Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 10, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Adhera Therapeutics, Inc. | |
Entity Central Index Key | 0000737207 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 10,869,530 | |
Trading Symbol | ATRX | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash | $ 1,828,476 | $ 3,918,290 |
Accounts receivable, net of allowance | 39,388 | 48,289 |
Inventory | 258,007 | 241,458 |
Prepaid expenses and other assets | 491,177 | 469,142 |
Total current assets | 2,617,048 | 4,677,179 |
Operating lease right of use asset | 208,830 | |
Furniture and fixtures, net of depreciation | 68,852 | 71,774 |
Intangible assets, net of amortization | 374,317 | 391,892 |
Total non-current assets | 651,999 | 463,666 |
Total assets | 3,269,047 | 5,140,845 |
Current liabilities | ||
Accounts payable | 322,633 | 270,138 |
Due to related party | 52,658 | 27,977 |
Accrued expenses | 850,180 | 851,870 |
Current portion of operating lease liability | 88,940 | |
Accrued dividends | 1,445,825 | 1,064,141 |
Total current liabilities | 2,760,236 | 2,214,126 |
Other lease liability, net of current portion | 126,540 | |
Total liabilities | 2,886,776 | 2,214,126 |
Commitments and contingencies (Note 9) | ||
Stockholders' equity | ||
Common stock, $0.006 par value; 180,000,000 shares authorized; 10,761,684 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | 64,570 | 64,570 |
Additional paid-in capital | 29,105,306 | 28,709,916 |
Accumulated deficit | (28,787,643) | (25,847,805) |
Total stockholders' equity | 382,271 | 2,926,719 |
Total liabilities and stockholders' equity | 3,269,047 | 5,140,845 |
Series C Convertible Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock, $0.01 par value; 100,000 shares authorized | ||
Series D Convertible Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock, $0.01 par value; 100,000 shares authorized | ||
Series E Convertible Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock, $0.01 par value; 100,000 shares authorized | 35 | 35 |
Series F Convertible Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock, $0.01 par value; 100,000 shares authorized | $ 3 | $ 3 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Common stock, par value | $ 0.006 | $ 0.006 |
Common stock, shares authorized | 180,000,000 | 180,000,000 |
Common stock, shares issued | 10,761,684 | 10,761,684 |
Common stock, shares outstanding | 10,761,684 | 10,761,684 |
Series C Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,200 | 1,200 |
Preferred stock, liquidation preference value | $ 5,100 | $ 5,100 |
Preferred stock, shares issued | 100 | 100 |
Preferred stock, shares outstanding | 100 | 100 |
Series D Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 220 | 220 |
Preferred stock, liquidation preference value | $ 300 | $ 300 |
Preferred stock, shares issued | 40 | 40 |
Preferred stock, shares outstanding | 40 | 40 |
Series E Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 3,500 | 3,500 |
Preferred stock, liquidation preference value | $ 5,000 | $ 5,000 |
Preferred stock, shares issued | 3,488 | 3,488 |
Preferred stock, shares outstanding | 3,488 | 3,488 |
Series F Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,200 | 2,200 |
Preferred stock, liquidation preference value | $ 5,000 | $ 5,000 |
Preferred stock, shares issued | 381 | 381 |
Preferred stock, shares outstanding | 381 | 381 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Net sales | $ 2,881 | |
Cost of sales | 116,933 | |
Gross loss | (114,052) | |
Operating expenses | ||
Sales, marketing and commercial operations | 1,059,222 | |
Research and development | 173,256 | |
General and administrative | 1,367,303 | 919,908 |
Amortization | 17,575 | 123,261 |
Total operating expenses | 2,444,100 | 1,216,425 |
Loss from operations | (2,558,152) | (1,216,425) |
Other expense | ||
Interest expense | (144,744) | |
Total other expense, net | (144,744) | |
Loss before provision for income taxes | (2,558,152) | (1,361,169) |
Provision for income taxes | ||
Net loss | (2,558,152) | (1,361,169) |
Preferred Stock Dividends | (381,686) | |
Net Loss Applicable to Common Stockholders | $ (2,939,838) | $ (1,361,169) |
Net loss Per Share - Common Stockholders - basic and diluted | $ (0.27) | $ (0.13) |
Weighted average shares outstanding- basic and diluted | 10,761,684 | 10,521,278 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Series E Preferred Stock [Member] | Series F Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital - Warrants [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2017 | $ 63,127 | $ 8,413,823 | $ (8,028,707) | $ 448,243 | |||
Balance, shares at Dec. 31, 2017 | 10,521,278 | ||||||
Share based compensation | 118,879 | 118,879 | |||||
Net loss | (1,361,169) | (1,361,169) | |||||
Balance at Mar. 31, 2018 | $ 63,127 | 8,532,702 | (9,389,876) | (794,047) | |||
Balance, shares at Mar. 31, 2018 | 10,521,278 | ||||||
Balance at Dec. 31, 2018 | $ 35 | $ 3 | $ 64,570 | (5,383,913) | 34,093,829 | (25,847,805) | 2,926,719 |
Balance, shares at Dec. 31, 2018 | 3,488 | 381 | 10,761,684 | ||||
Accrued dividend | (381,686) | (381,686) | |||||
Share based compensation | 395,390 | 395,390 | |||||
Net loss | (2,558,152) | (2,558,152) | |||||
Balance at Mar. 31, 2019 | $ 35 | $ 3 | $ 64,570 | $ (4,988,523) | $ 34,093,829 | $ (28,787,643) | $ 382,271 |
Balance, shares at Mar. 31, 2019 | 3,488 | 381 | 10,761,684 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash Flows Used in Operating Activities: | ||
Net loss | $ (2,558,152) | $ (1,361,169) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share based compensation | 395,390 | 118,879 |
Amortization of intangibles | 17,575 | 123,261 |
Depreciation | 2,922 | |
Non-cash interest expense | 144,744 | |
Non-cash lease expense | 30,938 | |
Deferred revenue | 200,000 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 8,901 | |
Inventory | (16,549) | |
Prepaid expenses and other assets | (22,035) | (80,571) |
Accounts payable | 52,495 | 428,906 |
Accrued expenses | 4,862 | 47,816 |
Due to related party | 24,681 | 319,524 |
Lease liability | (30,842) | |
Net Cash Used in Operating Activities | (2,089,814) | (58,610) |
Net decrease in cash | (2,089,814) | (58,610) |
Cash - Beginning of Period | 3,918,290 | 106,378 |
Cash - End of Period | 1,828,476 | 47,768 |
Non-cash Investing and Financing Activities: | ||
Capitalization of operating lease right of use asset | 239,768 | |
Accrued dividends | $ 381,686 |
Nature of Operations, Basis of
Nature of Operations, Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Nature of Operations, Basis of Presentation and Significant Accounting Policies | Note 1 – Nature of Operations, Basis of Presentation and Significant Accounting Policies Business Overview Adhera Therapeutics, Inc. (formerly known as Marina Biotech, Inc.) and its wholly-owned subsidiaries, MDRNA Research, Inc. (“MDRNA”), Cequent Pharmaceuticals, Inc. (“Cequent”), Atossa Healthcare, Inc. (“Atossa”), and IThenaPharma, Inc. (“IThena”) (collectively “Adhera,” the “Company,” “we,” “our,” or “us”) is an emerging specialty pharmaceutical company that leverages innovative distribution models and technologies to improve the quality of care for patients in the United States suffering from chronic and acute diseases. We are focused on fixed dose combination (“FDC”) therapies in hypertension, with plans to expand the portfolio of drugs we commercialize to include other therapeutic areas. Our mission is to provide effective and patient centric treatment for hypertension and resistant hypertension while actively seeking additional assets that can be commercialized through our proprietary Total Care System (“TCS”). At the core of our TCS system is DyrctAxess, our patented technology platform. DyrctAxess is designed to offer enhanced efficiency, control and access to the information necessary to empower patients, physicians and manufacturers to achieve optimal care. We began marketing Prestalia ® ® ® We have discontinued all significant clinical development and are evaluating disposition options for all of our development assets, including: (i) our next generation celecoxib program drug candidates for the treatment of acute and chronic pain, IT-102 and IT-103; (ii) CEQ508, an oral delivery of small interfering RNA against beta-catenin, combined with IT-102 to suppress polyps in the precancerous syndrome and orphan indication Familial Adenomatous Polyposis; (iii) CEQ508 combined with IT-103 to treat Colorectal Cancer; (iv) CEQ608 and CEQ609, an oral delivery of IL-6Ra tkRNAi against irritable bowel disease (IBD) gene targets, which could significantly reduce colon length and abolish the IL-6Rα message in proximal ileum; (v) Claudin-2 strains which (CEQ631 and CEQ632) significantly reduce Claudin-2 mRNA expression and protein levels in the colon as well as attenuation of the disease phenotype and enhance survival; (vi) MIP3a therapeutic strains CEQ631 and CEQ632 which also resulted in a significant reduction in sum pathology scores and reduction in MIP3a mRNA expression. We plan to license or divest these development assets since they no longer align with our focus on the treatment of hypertension. As our strategy is to be a commercial pharmaceutical company, we will drive a primary corporate focus on revenue generation through our commercial assets, while continuing to develop our technology platform and TCS. We intend to create value through the expanded commercialization of our FDA-approved product, Prestalia, while continuing to develop and leverage our TCS to further strengthen our commercial presence. On November 15, 2016, Adhera entered into, and consummated the transactions contemplated by, an Agreement and Plan of Merger between and among IThenaPharma, Inc., a Delaware corporation (“IThena”), IThena Acquisition Corporation, a Delaware corporation and wholly-owned subsidiary of Adhera (“Merger Sub”), and a representative of the stockholders of IThena (the “Merger Agreement”), pursuant to which IThena merged into Merger Sub (the “Merger”). In the second quarter of 2018, we raised approximately $12.2 million, net of fees and expenses, from a private placement of our newly created Series E Convertible Preferred Stock. In July and November 2018, we raised approximately $1.7 million net of fees and expenses, from a private placement of our newly created Series F Convertible Preferred Stock. The use of funds from the raises was used for the commercialization of Prestalia, funding working capital, capital expenditure needs, payment of certain liabilities and other general corporate requirements. We plan to license or divest our other pharmaceutical assets and halt any other development programs, since they no longer align with our focus on the treatment of hypertension. Change of Company Name and OTC Markets Symbol On October 4, 2018, we filed a Certificate of Amendment to our Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to change our name from “Marina Biotech, Inc.” to “Adhera Therapeutics, Inc.” The change of name was effective October 9, 2018. Following the name change from Marina Biotech, Inc. to Adhera Therapeutics, Inc., our common stock, par value $0.006 per share, began trading on the OTCQB tier of the OTC Markets under the symbol “ATRX”. Reverse Stock Split In August 2017, we filed a Certificate of Amendment of our Amended and Restated Certificate of Incorporation to effect a one-for-ten reverse split of our issued and outstanding shares of common stock. Our common stock commenced trading on the OTCQB tier of the OTC Markets on a split-adjusted basis on Thursday, August 3, 2017. Unless indicated otherwise, all share and per share information included in these condensed consolidated financial statements and Notes to the Condensed Consolidated Financial Statements give effect to the reverse split. Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete audited financial statements. This quarterly report should be read in conjunction with the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The information furnished in this report reflects all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for each period presented. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results for the year ending December 31, 2019 or for any future period. Principles of Consolidation The condensed consolidated financial statements include the accounts of Adhera Therapeutics, Inc. and the wholly-owned subsidiaries, Ithena, Cequent, MDRNA, and Atossa, and eliminate any inter-company balances and transactions. Going Concern and Management’s Liquidity Plans The accompanying condensed consolidated financial statements have been prepared on the basis that we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. At March 31, 2019, we had a significant accumulated deficit of approximately $28.8 million and negative working capital of approximately $0.1 million. For the three months ended March 31, 2019, we had a net loss from operations of approximately $2.6 million and negative cash flows from operations of approximately $2.1 million. Our operating activities consume the majority of our cash resources. We anticipate that we will continue to incur operating losses as we execute our commercialization plans for Prestalia, as well as strategic and business development initiatives. In addition, we have had and will continue to have negative cash flows from operations, at least into the near future. We have previously funded, and plan to continue funding, our losses primarily through the sale of common and preferred stock, combined with or without warrants, the sale of notes, cash generated from the out-licensing or sale of our licensed assets and, to a lesser extent, equipment financing facilities and secured loans. We will need to raise additional operating capital during the second quarter of 2019 in order to maintain our operations and realize our business plan. Without additional sources of cash and/or deferral, reduction, or elimination of significant planned expenditures, we may not have the cash resources to continue as a going concern thereafter. However, we cannot be certain that we will be able to obtain such funds required for our operations at terms acceptable to us or at all. In April and May 2018, we raised approximately $12.2 million net proceeds from a private placement of shares of our Series E Convertible Preferred Stock and warrants to purchase shares of our common stock. Further, in July 2018, we raised an additional $1.4 million net proceeds from the private placement of our Series F Convertible Preferred Stock. On November 9, 2018, we sold 73 shares of our Series F Preferred Stock for total net proceeds of approximately $0.31 million. For our assessment as of March 31, 2019, we have considered the amount raised and we will continue to reassess our ability to address the going concern. We will continue to attempt to obtain future financing or engage in strategic transactions which may require us to curtail our operations. We cannot predict, with certainty, the outcome of our actions to generate liquidity, including the availability of additional equity or debt financing, or whether such actions would generate the expected liquidity as currently planned. Summary of Significant Accounting Policies Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Significant areas requiring the use of management estimates include revenue and related discounts and allowances, valuation allowance for deferred income tax assets, legal contingencies and fair value of financial instruments. Actual results could differ materially from such estimates under different assumptions or circumstances. Fair Value of Financial Instruments We consider the fair value of cash, accounts payable, due to related parties, accounts receivable and accrued expenses not to be materially different from their carrying value. These financial instruments have short-term maturities. We follow authoritative guidance with respect to fair value reporting issued by the Financial Accounting Standards Board (“FASB”) for financial assets and liabilities, which defines fair value, provides guidance for measuring fair value and requires certain disclosures. The guidance does not apply to measurements related to share-based payments. The guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. Our cash is subject to fair value measurement and is determined by Level 1 inputs. We measure the liability for committed stock issuances with a fixed share number using Level 1 inputs. There were no liabilities measured at fair value as of March 31, 2019 or December 31, 2018. Goodwill and Intangible Assets The Company periodically reviews the carrying value of intangible assets, including goodwill, to determine whether impairment may exist. Goodwill and certain intangible assets are assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. Specifically, goodwill impairment is determined using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses level 3 inputs and a discounted cash flow methodology to estimate the fair value of a reporting unit. A discounted cash flow analysis requires one to make various judgmental assumptions including assumptions about future cash flows, growth rates, and discount rates. The assumptions about future cash flows and growth rates are based on the Company’s budget and long-term plans. Discount rate assumptions are based on an assessment of the risk inherent in the respective reporting units. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit. During the year ended December 31, 2018, we determined that goodwill was impaired and, as a result, a loss on impairment of $3.5 million was recognized. The impairment determination was primarily a result of the decision to divest of assets that no longer align with the Company’s strategic objectives. Impairment of Long-Lived Assets We review all of our long-lived assets for impairment indicators throughout the year and perform detailed testing whenever impairment indicators are present. In addition, we perform detailed impairment testing for indefinite-lived intangible assets, at least annually, at December 31. When necessary, we record charges for impairments. Specifically: ● For finite-lived intangible assets, such as developed technology rights, and for other long-lived assets, we compare the undiscounted amount of the projected cash flows associated with the asset, or asset group, to the carrying amount. If the carrying amount is found to be greater, we record an impairment loss for the excess of book value over fair value. In addition, in all cases of an impairment review, we re-evaluate the remaining useful lives of the assets and modify them, as appropriate; and ● For indefinite-lived intangible assets, such as acquired in-process R&D assets, each year and whenever impairment indicators are present, we determine the fair value of the asset and record an impairment loss for the excess of book value over fair value, if any. During the year ended December 31, 2018, the Company determined that the intangible asset from the Merger was impaired, and, as a result, a loss on impairment of $1,672,885 was recorded. The impairment determination was primarily a result of the decision to divest of assets that no longer align with the Company’s strategic objectives. Revenue Recognition The Company adopted the new revenue recognition guidelines in accordance with ASC 606, Revenue from Contracts with Customers The Company sells its medicines primarily to wholesale distributors and specialty pharmacy providers. These customers subsequently resell the Company’s medicines to health care patients. In addition, the Company enters into arrangements with health care providers and payers that provide for government-mandated or privately-negotiated discounts and allowances related to the Company’s medicines. Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied. The majority of the Company’s contracts have a single performance obligation to transfer medicines. Accordingly, revenues from medicine sales are recognized when the customer obtains control of the Company’s medicines, which occurs at a point in time, typically upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring medicines and is generally based upon a list or fixed price less allowances for medicine returns, rebates and discounts. The Company sells its medicines to wholesale pharmaceutical distributors and pharmacies under agreements with payment terms typically less than 90 days. During the year ended December 31, 2018, management determined certain costs related to the sales of Prestalia, specifically, costs associated with free product, should be classified as cost of goods sold and not revenue reductions. Consistent with the accounting for the year ended December 31, 2018, the Company recorded an estimate of unrealized revenue reductions, and the related liability, for bottles sold to pharmacies but not yet prescribed. Medicine Sales Discounts and Allowances The nature of the Company’s contracts gives rise to variable consideration because of allowances for medicine returns, rebates and discounts. Allowances for medicine returns, rebates and discounts are recorded at the time of sale to wholesale pharmaceutical distributors and pharmacies. The Company applies significant judgments and estimates in determining some of these allowances. If actual results differ from its estimates, the Company will be required to make adjustments to these allowances in the future. The Company’s adjustments to gross sales are discussed further below. Distribution Service Fees The Company includes distribution service fees paid for inventory management services as cost of good sold. The Company calculates accrued distribution service fee estimates using the most likely amount method. The Company accrues estimated distribution fees based on contractually determined amounts. Accrued distribution service fees are included in “accrued expenses” on the condensed consolidated balance sheet. Patient Access Programs The Company offers discounts to patients under which the patient receives a discount on his or her prescription. In circumstances when a patient’s prescription is rejected by a third-party payer, the Company will pay for the full cost of the prescription. The Company reimburses pharmacies for this discount directly or through third-party vendors. The Company reduces gross sales by the amount of actual co-pay and other patient assistance in the period based on the invoices received. The Company also records an accrual to reduce gross sales for estimated co-pay and other patient assistance on units sold to distributors or pharmacies that have not yet been prescribed/dispensed to a patient. The Company calculates accrued co-pay and other patient assistance fee estimates using the expected value method. The estimate is based on contract prices, estimated percentages of medicine that will be prescribed to qualified patients, average assistance paid based on reporting from the third-party vendors and estimated levels of inventory in the distribution channel. Accrued co-pay and other patient assistance fees are included in “accrued expenses” on the condensed consolidated balance sheet. Patient assistance programs include both co-pay assistance and fully bought down prescriptions. Sales Returns Consistent with industry practice, the Company maintains a return policy that allows customers to return medicines within a specified period prior to and subsequent to the medicine expiration date. Generally, medicines may be returned for a period beginning six months prior to its expiration date and up to one year after its expiration date. The right of return expires on the earlier of one year after the medicine expiration date or the time that the medicine is dispensed to the patient. The majority of medicine returns result from medicine dating, which falls within the range set by the Company’s policy and are settled through the issuance of a credit to the customer. The Company calculates sales returns using the expected value method. The estimate of the provision for returns is based upon industry experience. This period is known to the Company based on the shelf life of medicines at the time of shipment. The Company records sales returns in “accrued expenses” and as a reduction of revenue. Shipping Fees The Company includes fees incurred by pharmacies for shipping medicines to patients as cost of good sold. The Company calculates accrued shipping fee estimates using the expected value method. The Company records accrued shipping fees in “accrued expenses” on the condensed consolidated balance sheet. Customers Concentration The Company sells its prescription drug (Prestalia) directly to specialty contracted retail pharmacies and indirectly through wholesalers. For the three months ended March 31, 2019, the Company’s three largest customers accounted for approximately 56%, 26%, and 18%, respectively, of the Company’s total gross sales. The Company works with a third-party pharmacy network manager to attract, retain, and manage the Company’s pharmacy customers and distribution channels. All of 2019 gross sales were made to customers associated with or related to the Company’s third-party pharmacy network manager. The Company had no significant sales for the three months ended March 31, 2018. Licensing Agreements Licensing agreements entered into by the Company, typically include payment of one or more of the following: non-refundable, up-front license fees; development, regulatory and commercial milestone payments; payments for manufacturing supply services; and royalties on net sales of licensed products. Each of these payments results in license, collaboration and other revenues, except for revenues from royalties on net sales of licensed products, which are classified as royalty revenues. The core principle of ASC 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received in exchange for those goods or services. During the year ended December 31, 2018, Adhera entered into a Licensing Agreement, whereby Adhera granted exclusive rights to the Company’s DiLA 2 2 Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU No. 2016-02”). Under ASU No. 2016-02, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. For leases with a term of twelve months or less, the lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities by class of underlying assets. ASU No. 2016-02 becomes effective for the Company beginning in the first quarter of 2019. The guidance can be applied using either a modified retrospective approach at the beginning of the earliest period presented, or at the beginning of the period in which it is adopted. The Company adopted this standard on January 1, 2019, using a modified retrospective approach at the adoption date through a cumulative-effect adjustment to retained earnings. The adoption did not have a material impact on its condensed consolidated statement of operations. However, the new standard required the Company to establish approximately $0.2 million of liabilities and corresponding right-of-use assets of approximately $0.2 million on its condensed consolidated balance sheet for operating leases on rented office properties that existed as of the January 1, 2019, adoption date. The Company elected to not recognize lease assets and liabilities for leases with an initial term of twelve months or less. Net Income (Loss) per Common Share Basic net income (loss) per common share (after giving effect of the one for ten reverse stock split that became effective in August 2017) is computed by dividing the net income (loss) by the weighted average number of common shares outstanding during the period, excluding any unvested restricted stock awards. Diluted net income (loss) per share includes the effect of common stock equivalents (stock options, unvested restricted stock, and warrants) when, under either the treasury or if-converted method, such inclusion in the computation would be dilutive. Net income (loss) is adjusted for the dilutive effect of the change in fair value liability for price adjustable warrants, if applicable. The following number of shares have been excluded from diluted net (loss) since such inclusion would be anti-dilutive: Three Months Ended March 31, 2019 2018 Stock options outstanding 4,522,807 764,707 Warrants 36,267,329 2,548,481 Shares to be issued upon conversion of notes payable - 323,404 Series E Preferred Stock 34,880,000 - Series F Preferred Stock 3,810,000 - Total 79,480,136 3,636,592 |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory | NOTE 2 – Inventory Inventory consists of raw material and finished goods stated at the lower of cost or net realizable value with cost determined on a first-in, first-out basis. The Company reviews the composition of inventory at each reporting period in order to identify obsolete, slow-moving, quantities in excess of expected demand, or otherwise non-saleable items. Inventory consisted of the following as of March 31, 2019 and December 31, 2018: March 31, 2019 December 31, 2018 Raw Materials $ 84,618 $ 147,139 Finished Goods 173,389 94,319 Inventory, Net $ 258,007 $ 241,458 |
Prepaid and Other Assets
Prepaid and Other Assets | 3 Months Ended |
Mar. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid and Other Assets | NOTE 3 – PREPAID AND OTHER ASSETS Prepaid expenses and other assets at March 31, 2019 and December 31, 2018 included prepaid insurance of $163,777 and $179,145, respectively, and deposits with third-party co-pay program managers of $143,795 and $157,584, respectively. The deposits with co-pay program managers are used to fund patient’s insurance co-pay support, for a specified period of time, with any unused amounts refunded to the Company. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 4 - Intangible Assets Acquisition of Prestalia & DyrctAxess In June 2017, we entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Symplmed Pharmaceuticals LLC (“Symplmed”) pursuant to which we purchased from Symplmed, for aggregate consideration of approximately $620,000 (consisting of $300,000 in cash plus the assumption of certain liabilities of Symplmed in the amount of approximately $320,000), Symplmed’s assets relating to a single-pill FDC of perindopril arginine and amlodipine besylate known as Prestalia® (“Prestalia”), that has been approved by the FDA for the treatment of hypertension. In addition, as part of the transactions contemplated by the Purchase Agreement: (i) Symplmed transferred to us the New Drug Applications for the approval of Prestalia as a new drug by the FDA; and (ii) Symplmed assigned to us all of its rights and obligations under that certain Amended and Restated License and Commercialization Agreement by and between Symplmed and Les Laboratoires Servier (“Servier”) dated January 2012, pursuant to which Symplmed has an exclusive license from Servier to manufacture, have manufactured, develop, promote, market, distribute and sell Prestalia in the U.S. (and its territories and possessions) in consideration of regulatory and sales-based milestone payments and royalty payments based on net sales. Management has determined that this acquisition was deemed an asset purchase under FASB ASC 805. The purchase price of $620,000 was allocated based on a preliminary estimate of the fair value of the assets acquired and was included in intangible assets as of December 31, 2017. During the year ended December 31, 2018, the allocation of the purchase price was finalized which resulted in $160,800 of the price being allocated to raw materials received from Symplmed, and the remaining $459,200 being allocated to intangible assets. Further, we hired a Chief Commercial Officer, who was the President and Chief Executive Officer of Symplmed, which appointment became effective in June 2017. We also agreed in such offer letter to issue 60,000 restricted shares of our common stock under our 2014 Long-Term Incentive Plan to our Chief Commercial Officer, with all of such shares vesting on the six (6) month anniversary of the date of grant. These shares were fully vested on December 31, 2017. This Chief Commercial Officer resigned in January 2019. In furtherance of the acquisition and commercialization of Prestalia, in July 2017 we acquired from Symplmed and its wholly-owned subsidiary, Symplmed Technologies, LLC, certain of the intellectual property assets related to the patented technology platform known as DyrctAxess, also known as Total Care, that offers enhanced efficiency, control and information to empower patients, physicians and manufacturers to help achieve optimal care for $75,000 in cash. Intangible Asset Summary The following table summarizes the balances as of March 31, 2019, of the identifiable intangible assets acquired, their useful life, and annual amortization: Net Book Value March 31, 2019 Remaining Estimated Annual Amortization Expense Intangible asset - Prestalia $ 308,469 4.76 $ 64,941 Intangible asset - DyrctAxess 65,848 12.34 5,357 Total $ 374,317 $ 70,298 During the year ended December 31, 2018, we determined that the intangible asset from the merger was impaired, and as a result, we recognized a loss on impairment of $1,672,885. The impairment determination was primarily a result of the decision to divest of assets that no longer align with the Company’s strategic objectives. Amortization expense was $17,575 and $123,261 for the three months ended March 31, 2019 and 2018, respectively. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 5 - Related Party Transactions Due to Related Party The Company and other related entities have had a commonality of ownership and/or management control, and as a result, the reported operating results and/or financial position of the Company could significantly differ from what would have been obtained if such entities were autonomous. The Company had a Master Services Agreement (“MSA”) with Autotelic Inc., a related party that is partly-owned by one of the Company’s former Board members and executive officers, namely Vuong Trieu, Ph.D., effective November 15, 2016. The MSA stated that Autotelic Inc. will provide business functions and services to the Company and allowed Autotelic Inc. to charge the Company for these expenses paid on its behalf. The MSA included personnel costs allocated based on amount of time incurred and other services such as consultant fees, clinical studies, conferences and other operating expenses incurred on behalf of the Company. The MSA required a 90-day written termination notice in the event either party requires to terminate such services. We and Autotelic Inc. agreed to terminate the MSA effective October 31, 2018. Dr. Trieu resigned as a director of our company effective October 1, 2018. During the period commencing November 15, 2016 (the “Effective Date”) and ending on the date that the Company had completed an equity offering of either common or preferred stock in which the gross proceeds therefrom is no less than $10 million (the “Equity Financing Date”), the Company paid Autotelic the following compensation: cash in an amount equal to the actual labor cost (paid on a monthly basis), plus 100% markup in warrants for shares of the Company’s common stock with a strike price equal to the fair market value of the Company’s common stock at the time said warrants were issued. The Company also paid Autotelic for the services provided by third party contractors plus 20% mark up. The warrant price per share was calculated based on the Black-Scholes model. After the Equity Financing Date, the Company paid Autotelic Inc. a cash amount equal to the actual labor cost plus 100% mark up of provided services and 20% mark up of provided services by third party contractors or material used in connection with the performance of the contracts, including but not limited to clinical trial, non-clinical trial, Contract Manufacturing Organizations, FDA regulatory process, Contract Research Organizations and Chemistry and Manufacturing Controls. In accordance with the MSA, Autotelic Inc. billed the Company for personnel and service expenses Autotelic Inc. incurred on behalf of the Company. For the three months ended March 31, 2019 and 2018, Autotelic Inc. billed a total of $0 and $256,997, respectively, including personnel costs of $0 and $133,633, respectively. An unpaid balance of $4,392 and $4,392 is included in due to related party in the accompanying balance sheets as of March 31, 2019 and December 31, 2018, respectively. In April 2018, and in connection with the closing of our private placement on that date, we entered into a Compromise and Settlement Agreement with Autotelic Inc. pursuant to which we agreed to issue to Autotelic Inc. an aggregate of 162.59 shares of Series E Preferred Stock to settle accounts payable of $812,967 and Warrants to purchase up to 1,345,040 shares of common stock to satisfy accrued and unpaid fees in the aggregate amount of approximately $739,772, and other liabilities, owed to Autotelic Inc. as of March 31, 2018 pursuant to the MSA. The securities that were issued to Autotelic Inc., which were issued upon the closing of the offering described above, have the same terms and conditions as the securities that were issued to investors in the offering (See Note 6). The warrants have a five-year term, an initial exercise price of $0.55, and have a fair value of $1,494,469 resulting in a loss on settlement of debt of $754,697. Transactions with BioMauris, LLC/Erik Emerson During the three months ended March 31, 2019 and 2018, we paid a total of $21,690 and $46,532, respectively, for services provided by BioMauris, LLC, of which Erik Emerson, our former Chief Commercial Officer and a current director of Adhera, is Executive Chairman. A total of $48,266 and $23,585 was due BioMauris, LLC as of March 31, 2019 and December 31, 2018, respectively, and is included in due to related party on the accompanying balance sheets. Option Grant for Former Chief Financial Officer On January 15, 2019, our Board of Directors (the “Board”) granted to our CFO options to purchase up to an aggregate of 100,000 shares of our common stock at an exercise price of $0.32 per share, with 25,000 options being exercisable immediately and with 25,000 options vesting on each of the first, second and third anniversary of the grant date (See Note 7). Resignation of Chief Commercial Officer On January 15, 2019, the Board accepted the resignation of our Chief Commercial Officer (our “former CCO”), effective immediately. He will remain as a member of the Board. Simultaneous with his resignation as our CCO, we and our former CCO entered into a Consulting Agreement dated as of January 15, 2019 pursuant to which our former CCO agreed to provide certain consulting services regarding our FDA-approved Prestalia product for a fee of $3,000 per month. During the three months ended March 31, 2019, the Consulting Agreement was terminated. Resignation of Chief Financial Officer On March 11, 2019, our CFO submitted his resignation as our CFO and from any other positions that he may hold with our company or any of its subsidiaries, effective March 22, 2019. Resignation and Appointment of Chief Executive Officer On April 4, 2019, the Company appointed Nancy R. Phelan, to serve as CEO and Secretary of the Company, effective immediately. In connection with the appointment Ms. Phelan as our new CEO and Secretary, Robert C. Moscato, Jr. resigned from such positions, and also from his position as a member of the Board of Directors of the Company effective immediately. In connection with our appointment of Ms. Phelan as our CEO, we granted her options to purchase an aggregate of 1,500,000 shares of our common stock, of which 400,000 are exercisable immediately, 600,000 vest on a monthly basis over a two-year period beginning on April 4, 2020, and 500,000 vest upon the achievement of certain product sales and stock price targets. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Note 6 - Stockholders’ Equity Preferred Stock Adhera has authorized 100,000 shares of preferred stock for issuance and has designated 1,000 shares as Series B Preferred Stock (“Series B Preferred”) and 90,000 shares as Series A Junior Participating Preferred Stock (“Series A Preferred”). No shares of Series B Preferred or Series A Preferred are outstanding. In March 2014, Adhera designated 1,200 shares as Series C Convertible Preferred Stock (“Series C Preferred”). In August 2015, Adhera designated 220 shares as Series D Convertible Preferred Stock (“Series D Preferred”). In April 2018, Adhera designated 3,500 shares of Series E Convertible Preferred Stock (“Series E Preferred”). In July 2018, Adhera designated 2,200 shares of Series F Convertible Preferred Stock (“Series F Preferred”). Series C Preferred As of both March 31, 2019 and December 31, 2018, 100 shares of Series C Preferred remained outstanding. Series D Preferred As of both March 31, 2019 and December 31, 2018, 40 shares of Series D Preferred remained outstanding. Series E Convertible Preferred Stock Private Placement In April and May 2018, we entered into Subscription Agreements with certain accredited investors and conducted a closing pursuant to which we sold 2,812 shares of our Series E Preferred, at a purchase price of $5,000 per share of Series E Preferred. Each share of Series E Preferred is initially convertible into shares of our common stock at a conversion price of $0.50 per share of common stock. In addition, each investor received a 5-year warrant (the “Warrants”, and collectively with the Series E Preferred, the “Securities”) to purchase 0.75 shares of common stock for each share of common stock issuable upon the conversion of the Series E Preferred purchased by such investor at an initial exercise price equal to $0.55 per share of common stock, subject to adjustment thereunder. The Series E Preferred accrues 8% dividends per annum and are payable in cash or stock at the Company’s discretion. The Series E Preferred has voting rights, dividend rights, liquidation preferences, conversion rights and anti-dilution rights as described in the Certificate of Designation of Preferences, Rights and Limitations of the Preferred Stock, which we filed with the Secretary of State of Delaware in April 2018. The Warrants have full-ratchet anti-dilution protection, are exercisable for a period of five years and contain customary exercise limitations. We accrued dividends on the Series E Preferred of $344,108 for the three months ended March 31, 2019. No similar dividends were accrued in 2018. Series F Convertible Preferred Share Private Placement In July 2018, we entered into Subscription Agreements with certain accredited investors and conducted a closing pursuant to which we sold 308 shares of our Series F Preferred, at a purchase price of $5,000 per share of Series F Preferred. Each share of Series F Preferred is initially convertible into shares of our common stock at a conversion price of $0.50 per share of common stock. In addition, each investor received a 5-year warrant (the “Warrants”, and collectively with the Preferred Stock, the “Securities”) to purchase 0.75 shares of common stock for each share of common stock issuable upon the conversion of the Series F Preferred purchased by such investor at an initial exercise price equal to $0.55 per share of common stock, subject to adjustment thereunder. The Series F Preferred accrues 8% dividends per annum and are payable in cash or stock at the Company’s discretion. The Series F Preferred has voting rights, dividend rights, liquidation preferences, conversion rights and anti-dilution rights as described in the Certificate of Designation of Preferences, Rights and Limitations of the Preferred Stock, which we filed with the Secretary of State of Delaware in July 2018. The Warrants have full-ratchet anti-dilution protection, are exercisable for a period of five years and contain customary exercise limitations. We received proceeds of approximately $1.4 million from the sale of the Securities, after deducting placement agent fees and estimated expenses payable by us of approximately $180,000 associated with such closing. We used the proceeds of the offering for funding our commercial operations to the sale and promotion of our Prestalia product, working capital needs, capital expenditures, the repayment of certain liabilities and other general corporate purposes. In connection with the private placement described above, we also issued to the placement agent for such private placement a Warrant to purchase 308,000 shares of our common stock. The Warrant has a five-year term and an exercise price of $0.55 per share. On November 9, 2018, we entered into Subscription Agreements with certain accredited investors and conducted a closing pursuant to which we sold 73 shares of our Series F Preferred Stock, at a purchase price of $5,000 per share of Preferred Stock. Each share of Series F Preferred is initially convertible into shares of our common stock at a conversion price of $0.50 per share of common stock. In addition, each investor received a 5-year warrant to purchase 0.75 shares of common stock for each share of common stock issuable upon the conversion of the Series F Preferred purchased by such investor at an initial exercise price equal to $0.55 per share of common stock, subject to adjustment thereunder. We received total net proceeds of approximately $0.31 million from the issuance of the securities described above, after deducting placement agent fees and estimated expenses payable by us associated with such closing. In connection with the private placement described above, we also issued to the placement agent for such private placement a Warrant to purchase 73,000 shares of our common stock. The Warrant has a five-year term and an exercise price of $0.55 per share. We accrued dividends on the Series F Preferred of $37,578 for the three months ended March 31, 2019. No similar dividends were accrued in 2018. Stock Option Grants During the three months ended March 31, 2019, Mr. Moscato, Mr. Emerson, and Mr. Teague resigned (See Note 5 – Related Party Transactions). All vested options held by Mr. Teague are set to expire 90 days after his resignation date and all vested options held by Mr. Moscato are set to expire 12 months after his resignation date. During the three months ended March 31, 2019, we granted an aggregate of 135,000 stock options to employees. Common Stock Our common stock currently trades on the OTCQB tier of the OTC Markets under the symbol “ATRX”. As of March 31, 2019, we have 10,761,684 shares of our common stock outstanding. Stock Issuances We issued no common stock during the three months ended March 31, 2019. Warrants As of March 31, 2019, there were 36,267,329 warrants outstanding, with a weighted average exercise price of $0.79 per share, and annual expirations as follows: Expiring in 2019 600,000 Expiring in 2020 1,189,079 Expiring in 2021 343,750 Expiring in 2022 66,667 Expiring in 2023 33,729,180 Expiring thereafter 338,653 Total 36,267,329 The above includes price adjustable warrants totaling 34,373,030. No warrants expired during the three months ended March 31, 2019. |
Stock Incentive Plans
Stock Incentive Plans | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Incentive Plans | Note 7 - Stock Incentive Plans Stock Options The following table summarizes stock option activity for the three months ended March 31, 2019: Options Outstanding Shares Weighted Average Exercise Price Outstanding, December 31, 2018 5,613,057 $ 0.83 Options granted 135,000 0.31 Options expired / forfeited (1,225,250 ) 1.10 Outstanding, March 31, 2019 4,522,807 0.86 Exercisable, March 31, 2019 1,736,414 $ 0.90 The following table summarizes additional information on Adhera’s stock options outstanding at March 31, 2019. Options Outstanding Options Exercisable Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $0.28 - $0.98 3,875,000 9.85 $ 0.69 1,567,500 $ 0.71 $1.00 7,000 2.63 $ 1.00 7,000 $ 1.00 $1.50 - $1.80 493,207 8.43 $ 1.79 134,314 $ 1.78 $2.60 - $8.20 135,200 3.28 $ 2.77 15,200 $ 4.48 $10.70 - $22.00 12,400 0.46 $ 10.70 12,400 $ 10.70 Totals 4,522,807 8.60 $ 0.86 1,736,414 $ 0.90 Weighted-Average Exercisable Remaining Contractual Life (Years) 7.93 During the three months ended March 31, 2019, we granted an aggregate of 135,000 stock options to employees at exercise prices ranging from $0.28 to $0.34 per share. 35,000 stock options vest at a rate of one-third at the end of each annual anniversary over three years from the grant date and have a 10-year term. 100,000 options vest at a rate of 25,000 upon grant and 25,000 at the end of each annual anniversary over three years from the grant date and have revised 90 day term based on our former CFO’s resignation. As of March 31, 2019, we had $680,057 of total unrecognized compensation expense related to unvested stock options. Total expense related to stock options was $395,390 and $118,879 for the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019, the intrinsic value of options outstanding or exercisable was $15,100 as there were options outstanding with an exercise price less than $0.40, the per share closing market price of our common stock at that date. |
Intellectual Property and Colla
Intellectual Property and Collaborative Agreements | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intellectual Property and Collaborative Agreements | Note 8 - Intellectual Property and Collaborative Agreements License of DiLA 2 On March 16, 2018, Adhera entered into a Licensing Agreement, whereby Adhera granted exclusive rights to the company’s DiLA 2 2 Asset Purchase Agreement In July 2017, Adhera entered into an Asset Purchase Agreement with Symplmed Pharmaceuticals LLC and its wholly-owned subsidiary Symplmed Technologies, LLC pursuant to which the Company purchased from the sellers, for an aggregate purchase price of $75,000 in cash, certain specified assets of the sellers relating to the sellers’ patented technology platform known as DyrctAxess that offers enhanced efficiency, control and information to empower patients, physicians and manufacturers to help achieve optimal care (see Note 4). |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 9 - Commitments and Contingencies Amendment to Agreement with Windlas Healthcare Private Limited On August 17, 2017, we entered into an amendment (the “Amendment”) of that certain Pharmaceutical Development Agreement dated as of March 30, 2017 by and between Windlas Healthcare Private Limited (“Windlas”) and our company (the “Development Agreement”), relating to the development by Windlas of certain pharmaceutical products to be used for conducting clinical trials or for regulatory submissions, as more fully described therein. Pursuant to the Amendment, we and Windlas agreed to amend the Development Agreement to reflect our agreement to issue to Windlas, and Windlas’ agreement to accept from us, in lieu of cash payments with respect to forty percent (40%) of the total amount reflected on invoices sent from time to time by Windlas to us, shares of our common stock having an aggregate value equal to forty percent (40%) of such invoiced amount (with the remaining portion of the invoiced amount being paid in cash). The maximum value of common stock that may be issued to Windlas pursuant to the Development Agreement (as modified by the Amendment) is $2 million. The parties also agreed that the foregoing payment arrangement would apply to any Contract Manufacturing and Supply Agreement (or similar agreement) relating to the manufacturing of commercial batches of the products covered by the Development Agreement that may be entered into between the parties. Litigation Because of the nature of our activities, we are subject to claims and/or threatened legal actions, which arise out of the normal course of business. Other than the disclosure below, as of the date of this filing, we are not aware of any pending lawsuits against us, our officers or our directors. Paragraph IV Challenge Our Prestalia product was involved in a paragraph IV challenge regarding patents issued to perindopril arginine. This challenge, which was pending in the United States District Court for the District of Delaware (No. 1:17-cv-00276), was captioned Apotex Inc. and Apotex Corp. v. Symplmed Pharmaceuticals, LLC and Les Laboratoires Servier Apotex entered into negotiations with Symplmed Pharmaceuticals, LLC (which entity sold its assets relating to Prestalia to us in June 2017, including its License and Commercialization Agreement with Les Laboratories Servier) and Les Laboratories Servier (which entity owns or controls intellectual property rights relating to pharmaceutical products containing as an active pharmaceutical ingredient perindopril in combination with other active pharmaceutical ingredients, which rights have been licensed to Symplmed Pharmaceuticals) to resolve the challenge in the second quarter of 2017. Such parties, along with us, have reached an agreement on terms that result in a delay to the challengers’ ability to enter the market with a generic version of Prestalia, while still providing the challenger with the right to enter the market prior to the expiration of the patent covering such product. Specifically, the parties have entered into a Confidential Settlement Agreement in connection with the settlement of the matter, pursuant to which, among other things, the parties entered into a Confidential License Agreement, whereby Symplmed, Servier and our company agreed to grant to Apotex a non-transferable, non-sublicensable, perpetual, irrevocable, royalty-free, non-exclusive license to the two patents listed in the FDA Orange Book as having claims covering Prestalia to make, use and market a generic version of Prestalia, or import a generic version of Prestalia from India into the United States, on or after January 1, 2021. As a result of the foregoing, the matter is now settled. Litigation Regarding Vaya Pharma We had been named on a complaint filed in New York State as a defendant in the matter entitled Vaya Pharma, Inc. v. Symplmed Technologies, Inc., Symplmed Pharmaceuticals, Inc., Erik Emerson and Marina Biotech, Inc. Leases We have entered into a Standard Form Office Lease with ROC III Fairlead Imperial Center, LLC, as landlord, pursuant to which we lease our corporate headquarters located at 4721 Emperor Boulevard, Suite 350, Durham, North Carolina 27703 for a term of 37 months starting on October 1, 2018. Our base monthly rent for such space is currently $6,458, which amount will increase to $7,057 for the final month of the term. Other than the lease for our corporate headquarters, we do not own or lease any real property or facilities that are material to our current business operations. As we expand our business operations, we may seek to lease additional facilities of our own in order to support our operational and administrative needs under our current operating plan. The Company adopted ASU No. 2016-02 on January 1, 2019, using a modified retrospective approach at the adoption date through a cumulative-effect adjustment to retained earnings. The adoption did not have a material impact on its condensed consolidated statement of operations. However, the new standard required the Company to establish approximately $0.2 million of liabilities and corresponding right-of-use assets of approximately $0.2 million on its condensed consolidated balance sheet for operating leases on rented office properties that existed as of the January 1, 2019, adoption date. The total right-of-use asset was approximately $0.2 million as of March 31, 2019 and is reflected in the operating lease right of use asset on the accompanying condensed consolidated balance sheet. The total related liability was approximately $0.2 million as of March 31, 2019, of which approximately $0.1 million is included in current portion of operating lease liability and approximately $0.1 million is reflected in operating lease liability, net of current portion on the accompanying condensed consolidated balance sheet. The future minimum lease payments as of March 31, 2019 are approximately $0.07 million for the remaining nine months of 2019, $0.08 million for 2020, and $0.07 million for 2021. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 10 - Subsequent Events Except for the event(s) discussed below, there were no subsequent events that required recognition or disclosure. We evaluated subsequent events through the date the financial statements were issued and filed with the Securities and Exchange Commission. On April 4, 2019, we entered into an employment agreement with our new CEO, Nancy R. Phelan, effective immediately, who was also appointed to serve as our Secretary. In connection with the appointment of our new CEO and Secretary, Robert C. Moscato, Jr. resigned from such positions, and also from his position as a member of our Board of Directors effective immediately (See Note 5 – Related Party Transactions). In April 2019, we issued 107,846 unregistered shares of our common stock to a holder of our Series E Convertible Preferred Stock in connection with the conversion of $53,923 of “Stated Value” of our Series E Convertible Preferred Stock. |
Nature of Operations, Basis o_2
Nature of Operations, Basis of Presentation and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Significant areas requiring the use of management estimates include revenue and related discounts and allowances, valuation allowance for deferred income tax assets, legal contingencies and fair value of financial instruments. Actual results could differ materially from such estimates under different assumptions or circumstances. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We consider the fair value of cash, accounts payable, due to related parties, accounts receivable and accrued expenses not to be materially different from their carrying value. These financial instruments have short-term maturities. We follow authoritative guidance with respect to fair value reporting issued by the Financial Accounting Standards Board (“FASB”) for financial assets and liabilities, which defines fair value, provides guidance for measuring fair value and requires certain disclosures. The guidance does not apply to measurements related to share-based payments. The guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. Our cash is subject to fair value measurement and is determined by Level 1 inputs. We measure the liability for committed stock issuances with a fixed share number using Level 1 inputs. There were no liabilities measured at fair value as of March 31, 2019 or December 31, 2018. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company periodically reviews the carrying value of intangible assets, including goodwill, to determine whether impairment may exist. Goodwill and certain intangible assets are assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. Specifically, goodwill impairment is determined using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses level 3 inputs and a discounted cash flow methodology to estimate the fair value of a reporting unit. A discounted cash flow analysis requires one to make various judgmental assumptions including assumptions about future cash flows, growth rates, and discount rates. The assumptions about future cash flows and growth rates are based on the Company’s budget and long-term plans. Discount rate assumptions are based on an assessment of the risk inherent in the respective reporting units. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit. During the year ended December 31, 2018, we determined that goodwill was impaired and, as a result, a loss on impairment of $3.5 million was recognized. The impairment determination was primarily a result of the decision to divest of assets that no longer align with the Company’s strategic objectives. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets We review all of our long-lived assets for impairment indicators throughout the year and perform detailed testing whenever impairment indicators are present. In addition, we perform detailed impairment testing for indefinite-lived intangible assets, at least annually, at December 31. When necessary, we record charges for impairments. Specifically: ● For finite-lived intangible assets, such as developed technology rights, and for other long-lived assets, we compare the undiscounted amount of the projected cash flows associated with the asset, or asset group, to the carrying amount. If the carrying amount is found to be greater, we record an impairment loss for the excess of book value over fair value. In addition, in all cases of an impairment review, we re-evaluate the remaining useful lives of the assets and modify them, as appropriate; and ● For indefinite-lived intangible assets, such as acquired in-process R&D assets, each year and whenever impairment indicators are present, we determine the fair value of the asset and record an impairment loss for the excess of book value over fair value, if any. During the year ended December 31, 2018, the Company determined that the intangible asset from the Merger was impaired, and, as a result, a loss on impairment of $1,672,885 was recorded. The impairment determination was primarily a result of the decision to divest of assets that no longer align with the Company’s strategic objectives. |
Revenue Recognition | Revenue Recognition The Company adopted the new revenue recognition guidelines in accordance with ASC 606, Revenue from Contracts with Customers The Company sells its medicines primarily to wholesale distributors and specialty pharmacy providers. These customers subsequently resell the Company’s medicines to health care patients. In addition, the Company enters into arrangements with health care providers and payers that provide for government-mandated or privately-negotiated discounts and allowances related to the Company’s medicines. Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied. The majority of the Company’s contracts have a single performance obligation to transfer medicines. Accordingly, revenues from medicine sales are recognized when the customer obtains control of the Company’s medicines, which occurs at a point in time, typically upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring medicines and is generally based upon a list or fixed price less allowances for medicine returns, rebates and discounts. The Company sells its medicines to wholesale pharmaceutical distributors and pharmacies under agreements with payment terms typically less than 90 days. During the year ended December 31, 2018, management determined certain costs related to the sales of Prestalia, specifically, costs associated with free product, should be classified as cost of goods sold and not revenue reductions. Consistent with the accounting for the year ended December 31, 2018, the Company recorded an estimate of unrealized revenue reductions, and the related liability, for bottles sold to pharmacies but not yet prescribed. Medicine Sales Discounts and Allowances The nature of the Company’s contracts gives rise to variable consideration because of allowances for medicine returns, rebates and discounts. Allowances for medicine returns, rebates and discounts are recorded at the time of sale to wholesale pharmaceutical distributors and pharmacies. The Company applies significant judgments and estimates in determining some of these allowances. If actual results differ from its estimates, the Company will be required to make adjustments to these allowances in the future. The Company’s adjustments to gross sales are discussed further below. Distribution Service Fees The Company includes distribution service fees paid for inventory management services as cost of good sold. The Company calculates accrued distribution service fee estimates using the most likely amount method. The Company accrues estimated distribution fees based on contractually determined amounts. Accrued distribution service fees are included in “accrued expenses” on the condensed consolidated balance sheet. Patient Access Programs The Company offers discounts to patients under which the patient receives a discount on his or her prescription. In circumstances when a patient’s prescription is rejected by a third-party payer, the Company will pay for the full cost of the prescription. The Company reimburses pharmacies for this discount directly or through third-party vendors. The Company reduces gross sales by the amount of actual co-pay and other patient assistance in the period based on the invoices received. The Company also records an accrual to reduce gross sales for estimated co-pay and other patient assistance on units sold to distributors or pharmacies that have not yet been prescribed/dispensed to a patient. The Company calculates accrued co-pay and other patient assistance fee estimates using the expected value method. The estimate is based on contract prices, estimated percentages of medicine that will be prescribed to qualified patients, average assistance paid based on reporting from the third-party vendors and estimated levels of inventory in the distribution channel. Accrued co-pay and other patient assistance fees are included in “accrued expenses” on the condensed consolidated balance sheet. Patient assistance programs include both co-pay assistance and fully bought down prescriptions. Sales Returns Consistent with industry practice, the Company maintains a return policy that allows customers to return medicines within a specified period prior to and subsequent to the medicine expiration date. Generally, medicines may be returned for a period beginning six months prior to its expiration date and up to one year after its expiration date. The right of return expires on the earlier of one year after the medicine expiration date or the time that the medicine is dispensed to the patient. The majority of medicine returns result from medicine dating, which falls within the range set by the Company’s policy and are settled through the issuance of a credit to the customer. The Company calculates sales returns using the expected value method. The estimate of the provision for returns is based upon industry experience. This period is known to the Company based on the shelf life of medicines at the time of shipment. The Company records sales returns in “accrued expenses” and as a reduction of revenue. Shipping Fees The Company includes fees incurred by pharmacies for shipping medicines to patients as cost of good sold. The Company calculates accrued shipping fee estimates using the expected value method. The Company records accrued shipping fees in “accrued expenses” on the condensed consolidated balance sheet. Customers Concentration The Company sells its prescription drug (Prestalia) directly to specialty contracted retail pharmacies and indirectly through wholesalers. For the three months ended March 31, 2019, the Company’s three largest customers accounted for approximately 56%, 26%, and 18%, respectively, of the Company’s total gross sales. The Company works with a third-party pharmacy network manager to attract, retain, and manage the Company’s pharmacy customers and distribution channels. All of 2019 gross sales were made to customers associated with or related to the Company’s third-party pharmacy network manager. The Company had no significant sales for the three months ended March 31, 2018. Licensing Agreements Licensing agreements entered into by the Company, typically include payment of one or more of the following: non-refundable, up-front license fees; development, regulatory and commercial milestone payments; payments for manufacturing supply services; and royalties on net sales of licensed products. Each of these payments results in license, collaboration and other revenues, except for revenues from royalties on net sales of licensed products, which are classified as royalty revenues. The core principle of ASC 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received in exchange for those goods or services. During the year ended December 31, 2018, Adhera entered into a Licensing Agreement, whereby Adhera granted exclusive rights to the Company’s DiLA 2 2 |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU No. 2016-02”). Under ASU No. 2016-02, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. For leases with a term of twelve months or less, the lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities by class of underlying assets. ASU No. 2016-02 becomes effective for the Company beginning in the first quarter of 2019. The guidance can be applied using either a modified retrospective approach at the beginning of the earliest period presented, or at the beginning of the period in which it is adopted. The Company adopted this standard on January 1, 2019, using a modified retrospective approach at the adoption date through a cumulative-effect adjustment to retained earnings. The adoption did not have a material impact on its condensed consolidated statement of operations. However, the new standard required the Company to establish approximately $0.2 million of liabilities and corresponding right-of-use assets of approximately $0.2 million on its condensed consolidated balance sheet for operating leases on rented office properties that existed as of the January 1, 2019, adoption date. The Company elected to not recognize lease assets and liabilities for leases with an initial term of twelve months or less. |
Net Income (Loss) Per Common Share | Net Income (Loss) per Common Share Basic net income (loss) per common share (after giving effect of the one for ten reverse stock split that became effective in August 2017) is computed by dividing the net income (loss) by the weighted average number of common shares outstanding during the period, excluding any unvested restricted stock awards. Diluted net income (loss) per share includes the effect of common stock equivalents (stock options, unvested restricted stock, and warrants) when, under either the treasury or if-converted method, such inclusion in the computation would be dilutive. Net income (loss) is adjusted for the dilutive effect of the change in fair value liability for price adjustable warrants, if applicable. The following number of shares have been excluded from diluted net (loss) since such inclusion would be anti-dilutive: Three Months Ended March 31, 2019 2018 Stock options outstanding 4,522,807 764,707 Warrants 36,267,329 2,548,481 Shares to be issued upon conversion of notes payable - 323,404 Series E Preferred Stock 34,880,000 - Series F Preferred Stock 3,810,000 - Total 79,480,136 3,636,592 |
Nature of Operations, Basis o_3
Nature of Operations, Basis of Presentation and Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Anti-dilutive Securities | The following number of shares have been excluded from diluted net (loss) since such inclusion would be anti-dilutive: Three Months Ended March 31, 2019 2018 Stock options outstanding 4,522,807 764,707 Warrants 36,267,329 2,548,481 Shares to be issued upon conversion of notes payable - 323,404 Series E Preferred Stock 34,880,000 - Series F Preferred Stock 3,810,000 - Total 79,480,136 3,636,592 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following as of March 31, 2019 and December 31, 2018: March 31, 2019 December 31, 2018 Raw Materials $ 84,618 $ 147,139 Finished Goods 173,389 94,319 Inventory, Net $ 258,007 $ 241,458 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The following table summarizes the balances as of March 31, 2019, of the identifiable intangible assets acquired, their useful life, and annual amortization: Net Book Value March 31, 2019 Remaining Estimated Annual Amortization Expense Intangible asset - Prestalia $ 308,469 4.76 $ 64,941 Intangible asset - DyrctAxess 65,848 12.34 5,357 Total $ 374,317 $ 70,298 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Schedule of Warrant Activity | As of March 31, 2019, there were 36,267,329 warrants outstanding, with a weighted average exercise price of $0.79 per share, and annual expirations as follows: Expiring in 2019 600,000 Expiring in 2020 1,189,079 Expiring in 2021 343,750 Expiring in 2022 66,667 Expiring in 2023 33,729,180 Expiring thereafter 338,653 Total 36,267,329 |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | The following table summarizes stock option activity for the three months ended March 31, 2019: Options Outstanding Shares Weighted Average Exercise Price Outstanding, December 31, 2018 5,613,057 $ 0.83 Options granted 135,000 0.31 Options expired / forfeited (1,225,250 ) 1.10 Outstanding, March 31, 2019 4,522,807 0.86 Exercisable, March 31, 2019 1,736,414 $ 0.90 |
Summary of Additional Information on Stock Options Outstanding | The following table summarizes additional information on Adhera’s stock options outstanding at March 31, 2019. Options Outstanding Options Exercisable Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $0.28 - $0.98 3,875,000 9.85 $ 0.69 1,567,500 $ 0.71 $1.00 7,000 2.63 $ 1.00 7,000 $ 1.00 $1.50 - $1.80 493,207 8.43 $ 1.79 134,314 $ 1.78 $2.60 - $8.20 135,200 3.28 $ 2.77 15,200 $ 4.48 $10.70 - $22.00 12,400 0.46 $ 10.70 12,400 $ 10.70 Totals 4,522,807 8.60 $ 0.86 1,736,414 $ 0.90 |
Nature of Operations, Basis o_4
Nature of Operations, Basis of Presentation and Significant Accounting Policies (Details Narrative) - USD ($) | Nov. 09, 2018 | Nov. 30, 2018 | Jul. 31, 2018 | May 31, 2018 | Apr. 30, 2018 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Jan. 02, 2019 |
Common stock, par value | $ 0.006 | $ 0.006 | ||||||||
Accumulated deficit | $ (28,787,643) | $ (25,847,805) | ||||||||
Working capital | 100,000 | |||||||||
Loss from operations | (2,558,152) | $ (1,216,425) | ||||||||
Net cash used in operating activities | (2,089,814) | (58,610) | ||||||||
Loss on impairment of goodwill | 3,500,000 | |||||||||
Impairment of intangible assets | 1,672,885 | |||||||||
Revenue recognized | $ (200,000) | |||||||||
Operating lease, right-of-use asset | 208,830 | |||||||||
ASU No. 2016-02 [Member] | ||||||||||
Operating lease liabilities | $ 200,000 | |||||||||
Operating lease, right-of-use asset | $ 200,000 | |||||||||
Licensing Agreement [Member] | ||||||||||
Accrued liabilities | 200,000 | 200,000 | ||||||||
Licensing Agreement [Member] | DiLA2 Delivery System [Member] | ||||||||||
Upfront milestones payment | 200,000 | |||||||||
Accrued liabilities | $ 200,000 | $ 200,000 | ||||||||
Customer Concentration Risk [Member] | Customer 1 [Member] | Sales Revenue, Net [Member] | ||||||||||
Customers concentration risk percentage | 56.00% | |||||||||
Customer Concentration Risk [Member] | Customer 2 [Member] | Sales Revenue, Net [Member] | ||||||||||
Customers concentration risk percentage | 26.00% | |||||||||
Customer Concentration Risk [Member] | Customer 3 [Member] | Sales Revenue, Net [Member] | ||||||||||
Customers concentration risk percentage | 18.00% | |||||||||
Series E Convertible Preferred Stock [Member] | ||||||||||
Proceeds from private placement | $ 12,200,000 | $ 12,200,000 | $ 12,200,000 | |||||||
Series F Convertible Preferred Stock [Member] | ||||||||||
Proceeds from private placement | $ 1,700,000 | $ 1,700,000 | ||||||||
Additional proceeds from private placement | $ 1,400,000 | |||||||||
Series F Preferred Stock [Member] | ||||||||||
Sale of stock, shares | 73 | |||||||||
Proceeds from sale of shares | $ 310,000 |
Nature of Operations, Basis o_5
Nature of Operations, Basis of Presentation and Significant Accounting Policies - Schedule of Anti-dilutive Securities (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Anti-dilutive securities | 79,480,136 | 3,636,592 |
Stock Options Outstanding [Member] | ||
Anti-dilutive securities | 4,522,807 | 764,707 |
Warrants [Member] | ||
Anti-dilutive securities | 36,267,329 | 2,548,481 |
Shares to be Issued Upon Conversion of Notes Payable [Member] | ||
Anti-dilutive securities | 323,404 | |
Series E Preferred Stock [Member] | ||
Anti-dilutive securities | 34,880,000 | |
Series F Preferred Stock [Member] | ||
Anti-dilutive securities | 3,810,000 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw Materials | $ 84,618 | $ 147,139 |
Finished Goods | 173,389 | 94,319 |
Inventory, Net | $ 258,007 | $ 241,458 |
Prepaid and Other Assets (Detai
Prepaid and Other Assets (Details Narrative) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Prepaid insurance | $ 163,777 | $ 179,145 |
Third-party Co-pay Program Managers [Member] | ||
Deposits with a customer | $ 143,795 | $ 157,584 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jul. 31, 2017 | |
Impairment of intangible assets | $ 1,672,885 | |||||
Amortization | $ 17,575 | $ 123,261 | ||||
2014 Long-Term Incentive Plan [Member] | Chief Commercial Officer [Member] | ||||||
Number of restricted shares of common stock | 60,000 | |||||
Symplmed Technologies, LLC [Member] | ||||||
Intangible asset | $ 75,000 | |||||
Purchase Agreement [Member] | Symplmed Pharmaceuticals LLC [Member] | ||||||
Purchase consideration | $ 620,000 | |||||
Payment to acquire business | 300,000 | |||||
Liabilities assumed | $ 320,000 | |||||
Fair value of the assets acquired | $ 160,800 | $ 620,000 | ||||
Intangible asset | $ 459,200 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Net Book Value, Intangible assets | $ 374,317 |
Annual Amortization Expense, Intangible assets | 70,298 |
Prestalia [Member] | |
Net Book Value, Intangible assets | $ 308,469 |
Estimated Useful Life, Intangible assets | 4 years 9 months 3 days |
Annual Amortization Expense, Intangible assets | $ 64,941 |
DyrctAxess [Member] | |
Net Book Value, Intangible assets | $ 65,848 |
Estimated Useful Life, Intangible assets | 12 years 4 months 2 days |
Annual Amortization Expense, Intangible assets | $ 5,357 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jan. 15, 2019 | Apr. 30, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 |
Due to related party | $ 4,392 | $ 4,392 | |||
Stock option granted during the period | 135,000 | ||||
Stock options exercisable | 1,736,414 | ||||
Chief Financial Officer [Member] | |||||
Stock option granted during the period | 100,000 | ||||
Exercise price | $ 0.32 | ||||
Stock options exercisable | 25,000 | ||||
Stock option vesting period description | The Board also granted to our CFO options to purchase up to an aggregate of 100,000 shares of the common stock of the Company at an exercise price of $0.32 per share, with 25,000 options being exercisable immediately and with 25,000 options vesting on each of the first, second and third anniversary of the grant date. | ||||
New Chief Executive Officer [Member] | April 4, 2019 [Member] | Achievement Of Certain Product Sales And Stock Price Targets [Member] | |||||
Number of stock options vested | 500,000 | ||||
BioMauris, LLC [Member] | |||||
Due to related party | $ 48,266 | $ 23,585 | |||
Paid to related party for services | $ 21,690 | $ 46,532 | |||
Warrants [Member] | |||||
Warrant term | 5 years | ||||
Exercise price of warrants | $ 0.55 | ||||
Fair value of warrant | $ 1,494,469 | ||||
Loss on settlement of debt | 754,697 | ||||
Autotelic [Member] | |||||
Billed expenses | 0 | 256,997 | |||
Personnel cost | 0 | $ 133,633 | |||
Master Services Agreement [Member] | |||||
Proceeds from common or preferred stock, gross | $ 10,000,000 | ||||
Compensation description | After the Equity Financing Date, the Company paid Autotelic Inc. a cash amount equal to the actual labor cost plus 100% mark up of provided services and 20% mark up of provided services by third party contractors or material used in connection with the performance of the contracts, including but not limited to clinical trial, non-clinical trial, Contract Manufacturing Organizations, FDA regulatory process, Contract Research Organizations and Chemistry and Manufacturing Controls. | ||||
Master Services Agreement [Member] | Related Party [Member] | |||||
Service provider percentage | 20.00% | ||||
Settlement Agreement with Autotelic Inc [Member] | Maximum [Member] | |||||
Warrants to purchase common shares | 1,345,040 | ||||
Settlement Agreement with Autotelic Inc [Member] | Series E Preferred Stock [Member] | |||||
Number of stock issued during the period, shares | 162.59 | ||||
Proceeds from notes payable due to related party | $ 812,967 | ||||
Accrued and unpaid fees | $ 739,772 | ||||
Resignation of Chief Commercial Officer [Member] | Chief Commercial Officer [Member] | |||||
Consulting fees | $ 3,000 | ||||
New Chief Executive Officer [Member] | April 4, 2019 [Member] | |||||
Stock option granted during the period | 1,500,000 | ||||
Stock options exercisable | 400,000 | ||||
Number of stock options vested | 600,000 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Nov. 09, 2018 | Nov. 30, 2018 | Jul. 31, 2018 | May 31, 2018 | Apr. 30, 2018 | May 31, 2018 | Mar. 31, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Aug. 31, 2015 | Mar. 31, 2014 |
Preferred stock, shares authorized | 100,000 | 100,000 | |||||||||
Preferred stock, par value | $ 0.01 | $ 0.01 | |||||||||
Stock option granted during the period | 135,000 | ||||||||||
Common stock, shares outstanding | 10,761,684 | 10,761,684 | |||||||||
Warrants outstanding | 36,267,329 | ||||||||||
Warrants [Member] | |||||||||||
Weighted average exercise price | $ 0.79 | ||||||||||
Number of warrants expired | |||||||||||
Employees [Member] | |||||||||||
Stock option granted during the period | 135,000 | ||||||||||
Warrants [Member] | |||||||||||
Common stock exercise price, per share | $ 0.55 | ||||||||||
Warrants outstanding | 36,267,329 | ||||||||||
Adjustable warrants, shares | 34,373,030 | ||||||||||
Subscription Agreements [Member] | Warrants [Member] | |||||||||||
Preferred stock, par value | $ 0.75 | $ 0.75 | |||||||||
Warrants to purchase of common stock shares | 73,000 | 308,000 | |||||||||
Common stock exercise price, per share | $ 0.55 | $ 0.55 | |||||||||
Series B Preferred Stock [Member] | |||||||||||
Preferred stock designated, shares | 1,000 | ||||||||||
Preferred stock shares outstanding | |||||||||||
Series A Preferred Stock [Member] | |||||||||||
Preferred stock designated, shares | 90,000 | ||||||||||
Preferred stock shares outstanding | |||||||||||
Series C Preferred Stock [Member] | |||||||||||
Preferred stock designated, shares | 1,200 | ||||||||||
Preferred stock shares outstanding | 100 | 100 | |||||||||
Series D Preferred Stock [Member] | |||||||||||
Preferred stock designated, shares | 220 | ||||||||||
Preferred stock shares outstanding | 40 | 40 | |||||||||
Series E Convertible Preferred Stock [Member] | |||||||||||
Preferred stock, shares authorized | 3,500 | 3,500 | |||||||||
Preferred stock designated, shares | 3,500 | ||||||||||
Preferred stock shares outstanding | 3,488 | 3,488 | |||||||||
Preferred stock, par value | $ 0.01 | $ 0.01 | |||||||||
Accrued dividends | $ 344,108 | ||||||||||
Proceeds from private placement | $ 12,200,000 | $ 12,200,000 | $ 12,200,000 | ||||||||
Series E Convertible Preferred Stock [Member] | Subscription Agreements [Member] | |||||||||||
Sale of stock, shares | 2,812 | ||||||||||
Preferred stock stated dividend rate | 8.00% | ||||||||||
Series E Convertible Preferred Stock [Member] | Subscription Agreements [Member] | Warrants [Member] | |||||||||||
Purchase price of preferred stock | $ 5,000 | $ 5,000 | |||||||||
Common stock at a conversion price, per share | $ 0.50 | $ 0.50 | |||||||||
Warrant term | 5 years | 5 years | |||||||||
Warrants to purchase of common stock shares | 0.75 | 0.75 | |||||||||
Common stock exercise price, per share | $ 0.55 | $ 0.55 | |||||||||
Series F Convertible Preferred Stock [Member] | |||||||||||
Preferred stock, shares authorized | 2,200 | 2,200 | |||||||||
Preferred stock designated, shares | 2,200 | ||||||||||
Preferred stock shares outstanding | 381 | 381 | |||||||||
Preferred stock, par value | $ 0.01 | $ 0.01 | |||||||||
Accrued dividends | $ 37,578 | ||||||||||
Proceeds from private placement | $ 1,700,000 | $ 1,700,000 | |||||||||
Series F Convertible Preferred Stock [Member] | Subscription Agreements [Member] | |||||||||||
Sale of stock, shares | 73 | 308 | |||||||||
Purchase price of preferred stock | $ 5,000 | $ 5,000 | |||||||||
Common stock at a conversion price, per share | $ 0.50 | $ 0.50 | |||||||||
Warrant term | 5 years | 5 years | |||||||||
Preferred stock stated dividend rate | 8.00% | ||||||||||
Proceeds from private placement | $ 310,000 | $ 1,400,000 | |||||||||
Placement agent fees and estimated expenses | $ 180,000 | ||||||||||
Weighted average exercise price | $ 0.55 | $ 0.55 | |||||||||
Common Stock [Member] | |||||||||||
Common stock, shares outstanding | 10,761,684 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Warrant Activity (Details) | Mar. 31, 2019shares |
Equity [Abstract] | |
Expiring in 2019 | 600,000 |
Expiring in 2020 | 1,189,079 |
Expiring in 2021 | 343,750 |
Expiring in 2022 | 66,667 |
Expiring in 2023 | 33,729,180 |
Expiring thereafter | 338,653 |
Total | 36,267,329 |
Stock Incentive Plans (Details
Stock Incentive Plans (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Stock option granted during the period | 135,000 | |
Employee Stock Option [Member] | ||
Weighted-average exercisable remaining contractual life (years) | 7 years 11 months 4 days | |
Stock option granted during the period | 135,000 | |
Stock option vesting period description | 35,000 stock options vest at a rate of one-third at the end of each annual anniversary over three years from the grant date and have a 10-year term. 100,000 options vest at a rate of 25,000 upon grant and 25,000 at the end of each annual anniversary over three years from the grant date and have revised 90 day term based on our former CFO's resignation. | |
Stock option weighted average period term | 10 years | |
Number of shares vested | 100,000 | |
Stock option unrecognized compensation expense | $ 680,057 | |
Stock option expenses | 395,390 | $ 118,879 |
Stock option outstanding, intrinsic value | $ 15,100 | |
Stock option outstanding exercise price | $ 0.40 | |
Employee Stock Option [Member] | One-third At End of Each Annual Anniversary Over Three Years [Member] | ||
Number of shares vested | 35,000 | |
Employee Stock Option [Member] | Vested Upon Grant[Member] | ||
Number of shares vested | 25,000 | |
Employee Stock Option [Member] | Annual Anniversary One[Member] | ||
Number of shares vested | 25,000 | |
Employee Stock Option [Member] | Annual Anniversary Two[Member] | ||
Number of shares vested | 25,000 | |
Employee Stock Option [Member] | Annual Anniversary Three[Member] | ||
Number of shares vested | 25,000 | |
Employee Stock Option [Member] | Minimum [Member] | ||
Options to purchase exercise price, per share | $ 0.28 | |
Employee Stock Option [Member] | Maximum [Member] | ||
Options to purchase exercise price, per share | $ 0.34 |
Stock Incentive Plans - Schedul
Stock Incentive Plans - Schedule of Stock Option Activity (Details) | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Options Outstanding Beginning, Shares | shares | 5,613,057 |
Options Outstanding, granted | shares | 135,000 |
Options Outstanding, expired/ forfeited | shares | (1,225,250) |
Options Outstanding Ending, Shares | shares | 4,522,807 |
Options Outstanding Exercisable, Shares | shares | 1,736,414 |
Options Outstanding Weighted Average Exercise Price, Beginning | $ / shares | $ 0.83 |
Options Outstanding Weighted Average Exercise Price, granted | $ / shares | 0.31 |
Options Outstanding Weighted Average Exercise Price, expired/ forfeited | $ / shares | 1.10 |
Options Outstanding Weighted Average Exercise Price, Ending | $ / shares | 0.86 |
Options Outstanding Exercisable Weighted Average Exercise Price | $ / shares | $ 0.90 |
Stock Incentive Plans - Summary
Stock Incentive Plans - Summary of Additional Information on Stock Options Outstanding (Details) | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Number of Options Outstanding, Shares | shares | 4,522,807 |
Options Outstanding Weighted-average Remaining Contractual Life (years) | 8 years 7 months 6 days |
Options Outstanding Weighted Average Exercise Price | $ 0.86 |
Number of Option Exercisable, Shares | shares | 1,736,414 |
Options Exercisable Weighted Average Exercise Price | $ 0.90 |
Range One [Member] | |
Range of Exercise Prices, Lower | 0.28 |
Range of Exercise Prices, Upper | $ 0.98 |
Number of Options Outstanding, Shares | shares | 3,875,000 |
Options Outstanding Weighted-average Remaining Contractual Life (years) | 9 years 10 months 6 days |
Options Outstanding Weighted Average Exercise Price | $ 0.69 |
Number of Option Exercisable, Shares | shares | 1,567,500 |
Options Exercisable Weighted Average Exercise Price | $ 0.71 |
Range Two [Member] | |
Range of Exercise Prices, Upper | $ 1 |
Number of Options Outstanding, Shares | shares | 7,000 |
Options Outstanding Weighted-average Remaining Contractual Life (years) | 2 years 7 months 17 days |
Options Outstanding Weighted Average Exercise Price | $ 1 |
Number of Option Exercisable, Shares | shares | 7,000 |
Options Exercisable Weighted Average Exercise Price | $ 1 |
Range Three [Member] | |
Range of Exercise Prices, Lower | 1.50 |
Range of Exercise Prices, Upper | $ 1.80 |
Number of Options Outstanding, Shares | shares | 493,207 |
Options Outstanding Weighted-average Remaining Contractual Life (years) | 8 years 5 months 5 days |
Options Outstanding Weighted Average Exercise Price | $ 1.79 |
Number of Option Exercisable, Shares | shares | 134,314 |
Options Exercisable Weighted Average Exercise Price | $ 1.78 |
Range Four [Member] | |
Range of Exercise Prices, Lower | 2.60 |
Range of Exercise Prices, Upper | $ 8.20 |
Number of Options Outstanding, Shares | shares | 135,200 |
Options Outstanding Weighted-average Remaining Contractual Life (years) | 3 years 3 months 11 days |
Options Outstanding Weighted Average Exercise Price | $ 2.77 |
Number of Option Exercisable, Shares | shares | 15,200 |
Options Exercisable Weighted Average Exercise Price | $ 4.48 |
Range Five [Member] | |
Range of Exercise Prices, Lower | 10.70 |
Range of Exercise Prices, Upper | $ 22 |
Number of Options Outstanding, Shares | shares | 12,400 |
Options Outstanding Weighted-average Remaining Contractual Life (years) | 5 months 16 days |
Options Outstanding Weighted Average Exercise Price | $ 10.70 |
Number of Option Exercisable, Shares | shares | 12,400 |
Options Exercisable Weighted Average Exercise Price | $ 10.70 |
Intellectual Property and Col_2
Intellectual Property and Collaborative Agreements (Details Narrative) - USD ($) | Mar. 16, 2018 | Jul. 31, 2017 | Jun. 30, 2017 | Mar. 31, 2019 | Dec. 31, 2018 |
Licensing Agreement [Member] | |||||
Upfront payment of future consideration | $ 200,000 | ||||
Accrued liabilities | $ 200,000 | $ 200,000 | |||
Purchase Agreement [Member] | Symplmed Pharmaceuticals LLC [Member] | |||||
Upfront payment of future consideration | $ 620,000 | ||||
Purchase price | $ 75,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Apr. 30, 2018 | Mar. 31, 2019 | Jan. 02, 2019 | Dec. 31, 2018 | |
Operating lease term of contract | 37 months | |||
Operating lease rent expenses | $ 6,458 | |||
Operating lease rent increase in future | 7,057 | |||
Operating lease, right-of-use asset | 208,830 | |||
Operating lease liability, current | 88,940 | |||
Operating lease liability, noncurrent | 126,540 | |||
Future minimum lease payments, remaining nine months of 2019 | 70,000 | |||
Future minimum lease payments, 2020 | 80,000 | |||
Future minimum lease payments, 2021 | $ 70,000 | |||
ASU No. 2016-02 [Member] | ||||
Operating lease, right-of-use asset | $ 200,000 | |||
Operating lease liabilities | $ 200,000 | |||
Vaya Pharma, Inc. [Member] | ||||
Issuance of common stock, value | $ 250,000 | |||
Issuance of common stock, shares | 210,084 | |||
Pharmaceutical Development Agreement [Member] | ||||
Commitments, description | The Amendment, we and Windlas agreed to amend the Development Agreement to reflect our agreement to issue to Windlas, and Windlas' agreement to accept from us, in lieu of cash payments with respect to forty percent (40%) of the total amount reflected on invoices sent from time to time by Windlas to us, shares of our common stock having an aggregate value equal to forty percent (40%) of such invoiced amount (with the remaining portion of the invoiced amount being paid in cash). | |||
Cash payments percentage | 40.00% | |||
Pharmaceutical Development Agreement [Member] | Maximum [Member] | ||||
Issuance of common stock, value | $ 2,000,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - Series E Convertible Preferred Stock [Member] | 1 Months Ended |
Apr. 30, 2019USD ($)shares | |
Stock issued during period | shares | 107,846 |
Stock issued during period, value | $ | $ 53,923 |