Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 26, 2019 | Jun. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | ProPhase Labs, Inc. | ||
Entity Central Index Key | 0000868278 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Reporting Status Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 27,560,318 | ||
Entity Common Stock, Shares Outstanding | 11,556,685 | ||
Trading Symbol | PRPH | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 1,554 | $ 3,173 |
Marketable securities, available for sale | 6,687 | 18,765 |
Escrow receivable, current portion | 4,830 | 2,500 |
Accounts receivable, net | 2,968 | 1,945 |
Inventory | 1,903 | 1,531 |
Prepaid expenses and other current assets | 296 | 481 |
Assets held for sale, discontinued operations | 22 | |
Total current assets | 18,238 | 28,417 |
Property, plant and equipment, net of accumulated depreciation of $5,854 and $5,471, respectively | 2,499 | 2,742 |
Escrow receivable | 2,500 | |
TOTAL ASSETS | 20,737 | 33,659 |
Current liabilities | ||
Accounts payable | 437 | 562 |
Accrued advertising and other allowances | 101 | 200 |
Dividend payable | 2,929 | |
Other current liabilities | 766 | 1,050 |
Total current liabilities | 4,233 | 1,812 |
COMMITMENTS AND CONTINGENCIES | ||
Stockholders' equity | ||
Preferred stock authorized 1,000,000, $.0005 par value, no shares issued | ||
Common stock authorized 50,000,000, $.0005 par value, issued 28,201,541 and 27,696,593 shares, respectively | 14 | 14 |
Additional paid-in capital | 59,471 | 58,034 |
Retained earnings | 4,533 | 20,902 |
Treasury stock, at cost, 16,652,022 and 16,566,701 shares | (47,490) | (47,025) |
Accumulated comprehensive loss | (24) | (78) |
Total stockholders' equity | 16,504 | 31,847 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 20,737 | $ 33,659 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 5,854 | $ 5,471 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, par value | $ 0.0005 | $ 0.0005 |
Preferred stock, shares issued | ||
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, par value | $ 0.0005 | $ 0.0005 |
Common stock, shares issued | 28,201,541 | 27,696,593 |
Treasury stock, shares | 16,652,022 | 16,566,701 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Other Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
Net sales | $ 13,126 | $ 9,867 |
Cost of sales | 8,345 | 7,919 |
Gross profit | 4,781 | 1,948 |
Operating expenses: | ||
Sales and marketing | 1,107 | 699 |
Administration | 4,910 | 4,808 |
Research and development | 398 | 431 |
Total operating expenses | 6,415 | 5,938 |
Loss from operations | (1,634) | (3,990) |
Interest income, net | 167 | 177 |
Other income | 150 | |
Total interest and other income | 167 | 327 |
Loss from continuing operations before income taxes | (1,467) | (3,663) |
Income tax benefit (provision) from continuing operations | (103) | 1,421 |
Loss from continuing operations | (1,570) | (2,242) |
Discontinued operations: | ||
Income from discontinued operations | 530 | |
Gain (loss) on sale of discontinued operations, net of taxes | (170) | 42,301 |
Income (loss) from discontinued operations | (170) | 42,831 |
Net income (loss) | (1,740) | 40,589 |
Other comprehensive income (loss): | ||
Unrealized gain (loss) on marketable securities | 54 | (78) |
Total comprehensive income (loss) | $ (1,686) | $ 40,511 |
Basic earnings (loss) per share: | ||
Loss from continuing operations | $ (0.14) | $ (0.14) |
Income (loss) from discontinued operations | (0.01) | 2.75 |
Net income (loss) | (0.15) | 2.61 |
Diluted earnings (loss) per share: | ||
Loss from continuing operations | (0.14) | (0.14) |
Income (loss) from discontinued operations | (0.01) | 2.73 |
Net income (loss) | $ (0.15) | $ 2.59 |
Weighted average common shares outstanding: | ||
Basic | 11,396,000 | 15,565,000 |
Diluted | 11,396,000 | 15,696,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock Shares Outstanding, Net of Shares of Treasury Stock [Member] | Additional Paid in Capital [Member] | Retained Earnings [Member] | Accumulated Comprehensive Loss [Member] | Treasury Stock [Member] | Total |
Balance at Dec. 31, 2016 | $ 13 | $ 56,378 | $ (19,687) | $ (30,742) | $ 5,962 | |
Balance, shares at Dec. 31, 2016 | 17,080,776 | |||||
Proceeds for warrants exercised | 69 | 69 | ||||
Proceeds for warrants exercised, shares | 51,000 | |||||
Proceeds for options exercised | $ 1 | 1,509 | $ 1,510 | |||
Proceeds for options exercised, shares | 1,332,000 | 315,000 | ||||
Unrealized loss on marketable securities | (78) | $ (78) | ||||
Share-based compensation | 78 | 78 | ||||
Stock-based compensation, shares | ||||||
Treasury stock acquired | (16,283) | (16,283) | ||||
Treasury stock acquired, shares | (7,333,884) | |||||
Cashless options exercise | ||||||
Net loss | 40,589 | 40,589 | ||||
Balance at Dec. 31, 2017 | $ 14 | 58,034 | 20,902 | (78) | (47,025) | 31,847 |
Balance, shares at Dec. 31, 2017 | 11,129,892 | |||||
Proceeds for warrants exercised | ||||||
Proceeds for options exercised | 338 | $ 338 | ||||
Proceeds for options exercised, shares | 240,000 | 490,000 | ||||
Unrealized loss on marketable securities | 54 | $ 54 | ||||
Share-based compensation | 634 | 634 | ||||
Stock-based compensation, shares | 14,948 | |||||
Cashless options exercise | 465 | (465) | ||||
Cashless options exercise, shares | 164,679 | |||||
Cash dividends | (14,629) | (14,629) | ||||
Net loss | (1,740) | (1,740) | ||||
Balance at Dec. 31, 2018 | $ 14 | $ 59,471 | $ 4,533 | $ (24) | $ (47,490) | $ 16,504 |
Balance, shares at Dec. 31, 2018 | 11,549,519 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities | ||
Net (loss) income | $ (1,740) | $ 40,589 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Realized gain on marketable securities | 130 | |
Loss (gain) on sale of discontinued operations, net of tax | 170 | (42,301) |
Change in valuation allowance, income tax | (1,421) | |
Depreciation and amortization | 383 | 337 |
Loss on fixed asset disposal | 291 | |
Amortization of loan origination and warrant expenses | 10 | |
Stock-based compensation expense | 634 | 78 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,023) | 3,825 |
Inventory | (372) | 1,205 |
Prepaid and other assets | 185 | 199 |
Accounts payable and accrued expenses | (125) | (1,594) |
Accrued advertising and other allowances | (99) | (2,605) |
Due to Mylan, Inc. and affiliates | (59) | 59 |
Other current liabilities | (225) | (1,488) |
Assets held for sale | 22 | (22) |
Net cash used in operating activities | (2,119) | (2,838) |
Cash flows from investing activities | ||
Net proceeds from the sale of assets | 40,825 | |
Purchase of marketable securities | (13,350) | (31,693) |
Proceeds from maturities of marketable securities | 14,280 | 12,850 |
Proceeds from sale of marketable securities | 11,071 | |
Capital expenditures | (140) | (208) |
Net cash provided by investing activities | 11,862 | 21,774 |
Cash flows from financing activities | ||
Payments to retire notes | (1,500) | |
Payments to acquire treasury stock | (16,283) | |
Payment of dividends | (11,700) | |
Proceeds from exercise of warrants | 69 | |
Proceeds from exercise of stock options | 337 | 1,510 |
Net cash used in financing activities | (11,362) | (16,204) |
(Decrease) increase in cash and cash equivalents | (1,619) | 2,732 |
Cash and cash equivalents, at the beginning of the year | 3,173 | 441 |
Cash and cash equivalents, at the end of the year | 1,554 | 3,173 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 54 | |
Income taxes paid | 738 | 1,350 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Net unrealized gain (loss), investments in marketable securities | 54 | (78) |
Declaration of dividend payable | 2,929 | |
Cashless options exercise | 465 | |
Escrow receivable | $ 5,000 |
Organization and Business
Organization and Business | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Note 1 – Organization and Business ProPhase Labs, Inc. (“we”, “us” or the “Company”) was initially organized as a corporation in Nevada in July 1989. Effective June 18, 2015, we changed our state of incorporation from the State of Nevada to the State of Delaware. We are a vertically integrated and diversified branding, marketing and technology company engaged in the research, development, manufacture, distribution, marketing and sale of over-the-counter (“OTC”) consumer healthcare products and dietary supplements in the United States. This includes the development and marketing of dietary supplements under the TK Supplements ® ProPhase Digital Media, Inc. (“PDM”), a wholly-owned subsidiary of ProPhase Labs, Inc., is an independent full-service direct marketing agency. PDM’s first initiative will be to market the TK Supplements ® In addition, we also continue to actively pursue acquisition opportunities for other companies, technologies and products within and outside the consumer products industry. We use a December 31 year-end for financial reporting purposes. References herein to “Fiscal 2018” shall mean the fiscal year ended December 31, 2018 and references to other “fiscal” years shall mean the year, which ended on December 31 of the year indicated. The term “we”, “us” or the “Company” as used herein also refer, where appropriate, to the Company, together with its subsidiaries and consolidated variable interest entities unless the context otherwise requires. Discontinued Operations Prior to March 29, 2017, our flagship OTC drug brand was Cold-EEZE ® ® ® ® ® ® ® Effective March 29, 2017, we sold our intellectual property rights and other assets related to our Cold-EEZE ® ® ® ® ® ® ® ® ® Continuing Operations We continue to own and operate our manufacturing facility and manufacturing business in Lebanon, Pennsylvania, and our headquarters in Doylestown, Pennsylvania. As part of the sale of the Cold-EEZE ® ® We are also engaged in development and distribution of a product line of OTC dietary supplements under the brand name of TK Supplements ® ® ® ® TM ® |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies For Fiscal 2018 and 2017, our revenues from continuing operations have come principally from our OTC healthcare contract manufacturing business and sales to retail customers of dietary supplement product. Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated. Discontinued Operations Carve Out and ProPhase Allocations For Fiscal 2018 and 2017, results from operations for the Cold-EEZE ® ® ® Product Innovation, Seasonality of the Business and Liquidity Our net sales are derived principally from our contract manufacturing of OTC healthcare and dietary supplement products sold in the United States. In addition, we are engaged in market activities for the TK Supplements ® Our sales are influenced by and subject to (i) the scope and timing of TK Supplement ® As a consequence of the scope and timing of our TK Supplements ® Use of Estimates The preparation of financial statements and the accompanying notes thereto, in conformity with generally accepted accounting principles in the United States of America (“GAAP”), requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the respective reporting periods. Examples include the provision for bad debt, sales returns and allowances, inventory obsolescence, useful lives of property and equipment, impairment of property and equipment, income tax valuations and assumptions related to accrued advertising. When providing for the appropriate sales returns, allowances, cash discounts and cooperative incentive promotion costs (“Sales Allowances”), we apply a uniform and consistent method for making certain assumptions for estimating these provisions. These estimates and assumptions are based on historical experience, current trends and other factors that management believes to be relevant at the time the financial statements are prepared. Management reviews the accounting policies, assumptions, estimates and judgments on a quarterly basis. Actual results could differ from those estimates. Cash and Cash Equivalents We consider all highly liquid investments with an initial maturity of three months or less at the time of purchase to be cash equivalents. Cash equivalents include cash on hand and monies invested in money market funds. The carrying amount approximates the fair market value due to the short-term maturity of these investments. Marketable Securities We have classified our investments in marketable securities as available-for-sale and as a current asset. Our investments in marketable securities are carried at fair value, with unrealized gains and losses included as a separate component of stockholders’ equity. Realized gains and losses from our marketable securities are recorded as other interest income (expense). We initiated short term investments in marketable securities, which carry maturity dates between one and three years from date of purchase with interest rates of 2.39% - 3.67%, during Fiscal 2018. For Fiscal 2018 and 2017, we reported an unrealized gain of $54,000 and unrealized loss of $78,000, respectively. We had an accumulated unrealized loss of $24,000 and $78,000 as of December 31, 2018 and 2017, respectively. Unrealized gains and losses are classified as other comprehensive income (loss) and cost is determined on a specific identification basis. The following is a summary of the components of our marketable securities and the underlying fair value input level tier hierarchy (see long-lived assets below) (in thousands): As of December 31, 2018 Amortized Unrealized Market Cost Losses Value U.S treasuries $ 2,401 $ (3 ) $ 2,398 Corporate bonds 4,310 (21 ) 4,289 $ 6,711 $ (24 ) $ 6,687 As of December 31, 2017 Amortized Unrealized Market Cost Losses Value U.S treasuries $ 1,744 $ - $ 1,744 Corporate bonds 17,099 (78 ) 17,021 $ 18,843 $ (78 ) $ 18,765 We have determined that the unrealized losses are deemed to be temporary as of December 31, 2018. We believe that the unrealized losses generally are the result of increases in the risk premiums required by market participants rather than an adverse change in cash flows or a fundamental weakness in the credit quality of the issuer or underlying assets. We have the ability and intent to hold these investments until a recovery of fair value, which may be maturity. We do not consider the investment in corporate bonds to be other-than-temporarily impaired at December 31, 2018. Inventory Inventory is valued at the lower of cost, determined on a first-in, first-out basis (FIFO), or net realizable value. Inventory items are analyzed to determine cost and the net realizable value and appropriate valuation adjustments are established. At December 31, 2018, after the 2018 write-off of certain inventory previously reserved, the financial statements include adjustments to reduce inventory for excess, obsolete or short-dated shelf-life inventory of $377,000, inclusive of adjustments of $270,000 for product samples of TK Supplements ® ® December 31, December 31, 2018 2017 Raw materials $ 1,374 $ 1,269 Work in process 371 245 Finished goods 158 17 $ 1,903 $ 1,531 Property, Plant and Equipment Property, plant and equipment are recorded at cost. We use the straight-line method in computing depreciation for financial reporting purposes. Depreciation expense is computed in accordance with the following ranges of estimated asset lives: building and improvements – ten to thirty-nine years; machinery and equipment – three to seven years; computer equipment and software – three to five years; and furniture and fixtures – five years. Concentration of Risks Future revenues, costs, margins and profits will continue to be influenced by our ability to maintain our manufacturing availability and capacity together with our marketing and distribution capabilities and the regulatory requirements associated with the development of OTC consumer healthcare products, dietary supplements and other remedies in order to compete on a national level and/or international level. Our business is subject to federal and state laws and regulations adopted for the health and safety of users of our products. The manufacturing and distribution of OTC healthcare and dietary supplement products are subject to regulations by various federal, state and local agencies, including the Food and Drug Administration (“FDA”) and, as applicable, the Homeopathic Pharmacopoeia of the United States. Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash investments, marketable securities, and trade accounts receivable. Our marketable securities are fixed income investments, which are highly liquid and can be readily purchased or sold through established markets. We maintain cash and cash equivalents with certain major financial institutions. As of December 31, 2018, our cash and cash equivalents balance was $1.6 million and our bank balance was $1.6 million. Of the total bank balance, $250,000 was covered by federal depository insurance and $1.4 million was uninsured at December 31, 2018. Trade accounts receivable potentially subject us to credit concentrations from time-to-time as a consequence of the timing, payment pattern and ultimate purchase volumes or shipping schedules with our customers. We extend credit to our customers based upon an evaluation of the customer’s financial condition and credit history and generally we do not require collateral. Our customers include consumer products companies and large national chain, regional, specialty and local retail stores. These credit concentrations may impact our overall exposure to credit risk, either positively or negatively, in that our customers may be similarly affected by changes in economic, regulatory or other conditions that may impact the timing and collectability of amounts due to us. As a consequence of an evaluation of our customer’s financial condition, payment patterns, balance due to us and other factors, we did not offset our account receivable with an allowance for bad debt at December 31, 2018 and 2017. Long-lived Assets We review the carrying value of our long-lived assets with definite lives whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When indicators of impairment exist, we determine whether the estimated undiscounted sum of the future cash flows of such assets is less than their carrying amounts. If less, an impairment loss is recognized in the amount, if any, by which the carrying amount of such assets exceeds their respective fair values. The determination of fair value is based on quoted market prices in active markets, if available, or independent appraisals; sales price negotiations; or projected future cash flows discounted at a rate determined by management to be commensurate with our business risk. The estimation of fair value utilizing discounted forecasted cash flows includes significant judgments regarding assumptions of revenue, operating and marketing costs; selling and administrative expenses; interest rates; property and equipment additions and retirements; industry competition; and general economic and business conditions, among other factors. Fair value is based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, a three-tier fair value hierarchy prioritizes the inputs used to measure fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. Fair Value of Financial Instruments Cash and cash equivalents, marketable securities, accounts receivable, assets held for sale, accounts payable, and accrued expenses are reflected in the consolidated financial statements at carrying value which approximates fair value. We account for our marketable securities at fair value pursuant to Accounting Standards Codification, or ASC, 820-10, with the net unrealized gains or losses reported as a component of accumulated other comprehensive income or loss. As of December 31, 2018 Level 1 Level 2 Level 3 Total Marketable securities U.S. government obligations $ - $ 2,398 $ - $ 2,398 Corporate obligations - 4,289 - 4,289 $ - $ 6,687 $ - $ 6,687 As of December 31, 2017 Level 1 Level 2 Level 3 Total Marketable securities U.S. government obligations $ - $ 1,744 $ - $ 1,744 Corporate obligations - 17,021 - 17,021 $ - $ 18,765 $ - $ 18,765 There were no transfers of marketable securities between Levels 1, 2 or 3 for the Fiscal 2018 and 2017. Revenue Recognition We account for revenue in accordance with ASC 606, which requires revenue recognized to represent the transfer of promised goods or services to customers at an amount that reflects the consideration which is expected to be received in exchange for those goods or services. We recognize revenue when performance obligations with our customers have been satisfied. At contract inception, we determine if a contract is within the scope of ASC Topic 606 and then evaluate the contract using the following five steps: (1) identify the contract with the customer; (2) identify the performance obligations; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. We adopted ASC 606 as of January 1, 2018 using the modified retrospective method. For the year ended December 31, 2018, there were no changes to our opening balances upon the adoption of ASC 606 and the amounts which would have been reported under the standards in effect prior to adoption. Performance Obligations We generate sales principally through two types of customers, contract manufacturing and retail customers. Sales from product shipments to contract manufacturing and retailer customers are recognized at the time ownership is transferred to the customer. Net sales from OTC healthcare contract manufacturing and retail dietary supplement product customers were $12.6 million and $0.5 million, respectively, for Fiscal 2018 and $9.7 million and $0.2 million, respectively, for Fiscal 2017. Revenue from retailer customers is reduced for trade promotions, estimated sales returns, cash discounts and other allowances in the same period as the related sales are recorded. No such allowance is applicable to our contract manufacturing customers. We make estimates of potential future product returns and other allowances related to current period revenue. We analyze historical returns, current trends, and changes in customer and consumer demand when evaluating the adequacy of the sales returns and other allowances. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in accordance with ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The combined duties and responsibilities within each contract will be considered one single performance obligation under ASC 606 as these items would not be separately identifiable from each other promise in the contract and we provide a significant service of integrating the duties with other promises in the contracts. Transaction Price The transaction price is fixed based upon either (i) a combined Master Agreement and each related purchase order, or (ii) if there is no Master Agreement, the price per the individual purchase order received from each customer. The customers are invoiced at an agreed upon contractual price for each unit ordered and delivered by us. Consistent with Company practice prior to the adoption of ASC 606, we do not collect sales tax or other similar taxes from customers. As such, there is no effect on the measurement of the transaction price. Recognize Revenue When the Company Satisfies a Performance Obligation Performance obligations related to contract manufacturing and retail customers are satisfied at a point in time when the goods are shipped to the customer as (i) we have transferred control of the assets to the customers upon shipping, and (ii) the customer obtains title and assumes the risks and rewards of ownership after the goods are shipped. We do not accept returns in the contract manufacturing revenue stream. Our return policy for retailer customers accommodates returns for (i) discontinued products, (ii) store closings and (iii) products that have reached or exceeded their designated expiration date. We do not impose a period of time within which product may be returned. All requests for product returns must be submitted to us for pre-approval. The main components of our returns policy are: (i) we will accept returns that are due to damaged product that is un-saleable and such return request activity falls within an acceptable range, (ii) we will accept returns for products that have reached or exceeded designated expiration dates and (iii) we will accept returns in the event that we discontinue a product provided that the customer will have the right to return only such items that it purchased directly from us. We will not accept return requests pertaining to customer inventory “Overstocking” or “Resets”. We will accept return requests for only products in its intended package configuration. We reserve the right to terminate shipment of product to customers who have made unauthorized deductions contrary to our return policy or pursue other methods of reimbursement. We compensate the customer for authorized returns by means of a credit applied to amounts owed or to be owed and in the case of discontinued product only, also by way of an exchange. We do not have any significant product exchange history. Under ASC 606, we continue to recognize revenue from contract manufacturing and retail customers at a point in time as we have an enforceable right to payment for goods as products are shipped to customers. As of December 31, 2018 and 2017, we included a provision for sales allowances from continuing operations of $1,000 and $2,000, respectively, which are reported as a reduction to account receivables. Additionally, accrued advertising and other allowances from discontinued operations as of December 31, 2018 included (i) 181,000 for estimated returns which is reported as a reduction to account receivables and (ii) $88,000 for cooperative incentive promotion costs, which is reported as accrued advertising and other allowances under current liabilities. As of December 31, 2017, accrued advertising and other allowances from discontinued operations included (i) $480,000 for estimated future sales returns which is reported as a reduction to account receivables and (ii) $200,000 for cooperative incentive promotion costs which is reported as accrued advertising and other allowances under current liabilities. As of December 31, 2018, we have deferred revenue of $206,000 in relation to Research and Development (“R&D”) stability and release testing programs. No revenue was deferred as of December 31, 2017. Deferred revenues primarily consist of amounts that have been billed to or received from customers in advance of revenue recognition and prepayments received from customers in advance for implementation, maintenance and other services, as well as initial subscription fees. We recognize deferred revenues as revenues when the services are performed and the corresponding revenue recognition criteria are met. Customer prepayments are generally applied against invoices issued to customers when services are performed and billed. The following table disaggregates the Company’s deferred revenue by recognition period (in thousands): Recognition Period Deferred Revenue 0-12 Months $ 184 13-24 Months 22 Total $ 206 Disaggregation of Revenue We disaggregate revenue from contracts with customers into two categories: contract manufacturing and retail customers. We determined that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The following table disaggregates the Company’s revenue by revenue source for Fiscal 2018 and 2017 (in thousands): For the Years Ended Revenue by Customer Type December 31, 2018 December 31, 2017 Contract manufacturing $ 12,633 $ 9,666 Retail and others 493 201 Total revenue $ 13,126 $ 9,867 Practical Expedients Elected We have elected the following practical expedients in applying ASC 606 across all revenue stream: Sales Tax Exclusion from the Transaction Price We exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from the customer. Shipping and Handling Activities We account for shipping and handling activities that we perform as activities to fulfill the promise to transfer the good. Advertising and Incentive Promotions Advertising and incentive promotion costs are expensed within the period in which they are utilized. Advertising and incentive promotion expense is comprised of (i) media advertising, presented as part of sales and marketing expense, (ii) cooperative incentive promotions and coupon program expenses, which are accounted for as part of net sales, and (iii) free product, which is accounted for as part of cost of sales. Advertising and incentive promotion expenses (i) incurred from continuing operations for Fiscal 2018 and 2017 were $264,000 and $45,000, respectively, and (ii) attributed to and classified as discontinued operations for Fiscal 2018 and 2017 were $0 and $2.8 million, respectively. Share-Based Compensation We recognize all share-based payments to employees and directors, including grants of stock options, as compensation expense in the financial statements based on their fair values. Fair values of stock options are determined through the use of the Black-Scholes option pricing model. The compensation cost is recognized as an expense over the requisite service period of the award, which usually coincides with the vesting period. Stock and stock options for the purchase of our common stock, $0.0005 par value (“Common Stock”), have been granted to both employees and non-employees pursuant to the terms of certain agreements and stock option plans (see Note 6). Stock options are exercisable during a period determined by us, but in no event later than ten years from the date granted. Research and Development R&D costs are charged to operations in the period incurred R&D costs incurred for Fiscal 2018 and 2017 (i) from continuing operations were $398,000 and $431,000, respectively, and (ii) attributed to and classified as discontinued operations were $0 and $52,000, respectively. R&D costs are principally related to personnel expenses and new product development initiatives and costs associated with our OTC health care products, dietary supplements and other remedies. Income Taxes We utilize the asset and liability approach which requires the recognition of deferred tax assets and liabilities for the future tax consequences of events that have been recognized in our financial statements or tax returns. In estimating future tax consequences, we generally consider all expected future events other than enactments of changes in the tax law or rates. Until sufficient taxable income to offset the temporary timing differences attributable to operations and the tax deductions attributable to option, warrant and stock activities are assured, a valuation allowance equaling the total deferred tax asset is being provided. We utilize a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than fifty percent likely of being realized upon ultimate settlement. Any interest or penalties related to income taxes will be recorded as interest or administrative expense, respectively. As a result of our losses from continuing operations, we have recorded a full valuation allowance against a net deferred tax asset. Additionally, we have not recorded a liability for unrecognized tax benefit. Recently Adopted Accounting Standards, Not Yet Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” on revenue recognition. See the Revenue Recognition section within the Summary of Significant Accounting Policies in Note 2 for further details on the impact to our consolidated financial statements upon adoption and practical expedients elected. The implementation of the new revenue recognition standard did not have a material impact on our consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18 “Statement of Cash Flows: Restricted Cash” which requires a statement of cash flows to explain the change during a period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Under the new standard, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown in the statement of cash flows. ASU 2016-18 was effective for us as of January 1, 2018. We have not generally had restricted cash or restricted cash equivalents, and there is no restricted cash on the balance sheet as of December 31, 2018 and 2017. The adoption of this update did not have a material impact on our consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments.” The new standard attempts to reduce diversity in practice in how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU No. 2016-15 provides guidance on eight specific cash flow issues, none of which currently apply to us. The new guidance was effective for us in the first quarter of 2018. The adoption of ASU 2016-15 did not have a material impact on our financial statements. In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes: Intra-Entity Transfers of Assets Other than Inventory.” The new standard requires entities to recognize the income tax consequences of an asset other than inventory when the asset transfer occurs. The new guidance was effective for us in the first quarter of 2018. The adoption of ASU 2016-15 did not have a material impact on our financial statements. Recently Issued Accounting Standards In June 2018, the FASB issued ASU 2018-07 intended to reduce cost and complexity and to improve financial reporting for nonemployee share-based payments. Currently, the accounting requirements for nonemployee and employee share-based payment transactions are significantly different. This ASU expands the scope of Topic 718, Compensation-Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. This ASU supersedes Subtopic 505-50, Equity-Equity-Based Payments to Nonemployees. The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the impact of this new standard on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations by, among other provisions, recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous GAAP. For public companies, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 (including interim periods within those periods) using a modified retrospective approach and early adoption is permitted. In transition, entities may also elect a package of practical expedients that must be applied in its entirety to all leases commencing before the adoption date, unless the lease is modified, and permits entities to not reassess (a) the existence of a lease, (b) lease classification or (c) determination of initial direct costs, as of the adoption date, which effectively allows entities to carryforward accounting conclusions under previous GAAP. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provides entities an optional transition method to apply the guidance under Topic 842 as of the adoption date, rather than as of the earliest period presented. The Company adopted Topic 842 on January 1, 2019, using the optional transition method to apply the new guidance as of January 1, 2019, rather than as of the earliest period presented, and elected the package of practical expedients described above. We do not expect the new accounting guidance to have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses.” The standard modifies the impairment model for most financial assets, including trade accounts receivables and loans, and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. The effective date of the standard is for fiscal years beginning after December 15, 2019 with early adoption permitted. We are currently evaluating the impact of adoption of this update on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820), – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement,” which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted upon issuance of the update. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In August 2018, the SEC adopted SEC Final Rule Release No. 33-10532, Disclosure Update and Simplification, which amended certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements regarding stockholders’ equity for interim financial statements. Under the amendments, a description of the changes in each caption of stockholders’ equity presented in the balance sheet must be provided in a note or separate statement. The description must include a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. Our first presentation of changes in stockholders’ equity will be included in our Form 10-Q for the quarter ended March 31, 2019. |
Discontinued Operations, Sale o
Discontinued Operations, Sale of the Cold-EEZE® Business | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations, Sale of Cold-EEZE® Business | Note 3 – Discontinued Operations, Sale of the Cold-EEZE ® Effective March 29, 2017, we completed the sale of the Cold-EEZE ® ® ® ® ® ® ® Pursuant to the asset purchase agreement, we also agreed to a one-time sale to Mylan ® approximately Pursuant to the asset purchase agreement, we entered into a transition service arrangement with Mylan, for which we earned $150,000 in transition service fees through December 31, 2017. Pursuant to this arrangement, we (i) received, processed, fulfilled, and shipped customer orders, and billed such customers for these shipments on behalf of Mylan from March 30, 2017 to June 30, 2017, (ii) processed certain sales allowances, returns and other customer promotional deductions, and (iii) paid certain Cold-EEZE ® The net proceeds received from the sale of the Cold-EEZE ® Amount Gross consideration from the sale of the Cold-EEZE ® $ 50,000 Closing and transaction costs (4,175 ) Net proceeds from sale of the Cold-EEZE ® 45,825 Book value of assets sold (13 ) Gain on sale of the Cold-EEZE ® 45,812 Income tax expense (3,511 ) Gain on sale of the Cold-EEZE ® $ 42,301 Net proceeds: Cash paid at closing, net of closing and transaction costs $ 43,145 Proceeds due on sale of assets, cash held in escrow 5,000 $ 48,145 For Fiscal 2017, we incurred $4.2 million in closing and transaction costs associated with the sale of the Cold-EEZE ® ® The following table sets forth the operating results of our discontinued operations for Fiscal 2018 and 2017, respectively, (in thousands): For the Years ended December 31, 2018 December 31, 2017 Net sales $ - $ 4,687 Cost of sales - 2,037 Sales and marketing - 1,720 Administration - 348 Research and development - 52 Income from discontinued operations $ - $ 530 For Fiscal 2018, we incurred costs of $170,000 which was charged against the gain on sale of discontinued assets, net of taxes. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Note 4 – Property, Plant and Equipment The components of property and equipment are as follows (in thousands): December 31, December 31, 2018 2017 Estimated Useful Life Land $ 504 $ 504 Leasehold improvements 3,059 3,059 10-39 years Machinery 4,126 4,099 3-7 years Computer equipment 457 355 3-5 years Furniture and fixtures 207 197 5 years 8,353 8,213 Less: accumulated depreciation (5,854 ) (5,471 ) Total property, plant and equipment, net $ 2,499 $ 2,742 Depreciation expense incurred for Fiscal 2018 and 2017 (i) from continuing operations were $383,000 and $315,000, respectively, and (ii) attributed to and classified as discontinued operations of $0 and $22,000, respectively. |
Secured Promissory Notes and Ot
Secured Promissory Notes and Other Obligations | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Secured Promissory Notes and Other Obligations | Note 5 – Secured Promissory Notes and Other Obligations Secured Promissory Notes On March 29, 2017, in connection with the sale of the Cold-EEZE ® In connection with the issuance of the Notes, the Company entered into a security agreement with John E. Ligums, Jr., as collateral agent for the Investors (the “Security Agreement”), to secure the timely payment and performance in full of the Company’s obligations under the Notes. Under the Security Agreement, we granted to the collateral agent, for the benefit of the Investors a lien upon and security interest in the property and assets listed as collateral in the Security Agreement, including without limitation, all of our personal property, inventory, equipment, general intangibles, cash and cash equivalents, and proceeds. In connection with the payoff of the Notes, the Security Agreement was terminated. |
Transactions Affecting Stockhol
Transactions Affecting Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Transactions Affecting Stockholders' Equity | Note 6 – Transactions Affecting Stockholders’ Equity Our authorized capital stock consists of 50 million shares of Common Stock and one million shares of preferred stock, $0.0005 par value (“Preferred Stock”) per share. Preferred Stock The Preferred Stock authorized under our certificate of incorporation may be issued from time to time in one or more series. As of December 31, 2018, no shares of Preferred Stock have been issued. Our board of directors have the full authority permitted by law to establish, without further stockholder approval, one or more series of Preferred Stock and the number of shares constituting each such series and to fix by resolution voting powers, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any. Subject to the limitation on the total number of shares of Preferred Stock that we have authority to issue under our certificate of incorporation, the board of directors is also authorized to increase or decrease the number of shares of any series, subsequent to the issue of that series, but not below the number of shares of such series then-outstanding. In case the number of shares of any series is so decreased, the shares constituting such decrease will resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series. We may, subject to any required stockholder approval amend from time to time our certificate of incorporation to increase the number of authorized shares of Preferred Stock or Common Stock or to make other changes or additions to our capital structure or the terms of our capital stock. Stockholder Rights Plan On September 8, 1998, our Board of Directors declared a dividend distribution of Common Stock Purchase Rights (each individually, a “Right” and collectively, the “Rights”) payable to the stockholders of record on September 25, 1998, thereby creating a Stockholder Rights Plan (the “Rights Agreement”). The Rights Agreement was subsequently amended effective each of (i) May 23, 2008, (ii) August 18, 2009, (iii) June 2014 and (iv) January 6, 2017. The Rights Agreement, as amended and restated, provides that each Right entitles the stockholder of record to purchase from the Company that number of common shares of Common Stock having a combined market value equal to two times the Rights exercise price of $45. The Rights are not exercisable until the distribution date, which will be the earlier of a public announcement that a person or group of affiliated or associated persons has acquired 15% or more of the outstanding common shares of Common Stock, or the announcement of an intention by a similarly constituted party to make a tender or exchange offer resulting in the ownership of 15% or more of the outstanding common shares of Common Stock (such person, the “acquirer”). The Rights Agreement, as amended and restated, allows for an exemption for Ted Karkus, our Chairman and Chief Executive Officer, to acquire up to 20% of our Common Stock without our Board of Directors declaring a dividend distribution. The dividend has the effect of giving the stockholder a 50% discount on the share’s current market value for exercising such right. In the event of a cashless exercise of the Right, and the acquirer has acquired less than 50% beneficial ownership of the Company, a stockholder may exchange one Right for one common share of the Company. The Rights Agreement, as amended and restated, includes a provision pursuant to which our Board of Directors may exempt from the provisions of the Rights Agreement an offer for all outstanding shares of our Common Stock that the directors determine to be fair and not inadequate and to otherwise be in the best interests of the Company and its stockholders, after receiving advice from one or more investment banking firms. The expiration date of the Rights Agreement, as amended, is June 18, 2024. On February 16, 2018, our board of directors, approved the termination of the Rights Agreement effective February 20, 2018. As a consequence of the termination of the Rights Agreement, all of the Rights distributed to our stockholders expired on February 20, 2018. 2015 Equity Line of Credit On July 30, 2015, we entered into an equity line of credit agreement (the “2015 Equity Line”) with Dutchess Opportunity Fund II, LP (“Dutchess”). Pursuant to the 2015 Equity Line, Dutchess committed to purchase, subject to certain restrictions and conditions, up to 3,200,000 shares of our Common Stock, over a period of 36 months from the effectiveness of the registration statement registering the resale of shares purchased by Dutchess pursuant to the investment agreement. The 2015 Equity Line of Credit expired in July 2018. Common Stock Dividend On May 7, 2018, the Board declared a special cash dividend of $1.00 per share on the Company’s common stock, $11.7 million payable on June 5, 2018 to holders of record of the Company’s common stock on May 21, 2018. On December 24, 2018, the Board declared a special cash dividend of $0.25 per share on the Company’s common stock, $2.9 million payable on January 24, 2019 to holders of record of the Company’s common stock on January 10, 2019. The Company recorded $2.9 million dividend payable as of December 31, 2018. The 2010 Directors’ Equity Compensation Plan On May 5, 2010, our stockholders approved the 2010 Directors’ Equity Compensation Plan which, was has been subsequently amended and restated by our stockholders (the “2010 Directors’ Plan”). A primary purpose of the 2010 Directors’ Plan is to provide us with the ability to pay all or a portion of the fees of directors in restricted stock instead of cash. The 2010 Directors’ Plan provides that the total number of shares of Common Stock that may be issued under the 2010 Directors’ Plan is equal to 675,000 shares. During Fiscal 2018 and 2017, 14,948 shares and zero shares, respectively, were granted to our directors under the 2010 Directors’ Plan. We recorded $45,000 of director fees during Fiscal 2018 in connection with these grants. At December 31, 2018, there were 382,860 shares of Common Stock that may be issued pursuant to the terms of the 2010 Directors’ Plan. The 2010 Equity Compensation Plan On May 5, 2010, our stockholders approved the 2010 Equity Compensation Plan, which has been subsequently amended and restated by our stockholders (the “2010 Plan”). The 2010 Plan provides that the total number of shares of Common Stock that may be issued under the 2010 Plan is 3.9 million shares. During Fiscal 2018, we granted 30,000 options, exercisable at $2.35 per share and subject to vesting over a three-year term, to a consultant pursuant to the terms of the 2010 Plan and we granted 160,000 options to employees, exercisable at $3.18 per share and subject to vesting over four years. During Fiscal 2017, we granted, 600,000 options to employees, exercisable at $2.00 per share and subject to vesting over a four-year term. We use the Black-Scholes option pricing model to determine the fair value of the stock options at the date of grant. Options to non-employees are valued at initial issuance, then revalued at each reporting date until the date the options vest and at which point the final fair value is determined. Based upon our limited historical experience, we determined the expected term of the stock option grants to be 4.5 – 4.75 years, calculated using the “simplified” method in accordance with the SEC Staff Accounting Bulletin 110. We use the “simplified” method since our historical data does not provide a reasonable basis upon which to estimate expected term. Presented below is a summary of the terms of the grant of options. During Fiscal 2018 and 2017, there were 490,000 and 1,332,000 options exercised, respectively, and we derived $337,500 and $1.5 million from the exercise of options in 2018 and 2017, respectively. We had 250,000 shares that were exercised in Fiscal 2018 pursuant to a cashless exercise. At December 31, 2018, there were 679,500 stock options outstanding under the 2010 Plan. The 2018 Stock Incentive Plan On April 12, 2018, our stockholders approved the 2018 Stock Incentive Plan (the “2018 Stock Plan”). The 2018 Stock Plan provides for the grant of incentive stock options to eligible employees of the Company, and for the grant of nonstatutory stock options to eligible employees, directors and consultants. The purpose of the 2018 Stock Plan is to advance the interests of the Company and its stockholders by providing an incentive to attract, retain, and reward persons performing services for the Company and by motivating such persons to contribute to the growth and profitability of the Company. The 2018 Stock Plan provides that the total number of shares that may be issued pursuant to the 2018 Stock Plan is 2.3 million shares. At September 30, 2018, all 2.3 million shares have been granted in the form of stock options to Ted Karkus (the “CEO Option”), our Chief Executive Officer and no stock options have been exercised under the 2018 Stock Plan. We use the Black-Scholes option pricing model to determine the fair value of the stock options and Warrants at the date of grant. Based upon our limited historical experience, we determined the expected term of the stock option grants to be 4.5 years, calculated using the “simplified” method in accordance with the SEC Staff Accounting Bulletin 110. We use the “simplified” method since our historical data does not provide a reasonable basis upon which to estimate expected term. The 2018 Plan requires certain proportionate adjustments to be made to stock options granted under the 2018 Plan upon the occurrence of certain events, including a special distribution (whether in the form of cash, shares, other securities, or other property). Accordingly, the Compensation Committee of the board of directors, as required by the terms of the 2018 Stock Plan, adjusted the terms of the CEO Option, such that the exercise price of the CEO Option was reduced from $3.00 per share to $2.00 per share, effective as of June 5, 2018, the date the special $1.00 cash dividend was paid to stockholders. Pursuant to the terms of the CEO Option, the exercise price of the CEO Option was reduced from $2.00 to $1.75 per share, effective as of January 24, 2019, the date the special cash dividend was paid in order to maintain parity. The following table summarizes stock options activities during Fiscal 2018 and 2017 for both 2010 Plan and 2018 Stock Plan (in thousands, except per share data): Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Total Intrinsic Value Outstanding as of January 1, 2017 669 $ 1.52 3.2 $ 324 Granted 625 2.01 6.3 - Exercised (315 ) 1.55 - - Outstanding as of December 31, 2017 980 1.82 4.8 52 Granted 2,490 2.08 4.3 - Exercised (490 ) 1.64 - - Outstanding as of December 31, 2018 2,980 $ 1.82 4.8 $ 3,235 Options vested and exercisable 673 $ 2.00 4.1 $ 777 The following table summarizes weighted average assumptions used in determining the fair value of the stock options at the date of grant during Fiscal 2018 and 2017: For the Years Ended December 31, 2018 December 31, 2017 Exercise price $ 2.52 $ 2.01 Expected term in years 4.5 4.6 Expected volatility (annual) 40 % 42 % Risk-free interest rate 2 % 2 % Expected dividend yield (per share) 0 % 0 % The fair value of the stock options at the time of the grant in Fiscal 2018 and 2017 was $1.8 million and $476,000, respectively. For Fiscal 2018 and 2017, we charged to operations $590,000 and $78,000, respectively, for share-based compensation expense for the aggregate fair value of the vested stock options earned. Treasury Stock - Stock Purchase Agreements On June 12, 2017 we entered into a stock purchase agreement with each of Mark S. Leventhal, a former director of the Company, and certain other persons and entities associated and/or affiliated with Mr. Leventhal (the “Leventhal Holders”), pursuant to which we purchased all 1,061,980 shares of our Common Stock then held by the Leventhal Holders, representing an approximate 6.2% aggregate ownership interest (based on 17.2 million shares of common stock outstanding as of June 12, 2017). Upon consummation of the transactions, the Leventhal Holders ceased to hold any direct or indirect ownership interest in the Company. Pursuant to the terms of the stock purchase agreements, the total consideration paid by us to the Leventhal Holders for their shares was $1,858,465, which amount was equal to the product of (i) $1.75 multiplied by (ii) the number of shares purchased. Treasury Stock – Tender Offers In Fiscal 2017, we announced two discrete tender offers to purchase our Common Stock in each of August 2017 and November 2017. On August 25, 2017, we announced a tender offer to purchase up to 4.0 million shares of our Common Stock at a price of $2.30 per share (the “August 2017 Tender Offer”). The number of shares proposed to be purchased in the August 2017 Tender Offer represented approximately 24.7% of approximately 16.2 million shares our Common Stock issued and outstanding as of August 21, 2017. The last reported sale price of our Common Stock on August 15, 2017, the last full trading day before we announced the Tender Offer, was $2.13 per share. The August 2017 Tender Offer expired on September 25, 2017. Subject to the terms of the August 2017 Tender Offer, we accepted for purchase 4,323,335 shares of our Common Stock at a purchase price of $2.30 per share, for an aggregate purchase price of approximately $9.9 million. Based on the final tabulation, 5,910,327 shares of our Common Stock were properly tendered and not withdrawn. Prior to the August 2017 Tender Offer, an investor, BML Investment Partners, L.P. (“BLM”), owned 2,322,627 shares, or 13.6%, of our outstanding Common Stock. Pursuant to the terms of the Tender Offer, BML tendered and sold 1,695,305 shares of our Common Stock. In addition, Ted Karkus, our Chairman of the Board and Chief Executive Officer, Robert V. Cuddihy, Jr., our then Chief Operating Officer and Chief Financial Officer, and one of our directors tendered and sold 364,954, 358,621 and 4,379 shares of Common Stock, respectively. On November 20, 2017, we announced a tender offer to purchase up to 1.7 million shares of our Common Stock at a price of $2.30 per share (the “November 2017 Tender Offer”). The number of shares proposed to be purchased in the November 2017 Tender Offer represented approximately 13.7% of approximately 12.4 million shares our Common Stock issued and outstanding as of November 14, 2017. The last reported sale price of our Common Stock on November 9, 2017, the last full trading day before we announced the Tender Offer, was $2.13 per share. The November 2017 Tender Offer expired on December 18, 2017. Subject to the terms of the November 2017 Tender Offer, we accepted for purchase 1,948,569 shares of our Common Stock, at a purchase price of $2.30 per share, for an aggregate purchase price of approximately $4.5 million. Based on the final tabulation, 2,072,280 shares of our Common Stock were properly tendered and not withdrawn. Pursuant to the terms of the Tender Offer, Mr. Karkus sold 424,789 shares of Common Stock. Subsequent to the completion of the November 2017 Tender Offer, Mr. Karkus exercised 600,000 outstanding options. As a consequence of Mr. Karkus’s exercise of his options at an exercise price of $1.00 per share, we derived net proceeds of $600,000. |
Defined Contribution Plans
Defined Contribution Plans | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Defined Contribution Plans | Note 7 – Defined Contribution Plans We maintain the ProPhase Labs, Inc. 401(k) Savings and Retirement Plan, a defined contribution plan for our employees. Our contributions to the plan are based on the amount of the employee plan contributions and compensation. Our contributions to the plan in Fiscal 2018 and 2017 were $90,000 and $120,000, respectively. For Fiscal 2018 and 2017, we charged (i) to continuing operations $90,000 and $104,000, respectively and (ii) to discontinued operations $0 and $16,000, respectively, for our plan contribution. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8 – Income Taxes The components of the provision (benefit) for income taxes, in the consolidated statements of operations are as follows (in thousands): 2018 2017 Current Federal $ - $ (1,245 ) State 103 (176 ) 103 (1,421 ) Deferred Federal (86 ) 15,412 State 225 682 139 16,094 Total $ 242 $ 14,673 Income taxes from continuing operations before valuation allowance $ 242 $ 14,673 Change in valuation allowance (139 ) (16,094 ) Income tax provision (benefit) 103 (1,421 ) Total $ 103 $ (1,421 ) Discontinued Operations Current Federal $ - $ 1,245 State - 2,266 - 3,511 Deferred Federal (34 ) - State - - (34 ) - Total $ (34 ) $ 3,511 Income taxes from discontinued operations before valuation allowance $ (34 ) $ 3,511 Change in valuation allowance 34 - Income tax expense - 3,511 Total $ - $ 3,511 Total $ 103 $ 2,090 A reconciliation of the statutory federal income tax expense (benefit) to the effective tax is as follows (in thousands): 2018 2017 Statutory rate - federal $ (341 ) $ 14,512 State taxes, net of federal benefit 306 2,061 Rate Change - 1,804 Permanent differences and other 243 (193 ) Income tax from continuing operation before valuation allowance 208 18,184 Change in valuation allowance (105 ) (16,094 ) Income tax expense 103 2,090 Total $ 103 $ 2,090 The tax effects of the primary “temporary differences” between values recorded for assets and liabilities for financial reporting purposes and values utilized for measurement in accordance with tax laws giving rise to our deferred tax assets are as follows (in thousands): Year Ended December 31, 2018 2017 Net operating loss and capital loss carryforward $ 4,081 $ 3,595 Consulting-royalty costs - - Trademark - 21 Investment in Phusion - 33 Depreciation (109 ) 41 Other 216 604 Valuation allowance (4,188 ) (4,294 ) Total $ - $ - We recognize tax assets and liabilities for the future tax consequences related to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for net operating loss carryforwards. Management evaluated the deferred tax assets for recoverability using a consistent approach that considers the relative impact of negative and positive evidence, including historical profitability and projections of future reversals of temporary differences and future taxable income. We are required to establish a valuation allowance for deferred tax assets if management determines, based on available evidence at the time the determination is made, that it is not more likely than not that some portion or all of the deferred tax assets will be realized. A valuation allowance for all of our net deferred tax assets has been provided as we are unable to determine, at this time, that the generation of future taxable income against which the net operating losses (“NOL”) carryforwards could be used is more likely than not. As a result of ongoing losses from continuing operations the Company has concluded that it is more likely than not that it will not realize all of its deferred tax assets relating to federal and state filing jurisdictions. As of December 31, 2018, there is a valuation allowance of $4.2 million. As of December 31, 2018, the Company has state NOL carryforwards of $1.1 million which begin to expire in 2023 and a federal NOL carryforwards of $3.0 million. The amount of the federal NOL generated prior to the 2017 legislation commonly referred to as the Tax Cuts and Jobs Act (“TCJA”) of $2.6 million can be carried forward for 20 years and begins to expire in 2032. The remaining amount of $0.4 million federal NOL generated in year 2018 can be carried forward indefinitely. We file a consolidated federal income tax return and separate company state returns as well as combined sta t e returns where applicable. |
Other Current Liabilities
Other Current Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | Note 9 – Other Current Liabilities The following table sets forth the components of other current liabilities at December 31, 2018 and 2017, respectively, (in thousands): December 31, December 31, 2018 2017 Accrued Expenses $ 167 $ 66 Accrued Benefits 24 15 Accrued Payroll 195 79 Accrued Vacation 66 88 Sales tax payable 3 3 Income taxes payable 106 740 Deferred revenue 206 - Due to Mylan and affiliates - 59 Total other current liabilities $ 766 $ 1,050 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10 – Commitments and Contingencies Escrow Receivable We have indemnification obligations to Mylan under the asset purchase agreement that may require us to make future payments to Mylan and other related persons for any damages incurred by Mylan or such related persons as a result of any breaches of our representations, warranties, covenants or agreements contained in the asset purchase agreement, or arising from the Retained Liabilities (as such term is defined in the asset purchase agreement) or certain third party claims specified in the asset purchase agreement. Generally, our representations and warranties survive for a period of 24 months from the closing date, other than certain fundamental representations which survive until the expiration of the applicable statute of limitations. There is a limited indemnification cap with respect to a majority of the Company’s indemnification obligations under the asset purchase agreement with the exception of claims for actual fraud, the breach of any fundamental representations and certain other items, which have a larger indemnification cap (e.g., the purchase price). Pursuant to the terms of the asset purchase agreement, we, Mylan, and an escrow agent entered into an Escrow Agreement at closing, pursuant to which Mylan deposited $5 million of the aggregate purchase price for the Cold-EEZE ® The terms of the Escrow Agreement provide that if, as of September 29, 2018, there are funds remaining in the escrow account, then the escrow account will be reduced by the difference, if a positive number, of (i) $2.5 million minus (ii) the aggregate amount of all escrow claims asserted by Mylan prior to this date that have either been paid out of the escrow account or are pending as of such date, and, within two business days of such date, the Escrow Agent will disburse such difference, if a positive number, to us. In addition, within two business days of March 29, 2019, the Escrow Agent will release any funds remaining in the escrow account to us minus any amounts being reserved for escrow claims asserted by Mylan prior to such date. Upon the resolution of any pending escrow claims, the Escrow Agent will, within two business days of receipt of joint instructions or a final order from a court (as described in the Escrow Agreement) disburse such reserved amount to the parties entitled to such funds. As described below, in August 2018, Mylan asserted an indemnification claim against us, for a yet to be determined amount. Accordingly, the first distribution was not released to us on September 29, 2018 and remains subject to resolution of this claim. On August 2, 2018, we received notice of an indemnification claim from Mylan in relation to product advertising claims brought against Mylan on certain Cold-EEZE ® ® On May 31, 2018, we received notice of a claim for $800,000 in losses against the escrow amount. We resolved this claim pursuant to a settlement agreement, effective October 16, 2018, pursuant to which $160,000 of the funds held in escrow were released to Mylan. This expense is reflected in discontinued operations in the third quarter of 2018. Manufacturing Agreement In connection with the asset purchase agreement, the Company and its wholly-owned subsidiary, PMI, entered into a Manufacturing Agreement (the “Manufacturing Agreement”) with Mylan. Pursuant to the terms of the Manufacturing Agreement, Mylan (or an affiliate or designee) purchased the inventory of the Company’s Cold-EEZE ® Employment Agreements On April 17, 2017, we entered into an Employment Agreement Termination and Release Agreement (the “April 2017 Termination Agreement”) with Mr. Cuddihy our former Chief Financial Officer. The April 2017 Termination Agreement terminated Mr. Cuddihy’s prior employment agreement with us, and established new terms of Mr. Cuddihy’s employment with the Company. The April 2017 Termination Agreement was entered into in light of our recent successful sale of the Cold-EEZE ® On September 27, 2017, we entered into another Employment Agreement Termination and Release Agreement with Mr. Cuddihy (the “September 2017 Termination Agreement”). Pursuant to the terms of the September 2017 Termination Agreement, Mr. Cuddihy’s 2015 Employment Agreement terminated effective September 30, 2017 and we paid Mr. Cuddihy a one-time lump sum payment of $55,000 on October 20, 2017. The September 2017 Termination Agreement contains a general release of claims in favor of us and other customary provisions. On February 16, 2018, our board of directors approved the Amended and Restated 2015 Executive Employment Agreement with Ted Karkus, our Chief Executive Officer (the “Amended Employment Agreement”), which became effective February 23, 2018, and was approved by stockholders at a special meeting of stockholders held on April 12, 2018. Pursuant to the terms of the Amended Employment Agreement, Mr. Karkus voluntarily agreed to reduce his base salary from the rate set forth in his prior employment agreement ( i.e., In consideration of Mr. Karkus’s voluntary reduction in salary, our board of directors awarded Mr. Karkus a stock option to purchase 2,300,000 shares of our Common Stock at an exercise price of $3.00 per share on February 23, 2018. The CEO Option will vest and be exercisable in 35 equal monthly installments of 63,888 options and one monthly installment of 63,290 options, subject to his continued employment, and subject to accelerated vesting in the event Mr. Karkus’s employment is terminated for any reason other than by us for Cause or by Mr. Karkus without Good Reason (as such terms are defined in the Amended Employment Agreement). The CEO Option is be exercisable for a five year term commencing on the date of grant. The CEO Option was granted pursuant to the 2018 Stock Plan, which was also adopted and approved by our board of directors on February 16, 2018. The 2018 Plan, like the Amended Employment Agreement, received stockholder approval at a special meeting of stockholders held on April 12, 2018 at which time the CEO Option were considered granted for accounting purposes. The 2018 Plan authorizes the issuance of up to 2,300,000 shares pursuant to stock options granted under the 2018 Plan, all of which were issued to Mr. Karkus as part of the CEO Option. As discussed further in Note 6, on May 7, 2018, the Compensation Committee of the board of directors, as required by the terms of the 2018 Stock Plan in order to maintain parity, adjusted the terms of the CEO Option, such that the exercise price of the CEO Option was reduced from $3.00 per share to $2.00 per share, effective as of June 5, 2018, the date of the special $1.00 cash dividend was paid in order to maintain parity, and from $2.00 to $1.75 per share, effective as of January 24, 2019, the date of the special $0.25 cash dividend was paid in order to maintain parity. Future Obligations We have estimated future minimum obligations over the next five years, including the remainder of Fiscal 2018, as follows (in thousands): Employment Contracts 2019 $ 125 2020 125 2021 595 2022 675 2023 675 Total $ 2,195 Other Litigation In the normal course of our business, we are named as a defendant in legal proceedings. It is our policy to vigorously defend litigation and/or enter into settlements of claims where management deems appropriate. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Note 11 – Earnings (Loss) Per Share Basic earnings (loss) per share for continuing and discontinued operations are computed by dividing the respective net income or loss attributable to common stockholders by the weighted-average number of shares of our Common Stock outstanding for the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock or resulted in the issuance of Common Stock that shared in the earnings of the entity. Diluted earnings (loss) per share also utilize the treasury stock method which prescribes a theoretical buy-back of shares from the theoretical proceeds of all options and warrants outstanding during the period. Options and warrants outstanding to acquire shares of our Common Stock at December 31, 2018 and 2017 were 2,980,000 and 979,500, respectively. For Fiscal 2018, dilutive earnings (loss) per share were the same as basic earnings per share due to the inclusion of Common Stock in the form of stock options and warrants (“Common Stock Equivalents”), when in a net loss position would have an anti-dilutive effect on loss per share. For Fiscal 2018, there were 923,006 that were excluded from the earnings (loss) per share computation as a consequence of their anti-dilutive effect. For Fiscal 2017 there were 954,500 Common Stock Equivalents that were in the money and there were 130,966 Common Stock Equivalents which were included in the fully diluted earnings per share computation. |
Significant Customers
Significant Customers | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Significant Customers | Note 12 – Significant Customers Revenue from continuing operations for Fiscal 2018 and 2017 was $13.1 million and $9.9 million, respectively. Three third-party contract manufacturing customers accounted for 45.7%, 31.1% and 10.9%, respectively, of our revenue from continuing operations for Fiscal 2018. Three third-party contract manufacturing customers accounted for 61.7%, 16.1% and 11.1%, respectively, of our revenues from continuing operations for Fiscal 2017. The loss of sales to any of these large third-party contract manufacturing customers could have a material adverse effect on our business operations and financial condition. We are subject to account receivable credit concentrations from time-to-time as a consequence of the timing, payment pattern and ultimate purchase volumes or shipping schedules with our customers. These concentrations may impact our overall exposure to credit risk, either positively or negatively, in that our customers may be similarly affected by changes in economic, regulatory or other conditions that may impact the timing and collectability of amounts due to us. One customer represented 82% of our total trade receivable balances at December 31, 2018 and one customer represented 84% of our total trade receivable balances at December 31, 2017, respectively. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated. |
Discontinued Operations Carve Out and ProPhase Allocations | Discontinued Operations Carve Out and ProPhase Allocations For Fiscal 2018 and 2017, results from operations for the Cold-EEZE ® ® ® |
Product Innovation, Seasonality of the Business and Liquidity | Product Innovation, Seasonality of the Business and Liquidity Our net sales are derived principally from our contract manufacturing of OTC healthcare and dietary supplement products sold in the United States. In addition, we are engaged in market activities for the TK Supplements ® Our sales are influenced by and subject to (i) the scope and timing of TK Supplement ® As a consequence of the scope and timing of our TK Supplements ® |
Use of Estimates | Use of Estimates The preparation of financial statements and the accompanying notes thereto, in conformity with generally accepted accounting principles in the United States of America (“GAAP”), requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the respective reporting periods. Examples include the provision for bad debt, sales returns and allowances, inventory obsolescence, useful lives of property and equipment, impairment of property and equipment, income tax valuations and assumptions related to accrued advertising. When providing for the appropriate sales returns, allowances, cash discounts and cooperative incentive promotion costs (“Sales Allowances”), we apply a uniform and consistent method for making certain assumptions for estimating these provisions. These estimates and assumptions are based on historical experience, current trends and other factors that management believes to be relevant at the time the financial statements are prepared. Management reviews the accounting policies, assumptions, estimates and judgments on a quarterly basis. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with an initial maturity of three months or less at the time of purchase to be cash equivalents. Cash equivalents include cash on hand and monies invested in money market funds. The carrying amount approximates the fair market value due to the short-term maturity of these investments. |
Marketable Securities | Marketable Securities We have classified our investments in marketable securities as available-for-sale and as a current asset. Our investments in marketable securities are carried at fair value, with unrealized gains and losses included as a separate component of stockholders’ equity. Realized gains and losses from our marketable securities are recorded as other interest income (expense). We initiated short term investments in marketable securities, which carry maturity dates between one and three years from date of purchase with interest rates of 2.39% - 3.67%, during Fiscal 2018. For Fiscal 2018 and 2017, we reported an unrealized gain of $54,000 and unrealized loss of $78,000, respectively. We had an accumulated unrealized loss of $24,000 and $78,000 as of December 31, 2018 and 2017, respectively. Unrealized gains and losses are classified as other comprehensive income (loss) and cost is determined on a specific identification basis. The following is a summary of the components of our marketable securities and the underlying fair value input level tier hierarchy (see long-lived assets below) (in thousands): As of December 31, 2018 Amortized Unrealized Market Cost Losses Value U.S treasuries $ 2,401 $ (3 ) $ 2,398 Corporate bonds 4,310 (21 ) 4,289 $ 6,711 $ (24 ) $ 6,687 As of December 31, 2017 Amortized Unrealized Market Cost Losses Value U.S treasuries $ 1,744 $ - $ 1,744 Corporate bonds 17,099 (78 ) 17,021 $ 18,843 $ (78 ) $ 18,765 We have determined that the unrealized losses are deemed to be temporary as of December 31, 2018. We believe that the unrealized losses generally are the result of increases in the risk premiums required by market participants rather than an adverse change in cash flows or a fundamental weakness in the credit quality of the issuer or underlying assets. We have the ability and intent to hold these investments until a recovery of fair value, which may be maturity. We do not consider the investment in corporate bonds to be other-than-temporarily impaired at December 31, 2018. |
Inventory | Inventory Inventory is valued at the lower of cost, determined on a first-in, first-out basis (FIFO), or net realizable value. Inventory items are analyzed to determine cost and the net realizable value and appropriate valuation adjustments are established. At December 31, 2018, after the 2018 write-off of certain inventory previously reserved, the financial statements include adjustments to reduce inventory for excess, obsolete or short-dated shelf-life inventory of $377,000, inclusive of adjustments of $270,000 for product samples of TK Supplements ® ® December 31, December 31, 2018 2017 Raw materials $ 1,374 $ 1,269 Work in process 371 245 Finished goods 158 17 $ 1,903 $ 1,531 |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are recorded at cost. We use the straight-line method in computing depreciation for financial reporting purposes. Depreciation expense is computed in accordance with the following ranges of estimated asset lives: building and improvements – ten to thirty-nine years; machinery and equipment – three to seven years; computer equipment and software – three to five years; and furniture and fixtures – five years. |
Concentration of Risks | Concentration of Risks Future revenues, costs, margins and profits will continue to be influenced by our ability to maintain our manufacturing availability and capacity together with our marketing and distribution capabilities and the regulatory requirements associated with the development of OTC consumer healthcare products, dietary supplements and other remedies in order to compete on a national level and/or international level. Our business is subject to federal and state laws and regulations adopted for the health and safety of users of our products. The manufacturing and distribution of OTC healthcare and dietary supplement products are subject to regulations by various federal, state and local agencies, including the Food and Drug Administration (“FDA”) and, as applicable, the Homeopathic Pharmacopoeia of the United States. Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash investments, marketable securities, and trade accounts receivable. Our marketable securities are fixed income investments, which are highly liquid and can be readily purchased or sold through established markets. We maintain cash and cash equivalents with certain major financial institutions. As of December 31, 2018, our cash and cash equivalents balance was $1.6 million and our bank balance was $1.6 million. Of the total bank balance, $250,000 was covered by federal depository insurance and $1.4 million was uninsured at December 31, 2018. Trade accounts receivable potentially subject us to credit concentrations from time-to-time as a consequence of the timing, payment pattern and ultimate purchase volumes or shipping schedules with our customers. We extend credit to our customers based upon an evaluation of the customer’s financial condition and credit history and generally we do not require collateral. Our customers include consumer products companies and large national chain, regional, specialty and local retail stores. These credit concentrations may impact our overall exposure to credit risk, either positively or negatively, in that our customers may be similarly affected by changes in economic, regulatory or other conditions that may impact the timing and collectability of amounts due to us. As a consequence of an evaluation of our customer’s financial condition, payment patterns, balance due to us and other factors, we did not offset our account receivable with an allowance for bad debt at December 31, 2018 and 2017. |
Long-lived Assets | Long-lived Assets We review the carrying value of our long-lived assets with definite lives whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When indicators of impairment exist, we determine whether the estimated undiscounted sum of the future cash flows of such assets is less than their carrying amounts. If less, an impairment loss is recognized in the amount, if any, by which the carrying amount of such assets exceeds their respective fair values. The determination of fair value is based on quoted market prices in active markets, if available, or independent appraisals; sales price negotiations; or projected future cash flows discounted at a rate determined by management to be commensurate with our business risk. The estimation of fair value utilizing discounted forecasted cash flows includes significant judgments regarding assumptions of revenue, operating and marketing costs; selling and administrative expenses; interest rates; property and equipment additions and retirements; industry competition; and general economic and business conditions, among other factors. Fair value is based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, a three-tier fair value hierarchy prioritizes the inputs used to measure fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Cash and cash equivalents, marketable securities, accounts receivable, assets held for sale, accounts payable, and accrued expenses are reflected in the consolidated financial statements at carrying value which approximates fair value. We account for our marketable securities at fair value pursuant to Accounting Standards Codification, or ASC, 820-10, with the net unrealized gains or losses reported as a component of accumulated other comprehensive income or loss. As of December 31, 2018 Level 1 Level 2 Level 3 Total Marketable securities U.S. government obligations $ - $ 2,398 $ - $ 2,398 Corporate obligations - 4,289 - 4,289 $ - $ 6,687 $ - $ 6,687 As of December 31, 2017 Level 1 Level 2 Level 3 Total Marketable securities U.S. government obligations $ - $ 1,744 $ - $ 1,744 Corporate obligations - 17,021 - 17,021 $ - $ 18,765 $ - $ 18,765 There were no transfers of marketable securities between Levels 1, 2 or 3 for the Fiscal 2018 and 2017. |
Revenue Recognition | Revenue Recognition We account for revenue in accordance with ASC 606, which requires revenue recognized to represent the transfer of promised goods or services to customers at an amount that reflects the consideration which is expected to be received in exchange for those goods or services. We recognize revenue when performance obligations with our customers have been satisfied. At contract inception, we determine if a contract is within the scope of ASC Topic 606 and then evaluate the contract using the following five steps: (1) identify the contract with the customer; (2) identify the performance obligations; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. We adopted ASC 606 as of January 1, 2018 using the modified retrospective method. For the year ended December 31, 2018, there were no changes to our opening balances upon the adoption of ASC 606 and the amounts which would have been reported under the standards in effect prior to adoption. Performance Obligations We generate sales principally through two types of customers, contract manufacturing and retail customers. Sales from product shipments to contract manufacturing and retailer customers are recognized at the time ownership is transferred to the customer. Net sales from OTC healthcare contract manufacturing and retail dietary supplement product customers were $12.6 million and $0.5 million, respectively, for Fiscal 2018 and $9.7 million and $0.2 million, respectively, for Fiscal 2017. Revenue from retailer customers is reduced for trade promotions, estimated sales returns, cash discounts and other allowances in the same period as the related sales are recorded. No such allowance is applicable to our contract manufacturing customers. We make estimates of potential future product returns and other allowances related to current period revenue. We analyze historical returns, current trends, and changes in customer and consumer demand when evaluating the adequacy of the sales returns and other allowances. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in accordance with ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The combined duties and responsibilities within each contract will be considered one single performance obligation under ASC 606 as these items would not be separately identifiable from each other promise in the contract and we provide a significant service of integrating the duties with other promises in the contracts. Transaction Price The transaction price is fixed based upon either (i) a combined Master Agreement and each related purchase order, or (ii) if there is no Master Agreement, the price per the individual purchase order received from each customer. The customers are invoiced at an agreed upon contractual price for each unit ordered and delivered by us. Consistent with Company practice prior to the adoption of ASC 606, we do not collect sales tax or other similar taxes from customers. As such, there is no effect on the measurement of the transaction price. Recognize Revenue When the Company Satisfies a Performance Obligation Performance obligations related to contract manufacturing and retail customers are satisfied at a point in time when the goods are shipped to the customer as (i) we have transferred control of the assets to the customers upon shipping, and (ii) the customer obtains title and assumes the risks and rewards of ownership after the goods are shipped. We do not accept returns in the contract manufacturing revenue stream. Our return policy for retailer customers accommodates returns for (i) discontinued products, (ii) store closings and (iii) products that have reached or exceeded their designated expiration date. We do not impose a period of time within which product may be returned. All requests for product returns must be submitted to us for pre-approval. The main components of our returns policy are: (i) we will accept returns that are due to damaged product that is un-saleable and such return request activity falls within an acceptable range, (ii) we will accept returns for products that have reached or exceeded designated expiration dates and (iii) we will accept returns in the event that we discontinue a product provided that the customer will have the right to return only such items that it purchased directly from us. We will not accept return requests pertaining to customer inventory “Overstocking” or “Resets”. We will accept return requests for only products in its intended package configuration. We reserve the right to terminate shipment of product to customers who have made unauthorized deductions contrary to our return policy or pursue other methods of reimbursement. We compensate the customer for authorized returns by means of a credit applied to amounts owed or to be owed and in the case of discontinued product only, also by way of an exchange. We do not have any significant product exchange history. Under ASC 606, we continue to recognize revenue from contract manufacturing and retail customers at a point in time as we have an enforceable right to payment for goods as products are shipped to customers. As of December 31, 2018 and 2017, we included a provision for sales allowances from continuing operations of $1,000 and $2,000, respectively, which are reported as a reduction to account receivables. Additionally, accrued advertising and other allowances from discontinued operations as of December 31, 2018 included (i) 181,000 for estimated returns which is reported as a reduction to account receivables and (ii) $88,000 for cooperative incentive promotion costs, which is reported as accrued advertising and other allowances under current liabilities. As of December 31, 2017, accrued advertising and other allowances from discontinued operations included (i) $480,000 for estimated future sales returns which is reported as a reduction to account receivables and (ii) $200,000 for cooperative incentive promotion costs which is reported as accrued advertising and other allowances under current liabilities. As of December 31, 2018, we have deferred revenue of $206,000 in relation to Research and Development (“R&D”) stability and release testing programs. No revenue was deferred as of December 31, 2017. Deferred revenues primarily consist of amounts that have been billed to or received from customers in advance of revenue recognition and prepayments received from customers in advance for implementation, maintenance and other services, as well as initial subscription fees. We recognize deferred revenues as revenues when the services are performed and the corresponding revenue recognition criteria are met. Customer prepayments are generally applied against invoices issued to customers when services are performed and billed. The following table disaggregates the Company’s deferred revenue by recognition period (in thousands): Recognition Period Deferred Revenue 0-12 Months $ 184 13-24 Months 22 Total $ 206 Disaggregation of Revenue We disaggregate revenue from contracts with customers into two categories: contract manufacturing and retail customers. We determined that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The following table disaggregates the Company’s revenue by revenue source for Fiscal 2018 and 2017 (in thousands): For the Years Ended Revenue by Customer Type December 31, 2018 December 31, 2017 Contract manufacturing $ 12,633 $ 9,666 Retail and others 493 201 Total revenue $ 13,126 $ 9,867 Practical Expedients Elected We have elected the following practical expedients in applying ASC 606 across all revenue stream: Sales Tax Exclusion from the Transaction Price We exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from the customer. Shipping and Handling Activities We account for shipping and handling activities that we perform as activities to fulfill the promise to transfer the good. |
Advertising and Incentive Promotions | Advertising and Incentive Promotions Advertising and incentive promotion costs are expensed within the period in which they are utilized. Advertising and incentive promotion expense is comprised of (i) media advertising, presented as part of sales and marketing expense, (ii) cooperative incentive promotions and coupon program expenses, which are accounted for as part of net sales, and (iii) free product, which is accounted for as part of cost of sales. Advertising and incentive promotion expenses (i) incurred from continuing operations for Fiscal 2018 and 2017 were $264,000 and $45,000, respectively, and (ii) attributed to and classified as discontinued operations for Fiscal 2018 and 2017 were $0 and $2.8 million, respectively. |
Share-Based Compensation | Share-Based Compensation We recognize all share-based payments to employees and directors, including grants of stock options, as compensation expense in the financial statements based on their fair values. Fair values of stock options are determined through the use of the Black-Scholes option pricing model. The compensation cost is recognized as an expense over the requisite service period of the award, which usually coincides with the vesting period. Stock and stock options for the purchase of our common stock, $0.0005 par value (“Common Stock”), have been granted to both employees and non-employees pursuant to the terms of certain agreements and stock option plans (see Note 6). Stock options are exercisable during a period determined by us, but in no event later than ten years from the date granted. |
Research and Development | Research and Development R&D costs are charged to operations in the period incurred R&D costs incurred for Fiscal 2018 and 2017 (i) from continuing operations were $398,000 and $431,000, respectively, and (ii) attributed to and classified as discontinued operations were $0 and $52,000, respectively. R&D costs are principally related to personnel expenses and new product development initiatives and costs associated with our OTC health care products, dietary supplements and other remedies. |
Income Taxes | Income Taxes We utilize the asset and liability approach which requires the recognition of deferred tax assets and liabilities for the future tax consequences of events that have been recognized in our financial statements or tax returns. In estimating future tax consequences, we generally consider all expected future events other than enactments of changes in the tax law or rates. Until sufficient taxable income to offset the temporary timing differences attributable to operations and the tax deductions attributable to option, warrant and stock activities are assured, a valuation allowance equaling the total deferred tax asset is being provided. We utilize a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than fifty percent likely of being realized upon ultimate settlement. Any interest or penalties related to income taxes will be recorded as interest or administrative expense, respectively. As a result of our losses from continuing operations, we have recorded a full valuation allowance against a net deferred tax asset. Additionally, we have not recorded a liability for unrecognized tax benefit. |
Recently Adopted Accounting Standards, Not Yet Adopted | Recently Adopted Accounting Standards, Not Yet Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” on revenue recognition. See the Revenue Recognition section within the Summary of Significant Accounting Policies in Note 2 for further details on the impact to our consolidated financial statements upon adoption and practical expedients elected. The implementation of the new revenue recognition standard did not have a material impact on our consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18 “Statement of Cash Flows: Restricted Cash” which requires a statement of cash flows to explain the change during a period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Under the new standard, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown in the statement of cash flows. ASU 2016-18 was effective for us as of January 1, 2018. We have not generally had restricted cash or restricted cash equivalents, and there is no restricted cash on the balance sheet as of December 31, 2018 and 2017. The adoption of this update did not have a material impact on our consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments.” The new standard attempts to reduce diversity in practice in how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU No. 2016-15 provides guidance on eight specific cash flow issues, none of which currently apply to us. The new guidance was effective for us in the first quarter of 2018. The adoption of ASU 2016-15 did not have a material impact on our financial statements. In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes: Intra-Entity Transfers of Assets Other than Inventory.” The new standard requires entities to recognize the income tax consequences of an asset other than inventory when the asset transfer occurs. The new guidance was effective for us in the first quarter of 2018. The adoption of ASU 2016-15 did not have a material impact on our financial statements. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In June 2018, the FASB issued ASU 2018-07 intended to reduce cost and complexity and to improve financial reporting for nonemployee share-based payments. Currently, the accounting requirements for nonemployee and employee share-based payment transactions are significantly different. This ASU expands the scope of Topic 718, Compensation-Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. This ASU supersedes Subtopic 505-50, Equity-Equity-Based Payments to Nonemployees. The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the impact of this new standard on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations by, among other provisions, recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous GAAP. For public companies, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 (including interim periods within those periods) using a modified retrospective approach and early adoption is permitted. In transition, entities may also elect a package of practical expedients that must be applied in its entirety to all leases commencing before the adoption date, unless the lease is modified, and permits entities to not reassess (a) the existence of a lease, (b) lease classification or (c) determination of initial direct costs, as of the adoption date, which effectively allows entities to carryforward accounting conclusions under previous GAAP. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provides entities an optional transition method to apply the guidance under Topic 842 as of the adoption date, rather than as of the earliest period presented. The Company adopted Topic 842 on January 1, 2019, using the optional transition method to apply the new guidance as of January 1, 2019, rather than as of the earliest period presented, and elected the package of practical expedients described above. We do not expect the new accounting guidance to have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses.” The standard modifies the impairment model for most financial assets, including trade accounts receivables and loans, and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. The effective date of the standard is for fiscal years beginning after December 15, 2019 with early adoption permitted. We are currently evaluating the impact of adoption of this update on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820), – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement,” which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted upon issuance of the update. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In August 2018, the SEC adopted SEC Final Rule Release No. 33-10532, Disclosure Update and Simplification, which amended certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements regarding stockholders’ equity for interim financial statements. Under the amendments, a description of the changes in each caption of stockholders’ equity presented in the balance sheet must be provided in a note or separate statement. The description must include a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. Our first presentation of changes in stockholders’ equity will be included in our Form 10-Q for the quarter ended March 31, 2019. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Components of Marketable Securities | The following is a summary of the components of our marketable securities and the underlying fair value input level tier hierarchy (see long-lived assets below) (in thousands): As of December 31, 2018 Amortized Unrealized Market Cost Losses Value U.S treasuries $ 2,401 $ (3 ) $ 2,398 Corporate bonds 4,310 (21 ) 4,289 $ 6,711 $ (24 ) $ 6,687 As of December 31, 2017 Amortized Unrealized Market Cost Losses Value U.S treasuries $ 1,744 $ - $ 1,744 Corporate bonds 17,099 (78 ) 17,021 $ 18,843 $ (78 ) $ 18,765 |
Components of Inventory | December 31, December 31, 2018 2017 Raw materials $ 1,374 $ 1,269 Work in process 371 245 Finished goods 158 17 $ 1,903 $ 1,531 |
Schedule of Fair Value of Financial Instruments | Cash and cash equivalents, marketable securities, accounts receivable, assets held for sale, accounts payable, and accrued expenses are reflected in the consolidated financial statements at carrying value which approximates fair value. We account for our marketable securities at fair value pursuant to Accounting Standards Codification, or ASC, 820-10, with the net unrealized gains or losses reported as a component of accumulated other comprehensive income or loss. As of December 31, 2018 Level 1 Level 2 Level 3 Total Marketable securities U.S. government obligations $ - $ 2,398 $ - $ 2,398 Corporate obligations - 4,289 - 4,289 $ - $ 6,687 $ - $ 6,687 As of December 31, 2017 Level 1 Level 2 Level 3 Total Marketable securities U.S. government obligations $ - $ 1,744 $ - $ 1,744 Corporate obligations - 17,021 - 17,021 $ - $ 18,765 $ - $ 18,765 |
Schedule of Deferred Revenue | The following table disaggregates the Company’s deferred revenue by recognition period (in thousands): Recognition Period Deferred Revenue 0-12 Months $ 184 13-24 Months 22 Total $ 206 |
Schedule of Disaggregates by Revenue | The following table disaggregates the Company’s revenue by revenue source for Fiscal 2018 and 2017 (in thousands): For the Years Ended Revenue by Customer Type December 31, 2018 December 31, 2017 Contract manufacturing $ 12,633 $ 9,666 Retail and others 493 201 Total revenue $ 13,126 $ 9,867 |
Discontinued Operations, Sale_2
Discontinued Operations, Sale of the Cold-EEZE® Business (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Proceeds from Sale of Business | The net proceeds received from the sale of the Cold-EEZE ® Amount Gross consideration from the sale of the Cold-EEZE ® $ 50,000 Closing and transaction costs (4,175 ) Net proceeds from sale of the Cold-EEZE ® 45,825 Book value of assets sold (13 ) Gain on sale of the Cold-EEZE ® 45,812 Income tax expense (3,511 ) Gain on sale of the Cold-EEZE ® $ 42,301 Net proceeds: Cash paid at closing, net of closing and transaction costs $ 43,145 Proceeds due on sale of assets, cash held in escrow 5,000 $ 48,145 |
Schedule of Operating Results of Discontinued Operations | The following table sets forth the operating results of our discontinued operations for Fiscal 2018 and 2017, respectively, (in thousands): For the Years ended December 31, 2018 December 31, 2017 Net sales $ - $ 4,687 Cost of sales - 2,037 Sales and marketing - 1,720 Administration - 348 Research and development - 52 Income from discontinued operations $ - $ 530 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | The components of property and equipment are as follows (in thousands): December 31, December 31, 2018 2017 Estimated Useful Life Land $ 504 $ 504 Leasehold improvements 3,059 3,059 10-39 years Machinery 4,126 4,099 3-7 years Computer equipment 457 355 3-5 years Furniture and fixtures 207 197 5 years 8,353 8,213 Less: accumulated depreciation (5,854 ) (5,471 ) Total property, plant and equipment, net $ 2,499 $ 2,742 |
Transactions Affecting Stockh_2
Transactions Affecting Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Stock Options Granted | The following table summarizes stock options activities during Fiscal 2018 and 2017 for both 2010 Plan and 2018 Stock Plan (in thousands, except per share data): Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Total Intrinsic Value Outstanding as of January 1, 2017 669 $ 1.52 3.2 $ 324 Granted 625 2.01 6.3 - Exercised (315 ) 1.55 - - Outstanding as of December 31, 2017 980 1.82 4.8 52 Granted 2,490 2.08 4.3 - Exercised (490 ) 1.64 - - Outstanding as of December 31, 2018 2,980 $ 1.82 4.8 $ 3,235 Options vested and exercisable 673 $ 2.00 4.1 $ 777 |
Summary of Weighted Average Assumptions Used In Determining the Fair Value of Stock Options | The following table summarizes weighted average assumptions used in determining the fair value of the stock options at the date of grant during Fiscal 2018 and 2017: For the Years Ended December 31, 2018 December 31, 2017 Exercise price $ 2.52 $ 2.01 Expected term in years 4.5 4.6 Expected volatility (annual) 40 % 42 % Risk-free interest rate 2 % 2 % Expected dividend yield (per share) 0 % 0 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The components of the provision (benefit) for income taxes, in the consolidated statements of operations are as follows (in thousands): 2018 2017 Current Federal $ - $ (1,245 ) State 103 (176 ) 103 (1,421 ) Deferred Federal (86 ) 15,412 State 225 682 139 16,094 Total $ 242 $ 14,673 Income taxes from continuing operations before valuation allowance $ 242 $ 14,673 Change in valuation allowance (139 ) (16,094 ) Income tax provision (benefit) 103 (1,421 ) Total $ 103 $ (1,421 ) Discontinued Operations Current Federal $ - $ 1,245 State - 2,266 - 3,511 Deferred Federal (34 ) - State - - (34 ) - Total $ (34 ) $ 3,511 Income taxes from discontinued operations before valuation allowance $ (34 ) $ 3,511 Change in valuation allowance 34 - Income tax expense - 3,511 Total $ - $ 3,511 Total $ 103 $ 2,090 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the statutory federal income tax expense (benefit) to the effective tax is as follows (in thousands): 2018 2017 Statutory rate - federal $ (341 ) $ 14,512 State taxes, net of federal benefit 306 2,061 Rate Change - 1,804 Permanent differences and other 243 (193 ) Income tax from continuing operation before valuation allowance 208 18,184 Change in valuation allowance (105 ) (16,094 ) Income tax expense 103 2,090 Total $ 103 $ 2,090 |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of the primary “temporary differences” between values recorded for assets and liabilities for financial reporting purposes and values utilized for measurement in accordance with tax laws giving rise to our deferred tax assets are as follows (in thousands): Year Ended December 31, 2018 2017 Net operating loss and capital loss carryforward $ 4,081 $ 3,595 Consulting-royalty costs - - Trademark - 21 Investment in Phusion - 33 Depreciation (109 ) 41 Other 216 604 Valuation allowance (4,188 ) (4,294 ) Total $ - $ - |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Current Liabilities | The following table sets forth the components of other current liabilities at December 31, 2018 and 2017, respectively, (in thousands): December 31, December 31, 2018 2017 Accrued Expenses $ 167 $ 66 Accrued Benefits 24 15 Accrued Payroll 195 79 Accrued Vacation 66 88 Sales tax payable 3 3 Income taxes payable 106 740 Deferred revenue 206 - Due to Mylan and affiliates - 59 Total other current liabilities $ 766 $ 1,050 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Estimated Future Minimum Obligations | We have estimated future minimum obligations over the next five years, including the remainder of Fiscal 2018, as follows (in thousands): Employment Contracts 2019 $ 125 2020 125 2021 595 2022 675 2023 675 Total $ 2,195 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Administrative expense | $ 348 | |
Sales and marketing expenses | 0 | 1,700 |
Research and development discontinued operation | 52 | |
Working capital | 14,100 | |
Marketable securities, available for sale | 6,687 | 18,765 |
Unrealized gain (loss) on marketable securities | 54 | (78) |
Accumulated unrealized loss on marketable securities | 24 | 78 |
Adjustments to reduce inventory for excess or obsolete inventory | 377 | 1,100 |
Cash and cash equivalents | 1,554 | 3,173 |
Bank balance | 1,600 | |
Amount of bank balance covered by federal depository insurance | 250 | |
Amount of bank balance uninsured | 1,500 | |
Allowance for bad debt | ||
Net sales | 13,126 | 9,867 |
Provision for sales allowances | 1 | 2 |
Estimated sales returns | 181 | 480 |
Deferred revenue | $ 206 | |
Stock issued price per share | $ 0.0005 | |
Stock option exercisable period | 10 years | |
Research and development | $ 398 | 431 |
Continued Operations [Member] | ||
Advertising and incentive promotion expenses | 264 | 45 |
Research and development | 398 | 431 |
Discontinued Operations [Member] | ||
Advertising and incentive promotion expenses | 0 | 2,800 |
Research and development | 0 | 52 |
Cooperative Incentive [Member] | ||
Advertising and incentive promotion expenses | 88 | 200 |
Contract Manufacturing [Member] | ||
Net sales | 12,633 | 9,666 |
Retail Customers [Member] | ||
Net sales | $ 500 | $ 200 |
Furniture and Fixtures [Member] | ||
Property, plant and equipment, useful life | 5 years | 5 years |
TK Supplements [Member] | ||
Adjustments to reduce inventory for excess or obsolete inventory | $ 270 | $ 541 |
Minimum [Member] | Building and Improvements [Member] | ||
Property, plant and equipment, useful life | 10 years | |
Minimum [Member] | Machinery and Equipment [Member] | ||
Property, plant and equipment, useful life | 3 years | |
Minimum [Member] | Computer Equipment and Software [Member] | ||
Property, plant and equipment, useful life | 3 years | |
Maximum [Member] | Building and Improvements [Member] | ||
Property, plant and equipment, useful life | 39 years | |
Maximum [Member] | Machinery and Equipment [Member] | ||
Property, plant and equipment, useful life | 7 years | |
Maximum [Member] | Computer Equipment and Software [Member] | ||
Property, plant and equipment, useful life | 5 years | |
Marketable Securities [Member] | Minimum [Member] | ||
Investment in securities term | 1 year | |
Interest rate | 2.39% | |
Marketable Securities [Member] | Maximum [Member] | ||
Investment in securities term | 3 years | |
Interest rate | 3.67% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Components of Marketable Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Amortized Cost | $ 6,711 | $ 18,843 |
Unrealized Losses | (24) | (78) |
Market Value | 6,687 | 18,765 |
U.S. Treasuries [Member] | ||
Amortized Cost | 2,401 | 1,744 |
Unrealized Losses | (3) | |
Market Value | 2,398 | 1,744 |
Corporate Bonds [Member] | ||
Amortized Cost | 4,310 | 17,099 |
Unrealized Losses | (21) | (78) |
Market Value | $ 4,289 | $ 17,021 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Components of Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Raw materials | $ 1,374 | $ 1,269 |
Work in process | 371 | 245 |
Finished goods | 158 | 17 |
Total inventory | $ 1,903 | $ 1,531 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value of Marketable Securities | $ 6,687 | $ 18,765 |
Level 1 [Member] | ||
Fair Value of Marketable Securities | ||
Level 2 [Member] | ||
Fair Value of Marketable Securities | 6,687 | 18,765 |
Level 3 [Member] | ||
Fair Value of Marketable Securities | ||
U.S. Government Obligations [Member] | ||
Fair Value of Marketable Securities | 2,398 | 1,744 |
U.S. Government Obligations [Member] | Level 1 [Member] | ||
Fair Value of Marketable Securities | ||
U.S. Government Obligations [Member] | Level 2 [Member] | ||
Fair Value of Marketable Securities | 2,398 | 1,744 |
U.S. Government Obligations [Member] | Level 3 [Member] | ||
Fair Value of Marketable Securities | ||
Corporate Obligations [Member] | ||
Fair Value of Marketable Securities | 4,289 | 17,021 |
Corporate Obligations [Member] | Level 1 [Member] | ||
Fair Value of Marketable Securities | ||
Corporate Obligations [Member] | Level 2 [Member] | ||
Fair Value of Marketable Securities | 4,289 | 17,021 |
Corporate Obligations [Member] | Level 3 [Member] | ||
Fair Value of Marketable Securities |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Deferred Revenue (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Revenue | $ 206 | |
0-12 Months [Member] | ||
Deferred Revenue | 184 | |
13-24 Months [Member] | ||
Deferred Revenue | $ 22 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Schedule of Disaggregates by Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Total Revenue | $ 13,126 | $ 9,867 |
Contract Manufacturing [Member] | ||
Total Revenue | 12,633 | 9,666 |
Retail and Others [Member] | ||
Total Revenue | $ 493 | $ 201 |
Discontinued Operations, Sale_3
Discontinued Operations, Sale of the Cold-EEZE® Business (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Assets held for sale | $ 22 | |
Revenues | 13,126 | 9,867 |
Closing and transaction costs | 1,900 | |
Cold-EEZE® Business [Member] | ||
Closing and transaction costs | 4,200 | |
Employees related compensation | 2,300 | |
Gain on sale of business | $ 170 | |
Asset Purchase Agreement [Member] | Transaction Service Fees [Member] | ||
Revenues | $ 150 |
Discontinued Operations, Sale_4
Discontinued Operations, Sale of the Cold-EEZE® Business - Schedule of Proceeds from Sale of Business (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Gross consideration from the sale of the Cold-EEZE® Business | $ 50,000 | |
Closing and transaction costs | (4,175) | |
Net proceeds from sale of the Cold-EEZE® Business | 45,825 | |
Book value of assets sold | (13) | |
Gain on sale of the Cold-EEZE® Business before income taxes | 45,812 | |
Income tax expense | (3,511) | |
Gain on sale of the Cold-EEZE® Business after income taxes | $ (170) | 42,301 |
Cash paid at closing, net of closing and transaction costs | 43,145 | |
Proceeds due on sale of assets, cash held in escrow (see Note 8) | 5,000 | |
Net proceeds from the sale of assets | $ 48,145 |
Discontinued Operations, Sale_5
Discontinued Operations, Sale of the Cold-EEZE® Business - Schedule of Operating Results of Discontinued Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Net sales | $ 4,687 | |
Cost of sales | 2,037 | |
Sales and marketing | 1,720 | |
Administration | 348 | |
Research and development | 52 | |
Income from discontinued operations | $ 530 |
Property, Plant And Equipment_2
Property, Plant And Equipment (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Continuing Operations [Member] | ||
Depreciation expenses | $ 383 | $ 315 |
Discontinuing Operations [Member] | ||
Depreciation expenses | $ 0 | $ 22 |
Property, Plant And Equipment -
Property, Plant And Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment, Gross | $ 8,353 | $ 8,213 |
Less: Accumulated depreciation | (5,854) | (5,471) |
Property, Plant and Equipment, Net | 2,499 | 2,742 |
Land [Member] | ||
Property, Plant and Equipment, Gross | 504 | 504 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment, Gross | 3,059 | $ 3,059 |
Leasehold Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment, Estimated Useful Lives (in years) | 10 years | |
Leasehold Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment, Estimated Useful Lives (in years) | 39 years | |
Machinery [Member] | ||
Property, Plant and Equipment, Gross | 4,126 | $ 4,099 |
Machinery [Member] | Minimum [Member] | ||
Property, Plant and Equipment, Estimated Useful Lives (in years) | 3 years | |
Machinery [Member] | Maximum [Member] | ||
Property, Plant and Equipment, Estimated Useful Lives (in years) | 7 years | |
Computer Equipment [Member] | ||
Property, Plant and Equipment, Gross | 457 | $ 355 |
Computer Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment, Estimated Useful Lives (in years) | 3 years | |
Computer Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment, Estimated Useful Lives (in years) | 5 years | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment, Gross | $ 207 | $ 197 |
Property, Plant and Equipment, Estimated Useful Lives (in years) | 5 years | 5 years |
Secured Promissory Notes and _2
Secured Promissory Notes and Other Obligations (Details Narrative) - 12% Secured Promissory Notes - Series A [Member] - Cold-EEZE® Business [Member] $ in Thousands | Mar. 29, 2017USD ($) |
Debt instrument, interest rate | 12.00% |
Payment of principal and accrued interest | $ 1,500 |
Investors [Member] | |
Payment of principal and accrued interest | 1,500 |
Warrants aggregate exercise price | $ 69 |
Transactions Affecting Stockh_3
Transactions Affecting Stockholders' Equity (Details Narrative) - USD ($) | Dec. 24, 2018 | May 07, 2018 | Apr. 12, 2018 | Nov. 20, 2017 | Nov. 14, 2017 | Aug. 25, 2017 | Aug. 21, 2017 | Jun. 12, 2017 | Jul. 30, 2015 | Nov. 30, 2017 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 05, 2018 | Nov. 09, 2017 | Aug. 15, 2017 | Dec. 31, 2016 | May 05, 2010 |
Common stock, shares authorized | 50,000,000 | 50,000,000 | ||||||||||||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | ||||||||||||||||
Preferred stock, par value | $ 0.0005 | $ 0.0005 | ||||||||||||||||
Preferred stock, shares issued | ||||||||||||||||||
Equity method investment ownership percentage | 50.00% | |||||||||||||||||
Cash dividend paid | $ 0.25 | $ 1 | ||||||||||||||||
Dividend payable | $ 2,900,000 | $ 11,700,000 | $ 2,900,000 | |||||||||||||||
Dividends payable date | Jan. 24, 2019 | Jun. 5, 2018 | ||||||||||||||||
Dividends record date | Jan. 10, 2019 | May 21, 2018 | ||||||||||||||||
Stock option granted | 2,490,000 | 625,000 | ||||||||||||||||
Stock option, expected life | 4 years 6 months | 4 years 7 months 6 days | ||||||||||||||||
Stock option, exercised | 490,000 | 315,000 | ||||||||||||||||
Proceeds from stock options exercised | $ 337,000 | $ 1,510,000 | ||||||||||||||||
Options outstanding - shares | 2,980,000 | 980,000 | 669,000 | |||||||||||||||
Weighted average risk rate | 2.00% | 2.00% | ||||||||||||||||
Stock option, dividend yield | 0.00% | 0.00% | ||||||||||||||||
Stock option, expected volatility | 40.00% | 42.00% | ||||||||||||||||
Fair value of stock option grant | $ 1,800,000 | $ 476,000 | ||||||||||||||||
Share based compensation expenses | $ 590,000 | $ 78,000 | ||||||||||||||||
Common stock share price | $ 0.0005 | |||||||||||||||||
Common stock, shares issued | 28,201,541 | 27,696,593 | ||||||||||||||||
BML Investment Partners, L.P [Member] | ||||||||||||||||||
Equity method investment ownership percentage | 13.60% | |||||||||||||||||
Investments owned shares | 2,322,627 | |||||||||||||||||
Aggregate sold shares of our common stock | 1,695,305 | |||||||||||||||||
Stock Purchase Agreement [Member] | ||||||||||||||||||
Equity method investment ownership percentage | 6.20% | |||||||||||||||||
Common stock, shares purchased | 1,061,980 | |||||||||||||||||
Options outstanding - shares | 17,200,000 | |||||||||||||||||
August 2017 Tender Offer [Member] | ||||||||||||||||||
Stock issued during period shares | 4,323,335 | 5,910,327 | ||||||||||||||||
Common stock share price | $ 2.30 | |||||||||||||||||
Shares proposed to purchase in tender offer percentage | 24.70% | |||||||||||||||||
Common stock, shares issued | 16,200,000 | |||||||||||||||||
Common stock shares outstanding | 16,200,000 | |||||||||||||||||
Trading price per share | $ 2.13 | |||||||||||||||||
Purchase price per share | $ 2.30 | |||||||||||||||||
Offer expire date | Sep. 25, 2017 | |||||||||||||||||
Value of common stock purchased shares | $ 9,900,000 | |||||||||||||||||
November 2017 Tender Offer [Member] | ||||||||||||||||||
Stock issued during period shares | 1,700,000 | 1,948,569 | 2,072,280 | |||||||||||||||
Common stock share price | $ 2.30 | |||||||||||||||||
Shares proposed to purchase in tender offer percentage | 13.70% | |||||||||||||||||
Common stock, shares issued | 12,400,000 | |||||||||||||||||
Common stock shares outstanding | 12,400,000 | |||||||||||||||||
Trading price per share | $ 2.13 | |||||||||||||||||
Purchase price per share | $ 2.30 | |||||||||||||||||
Value of common stock purchased shares | $ 4,500,000 | |||||||||||||||||
Leventhal Holders [Member] | Stock Purchase Agreement [Member] | ||||||||||||||||||
Consideration paid | $ 1,858,465,000 | |||||||||||||||||
Share price | $ 1.75 | |||||||||||||||||
Ted Karkus [Member] | ||||||||||||||||||
Aggregate sold shares of our common stock | 364,954 | |||||||||||||||||
Robert V. Cuddihy, Jr. [Member] | ||||||||||||||||||
Aggregate sold shares of our common stock | 358,621 | |||||||||||||||||
Director [Member] | ||||||||||||||||||
Aggregate sold shares of our common stock | 4,379 | |||||||||||||||||
Mr. Karkus [Member] | ||||||||||||||||||
Stock options exercise price per share | $ 1 | |||||||||||||||||
Proceeds from stock options exercised | $ 600,000 | |||||||||||||||||
Aggregate sold shares of our common stock | 424,789 | |||||||||||||||||
Net proceeds | $ 600,000,000 | |||||||||||||||||
Maximum [Member] | ||||||||||||||||||
Stock issued during period shares | 3,200,000 | |||||||||||||||||
Maximum [Member] | August 2017 Tender Offer [Member] | ||||||||||||||||||
Stock issued during period shares | 4,000,000 | |||||||||||||||||
Stockholder Rights Plan [Member] | ||||||||||||||||||
Common stock right's exercise price | $ 45 | |||||||||||||||||
Acquisition percentage | 15.00% | |||||||||||||||||
Equity method investment ownership percentage required for rights exercisable under right agreement | 15.00% | |||||||||||||||||
Percentage of discount on exercise of right | 50.00% | |||||||||||||||||
Rights agreement expiration date | Jun. 18, 2024 | |||||||||||||||||
Stockholder Rights Plan [Member] | Chairman and Chief Executive Officer [Member] | Maximum [Member] | ||||||||||||||||||
Acquisition percentage | 20.00% | |||||||||||||||||
2015 Equity Line of Credit [Member] | ||||||||||||||||||
Line of credit expired, description | The 2015 Equity Line of Credit expired in July 2018. | |||||||||||||||||
2010 Directors' Equity Compensation Plan [Member] | ||||||||||||||||||
Stock issued during period shares | 382,860 | |||||||||||||||||
Plan provides total number of shares of common stock issued | 675,000 | |||||||||||||||||
Stock option granted | 14,948 | 0 | ||||||||||||||||
2010 Equity Compensation Plan [Member] | ||||||||||||||||||
Plan provides total number of shares of common stock issued | 3,900,000 | |||||||||||||||||
Stock option granted | 30,000 | |||||||||||||||||
Direct fees | $ 45,000 | |||||||||||||||||
Stock options exercise price per share | $ 2.35 | $ 2 | ||||||||||||||||
Vesting period | 3 years | 4 years | ||||||||||||||||
Stock option, expected life | 4 years 6 months | |||||||||||||||||
Stock option, exercised | 250,000 | |||||||||||||||||
Options outstanding - shares | 679,500 | |||||||||||||||||
2010 Equity Compensation Plan [Member] | Common Stock Shares [Member] | ||||||||||||||||||
Stock option, exercised | 490,000 | 1,332,000 | ||||||||||||||||
Proceeds from stock options exercised | $ 337,500 | $ 1,500,000 | ||||||||||||||||
2010 Equity Compensation Plan [Member] | Employees [Member] | ||||||||||||||||||
Stock option granted | 160,000 | 600,000 | ||||||||||||||||
Stock options exercise price per share | $ 3.18 | |||||||||||||||||
Vesting period | 4 years | |||||||||||||||||
2018 Stock Incentive Plan [Member] | ||||||||||||||||||
Cash dividend paid | $ 1 | |||||||||||||||||
Stock option, expected life | 4 years 6 months | |||||||||||||||||
Available for grant, shares | 2,300,000 | |||||||||||||||||
2018 Stock Incentive Plan [Member] | CEO [Member] | ||||||||||||||||||
Stock option granted | 2,300,000 | |||||||||||||||||
Stock option, exercised | ||||||||||||||||||
2018 Stock Incentive Plan [Member] | Maximum [Member] | ||||||||||||||||||
Stock options exercise price per share | $ 3 | |||||||||||||||||
2018 Stock Incentive Plan [Member] | Maximum [Member] | January 24, 2019 [Member] | ||||||||||||||||||
Stock options exercise price per share | $ 1.75 | |||||||||||||||||
2018 Stock Incentive Plan [Member] | Maximum [Member] | Mr. Karkus [Member] | ||||||||||||||||||
Available for grant, shares | 2,300,000 | |||||||||||||||||
2018 Stock Incentive Plan [Member] | Minimum [Member] | ||||||||||||||||||
Stock options exercise price per share | $ 2 | |||||||||||||||||
2018 Stock Incentive Plan [Member] | Minimum [Member] | January 24, 2019 [Member] | ||||||||||||||||||
Stock options exercise price per share | $ 2 |
Schedule of Stock Options Grant
Schedule of Stock Options Granted (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | ||
Options outstanding - beginning of year | 980,000 | 669,000 |
Shares, Granted | 2,490,000 | 625,000 |
Shares, Exercised | (490,000) | (315,000) |
Options outstanding - end of year | 2,980,000 | 980,000 |
Options vested and exercisable | 673,000 | |
Weighted Average Exercise Price Options outstanding - beginning of year | $ 1.82 | $ 1.52 |
Weighted Average Exercise Price, Granted | 2.08 | 2.01 |
Weighted Average Exercise Price, Exercised | 1.64 | 1.55 |
Weighted Average Exercise Price Options outstanding - end of year | 1.82 | $ 1.82 |
Weighted Average Exercise Price, Options vested and exercisable | $ 2 | |
Weighted Average Remaining Contractual Life (in years) - beginning of year | 4 years 9 months 18 days | 3 years 2 months 12 days |
Weighted Average Remaining Contractual Life (in years), Granted | 4 years 3 months 19 days | 6 years 3 months 19 days |
Weighted Average Remaining Contractual Life (in years) - ending of year | 4 years 9 months 18 days | 4 years 9 months 18 days |
Weighted Average Remaining Contractual Life (in years) - Options vested and exercisable | 4 years 1 month 6 days | |
Total Intrinsic Value - beginning of year | $ 52 | $ 324 |
Total Intrinsic Value - ending of year | 3,235 | $ 52 |
Total Intrinsic Value, Options vested and exercisable | $ 777 |
Summary of Weighted Average Ass
Summary of Weighted Average Assumptions Used In Determining the Fair Value of Stock Options (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | ||
Exercise price | $ 2.52 | $ 2.01 |
Expected term in years | 4 years 6 months | 4 years 7 months 6 days |
Expected volatility (annual) | 40.00% | 42.00% |
Risk-free interest rate | 2.00% | 2.00% |
Expected dividend yield (per share) | 0.00% | 0.00% |
Defined Contribution Plans (Det
Defined Contribution Plans (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Pension expense | $ 90 | $ 120 |
Continued Operations [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Pension expense | 90 | 104 |
Discontinued Operations [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Pension expense | $ 0 | $ 16 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred tax assets, valuation allowance | $ 4,188 | $ 4,294 |
Net operating loss carry-forwards | 400 | |
State and Local Jurisdiction [Member] | ||
Net operating loss carry-forwards | 1,100 | |
Domestic Tax Authority [Member] | ||
Net operating loss carry-forwards | 3,000 | |
Tax Cuts and Jobs Act [Member] | ||
Net operating loss carry-forwards | $ 2,600 | |
Operating loss carry forwards expiration dates description | 20 years and begins to expire in 2032 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Federal | $ (1,245) | |
State | 103 | (176) |
Current Income Tax Expense (Benefit) | 103 | (1,421) |
Federal | (86) | 15,412 |
State | 225 | 682 |
Deferred Income Tax Expense (Benefit) | 139 | 16,094 |
Total | 242 | 14,673 |
Income taxes from continuing operations before valuation allowance | 242 | 14,673 |
Change in valuation allowance | (139) | (16,094) |
Income tax provision (benefit) | 103 | (1,421) |
Total | 103 | (1,421) |
Federal | 1,245 | |
State | 2,266 | |
Current Income Tax Expense (Benefit) | 3,511 | |
Federal | (34) | |
State | ||
Deferred Income Tax Expense (Benefit) | (34) | |
Total | (34) | 3,511 |
Income taxes from discontinued operations before valuation allowance | (34) | 3,511 |
Change in valuation allowance | 34 | |
Income tax (benefit) | 3,511 | |
Total | 3,511 | |
Total | $ 103 | $ 2,090 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Statutory rate - federal | $ (341) | $ 14,512 |
State taxes, net of federal benefit | 306 | 2,061 |
Rate Change | 1,804 | |
Permanent differences and other | 243 | (193) |
Income tax from continuing operation before valuation allowance | 208 | 18,184 |
Change in valuation allowance | (105) | (16,094) |
Income tax expense | 103 | 2,090 |
Total | $ 103 | $ 2,090 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Net operating loss and capital loss carryforward | $ 4,081 | $ 3,595 |
Consulting-royalty costs | ||
Trademark | 21 | |
Investment in Phusion | 33 | |
Depreciation | (109) | 41 |
Other | 216 | 604 |
Valuation allowance | (4,188) | (4,294) |
Total |
Other Current Liabilities - Sch
Other Current Liabilities - Schedule of Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Other Liabilities Disclosure [Abstract] | ||
Accrued Expenses | $ 167 | $ 66 |
Accrued Benefits | 24 | 15 |
Accrued Payroll | 195 | 79 |
Accrued Vacation | 66 | 88 |
Sales Tax payable | 1 | 3 |
Income taxes payable | 106 | 740 |
Deferred revenue | 206 | |
Due to Mylan and affiliates | 59 | |
Other current liabilities | $ 766 | $ 1,050 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) $ / shares in Units, $ in Thousands | Oct. 16, 2018USD ($) | May 31, 2018USD ($) | May 07, 2018$ / shares | Feb. 23, 2018$ / sharesshares | Feb. 16, 2018USD ($) | Oct. 20, 2017USD ($) | Apr. 17, 2017USD ($) | Dec. 31, 2018USD ($)Integer$ / sharesshares | Dec. 31, 2017USD ($)$ / shares | Dec. 24, 2018$ / shares | Sep. 29, 2018USD ($) | Jun. 05, 2018$ / shares | Apr. 12, 2018shares |
Escrow deposit | $ | $ 2,500 | ||||||||||||
Stock option exercise price per share | $ 2.08 | $ 2.01 | |||||||||||
Stock option vested and exercisable, shares | shares | 673,000 | ||||||||||||
Cash dividend per share | $ 1 | $ 0.25 | |||||||||||
January 24, 2019 [Member] | |||||||||||||
Cash dividend per share | $ 0.25 | ||||||||||||
2018 Stock Incentive Plan [Member] | |||||||||||||
Number of shares authorized under plan | shares | 2,300,000 | ||||||||||||
Cash dividend per share | $ 1 | ||||||||||||
2018 Stock Plan [Member] | |||||||||||||
Cash dividend per share | 1 | ||||||||||||
Mr. Karkus [Member] | |||||||||||||
Number of stock options awarded to purchase common shares | shares | 2,300,000 | ||||||||||||
Stock option exercise price per share | $ 3 | ||||||||||||
Stock option vest and be exercisable, number of installments | Integer | 35 | ||||||||||||
Stock option vested and exercisable, shares | shares | 63,888 | ||||||||||||
Mr. Karkus [Member] | 2018 Stock Incentive Plan [Member] | |||||||||||||
Stock option exercisable term | 5 years | ||||||||||||
Mr. Karkus [Member] | One Month Installment [Member] | |||||||||||||
Stock option vested and exercisable, shares | shares | 63,290 | ||||||||||||
Minimum [Member] | 2018 Stock Plan [Member] | |||||||||||||
Stock option exercise price per share | 2 | ||||||||||||
Cash dividend per share | 2 | ||||||||||||
Maximum [Member] | 2018 Stock Plan [Member] | |||||||||||||
Stock option exercise price per share | $ 3 | ||||||||||||
Cash dividend per share | $ 1.75 | ||||||||||||
Maximum [Member] | Mr. Karkus [Member] | 2018 Stock Incentive Plan [Member] | |||||||||||||
Number of shares authorized under plan | shares | 2,300,000 | ||||||||||||
April 2017 Termination Agreement [Member] | Mr. Cuddihy [Member] | |||||||||||||
Termination payment | $ | $ 675 | ||||||||||||
Base salary | $ | $ 250 | ||||||||||||
Employment Agreement Termination and Release Agreement [Member] | Mr. Cuddihy [Member] | |||||||||||||
Base salary | $ | $ 55 | ||||||||||||
2015 Employment Agreements [Member] | Mr. Karkus [Member] | |||||||||||||
Base salary | $ | $ 125 | ||||||||||||
Employment agreement description | Pursuant to the terms of the Amended Employment Agreement, Mr. Karkus voluntarily agreed to reduce his base salary from the rate set forth in the 2015 Employment Agreement (i.e., not less than $675,000 per annum) to a base salary of $125,000 per annum (the"Term Base Salary") through February 22, 2021. Unless otherwise determined by the mutual agreement of the Company and Mr. Karkus, on February 22, 2021 and thereafter, Mr. Karkus' salary will increase from the Term Base Salary to not less than $675,000 per annum. | ||||||||||||
2015 Employment Agreements [Member] | Maximum [Member] | Mr. Karkus [Member] | |||||||||||||
Base salary | $ | $ 675 | ||||||||||||
Mylan and Escrow Agent [Member] | Minimum [Member] | |||||||||||||
Escrow deposit | $ | $ 2,500 | ||||||||||||
Mylan and Escrow Agent [Member] | Escrow Agreement [Member] | |||||||||||||
Escrow deposit | $ | $ 5,000 | ||||||||||||
Escrow receivable, description | The terms of the Escrow Agreement provide that if, as of September 29, 2018, there are funds remaining in the escrow account, then the escrow account will be reduced by the difference, if a positive number, of (i) $2.5 million minus (ii) the aggregate amount of all escrow claims asserted by Mylan prior to this date that have either been paid out of the escrow account or are pending as of such date, and, within two business days of such date, the Escrow Agent will disburse such difference, if a positive number, to us. In addition, within two business days of March 29, 2019, the Escrow Agent will release any funds remaining in the escrow account to us minus any amounts being reserved for escrow claims asserted by Mylan prior to such date. Upon the resolution of any pending escrow claims, the Escrow Agent will, within two business days of receipt of joint instructions or a final order from a court (as described in the Escrow Agreement) disburse such reserved amount to the parties entitled to such funds. As described below, in August 2018, Mylan asserted an indemnification claim against us, for a yet to be determined amount. Accordingly, the first distribution was not released to us on September 29, 2018 and remains subject to resolution of this claim. | ||||||||||||
Agreement termination date | Mar. 29, 2022 | ||||||||||||
Losses against escrow amount | $ | $ 160 | $ 800 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Estimated Future Minimum Obligations (Details) - Employment Contracts [Member] $ in Thousands | Dec. 31, 2018USD ($) |
2019 | $ 125 |
2020 | 125 |
2021 | 595 |
2022 | 675 |
2023 | 675 |
Total | $ 2,195 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details Narrative) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Options and warrants outstanding to acquire shares of common stock | 2,980,000 | 979,500 |
Common Stock Equivalents [Member] | ||
Anti-diluted shares | 923,006 | 954,500 |
Computation of fully diluted earning per share | 130,966 |
Significant Customers (Details
Significant Customers (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Net sales | $ 13,126 | $ 9,867 |
Allowance for doubtful accounts | $ 0 | $ 0 |
Sales Revenue, Net [Member] | Third Party Contract Manufacturing Customer One [Member] | ||
Concentration risk, percentage | 45.70% | 61.70% |
Sales Revenue, Net [Member] | Third Party Contract Manufacturing Customer Two [Member] | ||
Concentration risk, percentage | 31.10% | 16.10% |
Sales Revenue, Net [Member] | Third Party Contract Manufacturing Customer Three [Member] | ||
Concentration risk, percentage | 10.90% | 11.10% |
Accounts Receivable [Member] | One Customer [Member] | ||
Concentration risk, percentage | 82.00% | 84.00% |