualitative disclosures about the Company’s expected credit losses. Effective January 1, 2020, we adopted ASU 2016-13 under a modified retrospective approach for all financial assets measured at amortized cost. There was no adjustment recorded for the cumulative effect of adopting ASU 2016-13. The adoption expanded disclosures about our credit losses. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants and the SEC did not, and are not expected to, have a material effect on our results of operations or financial position. |
NOTE 3 _ SUMMARY OF SIGNIFICANT
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Trade Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are customer obligations due under normal trade terms. We review accounts receivable for uncollectible accounts and credit card chargebacks and provide an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information, reasonable supportable forecasts and existing economic conditions and we record an allowance that presents the net amount expected to be collected. We evaluate trade accounts receivable for delinquency. We write off delinquent receivables against our allowance for doubtful accounts based on individual credit evaluations, the results of collection efforts, and specific circumstances of customers. We record recoveries of accounts previously written off when received as an increase in the allowance for doubtful accounts. To the extent data we use to calculate these estimates does not accurately reflect bad debts, adjustments to these reserves may be required. Our exposure to credit losses may increase if our customers are adversely affected by changes in healthcare laws, coverage, and reimbursement, economic pressures or uncertainty associated with local or global economic recessions, disruption associated with the current COVID-19 pandemic, or other customer-specific factors. Although we have historically not experienced significant credit losses, it is possible that there could be a material adverse impact from potential adjustments of the carrying amount of trade receivables in the future. Fair Value of Financial Instruments Our financial instruments consist primarily of cash, accounts receivable, accounts payable, accrued expenses and long-term debt. The carrying amount of cash, accounts receivable, accounts payable and accrued expenses approximates their fair value because of the short-term maturity of such instruments, which are considered Level 1 assets under the fair value hierarchy. The carrying amount for long-term debt as of September 30, 2020 (as disclosed in Note 9) approximates fair value based on market activity for other debt instruments with similar characteristics and comparable risk (Level 2). We categorize our assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy as defined by ASC 820, Fair Value Measurements, or ASC 820. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). Assets and liabilities recorded in the consolidated balance sheet at fair value are categorized based on a hierarchy of inputs, as follows: Level 1 unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and Level 3 unobservable inputs for the assets or liabilities. At September 30, 2020 and 2019, we had no The fair value of indefinite-lived assets is measured on a non-recurring basis using significant unobservable inputs (Level 3) in connection with any required impairment test. During the nine months ended September 30, 2020 and 2019, we wrote off $ 584,509 78,864 Share-Based Compensation We measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include options, restricted stock, restricted stock units, performance-based awards, share appreciation rights, and employee share purchase plans. We amortize such compensation amounts, if any, over the respective service periods of the award. We use the Black-Scholes-Merton option pricing model, or the Black-Scholes Model, an acceptable model in accordance with ASC 718, Compensation-Stock Compensation, to value options. Option valuation models require the input of assumptions, including the expected life of the stock-based awards, the estimated stock price volatility, the risk-free interest rate, and the expected dividend yield. The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the term of the instrument. Estimated volatility is a measure of the amount by which our stock price is expected to fluctuate each year during the term of the award. On January 1, 2017, we began using our own stock price in our volatility calculation along with the other peer entities whose stock prices were publicly available that were similar to our company and in 2019 we started using only our own stock price in the volatility calculation. Our calculation of estimated volatility is based on historical stock prices over a period equal to the expected term of the awards. On January 1, 2020, we began calculating the expected term of our stock-based awards, which represents the period that the stock-based awards are expected to be outstanding. Prior to January 1, 2020, the average expected life of options was based on the contractual terms of the stock option using the simplified method. We utilize a dividend yield of zero based on the fact that we have never paid cash dividends and have no current intention to pay cash dividends. The assumptions used in calculating the fair value of stock-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, our share-based compensation expense could be materially different in the future. We recognize the compensation expense for share-based compensation granted based on the grant date fair value estimated in accordance with ASC 718. We generally recognize the compensation expense on a straight-line basis over the employee’s requisite service period. Effective January 1, 2017, we account for forfeitures when they occur. On January 1, 2019, we adopted ASU 2018-07 which simplified the accounting for share-based payments to non-employees by aligning it with the accounting for share-based payments to employees, with certain exceptions. The new guidance expanded the scope of ASC 718 to include share-based payments granted to non-employees in exchange for goods or services used or consumed in an entity’s own operations and superseded the guidance in ASC 505-50. Prior to January 1, 2019, equity instruments issued to non-employees were recorded on a fair value basis, as required by ASC 505, Equity - Based Payments to Non-Employees. We grant performance-based stock units and restricted stock units for shares of common stock, par value $ 0.001 Revenue Recognition In accordance with ASC 606, Revenue from Contracts with Customers Prescription Products As of September 30, 2020, our products consisted primarily of prescription vitamins and our FDA-approved products: IMVEXXY, which we began selling during the third quarter of 2018, BIJUVA, which we began selling in the second quarter of 2019, and ANNOVERA, which we began selling in the third quarter of 2019. As a result of the uncertainty surrounding the COVID-19 pandemic, we paused the commercial launch of ANNOVERA in the first quarter of 2020 and deferred sales and marketing initiatives into subsequent quarters. We resumed the launch of ANNOVERA on July 1, 2020. We sell our name brand and generic prescription products primarily through wholesale distributors and retail pharmacies. We have one performance obligation related to prescription products sold through wholesale distributors, which is to transfer promised goods to a customer, and two performance obligations related to products sold through retail pharmacies, which are to: (1) transfer promised goods and (2) provide customer service for an immaterial fee. We treat shipping as a fulfillment activity rather than as a separate obligation. We recognize prescription product revenue only when we satisfy performance obligations by transferring a promised good or service to a customer. A good or service is considered to be transferred when the customer receives the goods or service or obtains control. Control refers to the customer’s ability to direct the use of, and obtain substantially all of the remaining benefits from, an asset. Based on our contracts, we invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. We disclose receivables from contracts with customers separately in the statement of financial position. Payment for goods or services sold by us is typically due between 30 and 60 days after an invoice is sent to the customer. The transaction price of a contract is the amount of consideration which we expect to be entitled to in exchange for transferring promised goods or services to a customer. Prescription products are sold at fixed wholesale acquisition cost, or WAC, determined based on our list price. However, the total transaction price is variable as it is calculated net of estimated product returns, chargebacks, rebates, coupons, discounts and wholesaler fees. These estimates are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to the customer) or a current liability (if the amount is payable to a party other than a customer). In order to determine the transaction price, we estimate the amount of variable consideration at the outset of the contract either utilizing the expected value or most likely amount method, depending on the facts and circumstances relative to the contract or each variable consideration. The estimated amount of variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative product revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. In determining amounts of variable consideration to include in a contract’s transaction price, we rely on our historical experience and other evidence that supports our qualitative assessment of whether product revenue would be subject to a significant reversal. We consider all the facts and circumstances associated with both the risk of a product revenue reversal arising from an uncertain future event and the magnitude of the reversal if that uncertain event were to occur. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our original estimates, we will adjust these estimates, which would affect net product revenue and earnings in the period such changes in estimates become known. We accept returns of unsalable prescription products sold through wholesale distributors within a return period of six months 12 24 18 We offer various rebate and discount programs in an effort to maintain a competitive position in the marketplace and to promote sales and customer loyalty. We estimate the allowance for consumer rebates and coupons that we have offered based on our experience and industry averages, which is reviewed, and adjusted if necessary, on a quarterly basis. Estimates relating to these rebates and coupons are deducted from gross product revenues at the time the product revenues are recognized. We record distributor fees based on amounts stated in contracts. Rebate and coupon estimates and distributor fees are recorded in other current liabilities on the consolidated balance sheet. We estimate chargebacks based on number of units sold during the period taking into account prices stated in contracts and our historical experience. Estimates related to distributors fees, rebates, coupons and returns are disclosed in Note 8. We provide invoice discounts to our customers for prompt payment. Estimates relating to invoice discounts and chargebacks are deducted from gross product revenues at the time the product revenues are recognized. As part of commercial launches for our FDA-approved prescription products, we introduced a co-pay assistance program for eligible enrolled patients whose out of pocket costs are reduced to a more affordable price. This allows patients to access the product at a reasonable cost and is in line with our responsible pricing approach. We reimburse pharmacies for this discount through third-party vendors. The variable consideration is estimated based on contract prices, the estimated percentage of patients that will utilize the copay assistance, the average assistance paid, the estimated levels of inventory in the distribution channel and the current level of prescriptions covered by patients’ insurance. Payers may change coverage levels for our prescription products positively or negatively, at any time up to the time that we have formally contracted coverage with the payer. As such, the net transaction price of our prescription products is susceptible to such changes in coverage levels, which are outside the influence of the Company. As a result, we constrain variable consideration for our prescription products to an amount that will not result in a significant product revenue reversal in future periods. Our ability to estimate the net transaction price for our prescription products is constrained by our estimates of the amount to be paid for the co-pay assistance program which is directly related to the level of prescriptions paid for by insurance. As such, we record an accrual to reduce gross sales for the estimated co-pay and other patient assistance based on currently available third-party data and our internal analyses. We re-evaluate variable consideration each reporting period. License Revenue License arrangements may consist of non-refundable upfront license fees, exclusive licensed rights to patented or patent pending technology, and various performance or sales milestones and future product royalty payments. Some of these arrangements may include multiple performance obligations. Non-refundable up-front fees that are not contingent on any future performance by us, and do not require continuing involvement on our part, are recognized as revenue when the right to use functional IP is transferred to the customer. Disaggregation of revenue The following table provides information about disaggregated revenue by product mix Three Months Ended Nine Months Ended 2020 2019 2020 2019 Prescription vitamins $ 2,435,903 $ 2,550,330 $ 7,337,976 $ 7,309,174 IMVEXXY 6,841,592 4,772,354 18,319,382 9,904,744 BIJUVA 1,646,320 490,705 4,109,925 624,987 ANNOVERA 6,418,990 399,952 10,527,212 399,952 License revenue 2,000,000 15,506,400 2,000,000 15,506,400 Net revenue $ 19,342,805 $ 23,719,741 $ 42,294,495 $ 33,745,257 License Agreement with the Population Council On July 30, 2018, we entered into the Population Council License Agreement to commercialize ANNOVERA in the U.S. We began selling ANNOVERA in a “test and learn” market introduction in the third quarter of 2019. As a result of the uncertainty surrounding the COVID-19 pandemic, we paused the commercial launch of ANNOVERA in the first quarter of 2020 and deferred sales and marketing initiatives into subsequent quarters. We resumed the launch of ANNOVERA on July 1, 2020. Under the terms of the Population Council License Agreement, we paid the Population Council a milestone payment of $ 20,000,000 20,000,000 20,000,000 762,389 2,262,002 15,998 The Population Council is also eligible to receive milestone payments and royalties from commercial sales of ANNOVERA. We are responsible for marketing expenses related to the commercialization of ANNOVERA. In addition, we are required to pay the Population Council, on a quarterly basis, step-based royalty payments based on annual net sales of ANNOVERA in the U.S. by the Company and its affiliates and permitted licensees as follows: (i) if annual net sales are less than or equal to $ 50,000,000 5 50,000,000 150,000,000 10 150,000,000 15 50 20 40 million 200 400 1 20,000,000 License Agreement with Knight In July 2018, we entered into a license and supply agreement, or the Knight License Agreement, with Knight pursuant to which we granted Knight an exclusive license to commercialize IMVEXXY and BIJUVA in Canada and Israel. Pursuant to the terms of the Knight License Agreement, Knight paid us $ 2,000,000 Cost of Sales Cost of sales includes the cost of inventory, manufacturing, manufacturing overhead and supply chain costs, and product shipping and handling costs. The Population Council License Agreement requires payment of royalties based on the sale of future products. Such royalties are recorded as a component of cost of sales. Additionally, the amortization of license fees or milestone payments related to licensed products are classified as components of cost of sales to the extent such payments become due in the future. Inventory Obsolescence Reserve We evaluate inventory quarterly and record an allowance for obsolescence primarily associated with materials that are not currently or likely to be used in production in the near future. As of September 30, 2020 and December 31, 2019, we recorded an inventory obsolescence reserve of $ 5,744,464 0 Segment Reporting We are managed and operated as one business, which is focused on creating and commercializing products targeted exclusively for women. Our business operations are managed by a single executive leadership team that is chaired by the Chief Executive Officer of our Company, who oversees all operations. We do not operate separate lines of business with respect to any of our products and we do not prepare discrete financial information with respect to separate products. All product sales are derived from sales in the United States. Accordingly, we view our business as one reportable operating segment. Research and Development Expenses Research and development, or R&D, expenses include internal R&D activities, services of external contract research organizations, or CROs, costs of their clinical research sites, manufacturing, scale-up and validation costs, and other activities. Internal R&D activity expenses include laboratory supplies, salaries, benefits, and non-cash share-based compensation expenses. CRO activity expenses include preclinical laboratory experiments and clinical trial studies. Other activity expenses include regulatory consulting and other costs. The activities undertaken by our regulatory consultants that were classified as R&D expenses include assisting, consulting with, and advising our in-house staff with respect to various FDA submission processes, clinical trial processes, and scientific writing matters, including preparing protocols and FDA submissions. These consulting expenses were direct costs associated with preparing, reviewing, and undertaking work for our clinical trials and investigative drugs. We charge internal R&D activities and other activity expenses to operations as incurred. We make payments to CROs based on agreed-upon terms, which may include payments in advance of a study starting date. We expense nonrefundable advance payments for goods and services that will be used in future R&D activities when the activity has been performed or when the goods have been received rather than when the payment is made. We review and accrue CRO expenses and clinical trial study expenses based on services performed and rely on estimates of those costs applicable to the completion stage of a study as provided by CROs. Estimated accrued CRO costs are subject to revisions as such studies progress to completion. We charge revisions to expenses in the period in which the facts that give rise to the revision become known. |
NOTE 4 _ INVENTORY, NET
NOTE 4 – INVENTORY, NET | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
NOTE 4 – INVENTORY, NET | NOTE 4 – INVENTORY, NET Inventory, net consists of the following: September 30, December 31, Finished products $ 4,794,132 $ 4,976,910 Work in process 440,149 1,182,059 Raw materials 4,698,023 5,701,747 TOTAL INVENTORY, NET $ 9,932,304 $ 11,860,716 |
NOTE 5 _ OTHER CURRENT ASSETS
NOTE 5 – OTHER CURRENT ASSETS | 9 Months Ended |
Sep. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
NOTE 5 – OTHER CURRENT ASSETS | NOTE 5 – OTHER CURRENT ASSETS Other current assets consist of the following: September 30, December 31, Prepaid sales and marketing costs $ 686,346 $ 1,583,698 Debt financing fees on undrawn tranches (Note 9) — 550,757 Prepaid insurance 3,599,906 1,812,135 Prepaid manufacturing 543,050 2,595,721 Other prepaid costs 3,989,937 4,787,482 TOTAL OTHER CURRENT ASSETS $ 8,819,239 $ 11,329,793 |
NOTE 6 _ FIXED ASSETS, NET
NOTE 6 – FIXED ASSETS, NET | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
NOTE 6 – FIXED ASSETS, NET | NOTE 6 – FIXED ASSETS, NET Fixed assets, net consist of the following: September 30, December 31, Accounting system $ 301,096 $ 301,096 Equipment 1,658,258 1,619,646 Furniture and fixtures 1,406,858 1,406,858 Computer hardware 80,211 80,211 Leasehold improvements 68,788 68,788 TOTAL FIXED ASSETS 3,515,211 3,476,599 Accumulated depreciation (1,545,282 ) (968,824 ) TOTAL FIXED ASSETS, NET $ 1,969,929 $ 2,507,775 Depreciation expense for the three months ended September 30, 2020 and 2019 was $ 188,810 and $ 90,700 , respectively, and for the nine months ended September 30, 2020 and 2019 was $ 576,459 and $ 223,750 , respectively. |
NOTE 7 _ INTANGIBLE ASSETS, NET
NOTE 7 – INTANGIBLE ASSETS, NET | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
NOTE 7 – INTANGIBLE ASSETS, NET | NOTE 7 – INTANGIBLE ASSETS, NET The following table sets forth the gross carrying amount, accumulated amortization and net carrying amount of our intangible assets as of September 30, 2020 and December 31, 2019: September 30, 2020 Gross Carrying Amount Accumulated Amortization Net Weighted- Average Amortizable intangible assets: Approved hormone therapy drug candidate patents $ 4,108,745 $ (679,959 ) $ 3,428,786 12.25 Hormone therapy drug candidate patents (pending) 1,760,923 — 1,760,923 n/a Non-amortizable intangible assets: Multiple trademarks 348,176 — 348,176 indefinite TOTAL $ 6,217,844 $ (679,959 ) $ 5,537,885 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Weighted- Average Amortizable intangible assets: Approved hormone therapy drug candidate patents $ 3,463,082 $ (478,983 ) $ 2,984,099 13 Hormone therapy drug candidate patents (pending) 1,979,299 — 1,979,299 n/a Non-amortizable intangible assets: Multiple trademarks 294,813 — 294,813 indefinite TOTAL $ 5,737,194 $ (478,983 ) $ 5,258,211 We capitalize external costs, consisting primarily of legal costs, related to securing our patents and trademarks. Once a patent is granted, we amortize the approved hormone therapy drug candidate patents using the straight-line method over the estimated useful life of approximately 20 584,509 78,864 As of September 30, 2020, we had 35 35 • 14 seven three • Ten eight two 16 six ten • One • One eight • Three • Two four • One Amortization expense was $ 69,977 and $ 51,259 for the three months ended September 30, 2020 and 2019, respectively, and $ 200,879 and $ 140,206 for the nine months ended September 30, 2020 and 2019, respectively. Estimated amortization expense, based on current patent cost being amortized, for the next five years is as follows: Year Ending Estimated 2020 (3 months) $ 69,977 2021 $ 279,909 2022 $ 279,909 2023 $ 279,909 2024 $ 279,909 |
NOTE 8_ OTHER CURRENT LIABILITI
NOTE 8– OTHER CURRENT LIABILITIES | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
NOTE 8– OTHER CURRENT LIABILITIES | NOTE 8– OTHER CURRENT LIABILITIES Other current liabilities consist of the following: September 30, December 31, Accrued payroll, bonuses and commission costs $ 4,381,729 $ 8,040,278 Allowance for coupons and returns 8,353,403 10,316,298 Accrued sales and marketing costs 1,578,971 3,285,662 Accrued compensated absences 2,558,055 1,463,878 Allowance for wholesale distributor fees 2,130,230 2,347,122 Accrued legal and accounting expense 1,052,935 422,336 Accrued research and development 1,059,077 1,049,603 Operating lease liability 2,404,286 1,501,539 Accrued rebates 6,629,732 3,916,672 Other accrued expenses 1,072,066 1,480,225 TOTAL OTHER CURRENT LIABILITIES $ 31,220,484 $ 33,823,613 |
NOTE 9 _ DEBT
NOTE 9 – DEBT | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
NOTE 9 – DEBT | NOTE 9 – DEBT On April 24, 2019, we entered into a Financing Agreement, as amended, or the Financing Agreement, with TPG Specialty Lending, Inc., as administrative agent, or the Administrative Agent, various lenders from time to time party thereto, and certain of our subsidiaries party thereto from time to time as guarantors, which provides us with up to a $ 300,000,000 first lien secured term loan credit facility, or the Facility. The Facility provides for availability to us in three tranches: (i) $ 200,000,000 was drawn upon entering into the Financing Agreement; (ii) $ 50,000,000 was drawn on February 18, 2020 following our achievement of more than $ 11,000,000 in net revenues from IMVEXXY, BIJUVA and ANNOVERA for the fourth quarter of 2019 and (iii) $ 50,000,000 was previously available to us in the Administrative Agent’s sole and absolute discretion either contemporaneously with the delivery of our financial statements for the quarter ended June 30, 2020 or at such earlier date as the Administrative Agent may have consented to. Due to the pause in the successful full launch of ANNOVERA caused by the COVID-19 pandemic, the undrawn $ 50,000,000 3-month LIBOR plus 7.75 %, subject to a LIBOR floor of 2.70 % or (ii) the prime rate plus 6.75 %, subject to a prime rate floor of 5.2 % as selected by us. Interest on amounts borrowed under the Facility is payable quarterly. The outstanding principal amount of the Facility is payable in four equal quarterly installments beginning on June 30, 2023, with the Facility maturing on March 31, 2024. We have the right to prepay borrowings under the Facility in whole or in part at any time, subject to a prepayment fee on the principal amount being prepaid of (i) 30.0 % for the first two years following the initial funding date of the applicable borrowing, (ii) 5.0 % for the third year following the initial funding date of the applicable borrowing, (iii) 3.0 % for the fourth year following the initial funding date of the applicable borrowing and (iv) 1.0 % for the fifth year following the initial funding date of the applicable borrowing but prior to March 31, 2024. In connection with the initial borrowing under the Facility, we paid, for the benefit of the lenders, a facility fee equal to 2.5 % of the initial amount borrowed and will be required to pay such a facility fee in connection with any subsequent borrowings under the Facility. We are also required to pay the Administrative Agent and the lenders an annual administrative fee in addition to other fees and expenses. The Financing Agreement contains customary mandatory prepayments, restrictions and covenants applicable to us that are customary for financings of this type. Among other requirements, we are required to (i) maintain a minimum unrestricted cash balance of $ 60,000,000 , and (ii) achieve certain minimum consolidated net revenue amounts attributable to commercial sales of our IMVEXXY, BIJUVA and ANNOVERA products beginning with the fiscal quarter ending December 31, 2020. Pursuant to Amendment No. 6, the minimum required cash balance was lowered to $ 45 million On May 1, 2018, we entered into a Credit and Security Agreement, or the Credit Agreement, with MidCap Financial Trust, or MidCap, as agent, or Agent, and as lender, and the additional lenders party thereto from time to time (together with MidCap as a lender, the Lenders), as amended. The Credit Agreement provided a secured term loan facility in an aggregate principal amount of up to $ 200,000,000 three one-month LIBOR 1.50 7.75 On April 24, 2019, we terminated the Credit Agreement. A portion of the initial tranche of borrowing under the Financing Agreement in the amount of approximately $ 81,661,000 4 4 10,057,632 1,816,747 120,146 On August 5, 2020, we entered into Amendment No. 5 to the Financing Agreement, or Amendment No. 5. Amendment No. 5 adjusts the covenant in the Financing Agreement regarding our achievement of minimum consolidated net revenue attributable to commercial sales of our IMVEXXY, BIJUVA, and ANNOVERA products to reflect the impact of COVID-19 on our business. The covenant is effective beginning with the fiscal quarter ending December 31, 2020. In connection with Amendment No.5 and in lieu of a cash amendment fee, we issued to the Administrative Agent and the lenders under the Financing Agreement warrants to purchase an aggregate of 4,752,116 1.58 ten As of September 30, 2020, we had $ 250,000,000 7,902,270 7,626,891 7,428,179 50,000,000 275,379 During the three and nine months ended September 30, 2020, we amortized $ 677,676 1,370,118 as interest expense in the accompanying consolidated financial statements. 265,949 462,683 as interest 6,726,389 19,322,847 5,333,056 9,318,056 12.5 As of September 30, 2020 and December 31, 2019, the carrying value of our debt consisted of the following: September 30, December 31, Financing Agreement $ 250,000,000 $ 200,000,000 Debt discount and financing fees (12,948,798 ) (5,365,357 ) TOTAL LONG-TERM DEBT $ 237,051,202 $ 194,634,643 On April 27, 2020, we received a loan pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), as administered by the U.S. Small Business Administration. The loan in the principal amount of $ 6,477,094 |
NOTE 10 _ NET LOSS PER SHARE
NOTE 10 – NET LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2020 | |
Loss per share, basic and diluted: | |
NOTE 10 – NET LOSS PER SHARE | NOTE 10 – NET LOSS PER SHARE We calculate earnings per share, or EPS, in accordance with ASC 260, Earnings Per Share September 30, September 30, Stock options 23,893,180 24,849,984 Warrants 6,534,687 1,832,571 Performance stock units 2,422,885 — Restricted stock units 6,029,957 1,240,000 38,880,709 27,922,555 |
NOTE 11 _ STOCKHOLDERS_ EQUITY
NOTE 11 – STOCKHOLDERS’ EQUITY | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
NOTE 11 – STOCKHOLDERS’ EQUITY | NOTE 11 – STOCKHOLDERS’ EQUITY Preferred Stock At September 30, 2020, we had 10,000,000 0.001 no Common Stock At September 30, 2020, we had 600,000,000 272,812,271 Issuances During the Three and Nine Months ended September 30, 2020 During the three months ended September 30, 2020, stock options to purchase an aggregate of 517,891 105,494 1,182,195 271,678 in cash. Issuances During the Three and Nine Months ended September 30, 2019 During the three months ended September 30, 2019, certain individuals exercised stock options to purchase an aggregate of 55,236 8,549 331,619 108,656 12,097 11,834 Warrants to Purchase Common Stock As of September 30, 2020, we had warrants outstanding to purchase an aggregate of 6,534,687 7.5 0.24 8.20 1.83 The valuation methodology used to determine the fair value of our warrants is the Black-Scholes Model. The Black-Scholes Model requires the use of a number of assumptions, including volatility of the stock price, the risk-free interest rate, dividend yield and the term of the warrant. In connection with Amendment No. 5 and in lieu of a cash amendment fee, we issued to the Administrative Agent and the lenders under the Financing Agreement the Lender Warrants. The fair value for the Lender Warrants was determined by using the Black-Scholes Model on the date of the grant using a term of ten years, volatility of 68.8 0.34 0 1.56 We recorded share-based compensation expense related to warrants previously issued of $ 0 56,418 26,446 198,306 During the nine months ended September 30, 2019, we granted warrants to purchase an aggregate of 75,000 5.63 60.8 2.52 0 3.00 12 During the nine months ended September 30, 2020, no warrants were exercised. During the nine months ended September 30, 2019, warrants to purchase an aggregate of 1,250,000 471,184 Options to Purchase Common Stock In 2009, we adopted the 2009 Long Term Incentive Compensation Plan, or the 2009 Plan, to provide financial incentives to employees, directors, advisers, and consultants of our company who are able to contribute towards the creation of or who have created stockholder value by providing them stock options and other stock and cash incentives, or the Awards. As of September 30, 2020, there were non-qualified stock options to purchase an aggregate of 13,346,455 In 2012, we adopted the 2012 Stock Incentive Plan, or the 2012 Plan, a non-qualified plan that was amended in August 2013. The 2012 Plan was designed to serve as an incentive for retaining qualified and competent key employees, officers, directors, and certain consultants and advisors of our company. As of September 30, 2020, there were non-qualified stock options to purchase an aggregate of 6,305,974 890,000 On June 20, 2019, we adopted the 2019 Plan to serve as an incentive for retaining qualified and competent key employees, officers, directors, and certain consultants and advisors of our company. The Awards available under the 2019 Plan consist of stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock, performance units, and other stock or cash awards as described in the 2019 Plan. Generally, the options vest annually over four years or as determined by our board of directors, upon each option grant. Options may be exercised by paying the price for shares or on a cashless exercise basis after they have vested and prior to the specified expiration date provided and applicable exercise conditions are met, if any. The expiration date is generally ten years from the date the option is issued. As of September 30, 2020, there were 3,465,514 470,522 2,405,833 589,159 4,240,751 5,139,957 2,422,885 The valuation methodology used to determine the fair value of stock options is the Black-Scholes Model. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the risk-free interest rate, and the expected life of the stock options. The ranges of assumptions used in the Black-Scholes Model during the nine months ended September 30, 2020 and 2019 are set forth in the table below. September 30, September 30, Weighted average grant date fair value $ 0.95 $ 1.84 Risk-free interest rate 0.34 1.68 1.83 2.54 Volatility 63.53 67.92 61.25 64.49 Term (in years) 6 6.8 5.5 6.5 Dividend yield 0.00 0.00 A summary of option activity under the 2009, 2012 and 2019 Plans and related information during the nine months ended September 30, 2020 is as follows Number of Shares Under Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value Balance at December 31, 2019 25,030,234 $ 4.65 5.84 $ 3,668,171 Granted 736,500 $ 1.58 Exercised (1,182,195 ) $ 0.23 $ 1,738,740 Expired (361,109 ) $ 3.66 Cancelled/Forfeited (330,250 ) $ 3.69 Balance at September 30, 2020 23,893,180 $ 4.80 5.46 $ 379,535 Vested and Exercisable at September 30, 2020 19,827,306 $ 5.06 4.83 $ 218,370 Unvested at September 30, 2020 4,065,874 $ 3.55 8.53 $ 161,165 At September 30, 2020, our outstanding options had exercise prices ranging from $ 0.38 8.92 1,143,920 2,194,667 4,141,061 6,568,736 6,500,000 2.0 Restricted Stock Restricted stock units granted under our 2009, 2012 and 2019 Plans entitle the holder to receive, at the end of vesting period, a specified number of shares of our Common Stock. Share-based compensation expense is measured by the market value of our Common Stock on the day of the grant. The shares vest ratably over the period specified in the grant. There is no partial vesting and any unvested portion is forfeited. Performance stock units will vest if certain performance targets are achieved. If minimum performance thresholds are achieved, each award will convert into Common Stock at a defined ratio depending on the degree of achievement of the performance target designated by each individual award. If minimum performance thresholds are not achieved, then no shares will be issued. We recognize performance-based restricted stock as compensation expense based on the most likely probability of attaining the prescribed performance and over the requisite service period beginning at its grant date and through the date the restricted stock vests. The expected levels of achievement are reassessed over the requisite service periods and, to the extent that the expected levels of achievement change, stock-based compensation is adjusted and recorded on the consolidated statements of income and the remaining unrecognized stock-based compensation is recognized over the remaining requisite service period. During the three and nine months ended September 30, 2020 we recorded $ 1,988,844 4,334,537 84,061 1,080,738 11,000,000 This cost is expected to be recognized over a weighted-average period 1.6 Schedule of restricted stock units and performance stock units Restricted Stock Units Performance Stock Units Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Balance at December 31, 2019 1,240,000 $ 3.56 — $ — Granted 5,102,817 $ 1.40 2,585,745 $ 1.08 Vested/Released (301,500 ) $ 1.78 (151,500 ) $ 1.14 Forfeited (11,360 ) $ 1.07 (11,360 ) $ 1.07 Balance at September 30, 2020 6,029,957 $ 1.83 2,422,885 * $ 1.08 * The number of performance stock units (PSUs) represents the base number of PSUs that may vest. The actual number of PSUs that will vest will be between zero and two times the base number of PSUs depending on the Company's achievement of break-even quarterly EBITDA. Employee Stock Purchase Plan On June 18, 2020, our stockholders approved the TherapeuticsMD, Inc. 2020 Employee Stock Purchase Plan (the “ESPP”), which reserved 5,400,000 85 |
NOTE 12 _ INCOME TAXES
NOTE 12 – INCOME TAXES | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
NOTE 12 – INCOME TAXES | NOTE 12 – INCOME TAXES Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. We do not expect to pay any significant federal or state income tax for 2020 as a result of (i) the losses recorded during the nine months ended September 30, 2020, (ii) additional losses expected for the remainder of 2020, and/or (iii) net operating loss carry forwards from prior years. Accounting standards require the consideration of a valuation allowance for deferred tax assets if it is “more likely than not” that some component or all of the benefits of deferred tax assets will not be realized. As of September 30, 2020, we maintain a full valuation allowance for all deferred tax assets. Based on these requirements, no provision or benefit for income taxes has been recorded. There were no recorded unrecognized tax benefits at the end of the reporting period. |
NOTE 13 _ RELATED PARTIES
NOTE 13 – RELATED PARTIES | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
NOTE 13 – RELATED PARTIES | NOTE 13 – RELATED PARTIES In July 2015, J. Martin Carroll, a director of our company, was appointed to the board of directors of Catalent, Inc. From time to time, we have entered into agreements with Catalent, Inc. and its affiliates, or Catalent, in the normal course of business. Agreements with Catalent have been reviewed by independent directors of our Company, or a committee consisting of independent directors of our company, since July 2015. During the three months ended September 30, 2020 and 2019, we were billed by Catalent approximately $ 520,000 2,196,000 2,563,000 4,118,000 147,000 35,000 In April 2020, Karen L. Ling, Executive Vice President and Chief Human Resources Officer of American International Group, Inc., or AIG, was appointed to our board of directors. From time to time, we have entered into agreements with AIG in the normal course of business. Agreements with AIG have been reviewed by independent directors of our Company, or a committee consisting of independent directors of our Company, since April 2020. During the three and nine months ended September 30, 2020, we were billed by AIG approximately $ 52,000 195,000 |
NOTE 14 - BUSINESS CONCENTRATIO
NOTE 14 - BUSINESS CONCENTRATIONS | 9 Months Ended |
Sep. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
NOTE 14 - BUSINESS CONCENTRATIONS | NOTE 14 - BUSINESS CONCENTRATIONS We purchase our prescription products from several suppliers with approximately 42 25 24 36 28 26 We sell our prescription products to wholesale distributors, specialty pharmacies, specialty distributors, and chain drug stores that generally sell products to retail pharmacies, hospitals, and other institutional customers. During the nine months ended September 30, 2020, three 10 56 four 10 68 During the nine months ended September 30, 2020, Pillpack, Inc. accounted for approximately $ 9,319,000 7,415,000 6,009,000 6,397,000 2,226,000 1,935,000 1,863,000 |
NOTE 15 _ COMMITMENTS AND CONTI
NOTE 15 – COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
NOTE 15 – COMMITMENTS AND CONTINGENCIES | NOTE 15 – COMMITMENTS AND CONTINGENCIES Operating Leases We adopted ASC 842, Leases, effective January 1, 2019. Substantially all our operating lease right-of-use assets and operating lease liabilities represent leases for office space used to conduct our business. Upon adoption, we recognized a right-of-use asset and a lease liability for all leases that have commenced as of January 1, 2019. The right-of-use assets represent the right to use the leased asset for the lease term. The lease liabilities represent the present value of the lease payments under the lease. The right-of-use asset is initially measured at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, less any lease incentives received. All right-of-use assets are reviewed for impairment. The lease liability is initially measured at the present value of the lease payments, discounted using our secured incremental borrowing rate for the same term as the underlying lease because the rates are not implicit in the leases. Some of our leases contain variable lease payments, including payments based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement. Additional payments based on the change in an index or rate, or payments based on a change in our portion of the operating expenses are recorded as a period expense when incurred. Lease modifications result in remeasurement of the lease liability. Included in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability. We lease administrative office space in Boca Raton, Florida pursuant to a non-cancelable operating lease that commenced on July 1, 2013 and originally provided for a 63 In October 2018, we entered into a lease for new corporate offices in Boca Raton, Florida. The lease includes 56,212 7,561 48,651 11 years two five years agreement with the same lessors 6,536 pursuant to an addendum to such lease, which commenced in May 2020. Supplemental lease information: September 30, December 31, Right-of-use asset $ 9,975,725 $ 10,109,154 Short-term operating lease liability (included in Other current liabilities) $ 2,404,286 $ 1,501,539 Long-term operating lease liability $ 8,907,995 $ 9,145,049 Weighted average remaining term 8.8 9 Weighted average discount rate 8.3% 8.25% Supplemental cash flow information for the nine months ended September 30, September 30, Cash paid for amounts included in the measurement of lease liabilities for operating lease $ 1,006,970 $ 849,440 Right-of-use assets obtained in exchange for lease obligation $ 998,821 $ 11,171,471 The following table reconciles the undiscounted cash flows for all operating leases at September 30, 2020 to the operating lease liabilities recorded on the balance sheet: Years Ended December 31, 2020 (3 months) $ 610,675 2021 2,334,582 2022 1,413,289 2023 1,443,143 2024 1,476,534 Thereafter 8,947,869 Total undiscounted lease payments 16,226,092 Less: imputed interest (4,913,811 ) Present value of lease payments $ 11,312,281 During the three and nine months ended September 30, 2020, operating lease expense related to our real estate leases was approximately $ 590,000 and $ 1,749,000 , respectively, and variable lease expense was approximately $ 148,000 226,000 458,000 and $ 1,062,000 , respectively, and variable lease expense was insignificant for the same periods. Intellectual Property Licenses The Population Council License Agreement provides for future milestone payments to be paid by us for access to certain technologies. In addition, we pay royalties as a percent of product revenue as described in Note 7, Intangible Assets, to these consolidated financial statements. Purchase Commitments We have manufacturing and supply agreements whereby we are required to purchase from Catalent a minimum number of softgels during the first contract year and a higher number of softgels after the first contract year. If the minimum order quantities of specific products are not met, we are required to pay Catalent 50 3,719,000 2,150,000 2,991,000 3,347,000 3,786,000 Legal Proceedings From time to time, we are involved in litigation and proceedings in the ordinary course of business. We are not currently involved in any legal proceeding that we believe would have a material effect on our consolidated financial condition, results of operations, or cash flows. Off-Balance Sheet Arrangements As of September 30, 2020 and 2019, we had no off-balance sheet arrangements that have had or are reasonably likely to have current or future effects on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. Employment Agreements We have entered into employment agreements with certain of our executives that provide for compensation and certain other benefits. Under certain circumstances, including a change in control, some of these agreements provide for severance or other payments, if those circumstances occur during the term of the employment agreement. |
NOTE 16 _ SUBSEQUENT EVENTS
NOTE 16 – SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
NOTE 16 – SUBSEQUENT EVENTS | NOTE 16 – SUBSEQUENT EVENTS On November 8, 2020, we entered into Amendment No. 6 which temporarily lowered the minimum required cash balance under the Financing Agreement from $ 60 million 45 million 60 million |
NOTE 3 _ SUMMARY OF SIGNIFICA_2
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Trade Accounts Receivable and Allowance for Doubtful Accounts | Trade Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are customer obligations due under normal trade terms. We review accounts receivable for uncollectible accounts and credit card chargebacks and provide an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information, reasonable supportable forecasts and existing economic conditions and we record an allowance that presents the net amount expected to be collected. We evaluate trade accounts receivable for delinquency. We write off delinquent receivables against our allowance for doubtful accounts based on individual credit evaluations, the results of collection efforts, and specific circumstances of customers. We record recoveries of accounts previously written off when received as an increase in the allowance for doubtful accounts. To the extent data we use to calculate these estimates does not accurately reflect bad debts, adjustments to these reserves may be required. Our exposure to credit losses may increase if our customers are adversely affected by changes in healthcare laws, coverage, and reimbursement, economic pressures or uncertainty associated with local or global economic recessions, disruption associated with the current COVID-19 pandemic, or other customer-specific factors. Although we have historically not experienced significant credit losses, it is possible that there could be a material adverse impact from potential adjustments of the carrying amount of trade receivables in the future. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Our financial instruments consist primarily of cash, accounts receivable, accounts payable, accrued expenses and long-term debt. The carrying amount of cash, accounts receivable, accounts payable and accrued expenses approximates their fair value because of the short-term maturity of such instruments, which are considered Level 1 assets under the fair value hierarchy. The carrying amount for long-term debt as of September 30, 2020 (as disclosed in Note 9) approximates fair value based on market activity for other debt instruments with similar characteristics and comparable risk (Level 2). We categorize our assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy as defined by ASC 820, Fair Value Measurements, or ASC 820. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). Assets and liabilities recorded in the consolidated balance sheet at fair value are categorized based on a hierarchy of inputs, as follows: Level 1 unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and Level 3 unobservable inputs for the assets or liabilities. At September 30, 2020 and 2019, we had no The fair value of indefinite-lived assets is measured on a non-recurring basis using significant unobservable inputs (Level 3) in connection with any required impairment test. During the nine months ended September 30, 2020 and 2019, we wrote off $ 584,509 78,864 |
Share-Based Compensation | Share-Based Compensation We measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include options, restricted stock, restricted stock units, performance-based awards, share appreciation rights, and employee share purchase plans. We amortize such compensation amounts, if any, over the respective service periods of the award. We use the Black-Scholes-Merton option pricing model, or the Black-Scholes Model, an acceptable model in accordance with ASC 718, Compensation-Stock Compensation, to value options. Option valuation models require the input of assumptions, including the expected life of the stock-based awards, the estimated stock price volatility, the risk-free interest rate, and the expected dividend yield. The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the term of the instrument. Estimated volatility is a measure of the amount by which our stock price is expected to fluctuate each year during the term of the award. On January 1, 2017, we began using our own stock price in our volatility calculation along with the other peer entities whose stock prices were publicly available that were similar to our company and in 2019 we started using only our own stock price in the volatility calculation. Our calculation of estimated volatility is based on historical stock prices over a period equal to the expected term of the awards. On January 1, 2020, we began calculating the expected term of our stock-based awards, which represents the period that the stock-based awards are expected to be outstanding. Prior to January 1, 2020, the average expected life of options was based on the contractual terms of the stock option using the simplified method. We utilize a dividend yield of zero based on the fact that we have never paid cash dividends and have no current intention to pay cash dividends. The assumptions used in calculating the fair value of stock-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, our share-based compensation expense could be materially different in the future. We recognize the compensation expense for share-based compensation granted based on the grant date fair value estimated in accordance with ASC 718. We generally recognize the compensation expense on a straight-line basis over the employee’s requisite service period. Effective January 1, 2017, we account for forfeitures when they occur. On January 1, 2019, we adopted ASU 2018-07 which simplified the accounting for share-based payments to non-employees by aligning it with the accounting for share-based payments to employees, with certain exceptions. The new guidance expanded the scope of ASC 718 to include share-based payments granted to non-employees in exchange for goods or services used or consumed in an entity’s own operations and superseded the guidance in ASC 505-50. Prior to January 1, 2019, equity instruments issued to non-employees were recorded on a fair value basis, as required by ASC 505, Equity - Based Payments to Non-Employees. We grant performance-based stock units and restricted stock units for shares of common stock, par value $ 0.001 |
Revenue Recognition | Revenue Recognition In accordance with ASC 606, Revenue from Contracts with Customers Prescription Products As of September 30, 2020, our products consisted primarily of prescription vitamins and our FDA-approved products: IMVEXXY, which we began selling during the third quarter of 2018, BIJUVA, which we began selling in the second quarter of 2019, and ANNOVERA, which we began selling in the third quarter of 2019. As a result of the uncertainty surrounding the COVID-19 pandemic, we paused the commercial launch of ANNOVERA in the first quarter of 2020 and deferred sales and marketing initiatives into subsequent quarters. We resumed the launch of ANNOVERA on July 1, 2020. We sell our name brand and generic prescription products primarily through wholesale distributors and retail pharmacies. We have one performance obligation related to prescription products sold through wholesale distributors, which is to transfer promised goods to a customer, and two performance obligations related to products sold through retail pharmacies, which are to: (1) transfer promised goods and (2) provide customer service for an immaterial fee. We treat shipping as a fulfillment activity rather than as a separate obligation. We recognize prescription product revenue only when we satisfy performance obligations by transferring a promised good or service to a customer. A good or service is considered to be transferred when the customer receives the goods or service or obtains control. Control refers to the customer’s ability to direct the use of, and obtain substantially all of the remaining benefits from, an asset. Based on our contracts, we invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. We disclose receivables from contracts with customers separately in the statement of financial position. Payment for goods or services sold by us is typically due between 30 and 60 days after an invoice is sent to the customer. The transaction price of a contract is the amount of consideration which we expect to be entitled to in exchange for transferring promised goods or services to a customer. Prescription products are sold at fixed wholesale acquisition cost, or WAC, determined based on our list price. However, the total transaction price is variable as it is calculated net of estimated product returns, chargebacks, rebates, coupons, discounts and wholesaler fees. These estimates are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to the customer) or a current liability (if the amount is payable to a party other than a customer). In order to determine the transaction price, we estimate the amount of variable consideration at the outset of the contract either utilizing the expected value or most likely amount method, depending on the facts and circumstances relative to the contract or each variable consideration. The estimated amount of variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative product revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. In determining amounts of variable consideration to include in a contract’s transaction price, we rely on our historical experience and other evidence that supports our qualitative assessment of whether product revenue would be subject to a significant reversal. We consider all the facts and circumstances associated with both the risk of a product revenue reversal arising from an uncertain future event and the magnitude of the reversal if that uncertain event were to occur. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our original estimates, we will adjust these estimates, which would affect net product revenue and earnings in the period such changes in estimates become known. We accept returns of unsalable prescription products sold through wholesale distributors within a return period of six months 12 24 18 We offer various rebate and discount programs in an effort to maintain a competitive position in the marketplace and to promote sales and customer loyalty. We estimate the allowance for consumer rebates and coupons that we have offered based on our experience and industry averages, which is reviewed, and adjusted if necessary, on a quarterly basis. Estimates relating to these rebates and coupons are deducted from gross product revenues at the time the product revenues are recognized. We record distributor fees based on amounts stated in contracts. Rebate and coupon estimates and distributor fees are recorded in other current liabilities on the consolidated balance sheet. We estimate chargebacks based on number of units sold during the period taking into account prices stated in contracts and our historical experience. Estimates related to distributors fees, rebates, coupons and returns are disclosed in Note 8. We provide invoice discounts to our customers for prompt payment. Estimates relating to invoice discounts and chargebacks are deducted from gross product revenues at the time the product revenues are recognized. As part of commercial launches for our FDA-approved prescription products, we introduced a co-pay assistance program for eligible enrolled patients whose out of pocket costs are reduced to a more affordable price. This allows patients to access the product at a reasonable cost and is in line with our responsible pricing approach. We reimburse pharmacies for this discount through third-party vendors. The variable consideration is estimated based on contract prices, the estimated percentage of patients that will utilize the copay assistance, the average assistance paid, the estimated levels of inventory in the distribution channel and the current level of prescriptions covered by patients’ insurance. Payers may change coverage levels for our prescription products positively or negatively, at any time up to the time that we have formally contracted coverage with the payer. As such, the net transaction price of our prescription products is susceptible to such changes in coverage levels, which are outside the influence of the Company. As a result, we constrain variable consideration for our prescription products to an amount that will not result in a significant product revenue reversal in future periods. Our ability to estimate the net transaction price for our prescription products is constrained by our estimates of the amount to be paid for the co-pay assistance program which is directly related to the level of prescriptions paid for by insurance. As such, we record an accrual to reduce gross sales for the estimated co-pay and other patient assistance based on currently available third-party data and our internal analyses. We re-evaluate variable consideration each reporting period. License Revenue License arrangements may consist of non-refundable upfront license fees, exclusive licensed rights to patented or patent pending technology, and various performance or sales milestones and future product royalty payments. Some of these arrangements may include multiple performance obligations. Non-refundable up-front fees that are not contingent on any future performance by us, and do not require continuing involvement on our part, are recognized as revenue when the right to use functional IP is transferred to the customer. Disaggregation of revenue The following table provides information about disaggregated revenue by product mix Three Months Ended Nine Months Ended 2020 2019 2020 2019 Prescription vitamins $ 2,435,903 $ 2,550,330 $ 7,337,976 $ 7,309,174 IMVEXXY 6,841,592 4,772,354 18,319,382 9,904,744 BIJUVA 1,646,320 490,705 4,109,925 624,987 ANNOVERA 6,418,990 399,952 10,527,212 399,952 License revenue 2,000,000 15,506,400 2,000,000 15,506,400 Net revenue $ 19,342,805 $ 23,719,741 $ 42,294,495 $ 33,745,257 |
License Agreement with the Population Council | License Agreement with the Population Council On July 30, 2018, we entered into the Population Council License Agreement to commercialize ANNOVERA in the U.S. We began selling ANNOVERA in a “test and learn” market introduction in the third quarter of 2019. As a result of the uncertainty surrounding the COVID-19 pandemic, we paused the commercial launch of ANNOVERA in the first quarter of 2020 and deferred sales and marketing initiatives into subsequent quarters. We resumed the launch of ANNOVERA on July 1, 2020. Under the terms of the Population Council License Agreement, we paid the Population Council a milestone payment of $ 20,000,000 20,000,000 20,000,000 762,389 2,262,002 15,998 The Population Council is also eligible to receive milestone payments and royalties from commercial sales of ANNOVERA. We are responsible for marketing expenses related to the commercialization of ANNOVERA. In addition, we are required to pay the Population Council, on a quarterly basis, step-based royalty payments based on annual net sales of ANNOVERA in the U.S. by the Company and its affiliates and permitted licensees as follows: (i) if annual net sales are less than or equal to $ 50,000,000 5 50,000,000 150,000,000 10 150,000,000 15 50 20 40 million 200 400 1 20,000,000 |
License Agreement with Knight | License Agreement with Knight In July 2018, we entered into a license and supply agreement, or the Knight License Agreement, with Knight pursuant to which we granted Knight an exclusive license to commercialize IMVEXXY and BIJUVA in Canada and Israel. Pursuant to the terms of the Knight License Agreement, Knight paid us $ 2,000,000 |
Cost of Sales | Cost of Sales Cost of sales includes the cost of inventory, manufacturing, manufacturing overhead and supply chain costs, and product shipping and handling costs. The Population Council License Agreement requires payment of royalties based on the sale of future products. Such royalties are recorded as a component of cost of sales. Additionally, the amortization of license fees or milestone payments related to licensed products are classified as components of cost of sales to the extent such payments become due in the future. |
Inventory Obsolescence Reserve | Inventory Obsolescence Reserve We evaluate inventory quarterly and record an allowance for obsolescence primarily associated with materials that are not currently or likely to be used in production in the near future. As of September 30, 2020 and December 31, 2019, we recorded an inventory obsolescence reserve of $ 5,744,464 0 |
Segment Reporting | Segment Reporting We are managed and operated as one business, which is focused on creating and commercializing products targeted exclusively for women. Our business operations are managed by a single executive leadership team that is chaired by the Chief Executive Officer of our Company, who oversees all operations. We do not operate separate lines of business with respect to any of our products and we do not prepare discrete financial information with respect to separate products. All product sales are derived from sales in the United States. Accordingly, we view our business as one reportable operating segment. |
Research and Development Expenses | Research and Development Expenses Research and development, or R&D, expenses include internal R&D activities, services of external contract research organizations, or CROs, costs of their clinical research sites, manufacturing, scale-up and validation costs, and other activities. Internal R&D activity expenses include laboratory supplies, salaries, benefits, and non-cash share-based compensation expenses. CRO activity expenses include preclinical laboratory experiments and clinical trial studies. Other activity expenses include regulatory consulting and other costs. The activities undertaken by our regulatory consultants that were classified as R&D expenses include assisting, consulting with, and advising our in-house staff with respect to various FDA submission processes, clinical trial processes, and scientific writing matters, including preparing protocols and FDA submissions. These consulting expenses were direct costs associated with preparing, reviewing, and undertaking work for our clinical trials and investigative drugs. We charge internal R&D activities and other activity expenses to operations as incurred. We make payments to CROs based on agreed-upon terms, which may include payments in advance of a study starting date. We expense nonrefundable advance payments for goods and services that will be used in future R&D activities when the activity has been performed or when the goods have been received rather than when the payment is made. We review and accrue CRO expenses and clinical trial study expenses based on services performed and rely on estimates of those costs applicable to the completion stage of a study as provided by CROs. Estimated accrued CRO costs are subject to revisions as such studies progress to completion. We charge revisions to expenses in the period in which the facts that give rise to the revision become known. |
NOTE 3 _ SUMMARY OF SIGNIFICA_3
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
The following table provides information about disaggregated revenue by product mix | The following table provides information about disaggregated revenue by product mix Three Months Ended Nine Months Ended 2020 2019 2020 2019 Prescription vitamins $ 2,435,903 $ 2,550,330 $ 7,337,976 $ 7,309,174 IMVEXXY 6,841,592 4,772,354 18,319,382 9,904,744 BIJUVA 1,646,320 490,705 4,109,925 624,987 ANNOVERA 6,418,990 399,952 10,527,212 399,952 License revenue 2,000,000 15,506,400 2,000,000 15,506,400 Net revenue $ 19,342,805 $ 23,719,741 $ 42,294,495 $ 33,745,257 |
NOTE 4 _ INVENTORY, NET (Tables
NOTE 4 – INVENTORY, NET (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory, net consists of the following: | Inventory, net consists of the following: September 30, December 31, Finished products $ 4,794,132 $ 4,976,910 Work in process 440,149 1,182,059 Raw materials 4,698,023 5,701,747 TOTAL INVENTORY, NET $ 9,932,304 $ 11,860,716 |
NOTE 5 _ OTHER CURRENT ASSETS (
NOTE 5 – OTHER CURRENT ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other current assets consist of the following: | Other current assets consist of the following: September 30, December 31, Prepaid sales and marketing costs $ 686,346 $ 1,583,698 Debt financing fees on undrawn tranches (Note 9) — 550,757 Prepaid insurance 3,599,906 1,812,135 Prepaid manufacturing 543,050 2,595,721 Other prepaid costs 3,989,937 4,787,482 TOTAL OTHER CURRENT ASSETS $ 8,819,239 $ 11,329,793 |
NOTE 6 _ FIXED ASSETS, NET (Tab
NOTE 6 – FIXED ASSETS, NET (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Fixed assets, net consist of the following: | Fixed assets, net consist of the following: September 30, December 31, Accounting system $ 301,096 $ 301,096 Equipment 1,658,258 1,619,646 Furniture and fixtures 1,406,858 1,406,858 Computer hardware 80,211 80,211 Leasehold improvements 68,788 68,788 TOTAL FIXED ASSETS 3,515,211 3,476,599 Accumulated depreciation (1,545,282 ) (968,824 ) TOTAL FIXED ASSETS, NET $ 1,969,929 $ 2,507,775 |
NOTE 7 _ INTANGIBLE ASSETS, N_2
NOTE 7 – INTANGIBLE ASSETS, NET (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
The following table sets forth the gross carrying amount, accumulated amortization and net carrying amount of our intangible assets as of September 30, 2020 and December 31, 2019: | The following table sets forth the gross carrying amount, accumulated amortization and net carrying amount of our intangible assets as of September 30, 2020 and December 31, 2019: September 30, 2020 Gross Carrying Amount Accumulated Amortization Net Weighted- Average Amortizable intangible assets: Approved hormone therapy drug candidate patents $ 4,108,745 $ (679,959 ) $ 3,428,786 12.25 Hormone therapy drug candidate patents (pending) 1,760,923 — 1,760,923 n/a Non-amortizable intangible assets: Multiple trademarks 348,176 — 348,176 indefinite TOTAL $ 6,217,844 $ (679,959 ) $ 5,537,885 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Weighted- Average Amortizable intangible assets: Approved hormone therapy drug candidate patents $ 3,463,082 $ (478,983 ) $ 2,984,099 13 Hormone therapy drug candidate patents (pending) 1,979,299 — 1,979,299 n/a Non-amortizable intangible assets: Multiple trademarks 294,813 — 294,813 indefinite TOTAL $ 5,737,194 $ (478,983 ) $ 5,258,211 |
Estimated amortization expense, based on current patent cost being amortized, for the next five years is as follows: | Amortization expense was $ 69,977 and $ 51,259 for the three months ended September 30, 2020 and 2019, respectively, and $ 200,879 and $ 140,206 for the nine months ended September 30, 2020 and 2019, respectively. Estimated amortization expense, based on current patent cost being amortized, for the next five years is as follows: Year Ending Estimated 2020 (3 months) $ 69,977 2021 $ 279,909 2022 $ 279,909 2023 $ 279,909 2024 $ 279,909 |
NOTE 8_ OTHER CURRENT LIABILI_2
NOTE 8– OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Other current liabilities consist of the following: | Other current liabilities consist of the following: September 30, December 31, Accrued payroll, bonuses and commission costs $ 4,381,729 $ 8,040,278 Allowance for coupons and returns 8,353,403 10,316,298 Accrued sales and marketing costs 1,578,971 3,285,662 Accrued compensated absences 2,558,055 1,463,878 Allowance for wholesale distributor fees 2,130,230 2,347,122 Accrued legal and accounting expense 1,052,935 422,336 Accrued research and development 1,059,077 1,049,603 Operating lease liability 2,404,286 1,501,539 Accrued rebates 6,629,732 3,916,672 Other accrued expenses 1,072,066 1,480,225 TOTAL OTHER CURRENT LIABILITIES $ 31,220,484 $ 33,823,613 |
NOTE 9 _ DEBT (Tables)
NOTE 9 – DEBT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
As of September 30, 2020 and December 31, 2019, the carrying value of our debt consisted of the following: | As of September 30, 2020 and December 31, 2019, the carrying value of our debt consisted of the following: September 30, December 31, Financing Agreement $ 250,000,000 $ 200,000,000 Debt discount and financing fees (12,948,798 ) (5,365,357 ) TOTAL LONG-TERM DEBT $ 237,051,202 $ 194,634,643 |
NOTE 10 _ NET LOSS PER SHARE (T
NOTE 10 – NET LOSS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Loss per share, basic and diluted: | |
Schedule of calculation of diluted net loss per share allocable to common stockholders | September 30, September 30, Stock options 23,893,180 24,849,984 Warrants 6,534,687 1,832,571 Performance stock units 2,422,885 — Restricted stock units 6,029,957 1,240,000 38,880,709 27,922,555 |
NOTE 11 _ STOCKHOLDERS_ EQUITY
NOTE 11 – STOCKHOLDERS’ EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
The ranges of assumptions used in the Black-Scholes Model during the nine months ended September 30, 2020 and 2019 are set forth in the table below. | The valuation methodology used to determine the fair value of stock options is the Black-Scholes Model. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the risk-free interest rate, and the expected life of the stock options. The ranges of assumptions used in the Black-Scholes Model during the nine months ended September 30, 2020 and 2019 are set forth in the table below. September 30, September 30, Weighted average grant date fair value $ 0.95 $ 1.84 Risk-free interest rate 0.34 1.68 1.83 2.54 Volatility 63.53 67.92 61.25 64.49 Term (in years) 6 6.8 5.5 6.5 Dividend yield 0.00 0.00 |
A summary of option activity under the 2009, 2012 and 2019 Plans and related information during the nine months ended September 30, 2020 is as follows | A summary of option activity under the 2009, 2012 and 2019 Plans and related information during the nine months ended September 30, 2020 is as follows Number of Shares Under Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value Balance at December 31, 2019 25,030,234 $ 4.65 5.84 $ 3,668,171 Granted 736,500 $ 1.58 Exercised (1,182,195 ) $ 0.23 $ 1,738,740 Expired (361,109 ) $ 3.66 Cancelled/Forfeited (330,250 ) $ 3.69 Balance at September 30, 2020 23,893,180 $ 4.80 5.46 $ 379,535 Vested and Exercisable at September 30, 2020 19,827,306 $ 5.06 4.83 $ 218,370 Unvested at September 30, 2020 4,065,874 $ 3.55 8.53 $ 161,165 |
Schedule of restricted stock units and performance stock units | Schedule of restricted stock units and performance stock units Restricted Stock Units Performance Stock Units Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Balance at December 31, 2019 1,240,000 $ 3.56 — $ — Granted 5,102,817 $ 1.40 2,585,745 $ 1.08 Vested/Released (301,500 ) $ 1.78 (151,500 ) $ 1.14 Forfeited (11,360 ) $ 1.07 (11,360 ) $ 1.07 Balance at September 30, 2020 6,029,957 $ 1.83 2,422,885 * $ 1.08 * The number of performance stock units (PSUs) represents the base number of PSUs that may vest. The actual number of PSUs that will vest will be between zero and two times the base number of PSUs depending on the Company's achievement of break-even quarterly EBITDA. |
NOTE 15 _ COMMITMENTS AND CON_2
NOTE 15 – COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Supplemental lease information | Supplemental lease information: September 30, December 31, Right-of-use asset $ 9,975,725 $ 10,109,154 Short-term operating lease liability (included in Other current liabilities) $ 2,404,286 $ 1,501,539 Long-term operating lease liability $ 8,907,995 $ 9,145,049 Weighted average remaining term 8.8 9 Weighted average discount rate 8.3% 8.25% Supplemental cash flow information for the nine months ended September 30, September 30, Cash paid for amounts included in the measurement of lease liabilities for operating lease $ 1,006,970 $ 849,440 Right-of-use assets obtained in exchange for lease obligation $ 998,821 $ 11,171,471 |
The following table reconciles the undiscounted cash flows for all operating leases at September 30, 2020 to the operating lease liabilities recorded on the balance sheet: | The following table reconciles the undiscounted cash flows for all operating leases at September 30, 2020 to the operating lease liabilities recorded on the balance sheet: Years Ended December 31, 2020 (3 months) $ 610,675 2021 2,334,582 2022 1,413,289 2023 1,443,143 2024 1,476,534 Thereafter 8,947,869 Total undiscounted lease payments 16,226,092 Less: imputed interest (4,913,811 ) Present value of lease payments $ 11,312,281 |
NOTE 1 _ THE COMPANY (Details N
NOTE 1 – THE COMPANY (Details Narrative) | Sep. 30, 2020Number |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of subsidiaries | 3 |
NOTE 2 _ BASIS OF PRESENTATIO_2
NOTE 2 – BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Details Narrative) - Subsequent Event [Member] - USD ($) | Nov. 09, 2020 | Nov. 08, 2020 |
Financing Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Minimum cash balance required under credit agreement | $ 60,000,000 | |
Financing Agreement Amendment No. 6 [Member] | ||
Debt Instrument [Line Items] | ||
Minimum cash balance requirement under credit agreement before adjustment | $ 60,000,000 | |
Financing Agreement Amendment No. 6 - Through December 31, 2020 [Member] | ||
Debt Instrument [Line Items] | ||
Minimum cash balance required under credit agreement | 45,000,000 | |
Financing Agreement Amendment No. 6 - After December 31, 2020 [Member] | ||
Debt Instrument [Line Items] | ||
Minimum cash balance required under credit agreement | $ 60,000,000 |
The following table provides in
The following table provides information about disaggregated revenue by product mix (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Product Information [Line Items] | ||||
Net revenue | $ 19,342,805 | $ 23,719,741 | $ 42,294,495 | $ 33,745,257 |
Prescription Vitamins [Member] | ||||
Product Information [Line Items] | ||||
Net revenue | 2,435,903 | 2,550,330 | 7,337,976 | 7,309,174 |
Imvexxy [Member] | ||||
Product Information [Line Items] | ||||
Net revenue | 6,841,592 | 4,772,354 | 18,319,382 | 9,904,744 |
BIJUVA [Member] | ||||
Product Information [Line Items] | ||||
Net revenue | 1,646,320 | 490,705 | 4,109,925 | 624,987 |
ANNOVERA [Member] | ||||
Product Information [Line Items] | ||||
Net revenue | 6,418,990 | 399,952 | 10,527,212 | 399,952 |
License [Member] | ||||
Product Information [Line Items] | ||||
Net revenue | $ 2,000,000 | $ 15,506,400 | $ 2,000,000 | $ 15,506,400 |
NOTE 3 _ SUMMARY OF SIGNIFICA_4
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||||
Impairment of intangible assets | $ 584,509 | $ 78,864 | |||
Amortization of intellectual property license fee | $ 762,389 | $ 15,998 | 2,262,002 | 15,998 | |
Inventory valuation reserves | 5,744,464 | $ 5,744,464 | $ 0 | ||
Council License Agreement [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Annual royalty rate reduction of initial rate during the six-month period from commercial sale of a generic equivalent | 50.00% | ||||
Annual royalty rate reduction of initial rate after six-month period from commercial sale of a generic equivalent | 20.00% | ||||
Maximum costs and expenses for post approval | $ 20,000,000 | ||||
Council License Agreement Step 1 | |||||
Property, Plant and Equipment [Line Items] | |||||
Royalty (percent) | 5.00% | ||||
Council License Agreement Step 2 | |||||
Property, Plant and Equipment [Line Items] | |||||
Royalty (percent) | 10.00% | ||||
Council License Agreement Step 3 | |||||
Property, Plant and Equipment [Line Items] | |||||
Royalty (percent) | 15.00% | ||||
Vitamins and IMVEXXY [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Shelf life of prescription products following product expiration | 24 months | ||||
BIJUVA and ANNOVERA [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Shelf life of prescription products following product expiration | 18 months | ||||
BIJUVA and ANNOVERA [Member] | Knight License Agreement [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Milestone payment received upon regulatory approval | $ 2,000,000 | ||||
ANNOVERA [Member] | Council License Agreement [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Milestone payment upon FDA Approval | $ 20,000,000 | ||||
Milestone payments (payment after release of first commercial batch) | 20,000,000 | ||||
License rights acquired | 20,000,000 | ||||
Milestone payments upon specified levels of cumulative net sales | 40,000,000 | ||||
Specified level one of cumulative net sales for milestone payments | 200,000,000 | ||||
Specified level two of cumulative net sales for milestone payments | 400,000,000 | ||||
Specified level three of cumulative net sales for milestone payments | $ 1,000,000,000 | ||||
Minimum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Return period of unsalable prescription products | 6 months | ||||
Minimum [Member] | Council License Agreement Step 2 | |||||
Property, Plant and Equipment [Line Items] | |||||
Net sales amount per step-based royalty | $ 50,000,000 | ||||
Minimum [Member] | Council License Agreement Step 3 | |||||
Property, Plant and Equipment [Line Items] | |||||
Net sales amount per step-based royalty | $ 150,000,000 | ||||
Maximum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Return period of unsalable prescription products | 12 months | ||||
Maximum [Member] | Council License Agreement Step 1 | |||||
Property, Plant and Equipment [Line Items] | |||||
Net sales amount per step-based royalty | $ 50,000,000 | ||||
Maximum [Member] | Council License Agreement Step 2 | |||||
Property, Plant and Equipment [Line Items] | |||||
Net sales amount per step-based royalty | $ 150,000,000 | ||||
Performance Shares [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Common stock, shares, issued (in dollars per share) | $ 0.001 | $ 0.001 | |||
Restricted Stock [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Common stock, shares, issued (in dollars per share) | $ 0.001 | $ 0.001 | |||
Trademarks and Trade Names [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Impairment of intangible assets | $ 584,509 | 78,864 | |||
Fair Value, Recurring [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Assets or liabilities valued at fair value | $ 0 | $ 0 | $ 0 | $ 0 |
Inventory, net consists of the
Inventory, net consists of the following: (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished products | $ 4,794,132 | $ 4,976,910 |
Work in process | 440,149 | 1,182,059 |
Raw materials | 4,698,023 | 5,701,747 |
TOTAL INVENTORY, NET | $ 9,932,304 | $ 11,860,716 |
Other current assets consist of
Other current assets consist of the following: (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid sales and marketing costs | $ 686,346 | $ 1,583,698 |
Debt financing fees on undrawn tranches (Note 9) | 550,757 | |
Prepaid insurance | 3,599,906 | 1,812,135 |
Prepaid manufacturing | 543,050 | 2,595,721 |
Other prepaid costs | 3,989,937 | 4,787,482 |
TOTAL OTHER CURRENT ASSETS | $ 8,819,239 | $ 11,329,793 |
Fixed assets, net consist of th
Fixed assets, net consist of the following: (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
TOTAL FIXED ASSETS | $ 3,515,211 | $ 3,476,599 |
Accumulated depreciation | (1,545,282) | (968,824) |
TOTAL FIXED ASSETS, NET | 1,969,929 | 2,507,775 |
Software and Software Development Costs [Member] | ||
Property, Plant and Equipment [Line Items] | ||
TOTAL FIXED ASSETS | 301,096 | 301,096 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
TOTAL FIXED ASSETS | 1,658,258 | 1,619,646 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
TOTAL FIXED ASSETS | 1,406,858 | 1,406,858 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
TOTAL FIXED ASSETS | 80,211 | 80,211 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
TOTAL FIXED ASSETS | $ 68,788 | $ 68,788 |
NOTE 6 _ FIXED ASSETS, NET (Det
NOTE 6 – FIXED ASSETS, NET (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 188,810 | $ 90,700 | $ 576,459 | $ 223,750 |
The following table sets forth
The following table sets forth the gross carrying amount, accumulated amortization and net carrying amount of our intangible assets as of September 30, 2020 and December 31, 2019: (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Accumulated Amortization | $ (679,959) | $ (478,983) |
Intangible Assets, Gross (Excluding Goodwill) | 6,217,844 | 5,737,194 |
Intangible assets, net | 5,537,885 | 5,258,211 |
Multiple Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-Lived Trademarks | 348,176 | 294,813 |
Indefinite-lived Intangible Assets (Excluding Goodwill) | 348,176 | 294,813 |
Approved Hormone Therapy Drug Candidate Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 4,108,745 | 3,463,082 |
Finite-Lived Intangible Assets, Accumulated Amortization | (679,959) | (478,983) |
Finite-Lived Intangible Assets, Net | $ 3,428,786 | $ 2,984,099 |
Finite-Lived Intangible Assets, Remaining Amortization Period | 12 years 3 months | 13 years |
Hormone Therapy Drug Candidate Patents - (Pending) [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 1,760,923 | $ 1,979,299 |
Finite-Lived Intangible Assets, Net | $ 1,760,923 | $ 1,979,299 |
Estimated amortization expense,
Estimated amortization expense, based on current patent cost being amortized, for the next five years is as follows: (Details) | Sep. 30, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 (3 months) | $ 69,977 |
2021 | 279,909 |
2022 | 279,909 |
2023 | 279,909 |
2024 | $ 279,909 |
NOTE 7 _ INTANGIBLE ASSETS, N_3
NOTE 7 – INTANGIBLE ASSETS, NET (Details Narrative) | 9 Months Ended | |
Sep. 30, 2020USD ($)Number | Sep. 30, 2019USD ($) | |
Finite-Lived Intangible Assets [Line Items] | ||
Write off of patent and trademark costs | $ | $ 584,509 | $ 78,864 |
Approved Hormone Therapy Drug Candidate Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 20 years | |
Domestic US Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 35 | |
Foreign Patents Member | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 35 | |
Domestic Patents BIJUVA | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 14 | |
Foreign Patents BIJUVA | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 7 | |
Domestic Patents Estradiol and Progesterone Candidates | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 3 | |
Domestic US Patents IMVEXXY | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 10 | |
Domestic US Utility Patents IMVEXXY | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 8 | |
Domestic US Design Patents IMVEXXY | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 2 | |
Foreign Patents IMVEXXY | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 16 | |
Foreign Utility Patents IMVEXXY | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 6 | |
Foreign Design Patents IMVEXXY | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 10 | |
Domestic Utility Patent Topical Cream Candidates [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 1 | |
Domestic Utility Patent Transdermal Patch | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 1 | |
Foreign Utility Patent Transdermal Patch | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 8 | |
Domestic Utility Patent TX009HR | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 3 | |
Domestic Patents Progesterone Formulations | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 2 | |
Foreign Patents Progesterone Formulations | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 4 | |
Domestic Utility Patent Opera | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 1 |
Other current liabilities consi
Other current liabilities consist of the following: (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accrued payroll, bonuses and commission costs | $ 4,381,729 | $ 8,040,278 |
Allowance for coupons and returns | 8,353,403 | 10,316,298 |
Accrued sales and marketing costs | 1,578,971 | 3,285,662 |
Accrued compensated absences | 2,558,055 | 1,463,878 |
Allowance for wholesale distributor fees | 2,130,230 | 2,347,122 |
Accrued legal and accounting expense | 1,052,935 | 422,336 |
Accrued research and development | 1,059,077 | 1,049,603 |
Operating lease liability | 2,404,286 | 1,501,539 |
Accrued rebates | 6,629,732 | 3,916,672 |
Other accrued expenses | 1,072,066 | 1,480,225 |
TOTAL OTHER CURRENT LIABILITIES | $ 31,220,484 | $ 33,823,613 |
As of September 30, 2020 and De
As of September 30, 2020 and December 31, 2019, the carrying value of our debt consisted of the following: (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Debt discount and financing fees | $ (12,948,798) | $ (5,365,357) |
TOTAL LONG-TERM DEBT | 237,051,202 | 194,634,643 |
Financing Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 250,000,000 | $ 200,000,000 |
NOTE 9 _ DEBT (Details Narrativ
NOTE 9 – DEBT (Details Narrative) | Apr. 24, 2019USD ($)Number | May 01, 2018USD ($)Number | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Nov. 09, 2020USD ($) | Nov. 08, 2020USD ($) | Aug. 05, 2020$ / sharesshares | Jun. 30, 2020USD ($) | Apr. 27, 2020USD ($) |
Debt Instrument [Line Items] | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 19,342,805 | $ 23,719,741 | $ 42,294,495 | $ 33,745,257 | |||||||||
Repayments of Lines of Credit | 81,660,719 | ||||||||||||
Loss on extinguishment of debt | $ (10,057,632) | (10,057,632) | |||||||||||
Amortization of deferred financing fees | 1,370,118 | 582,829 | |||||||||||
Fair value of warrants | $ 6,534,687 | 6,534,687 | |||||||||||
Write off of deferred financing fees | $ 275,379 | ||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 12.50% | 12.50% | |||||||||||
Paycheck Protection Program Loan [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal amount | $ 6,477,094 | ||||||||||||
Lender Warrants [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of warrants issued | shares | 4,752,116 | ||||||||||||
Warrants exercise price | $ / shares | $ 1.58 | ||||||||||||
Fair value of warrants | $ 7,428,179 | $ 7,428,179 | |||||||||||
Financing Agreement Amendment No. 6 - Through December 31, 2020 [Member] | Subsequent Event [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Minimum cash balance requirement under credit agreement | $ 45,000,000 | ||||||||||||
Financing Agreement [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Amortization of deferred financing fees | 677,676 | 265,949 | 1,370,118 | 462,683 | |||||||||
Long-term Debt, Gross | 250,000,000 | $ 200,000,000 | 250,000,000 | ||||||||||
Debt Issuance Costs, Gross | 7,902,270 | 7,902,270 | |||||||||||
Interest Expense, Borrowings | 6,726,389 | $ 5,333,056 | 19,322,847 | $ 9,318,056 | |||||||||
Financing Agreement [Member] | Subsequent Event [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Minimum cash balance requirement under credit agreement | $ 60,000,000 | ||||||||||||
IMVEXXY, BIJUVA and ANNOVERA [Member] | Minimum [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 11,000,000 | ||||||||||||
Two Tranches [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Issuance Costs, Gross | 7,626,891 | 7,626,891 | |||||||||||
Financing Agreement [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Description of Variable Rate Basis | 3-month LIBOR | ||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 7.75% | ||||||||||||
LIBOR floor rate | 2.70% | ||||||||||||
Number of quarterly principal installment payments | Number | 4 | ||||||||||||
Prepayment fee for first two years funding (percent) | 30.00% | ||||||||||||
Prepayment fee third year funding (percent) | 5.00% | ||||||||||||
Prepayment fee fourth year funding (percent) | 3.00% | ||||||||||||
Prepayment fee fifth year funding (percent) | 1.00% | ||||||||||||
Facility fee paid (percent) | 2.50% | ||||||||||||
Minimum cash balance requirement under credit agreement | $ 60,000,000 | ||||||||||||
Write off of deferred financing fees | 275,379 | ||||||||||||
Financing Agreement [Member] | Prime Rate [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Description of Variable Rate Basis | prime rate | ||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 6.75% | ||||||||||||
Prime rate floor | 5.20% | ||||||||||||
Financing Agreement [Member] | Tranche Two [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 50,000,000 | ||||||||||||
Financing Agreement [Member] | Tranche Three [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 50,000,000 | ||||||||||||
Line Of Credit Facility Undrawn Tranche No Longer Available | $ 50,000,000 | 50,000,000 | |||||||||||
Credit Agreement [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Repayments of Lines of Credit | $ 81,661,000 | ||||||||||||
Prepayment fee percentage | 4.00% | ||||||||||||
Repayment fee percentage | 4.00% | ||||||||||||
Interest Expense, Debt | 1,816,747 | ||||||||||||
Amortization of deferred financing fees | $ 120,146 | ||||||||||||
Revolving Credit Facility [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 7.75% | ||||||||||||
Revolving Credit Facility [Member] | Financing Agreement [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 300,000,000 | ||||||||||||
Secured Debt [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 200,000,000 | $ 200,000,000 | |||||||||||
Debt Instrument, Description of Variable Rate Basis | one-month LIBOR | ||||||||||||
LIBOR floor rate | 1.50% | ||||||||||||
Number of tranches under term loan facility | Number | 3 |
Schedule of calculation of dilu
Schedule of calculation of diluted net loss per share allocable to common stockholders (Details) - shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 38,880,709 | 27,922,555 |
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 23,893,180 | 24,849,984 |
Warrant [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 6,534,687 | 1,832,571 |
Performance Stock Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,422,885 | |
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 6,029,957 | 1,240,000 |
The ranges of assumptions used
The ranges of assumptions used in the Black-Scholes Model during the nine months ended September 30, 2020 and 2019 are set forth in the table below. (Details) - Share-based Payment Arrangement, Option [Member] - $ / shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average grant date fair value | $ 0.95 | $ 1.84 |
Risk-free interest rate, minimum | 0.34% | 1.83% |
Risk-free interest rate, maximum | 1.68% | 2.54% |
Volatility, minimum | 63.53% | 61.25% |
Volatility, maximum | 67.92% | 64.49% |
Dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Term | 6 years | 5 years 6 months |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Term | 6 years 9 months 18 days | 6 years 6 months |
A summary of option activity un
A summary of option activity under the 2009, 2012 and 2019 Plans and related information during the nine months ended September 30, 2020 is as follows (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares under options, exercised | (517,891) | (55,236) | (1,182,195) | (331,619) | |
Share-based Payment Arrangement, Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares under options, beginning | 25,030,234 | ||||
Weighted average exercise price, beginning | $ 4.65 | ||||
Weighted average remaining contractual life | 5 years 5 months 15 days | 5 years 10 months 2 days | |||
Aggregate intrinsic value, beginning | $ 3,668,171 | ||||
Number of shares under options, granted | 736,500 | ||||
Weighted average exercise price, granted | $ 1.58 | ||||
Number of shares under options, exercised | (1,182,195) | ||||
Weighted average exercise price, exercised | $ 0.23 | ||||
Aggregate intrinsic value, exercised | $ 1,738,740 | ||||
Number of shares under options, expired | (361,109) | ||||
Weighted average exercise price, expired | $ 3.66 | ||||
Number of shares under options, cancelled forfeited | (330,250) | ||||
Weighted average exercise price, cancelled forfeited | $ 3.69 | ||||
Number of shares under options, ending | 23,893,180 | 23,893,180 | 25,030,234 | ||
Weighted average exercise price, ending | $ 4.80 | $ 4.80 | $ 4.65 | ||
Aggregate intrinsic value, ending | $ 379,535 | $ 379,535 | $ 3,668,171 | ||
Number of shares under options, vested and exercisable ending | 19,827,306 | 19,827,306 | |||
Weighted average exercise price, vested and exercisable ending | $ 5.06 | $ 5.06 | |||
Weighted average remaining contractual life, vested and exercisable | 4 years 9 months 29 days | ||||
Aggregate intrinsic value, vested and exercisable ending | $ 218,370 | $ 218,370 | |||
Number of shares under options, unvested ending | 4,065,874 | 4,065,874 | |||
Weighted average exercise price, unvested | $ 3.55 | $ 3.55 | |||
Weighted average remaining contractual life in years, unvested | 8 years 6 months 10 days | ||||
Aggregate intrinsic value, unvested | $ 161,165 | $ 161,165 |
Schedule of restricted stock un
Schedule of restricted stock units and performance stock units (Details) | 9 Months Ended | |
Sep. 30, 2020$ / sharesshares | ||
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares, beginning | shares | 1,240,000 | |
Weighted average grant date fair values, beginning | $ / shares | $ 3.56 | |
Number of shares, granted | shares | 5,102,817 | |
Weighted average grant date fair value, granted | $ / shares | $ 1.40 | |
Number of shares, vested/released | shares | (301,500) | |
Weighted average grant date fair value, vested/released | $ / shares | $ 1.78 | |
Number of shares, forfeited | shares | (11,360) | |
Weighted average grant date fair value, forfeited | $ / shares | $ 1.07 | |
Number of shares, ending | shares | 6,029,957 | |
Weighted average grant date fair value, ending | $ / shares | $ 1.83 | |
Performance Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares, granted | shares | 2,585,745 | |
Weighted average grant date fair value, granted | $ / shares | $ 1.08 | |
Number of shares, vested/released | shares | (151,500) | |
Weighted average grant date fair value, vested/released | $ / shares | $ 1.14 | |
Number of shares, forfeited | shares | (11,360) | |
Weighted average grant date fair value, forfeited | $ / shares | $ 1.07 | |
Number of shares, ending | shares | 2,422,885 | [1] |
Weighted average grant date fair value, ending | $ / shares | $ 1.08 | |
[1] | The number of performance stock units (PSUs) represents the base number of PSUs that may vest. The actual number of PSUs that will vest will be between zero and two times the base number of PSUs depending on the Company's achievement of break-even quarterly EBITDA. |
NOTE 11 _ STOCKHOLDERS_ EQUIT_2
NOTE 11 – STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | Jun. 18, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Aug. 05, 2020 | Dec. 31, 2019 | |
Class of Warrant or Right [Line Items] | ||||||||
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | 10,000,000 | |||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Preferred Stock, Shares Issued | 0 | 0 | 0 | |||||
Preferred Stock, Shares Issued | 0 | 0 | 0 | |||||
Common Stock, Shares Authorized | 600,000,000 | 600,000,000 | 350,000,000 | |||||
Common Stock, Shares, Issued | 272,812,271 | 272,812,271 | 271,177,076 | |||||
Common Stock, Shares, Outstanding | 272,812,271 | 272,812,271 | 271,177,076 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 517,891 | 55,236 | 1,182,195 | 331,619 | ||||
Stock Issued During Period, Value, Stock Options Exercised | $ 105,494 | $ 8,549 | $ 271,678 | $ 108,656 | ||||
Number of stock options exercised in cashless exercise | 12,097 | |||||||
Number of common stock issued during period for stock options exercised in cashless exercise | 11,834 | |||||||
Warrants and Rights Outstanding | $ 6,534,687 | $ 6,534,687 | ||||||
Weighted-average contractual remaining life | 7 years 6 months | |||||||
Weighted average exercise price of warrants (in dollars per share) | $ 1.83 | $ 1.83 | ||||||
Share-based Payment Arrangement, Noncash Expense | $ 8,502,044 | $ 7,859,357 | ||||||
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | $ 6,500,000 | 6,500,000 | ||||||
Restricted Stock or Unit Expense | 1,988,844 | 84,061 | 4,334,537 | 1,080,738 | ||||
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount | $ 11,000,000 | $ 11,000,000 | ||||||
Restricted Stock [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 1.40 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 6,029,957 | 6,029,957 | 1,240,000 | |||||
Performance Shares [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 1.08 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | [1] | 2,422,885 | 2,422,885 | |||||
Share-based Payment Arrangement, Option [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 1,182,195 | |||||||
Share-based Payment Arrangement, Noncash Expense | $ 1,143,920 | 2,194,667 | $ 4,141,061 | 6,568,736 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 23,893,180 | 23,893,180 | 25,030,234 | |||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 2 years | |||||||
Restricted Stock Units (RSUs) [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 1 year 7 months 6 days | |||||||
2009 Long Term Incentive Compensation Plan [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 13,346,455 | 13,346,455 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 589,159 | 589,159 | ||||||
2012 Stock Incentive Plan [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 6,305,974 | 6,305,974 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 2,405,833 | 2,405,833 | ||||||
2012 Stock Incentive Plan [Member] | Restricted Stock [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 890,000 | 890,000 | ||||||
Plan 2019 [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 4,240,751 | 4,240,751 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 3,465,514 | 3,465,514 | ||||||
Plan 2019 [Member] | Restricted Stock [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number | 5,139,957 | 5,139,957 | ||||||
Plan 2019 [Member] | Performance Shares [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number | 2,422,885 | 2,422,885 | ||||||
New Shares [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 470,522 | 470,522 | ||||||
Employee Stock Purchase Plan [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Common Stock, Capital Shares Reserved for Future Issuance | 5,400,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 85.00% | |||||||
Minimum [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Range - exercise price of options | $ 0.38 | $ 0.38 | ||||||
Maximum [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Range - exercise price of options | $ 8.92 | $ 8.92 | ||||||
Warrants Member | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Share-based Payment Arrangement, Noncash Expense | $ 0 | $ 56,418 | $ 26,446 | $ 198,306 | ||||
Warrants Member | Minimum [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.24 | $ 0.24 | ||||||
Warrants Member | Maximum [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 8.20 | $ 8.20 | ||||||
Lender Warrants [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Warrants and Rights Outstanding | $ 7,428,179 | $ 7,428,179 | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.58 | |||||||
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Expected Volatility Rate | 68.80% | |||||||
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Risk Free Interest Rate | 0.34% | |||||||
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Expected Dividend Rate | 0.00% | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 1.56 | |||||||
Outside Consultants Warrants [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.63 | $ 5.63 | ||||||
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Expected Volatility Rate | 60.80% | |||||||
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Risk Free Interest Rate | 2.52% | |||||||
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Expected Dividend Rate | 0.00% | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 3 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 75,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 12 months | |||||||
Warrant [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Warrants exercised | 1,250,000 | |||||||
Warrants - Cashless Exercise [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Number of stock issued in cashless exercise of warrants | 471,184 | |||||||
[1] | The number of performance stock units (PSUs) represents the base number of PSUs that may vest. The actual number of PSUs that will vest will be between zero and two times the base number of PSUs depending on the Company's achievement of break-even quarterly EBITDA. |
NOTE 13 _ RELATED PARTIES (Deta
NOTE 13 – RELATED PARTIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Catalent [Member] | |||||
Related Party Transaction [Line Items] | |||||
Amount billed | $ 520,000 | $ 2,196,000 | $ 2,563,000 | $ 4,118,000 | |
Amounts due to related party | 147,000 | 147,000 | $ 35,000 | ||
American International Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Amount billed | $ 52,000 | $ 195,000 |
NOTE 14 - BUSINESS CONCENTRAT_2
NOTE 14 - BUSINESS CONCENTRATIONS (Details Narrative) | 9 Months Ended | |
Sep. 30, 2020USD ($)Number | Sep. 30, 2019USD ($)Number | |
Supplier One Concentration Risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk | 42.00% | 36.00% |
Supplier 2 | ||
Concentration Risk [Line Items] | ||
Concentration risk | 25.00% | 28.00% |
Supplier 3 | ||
Concentration Risk [Line Items] | ||
Concentration risk | 24.00% | 26.00% |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk | 10.00% | 10.00% |
Number of customers - revenue | Number | 3 | 4 |
Three Customers Concentration Risk | Revenue Benchmark [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk | 56.00% | |
Four Customers Concentration Risk | Revenue Benchmark [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk | 68.00% | |
PillPack - Major Customer | Revenue Benchmark [Member] | ||
Concentration Risk [Line Items] | ||
Revenues | $ 9,319,000 | $ 6,397,000 |
Cardinal Health - Major Customer | Revenue Benchmark [Member] | ||
Concentration Risk [Line Items] | ||
Revenues | 7,415,000 | 1,863,000 |
McKesson Corporation - Major Customer | Revenue Benchmark [Member] | ||
Concentration Risk [Line Items] | ||
Revenues | $ 6,009,000 | |
AmerisourceBergen - Major Customer | Revenue Benchmark [Member] | ||
Concentration Risk [Line Items] | ||
Revenues | 2,226,000 | |
PI Services - Major Customer | Revenue Benchmark [Member] | ||
Concentration Risk [Line Items] | ||
Revenues | $ 1,935,000 |
Supplemental lease information
Supplemental lease information (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Right-of-use asset | $ 9,975,725 | $ 10,109,154 | |
Short-term operating lease liability (included in Other current liabilities) | 2,404,286 | 1,501,539 | |
Long-term operating lease liability | $ 8,907,995 | $ 9,145,049 | |
Weighted average remaining term | 8 years 9 months 18 days | 9 years | |
Weighted average discount rate | 8.30% | 8.25% | |
Cash paid for amounts included in the measurement of lease liabilities for operating lease | $ 1,006,970 | $ 849,440 | |
Right-of-use assets obtained in exchange for lease obligation | $ 998,821 | $ 11,171,471 |
The following table reconciles
The following table reconciles the undiscounted cash flows for all operating leases at September 30, 2020 to the operating lease liabilities recorded on the balance sheet: (Details) | Sep. 30, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 (3 months) | $ 610,675 |
2021 | 2,334,582 |
2022 | 1,413,289 |
2023 | 1,443,143 |
2024 | 1,476,534 |
Thereafter | 8,947,869 |
Total undiscounted lease payments | 16,226,092 |
Less: imputed interest | (4,913,811) |
Present value of lease payments | $ 11,312,281 |
NOTE 15 _ COMMITMENTS AND CON_3
NOTE 15 – COMMITMENTS AND CONTINGENCIES (Details Narrative) | Jul. 01, 2013 | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Aug. 01, 2019ft² | Jun. 01, 2019ft² | Oct. 02, 2018ft² |
Recorded Unconditional Purchase Obligation [Line Items] | ||||||||
Non-cancelable operating lease term | 63 months | |||||||
Net rentable area | ft² | 56,212 | |||||||
Rented area lease | ft² | 7,561 | |||||||
Additional area of lease occupied | ft² | 48,651 | |||||||
Lessee, Operating Lease, Term of Contract | 11 years | |||||||
Lessee operating lease existence of option to extend number | 2 | 2 | ||||||
Lessee, Operating Lease, Renewal Term | 5 years | 5 years | ||||||
Lease not yet commenced (area) | ft² | 6,536 | |||||||
Operating lease expense | $ 590,000 | $ 458,000 | $ 1,749,000 | $ 1,062,000 | ||||
Variable lease expense | $ 148,000 | $ 226,000 | ||||||
Significant supply commitment percentage payable | 50.00% | 50.00% | ||||||
Catalent [Member] | ||||||||
Recorded Unconditional Purchase Obligation [Line Items] | ||||||||
Minimum purchase commitment, 2020 | $ 3,719,000 | $ 3,719,000 | ||||||
Minimum purchase commitment, 2021 | 2,150,000 | 2,150,000 | ||||||
Minimum purchase commitment, 2022 | 2,991,000 | 2,991,000 | ||||||
Minimum purchase commitment, 2023 | 3,347,000 | 3,347,000 | ||||||
Minimum purchase commitment, 2024 | $ 3,786,000 | $ 3,786,000 |
NOTE 16 _ SUBSEQUENT EVENTS (De
NOTE 16 – SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] | Nov. 08, 2020USD ($) |
Financing Agreement Amendment No. 6 [Member] | |
Subsequent Event [Line Items] | |
Minimum cash balance requirement under credit agreement before adjustment | $ 60,000,000 |
Financing Agreement Amendment No. 6 - Through December 31, 2020 [Member] | |
Subsequent Event [Line Items] | |
Minimum cash balance requirement under credit agreement | 45,000,000 |
Financing Agreement Amendment No. 6 - After December 31, 2020 [Member] | |
Subsequent Event [Line Items] | |
Minimum cash balance requirement under credit agreement | $ 60,000,000 |