Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 08, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | ROCKWELL MEDICAL, INC. | |
Entity Central Index Key | 1,041,024 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 56,977,656 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and Cash Equivalents | $ 4,292,328 | $ 8,406,917 |
Investments Available for Sale | 13,410,151 | 24,648,459 |
Insurance Receivable | 500,000 | |
Accounts Receivable, net of a reserve of $7,800 in 2018 and $11,000 in 2017 | 7,581,699 | 6,355,566 |
Inventory | 4,646,522 | 7,637,384 |
Prepaid and Other Current Assets | 1,662,398 | 1,779,992 |
Total Current Assets | 32,093,098 | 48,828,318 |
Property and Equipment, net | 2,667,760 | 2,548,978 |
Inventory, Non-Current | 1,865,834 | 5,986,752 |
Goodwill | 920,745 | 920,745 |
Other Non-current Assets | 536,605 | 494,847 |
Total Assets | 38,084,042 | 58,779,640 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Accounts Payable | 6,931,292 | 4,222,159 |
Accrued Liabilities | 2,724,777 | 4,715,712 |
Settlement Payable | 666,667 | |
Current Portion of Deferred License Revenue | 2,276,139 | |
Customer Deposits | 86,435 | 205,303 |
Total Current Liabilities | 12,685,310 | 9,143,174 |
Deferred License Revenue | 12,729,052 | 16,723,318 |
Total Liabilities | 25,414,362 | 25,866,492 |
Commitments and Contingencies (See note 10) | ||
Shareholders' Equity: | ||
Common Shares, no par value, 51,769,294 shares issued and outstanding at September 30, 2018 and 51,768,424 shares issued and outstanding at December 31, 2017 | 275,634,848 | 273,210,907 |
Accumulated Deficit | (263,012,321) | (240,262,376) |
Accumulated Other Comprehensive Income (Loss) | 47,153 | (35,383) |
Total Shareholders' Equity | 12,669,680 | 32,913,148 |
Total Liabilities And Shareholders' Equity | $ 38,084,042 | $ 58,779,640 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Allowance for reserve, accounts receivable (in dollars) | $ 7,800 | $ 11,000 |
Common Shares, par value (in dollars per share) | $ 0 | $ 0 |
Common Shares, shares issued | 51,769,294 | 51,768,424 |
Common Shares, shares outstanding | 51,769,294 | 51,768,424 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Sales | $ 16,672,416 | $ 14,626,904 | $ 46,534,358 | $ 42,462,265 |
Cost of Sales | 14,703,606 | 13,555,853 | 49,303,048 | 37,535,454 |
Gross Profit (Loss) | 1,968,810 | 1,071,051 | (2,768,690) | 4,926,811 |
Selling, General and Administrative | 6,159,141 | 4,791,636 | 15,182,048 | 17,433,530 |
Settlement Expense, net of Reimbursement | 1,030,000 | |||
Research and Product Development | 808,192 | 1,304,658 | 4,033,494 | 4,195,003 |
Operating Loss | (4,998,523) | (5,025,243) | (23,014,232) | (16,701,722) |
Interest and Investment Income (Loss) | (4,969,632) | (5,056,994) | (22,749,945) | (16,882,001) |
Net Loss | $ 28,891 | $ (31,751) | $ 264,287 | $ (180,279) |
Basic and Diluted Net Loss per Share | $ (0.10) | $ (0.10) | $ (0.44) | $ (0.33) |
Basic and Diluted Weighted Average Shares Outstanding (in shares) | 51,288,537 | 51,260,975 | 51,288,462 | 50,995,079 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements Of Comprehensive Income (Loss) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net Loss | $ (4,969,632) | $ (5,056,994) | $ (22,749,945) | $ (16,882,001) |
Unrealized Gain on Available-for-Sale Securities | 143,868 | 248,628 | 96,327 | 860,752 |
Foreign Currency Translation Adjustments | (6,402) | 132 | (13,791) | (142) |
Comprehensive Loss | $ (4,832,166) | $ (4,808,234) | $ (22,667,409) | $ (16,021,391) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements Of Changes In Shareholders' Equity - 9 months ended Sep. 30, 2018 - USD ($) | COMMON SHARES | ACCUMULATED DEFICIT | ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS) | Total |
Balance at Dec. 31, 2017 | $ 273,210,907 | $ (240,262,376) | $ (35,383) | $ 32,913,148 |
Balance (in shares) at Dec. 31, 2017 | 51,768,424 | 51,768,424 | ||
Increase (Decrease) in Shareholders' Equity | ||||
Net Loss | (22,749,945) | $ (22,749,945) | ||
Unrealized Gain (Loss) on Available-for-Sale Investments | 96,327 | 96,327 | ||
Foreign Currency Translation Adjustments | (13,791) | (13,791) | ||
Exercise of Employee Stock Option, Net of Tax | $ (1,978) | (1,978) | ||
Exercise of Employee Stock Option, Net of Tax (in shares) | 870 | |||
Stock-based compensation | $ 2,425,919 | 2,425,919 | ||
Balance at Sep. 30, 2018 | $ 275,634,848 | $ (263,012,321) | $ 47,153 | $ 12,669,680 |
Balance (in shares) at Sep. 30, 2018 | 51,769,294 | 51,769,294 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements Of Cash Flow - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash Flows From Operating Activities: | ||
Net Loss | $ (22,749,945) | $ (16,882,001) |
Adjustments To Reconcile Net Loss To Net Cash Used In Operating Activities: | ||
Depreciation and Amortization | 466,994 | 384,835 |
Stock-based Compensation | 2,425,919 | 6,033,436 |
Increase in Inventory Reserves | 3,442,547 | |
Loss on Disposal of Assets | 4,030 | 4,084 |
Realized Loss on Sale of Investments Available-for-Sale | 222,014 | 704,695 |
Changes in Assets and Liabilities: | ||
(Increase) in Insurance Receivable | (500,000) | |
(Increase) Decrease in Accounts Receivable | (1,226,133) | (149,429) |
Decrease (Increase) in Inventory | 3,669,233 | (2,391,191) |
Decrease (Increase) in Other Assets | 75,570 | 224,635 |
(Decrease) in Accounts Payable | 2,709,133 | (1,669,651) |
Increase in Settlement Payable | 666,667 | |
(Decrease) in Other Liabilities | (2,109,802) | (863,034) |
(Decrease) in Deferred License Revenue | (1,718,127) | (1,698,903) |
Changes in Assets and Liabilities | 1,566,541 | (6,547,573) |
Cash Used In Operating Activities | (14,621,900) | (16,302,524) |
Cash Flows From Investing Activities: | ||
Purchase of Investments Available-for-Sale | (18,483,694) | (34,235,347) |
Sale of Investments Available-for-Sale | 29,596,315 | 40,122,266 |
Purchase of Equipment | (589,541) | (706,346) |
Proceeds on Sale of Assets | 450 | |
Cash Provided By Investing Activities | 10,523,080 | 5,181,023 |
Cash Flows From Financing Activities: | ||
Proceeds from the Issuance of Common Shares | 116,105 | |
Restricted Stock Retained in Satisfaction of Tax Liabilities | (2,287,231) | |
Stock Retained in Satisfaction of Tax Liabilities | (1,978) | |
Cash Used In Financing Activities | (1,978) | (2,171,126) |
Effects of Exchange Rate Changes | (13,791) | (44) |
Decrease In Cash and Cash Equivalents | (4,114,589) | (13,292,671) |
Cash At Beginning Of Period | 8,406,917 | 17,180,594 |
Cash At End Of Period | $ 4,292,328 | $ 3,887,923 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2018 | |
Description of Business | |
Description of Business | 1. Description of Business Rockwell Medical, Inc. and subsidiaries (collectively, “we”, “our”, “us”, or the “Company”), is a specialty pharmaceutical company targeting end-stage renal disease and chronic kidney disease with products for the treatment of iron deficiency, secondary hyperparathyroidism and hemodialysis. We are also a manufacturer of hemodialysis concentrates/dialysates for dialysis providers and distributors in the United States and abroad. We supply approximately 25% of the United States domestic market with dialysis concentrates and we also supply dialysis concentrates to distributors serving a number of foreign countries, primarily in the Americas and the Pacific Rim. Substantially, all of our sales have been concentrate products and ancillary items. Our business strategy is developing unique, proprietary renal drug therapies that we can commercialize or out-license, while also expanding our dialysis products business. These renal drug therapies support disease management initiatives to improve the quality of life and care of dialysis patients and are designed to deliver safe and effective therapy, while decreasing drug administration costs and improving patient convenience and outcome. Triferic ® is a registered trademark of Rockwell Medical, Inc. |
Liquidity and Financial Conditi
Liquidity and Financial Condition | 9 Months Ended |
Sep. 30, 2018 | |
Liquidity and Financial Condition | |
Liquidity and Financial Condition | 2. Liquidity and Financial Condition As of September 30, 2018, the Company had approximate balances of $4.3 million of cash and cash equivalents, $13.4 million of investments available-for-sale, working capital of $19.4 million and an accumulated deficit of $263.0 million. Net cash used in operating activities for the nine months ended September 30, 2018 was approximately $14.6 million. On October 15, 2018, the Company raised $22.0 million in capital from the offering and sale of 5,541,562 shares of common stock at a price of $3.97 per share, along with warrants to purchase up to an additional 2,770,781 shares of common stock at a price of $4.96 per share. (See Note 11 – Subsequent Events). Based on the additional capital raised from the October 2018 offering, management currently believes the Company currently has sufficient funds to meet its operating requirements for at least the next twelve months from the date of report filing. The Company will require additional capital to sustain its short-term operations and make the investments it needs to execute its long-term business plan, including the commercial launch of Dialysate Triferic and IV Triferic (if approved). If the Company is unable to generate sufficient revenue from its existing long-term business plan, the Company will need to obtain additional debt or equity financing. If the Company attempts to obtain additional debt or equity financing, the Company cannot assume that such financing will be available on favorable terms, if at all. |
Basis of Presentation, Summary
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2018 | |
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements | |
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements | 3. Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements The accompanying condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The accompanying condensed consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States (“U.S.”) of America (“GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the U. S. Securities and Exchange Commission (“SEC”) and on the same basis as the Company prepares its annual audited consolidated financial statements. The condensed consolidated balance sheet at September 30, 2018, condensed consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017, condensed consolidated statements of cash flows for the nine months ended September 30, 2018 and 2017, and condensed consolidated statement of changes in shareholder’s equity for the nine months ended September 30, 2018 are unaudited, but include all adjustments, consisting of normal recurring adjustments, that the Company considers necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The results for the three and nine months ended September 30, 2018 are not necessarily indicative of results to be expected for the year ending December 31, 2018 or for any future interim period. The condensed consolidated balance sheet at December 31, 2017 has been derived from audited financial statements, however, it does not include all of the information and notes required by GAAP for complete financial statements. The accompanying condensed consolidated financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2017 and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 as filed with the SEC (the “2017 Annual Report”). The Company’s consolidated subsidiaries consisted of its wholly-owned subsidiaries, Rockwell Transportation, Inc. and Rockwell Medical India Private Limited. Certain reclassifications have been made to the 2017 financial statements and notes to conform to the 2018 presentation. Revenue Recognition The Company recognizes revenue under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. The core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: · Step 1: Identify the contract with the customer · Step 2: Identify the performance obligations in the contract · Step 3: Determine the transaction price · Step 4: Allocate the transaction price to the performance obligations in the contract · Step 5: Recognize revenue when the company satisfies a performance obligation Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by us from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight related to contracts with customers are accounted for as a fulfillment cost and are included in cost of sales when control of the goods transfers to the customer. Nature of goods and services The following is a description of principal activities from which the Company generates its revenue. Product sales – The Company accounts for individual products and services separately if they are distinct (i.e., if a product or service is separately identifiable from other items and if a customer can benefit from it on its own or with other resources that are readily available to the customer). The consideration, including any discounts, is allocated between separate products and services based on their stand-alone selling prices. The stand-alone selling prices are determined based on the cost plus margin approach. Drug and dialysis concentrate products are sold directly to dialysis clinics and to wholesale distributors in both domestic and international markets. Distribution and license agreements for which upfront fees are received are evaluated upon execution or modification of the agreement to determine if the agreement creates a separate performance obligation from the underlying product sales. For all existing distribution and license agreements, the distribution and license agreement is not a distinct performance obligation from the product sales. In instances where regulatory approval of the product has not been established and the Company does not have sufficient experience with the foreign regulatory body to conclude that regulatory approval is probable, the revenue for the performance obligation is recognized over the term of the license agreement (over time recognition). Conversely, when regulatory approval already exists or is probable, revenue is recognized at the point in time that control of the product transfers to the customer. The Company received upfront fees under two distribution and license agreements that have been deferred as a contract liability. The amounts received from Wanbang Biopharmaceuticals Co., Ltd. (“Wanbang”) are recognized as revenue over the estimated term of the distribution and license agreement as regulatory approval was not received and the Company did not have sufficient experience in China to determine that regulatory approval was probable as of the execution of the agreement. The amounts received from Baxter Healthcare Corporation (“Baxter”), are recognized as revenue at the point in time that the estimated product sales under the agreement occur. For the business under the Company’s distribution agreement with Baxter (the “Baxter Agreement”), and for the majority of the Company’s international customers, the Company recognizes revenue at the shipping point, which is generally the Company’s plant or warehouse. For other business, the Company recognizes revenue based on when the customer takes control of the product. The amount of revenue recognized is based on the purchase order less returns and adjusted for any rebates, discounts, chargebacks or other amounts paid to customers. There were no such adjustments for the periods reported. Customers typically pay for the product based on customary business practices with payment terms averaging 30 days, while distributor payment terms average 45 days. Disaggregation of revenue Revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition. In thousands of US dollars ($) Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Products By Geographic Area Total U.S. Rest of World Total U.S. Rest of World Drug Revenues License Fee – Over time $ 68 $ — $ 68 $ 205 $ — $ 205 Concentrate Products Product Sales – Point-in-time 16,099 13,208 2,891 44,815 38,536 6,279 License Fee – Point-in-time 505 505 — 1,514 1,514 — Total Concentrate Products 16,604 13,713 2,891 46,329 40,050 6,279 Net Revenue $ 16,672 $ 13,713 $ 2,959 $ 46,534 $ 40,050 $ 6,484 For the three and nine months ended September 30, 2017, license fee revenue was $556 and $1,655 respectively. For the three and nine months ended September 30, 2017 product sales revenue was $14,061 and $40,807 respectively. Contract balances The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers. In thousands of US dollars ($) September 30, 2018 December 31, 2017 Receivables, which are included in "Trade and other receivables" $ 7,593 $ 5,544 Contract liabilities $ 15,005 $ 16,723 There were no impairment losses recognized related to any receivables arising from the Company’s contracts with customers for the nine months ended September 30, 2018. For the three and nine months ended September 30, 2018 and 2017, the Company did not recognize material bad-debt expense and there were no material contract assets recorded on the consolidated balance sheet as of September 30, 2018. The Company does not generally accept returns of its concentrate products and no reserve for returns of concentrate products was established as of September 30, 2018 or December 31, 2017. The contract liabilities primarily relate to upfront payments and consideration received from customers that are received in advance of the customer assuming control of the related products. Transaction price allocated to remaining performance obligations For the three and nine months ended September 30, 2018, revenue recognized from performance obligations related to prior periods was not material. Revenue expected to be recognized in any future year related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less, contracts where revenue is recognized as invoiced and contracts with variable consideration related to undelivered performance obligations, totaled $15,005,000 as of September 30, 2018. The amount relates primarily to upfront payments and consideration received from customers that are received in advance of the customer assuming control of the related products. The Company applies the practical expedient in paragraph 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less. The Baxter Agreement includes minimum commitments of product sales over the duration of the agreement. Unfulfilled performance obligations related to the Baxter Agreement are product sales of $11,732,000, which will be amortized through expiration of the agreement on October 2, 2024. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of 90 days or less at acquisition to be cash equivalents. Cash and cash equivalents include cash held in banks, money market mutual funds and unrestricted certificates of deposit. Fair Value Measurement The Company applies the guidance issued with ASC 820, Fair Value Measurements , which provides guidance on the development and disclosure of fair value measurements. Under this accounting guidance, fair value is defined as an exit price, representing the amount 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. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace. Level 3: Unobservable inputs which are supported by little or no market activity ad values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgement or estimation. Deferred Revenue In October of 2014, the Company entered into a 10 year distribution agreement with Baxter and received an upfront fee of $20 million. The upfront fee was recorded as deferred revenue and is being recognized based on the proportion of product shipments to Baxter in each period, compared with total expected sales volume over the term of the Distribution Agreement. The Company recognized revenue of approximately $0.5 million each of the three months ended September 30, 2018 and 2017, respectively, and $1.5 million for each of the nine months ended September 30, 2018 and 2017, respectively. Research and Product Development The Company recognizes research and product development expenses as incurred. The Company incurred product development and research costs related to the commercial development, patent approval and regulatory approval of new products aggregating approximately $0.8 million and $1.3 million for the three months ended September 30, 2018 and 2017, respectively, and $4.0 million and $4.2 million for the nine months ended September 30, 2018 and 2017, respectively. Stock-Based Compensation The Company expenses stock-based compensation to employees over the requisite service period based on the estimated grant-date fair value of the awards. For stock-based compensation awards to non-employees, the Company re-measures the fair value of the non-employee awards at each reporting period prior to vesting and finally at the vesting date of the award. Changes in the estimated fair value of these non-employee awards are recognized as compensation expense in the period of change. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model, and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgement. For the three and nine months ended September 30, 2018 and 2017, the Company recorded stock-based compensation expense on its options granted under the Company’s equity compensation plans to its directors and officers, and its employees. Loss Per Share ASC 260, Earnings Per Share, requires dual presentation of basic and diluted earnings per share (“EPS”), with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issued common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Basic net loss per share of common stock excludes dilution and is computed by dividing the net loss by the weighted average number of shares outstanding during the period. Diluted net loss per share of common stock 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 then shared in the earnings of the entity unless inclusion of such shares would be anti-dilutive. The Company has only incurred losses, therefore, basic and diluted net loss per share is the same. Securities that could potentially dilute loss per share in the future that were not included in the computation of diluted loss per share for the three and nine months ended September 30, 2018 and 2017 were as follows: As of September 30, 2018 2017 Options to purchase common stock 8,048,105 7,326,501 Unvested restricted stock awards - 480,000 Unvested restricted stock units 1,293,750 - 9,341,855 7,806,501 Adoption of Recent Accounting Pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its consolidated financial statements and assures that there are proper controls in place to ascertain that the Company’s consolidated financial statements properly reflect the change. In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), as modified by ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, ASU 2016-08 , Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, and ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The revenue recognition principle in ASU 2014-09 is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, new and enhanced disclosures will be required. Companies may adopt the new standard either using the full retrospective approach, a modified retrospective approach with practical expedients, or a cumulative effect upon the adoption approach. The Company adopted the new standard on January 1, 2018, using the modified retrospective approach. The adoption of ASU 2014-09 did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures. Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and subsequent amendments to the initial guidance: ASU 2017-13, ASU 2018-10 and ASU 2018-11 (collectively, Topic 842). Topic 842 requires companies to generally recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets. Topic 842 is effective for the Company in its first quarter 2020, and earlier adoption is permitted. The Company is currently evaluating the impact of its pending adoption of Topic 842 on its condensed consolidated financial statements. The Company currently expects that most of its operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon its adoption of Topic 842, which will increase its total assets and total liabilities that the Company reports relative to such amounts prior to adoption. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholder’s equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholder’s equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance and the ending balance of each period for which a statement of comprehensive income is required to be filed. This rule is effective on November 5, 2018. The Company is evaluating the impact of this guidance on its condensed consolidated financial statements. |
Investments in Available For Sa
Investments in Available For Sale Securities | 9 Months Ended |
Sep. 30, 2018 | |
INVESTMENTS IN AVAILABLE FOR SALE SECURITIES | |
INVESTMENTS IN AVAILABLE FOR SALE SECURITIES | 4. Investments - Available-for-Sale Investments available-for-sale are short-term investments, consisting of investments in short-term notes and bonds and are stated at fair value based upon observed market prices (Level 1 in the fair value hierarchy). The portfolio generally consists of high credit quality short-term debt instruments. These instruments are subject to changes in fair market value due primarily to changes in interest rates. The fair value of these investments was $13,410,151 and $24,648,459 as of September 30, 2018 and December 31, 2017, respectively. Unrealized holding gains or losses on these securities are included in accumulated other comprehensive income (loss). Realized gains and losses, including declines in value judged to be other-than-temporary on available-for-sale securities are included as a component of other income or expense. Gross unrealized losses for the three months ended September 30, 2018 was $157,982. There were no unrealized gains for the three months ended September 30, 2018. Gross unrealized gains for the three months ended September 30, 2017 $248,628. There were no unrealized losses for the three months ended September 30, 2017. Realized gains were $2,411 and $57 for the three months ended September 30, 2018 and 2017 respectively. Realized losses were $99,439 and $199,758 for the three months ended September 30, 2018 and 2017 respectively. There were no gross unrealized losses for the nine months ended September 30, 2018 and gross unrealized gains were $96,591 as of September 30, 2018. Gross unrealized losses were $76,399 and gross unrealized gains were $35,274 for the nine months ended September 30, 2017. There were realized gains of $6,050 and $57 for the nine months ended September 30, 2018 and 2017 respectively. There were realized losses of $228,064 and $704,752 during the nine months ended September 30, 2018 and 2017 respectively. The Company has evaluated the near term interest rate environment and the expected holding period of the investments along with the duration of the portfolio assets in assessing the severity and duration of potential impairments. Based on our evaluation, the Company does not consider those investments to be other-than-temporarily impaired at September 30, 2018. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2018 | |
Inventory | |
Inventory | 5. Inventory Components of inventory, net of reserves as of September 30, 2018 and December 31, 2017 are as follows: September 30, December 31, 2018 2017 Raw Materials $ 4,122,432 $ 10,604,232 Work in Process 203,498 212,505 Finished Goods 2,186,426 2,807,399 Total $ 6,512,356 $ 13,624,136 As of September 30, 2018, we classified $1,865,834 of inventory as non-current all of which was related to Triferic or the active pharmaceutical ingredient for Triferic. As of September 30, 2018 and December 31, 2017, we had total Triferic inventory aggregating $9,467,795 and $13,424,779 respectively against which we had reserved $6,900,000 and $3,460,801 respectively. For the three and nine months ended September 30, 2018, the Company increased its inventory reserve by $0.1 million and $7.8 million respectively. For the three and nine months ended September 30, 2017 the Company increased its inventory reserve by $0.7 million and $0.8 million respectively. |
Property And Equipment
Property And Equipment | 9 Months Ended |
Sep. 30, 2018 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 6. Property and Equipment As of September 30, 2018 and December 31 2017, the Company’s property and equipment consisted of the following: September 30, December 31, 2018 2017 Leasehold Improvements $ 909,846 $ 824,087 Machinery and Equipment 4,882,489 7,893,566 Information Technology & Office Equipment 2,459,832 2,327,524 Laboratory Equipment 614,733 631,666 Transportation — 242,277 8,866,900 11,919,120 Accumulated Depreciation (6,199,140) (9,370,142) Net Property and Equipment $ 2,667,760 $ 2,548,978 Depreciation expense for the three months ended September 30, 2018 and 2017, totaled $185,579 and $125,839. Depreciation expense for the nine months ended September 30, 2018 and 2017, totaled $466,729 and $ |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity | |
Stockholders' Equity | 7. Shareholders’ Equity Preferred Stock As of September 30, 2018 and December 31, 2017, there were 2,000,000 shares of preferred stock authorized and no shares of preferred stock issued or outstanding. Common Stock On September 19, 2018, an employee of the Company exercised 5,000 stock options at an exercise price of $15,450 or $3.09 per share. The Company withheld 4,130 of these common shares at a cost of $17,428 or $4.22 per share, to cover the employee withholding taxes and other expenses related to this exercise. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Stock-Based Compensation | |
Stock-Based Compensation | 8. Stock-Based Compensation The Company recognized total stock-based compensation expense during the three and nine months ended September 30, 2018 and 2017 as follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Restricted stock awards $ 20,222 $ 564,854 $ 1,292,125 $ 2,751,239 Stock option awards 427,944 1,071,653 967,377 3,275,339 Restricted stock units 166,417 - 166,417 - $ 614,583 $ 1,636,507 $ 2,425,919 $ 6,026,578 Restricted Stock A summary of the Company’s restricted stock awards during the nine months ended September 30, 2018 is as follows: Weighted Average Grant-Date Number of Shares Fair Value Granted at December 31, 2017 1,380,000 $ 7.27 Granted - - Forfeited (333,200) 5.70 Granted at September 30, 2018 $ 7.77 The fair value of restricted stock awards are measured based on their fair value on the date of grant and amortized over the vesting period. During the nine months ended September 30, 2018, the Company granted 388,125 restricted stock units and 905,625 performance-based restricted stock units to an employee. The Company did not record stock-based compensation expenses related to the performance-based grants, because vesting is not probable as of September 30, 2018. The restricted stock units are priced at $4.70 per share and were unvested at September 30, 2018. The 388,125 restricted stock units have a three year time based vesting period and the 905,625 performance-based grants will be subject to the satisfaction of performance based conditions. Stock Options A summary of the Company’s stock option activity for the nine months ended September 30, 2018 is as follows: Weighted Weighted Average Shares Average Remaining Underlying Exercise Contractual Aggregate Options Price Term Intrinsic Value Outstanding at December 31, 2017 6,906,001 $ 7.92 5.0 Granted 1,337,271 4.96 9.4 Exercised (5,000) 6.59 - Forfeited (190,167) 6.59 - Outstanding at September 30, 2018 8,048,105 $ 7.46 5.2 $ 365,135 Exercisable at September 30, 2018 6,248,160 $ 7.90 4.1 $ 365,135 The aggregate intrinsic value in the table above represents the total intrinsic (the difference between the Company’s closing stock price on September 30, 2018 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders, had all option holders been able to, and in fact had, exercised their options on September 30, 2018. During the nine months ended September 30, 2018, the stock options granted consisted of 949,146 options granted to employees, and 388,125 performance-based options granted to an employee. The vested options were exercisable at an average price of $7.90 per share and the unvested options were exercisable at an average of $5.92 per share. The fair value of the options granted for the nine months ended September 30, 2018 and 2017 were based on the following assumptions: Nine Months Ended September 30, 2018 2017 Exercise price $4.52 - $5.75 $6.09 Expected stock price volatility 67.5% 66.3% Risk-free interest rate 2.7% - 2.9% 2.2% Term (years) 5.0 - 6.5 5.5 - 6.5 In accordance with the original terms of their employment agreements of the former Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”) and in accordance with the terms of the Settlement Agreement (defined below), the Company accelerated the vesting of 258,334 and 71,667 unvested stock options on the termination date. As a result of this acceleration of stock options, the Company recorded additional stock-based compensation of approximately $162,000. As of September 30, 2018, total stock-based compensation expense related to unvested options not yet recognized totaled approximately $2.2 million. |
Settlement Agreement and Relate
Settlement Agreement and Related Director and Officer Insurance Receivable | 9 Months Ended |
Sep. 30, 2018 | |
Settlement Agreement and Related Director and Officer Insurance Receivable | |
Settlement Agreement and Related Director and Officer Insurance Receivable | 9. Settlement Agreement and Related Director and Officer Insurance Receivable On August 7, 2018, the Company entered into a confidential settlement agreement and mutual release (the “Settlement Agreement”) with its former CEO, former CFO and a former and then current director. For more details see Note 10. The Company accrued approximately $1.5 million related to this Settlement Agreement and as of September 30, 2018, the Company has paid $0.8 million. The Company is also entitled to a partial reimbursement for this accrual from the Company’s insurance company of approximately $0.5 million which was collected in October 2018. This resulted in a net settlement expense of approximately $1.0 million for the nine months ended September 30, 2018. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 10. Commitments and Contingencies Litigation Circuit Court for Oakland County, Michigan Following the Board’s termination of the Company’s former CEO on May 22, 2018, and in response to his continued assertion that he remained the duly appointed Chief Executive Officer of the Company, on May 23, 2018, the Company filed a complaint in the Oakland County Circuit Court in Michigan (“State Court”) seeking declaratory relief and a temporary restraining order. On May 24, 2018, the Board terminated its then-serving CFO. Following the State Court-ordered mediation, the Company, its former CEO, former CFO and a former and then current director, agreed to a term sheet (the “Term Sheet”) that outlined the terms of a withdrawal of the State Court proceeding while the parties continued to litigate their claims in the Federal Court actions described below. On July 11, 2018, the State Court entered a stipulated order permitting the Company to withdraw its complaint in accordance with the Term Sheet. On July 17, 2018, the lawsuit in the State Court action was dismissed and closed. United States District Court for the Eastern District of Michigan On June 13, 2018, the Company’s former CEO and CFO filed a complaint in the United States District Court for the Eastern District of Michigan (“Federal Court”) against the Company and certain directors (collectively, the “Defendants”). The complaint requested that the Federal Court reinstate the former CEO to his former position of Chief Executive Officer, reinstate the former CFO to his former position of Chief Financial Officer and order the Defendants to pay all costs associated with the matter. The complaint alleged that the Defendants possibly violated their duties of loyalty and care to the Company; rules under Regulation Fair Disclosure; and various federal securities laws, including Section 10(b) of the Exchange Act and SEC Rule 10b-5. On July 2, 2018, the Company filed an answer and counterclaim against the Company’s former CEO, former CFO, a former director and a then-serving director. On August 7, 2018, the parties entered into the Settlement Agreement by which the parties agreed to dismiss the Federal Court action with prejudice. Settlement Agreement On August 7, 2018, the Company, the Company’s former CEO, former CFO, a former director and a then-serving director and the Defendants, entered into the Settlement Agreement, pursuant to which the parties agreed to dismiss the Federal Court action with prejudice and to enter into a broad mutual release of claims. The Company agreed to: (i) pay the Company’s former CEO, former CFO, a former director and a then-serving director a total of $1,500,000, one-half of which was paid at execution and the remainder of which will be paid in nine equal monthly installments of $83,333, (ii) pay $30,000 to the then-serving director (who then agreed to resign as a director); (iii) accelerate the vesting of options held by the Company’s former CEO and former CFO as of the date of their terminations; and (iv) grant an extended option exercise period for vested options. The Company’s former CEO, former CFO, a former director and the resigning director agreed to certain standstill covenants for a period of approximately five years and agreed to forfeit a total of 313,600 unvested shares of restricted common stock. SEC Inquiry As a follow up to its prior inquiry letters, the Company received a subpoena from the SEC during the Company’s third quarter requesting, among other things, certain information and documents relating to the status of CMS’s determination of separate reimbursement status for Dialysate Triferic and the Board’s termination of our former CEO and CFO. The Company is actively cooperating and responding to these requests. State Court and Federal Court Actions As reported above, the State Court action was dismissed and closed on July 17, 2018 at the request of the parties. On August 7, 2018, the parties entered into the Settlement Agreement by which the parties agreed to dismiss the Federal Court action with prejudice. On August 15, 2018, the Federal Court action was dismissed and closed. Shareholder Class Action Lawsuits On July 27, 2018, Plaintiff Ah Kit Too filed a putative class action lawsuit in the United States District Court in the Eastern District of New York against the Company and former officers, Robert Chioini and On September 4, 2018, Plaintiff Robert Spock filed a similar putative class action lawsuit in the United States District Court in the Eastern District of New York against the Company and Messrs. Chioini and Klema. The Spock complaint is a federal securities class action purportedly brought on behalf of a class consisting of persons who purchased the Company’s securities between November 8, 2017 and June 26, 2018. This complaint alleges that the Company and Messrs. Chioini and Klema violated the Exchange Act in that the Company was aware the Centers for Medicare and Medicaid Services would not pursue the Company’s proposal for separate reimbursement for Triferic; misstated reserves in the Company’s quarterly report for the first quarter of 2018; had a material weakness its internal controls over financial reporting, which rendered those controls ineffective; Mr. Chioini withheld material information regarding Triferic from the Company’s auditor, corporate counsel, and independent directors of the Board; and, as a result of these alleged issues, statements about the Company’s business were materially false and misleading. On September 25, 2018, four Company stockholders filed motions to appoint lead plaintiffs, lead counsel, and to consolidate the Ah Kit Too v. Rockwell securities class action with the Spock v. Rockwell securities class action. On October 10, 2018, the court issued an order consolidating the two actions, appointing co-lead plaintiffs and co-lead counsel. The lawsuits seek damages sustained by the class and an award of plaintiffs’ costs and attorney fees. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
SUBSEQUENT EVENT. | |
Subsequent Events | 11. Subsequent Events Related-Party Transaction On October 7, 2018, the Company entered into a Master Services and Intellectual Property (“IP”) Agreement (“MSA”) with the Charak, LLC and Dr. Ajay Gupta (collectively “Charak”), who serves as the Company’s Executive Vice President and Chief Scientific Officer. Pursuant to the MSA, the parties entered into three additional agreements related to the license of certain soluble ferric pyrophosphate IP owned by Charak, as well as an employment agreement with Dr. Gupta. The MSA provides for a payment of $1,000,000 to Dr. Gupta, payable in four quarterly installments of $250,000 each on October 15, 2018, January 15, 2019, April 15, 2019 and July 15, 2019, and reimbursement for certain legal fees incurred in connection with the MSA. Securities Purchase Agreement On October 15, 2018, the Company entered into a Securities Purchase Agreement with an institutional investor (the “Purchaser”), pursuant to which the Company sold 5,541,562 units, with each unit (the “Units”) consisting of one share of common stock of the Company (the “Common Stock”) and a warrant to purchase 50% of a share of Common Stock (the “Warrant”). The Units were sold at $3.97 per Unit, which was equivalent to the closing price of the Company’s common stock on October 12, 2018, the last trading day prior to entering into the Securities Purchase Agreement. The Warrants, which are not exercisable for six months from issuance, have an exercise price of $4.96 per full share of Common Stock and have a five-year term from issuance. The Purchaser had the right to purchase up to an additional $8.0 million in Units at the same price and on the same terms as set forth in the Securities Purchase Agreement. This additional purchase right expired unexercised on October 26, 2018. As a result, no additional Units were sold and the total gross proceeds for the offering were $22.0 million. CMS Reimbursement Guidance Also on November 1, 2018, the Centers for Medicare & Medicaid Services (“CMS”), issued interpretive guidance on the availability of Medicare reimbursement for certain products indicated to treat renal disease (the CMS Guidance. As set forth in the CMS Guidance, Dialysate Triferic would not be eligible for add-on reimbursement under the CMS Traditional Drug Add On Pricing Adjustment (“TDAPA”) program. Accordingly, the Company is continuing its previously announced plans to commercially launch Dialysate Triferic “within the bundle,” with commercial launch for this product planned for the first half of 2019. However, based on the CMS Guidance, the Company believes that, if approved by the FDA on or after January 1, 2020, IV Triferic would be eligible for separate sole source payment with a separate J-Code for a two-year timeframe. In accordance with the current guidance, separate TDAPA payments would last for two years following launch, after which IV Triferic would be priced inside the bundle. The Company is working with outside experts to optimize its New Drug Application (“NDA”) filing and PDUFA action dates to realize the benefits of separate payment, and is targeting a launch of IV Triferic in the first half of 2020, subject to receipt of FDA approval. |
Basis of Presentation, Summar_2
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements | |
Revenue Recognition | Revenue Recognition The Company recognizes revenue under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. The core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: · Step 1: Identify the contract with the customer · Step 2: Identify the performance obligations in the contract · Step 3: Determine the transaction price · Step 4: Allocate the transaction price to the performance obligations in the contract · Step 5: Recognize revenue when the company satisfies a performance obligation Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by us from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight related to contracts with customers are accounted for as a fulfillment cost and are included in cost of sales when control of the goods transfers to the customer. Nature of goods and services The following is a description of principal activities from which the Company generates its revenue. Product sales – The Company accounts for individual products and services separately if they are distinct (i.e., if a product or service is separately identifiable from other items and if a customer can benefit from it on its own or with other resources that are readily available to the customer). The consideration, including any discounts, is allocated between separate products and services based on their stand-alone selling prices. The stand-alone selling prices are determined based on the cost plus margin approach. Drug and dialysis concentrate products are sold directly to dialysis clinics and to wholesale distributors in both domestic and international markets. Distribution and license agreements for which upfront fees are received are evaluated upon execution or modification of the agreement to determine if the agreement creates a separate performance obligation from the underlying product sales. For all existing distribution and license agreements, the distribution and license agreement is not a distinct performance obligation from the product sales. In instances where regulatory approval of the product has not been established and the Company does not have sufficient experience with the foreign regulatory body to conclude that regulatory approval is probable, the revenue for the performance obligation is recognized over the term of the license agreement (over time recognition). Conversely, when regulatory approval already exists or is probable, revenue is recognized at the point in time that control of the product transfers to the customer. The Company received upfront fees under two distribution and license agreements that have been deferred as a contract liability. The amounts received from Wanbang Biopharmaceuticals Co., Ltd. (“Wanbang”) are recognized as revenue over the estimated term of the distribution and license agreement as regulatory approval was not received and the Company did not have sufficient experience in China to determine that regulatory approval was probable as of the execution of the agreement. The amounts received from Baxter Healthcare Corporation (“Baxter”), are recognized as revenue at the point in time that the estimated product sales under the agreement occur. For the business under the Company’s distribution agreement with Baxter (the “Baxter Agreement”), and for the majority of the Company’s international customers, the Company recognizes revenue at the shipping point, which is generally the Company’s plant or warehouse. For other business, the Company recognizes revenue based on when the customer takes control of the product. The amount of revenue recognized is based on the purchase order less returns and adjusted for any rebates, discounts, chargebacks or other amounts paid to customers. There were no such adjustments for the periods reported. Customers typically pay for the product based on customary business practices with payment terms averaging 30 days, while distributor payment terms average 45 days. Disaggregation of revenue Revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition. In thousands of US dollars ($) Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Products By Geographic Area Total U.S. Rest of World Total U.S. Rest of World Drug Revenues License Fee – Over time $ 68 $ — $ 68 $ 205 $ — $ 205 Concentrate Products Product Sales – Point-in-time 16,099 13,208 2,891 44,815 38,536 6,279 License Fee – Point-in-time 505 505 — 1,514 1,514 — Total Concentrate Products 16,604 13,713 2,891 46,329 40,050 6,279 Net Revenue $ 16,672 $ 13,713 $ 2,959 $ 46,534 $ 40,050 $ 6,484 For the three and nine months ended September 30, 2017, license fee revenue was $556 and $1,655 respectively. For the three and nine months ended September 30, 2017 product sales revenue was $14,061 and $40,807 respectively. Contract balances The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers. In thousands of US dollars ($) September 30, 2018 December 31, 2017 Receivables, which are included in "Trade and other receivables" $ 7,593 $ 5,544 Contract liabilities $ 15,005 $ 16,723 There were no impairment losses recognized related to any receivables arising from the Company’s contracts with customers for the nine months ended September 30, 2018. For the three and nine months ended September 30, 2018 and 2017, the Company did not recognize material bad-debt expense and there were no material contract assets recorded on the consolidated balance sheet as of September 30, 2018. The Company does not generally accept returns of its concentrate products and no reserve for returns of concentrate products was established as of September 30, 2018 or December 31, 2017. The contract liabilities primarily relate to upfront payments and consideration received from customers that are received in advance of the customer assuming control of the related products. Transaction price allocated to remaining performance obligations For the three and nine months ended September 30, 2018, revenue recognized from performance obligations related to prior periods was not material. Revenue expected to be recognized in any future year related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less, contracts where revenue is recognized as invoiced and contracts with variable consideration related to undelivered performance obligations, totaled $15,005,000 as of September 30, 2018. The amount relates primarily to upfront payments and consideration received from customers that are received in advance of the customer assuming control of the related products. The Company applies the practical expedient in paragraph 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less. The Baxter Agreement includes minimum commitments of product sales over the duration of the agreement. Unfulfilled performance obligations related to the Baxter Agreement are product sales of $11,732,000, which will be amortized through expiration of the agreement on October 2, 2024. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of 90 days or less at acquisition to be cash equivalents. Cash and cash equivalents include cash held in banks, money market mutual funds and unrestricted certificates of deposit. |
Fair Market Value Measurements | Fair Value Measurement The Company applies the guidance issued with ASC 820, Fair Value Measurements , which provides guidance on the development and disclosure of fair value measurements. Under this accounting guidance, fair value is defined as an exit price, representing the amount 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. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace. Level 3: Unobservable inputs which are supported by little or no market activity ad values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgement or estimation. |
Deferred Revenue | Deferred Revenue In October of 2014, the Company entered into a 10 year distribution agreement with Baxter and received an upfront fee of $20 million. The upfront fee was recorded as deferred revenue and is being recognized based on the proportion of product shipments to Baxter in each period, compared with total expected sales volume over the term of the Distribution Agreement. The Company recognized revenue of approximately $0.5 million each of the three months ended September 30, 2018 and 2017, respectively, and $1.5 million for each of the nine months ended September 30, 2018 and 2017, respectively. |
Research and Product Development | Research and Product Development The Company recognizes research and product development expenses as incurred. The Company incurred product development and research costs related to the commercial development, patent approval and regulatory approval of new products aggregating approximately $0.8 million and $1.3 million for the three months ended September 30, 2018 and 2017, respectively, and $4.0 million and $4.2 million for the nine months ended September 30, 2018 and 2017, respectively. |
Share Based Compensation | Stock-Based Compensation The Company expenses stock-based compensation to employees over the requisite service period based on the estimated grant-date fair value of the awards. For stock-based compensation awards to non-employees, the Company re-measures the fair value of the non-employee awards at each reporting period prior to vesting and finally at the vesting date of the award. Changes in the estimated fair value of these non-employee awards are recognized as compensation expense in the period of change. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model, and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgement. For the three and nine months ended September 30, 2018 and 2017, the Company recorded stock-based compensation expense on its options granted under the Company’s equity compensation plans to its directors and officers, and its employees. |
Loss Per Share | Loss Per Share ASC 260, Earnings Per Share, requires dual presentation of basic and diluted earnings per share (“EPS”), with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issued common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Basic net loss per share of common stock excludes dilution and is computed by dividing the net loss by the weighted average number of shares outstanding during the period. Diluted net loss per share of common stock 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 then shared in the earnings of the entity unless inclusion of such shares would be anti-dilutive. The Company has only incurred losses, therefore, basic and diluted net loss per share is the same. Securities that could potentially dilute loss per share in the future that were not included in the computation of diluted loss per share for the three and nine months ended September 30, 2018 and 2017 were as follows: As of September 30, 2018 2017 Options to purchase common stock 8,048,105 7,326,501 Unvested restricted stock awards - 480,000 Unvested restricted stock units 1,293,750 - 9,341,855 7,806,501 |
Recent Accounting Pronouncements | Adoption of Recent Accounting Pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its consolidated financial statements and assures that there are proper controls in place to ascertain that the Company’s consolidated financial statements properly reflect the change. In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), as modified by ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, ASU 2016-08 , Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, and ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The revenue recognition principle in ASU 2014-09 is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, new and enhanced disclosures will be required. Companies may adopt the new standard either using the full retrospective approach, a modified retrospective approach with practical expedients, or a cumulative effect upon the adoption approach. The Company adopted the new standard on January 1, 2018, using the modified retrospective approach. The adoption of ASU 2014-09 did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures. Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and subsequent amendments to the initial guidance: ASU 2017-13, ASU 2018-10 and ASU 2018-11 (collectively, Topic 842). Topic 842 requires companies to generally recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets. Topic 842 is effective for the Company in its first quarter 2020, and earlier adoption is permitted. The Company is currently evaluating the impact of its pending adoption of Topic 842 on its condensed consolidated financial statements. The Company currently expects that most of its operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon its adoption of Topic 842, which will increase its total assets and total liabilities that the Company reports relative to such amounts prior to adoption. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholder’s equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholder’s equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance and the ending balance of each period for which a statement of comprehensive income is required to be filed. This rule is effective on November 5, 2018. The Company is evaluating the impact of this guidance on its condensed consolidated financial statements. |
Basis of Presentation, Summar_3
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements | |
Disaggregation Of Revenue | In thousands of US dollars ($) Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Products By Geographic Area Total U.S. Rest of World Total U.S. Rest of World Drug Revenues License Fee – Over time $ 68 $ — $ 68 $ 205 $ — $ 205 Concentrate Products Product Sales – Point-in-time 16,099 13,208 2,891 44,815 38,536 6,279 License Fee – Point-in-time 505 505 — 1,514 1,514 — Total Concentrate Products 16,604 13,713 2,891 46,329 40,050 6,279 Net Revenue $ 16,672 $ 13,713 $ 2,959 $ 46,534 $ 40,050 $ 6,484 |
Contract Balances | In thousands of US dollars ($) September 30, 2018 December 31, 2017 Receivables, which are included in "Trade and other receivables" $ 7,593 $ 5,544 Contract liabilities $ 15,005 $ 16,723 |
Summary of potentially dilutive securities | As of September 30, 2018 2017 Options to purchase common stock 8,048,105 7,326,501 Unvested restricted stock awards - 480,000 Unvested restricted stock units 1,293,750 - 9,341,855 7,806,501 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory | |
Schedule components of inventory | September 30, December 31, 2018 2017 Raw Materials $ 4,122,432 $ 10,604,232 Work in Process 203,498 212,505 Finished Goods 2,186,426 2,807,399 Total $ 6,512,356 $ 13,624,136 |
Property And Equipment (Tables)
Property And Equipment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
PROPERTY AND EQUIPMENT | |
Schedule of major classes of property and equipment, stated at cost | September 30, December 31, 2018 2017 Leasehold Improvements $ 909,846 $ 824,087 Machinery and Equipment 4,882,489 7,893,566 Information Technology & Office Equipment 2,459,832 2,327,524 Laboratory Equipment 614,733 631,666 Transportation — 242,277 8,866,900 11,919,120 Accumulated Depreciation (6,199,140) (9,370,142) Net Property and Equipment $ 2,667,760 $ 2,548,978 |
Stock-Based Compensation - (Tab
Stock-Based Compensation - (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stock-Based Compensation | |
Schedule of stock-based compensation expense recognized | Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Restricted stock awards $ 20,222 $ 564,854 $ 1,292,125 $ 2,751,239 Stock option awards 427,944 1,071,653 967,377 3,275,339 Restricted stock units 166,417 - 166,417 - $ 614,583 $ 1,636,507 $ 2,425,919 $ 6,026,578 |
Schedule of restricted stock activity | Weighted Average Grant-Date Number of Shares Fair Value Granted at December 31, 2017 1,380,000 $ 7.27 Granted - - Forfeited (333,200) 5.70 Granted at September 30, 2018 $ 7.77 |
Schedule of stock option activity | Weighted Weighted Average Shares Average Remaining Underlying Exercise Contractual Aggregate Options Price Term Intrinsic Value Outstanding at December 31, 2017 6,906,001 $ 7.92 5.0 Granted 1,337,271 4.96 9.4 Exercised (5,000) 6.59 - Forfeited (190,167) 6.59 - Outstanding at September 30, 2018 8,048,105 $ 7.46 5.2 $ 365,135 Exercisable at September 30, 2018 6,248,160 $ 7.90 4.1 $ 365,135 |
Schedule of assumptions used in stock option valuation | Nine Months Ended September 30, 2018 2017 Exercise price $4.52 - $5.75 $6.09 Expected stock price volatility 67.5% 66.3% Risk-free interest rate 2.7% - 2.9% 2.2% Term (years) 5.0 - 6.5 5.5 - 6.5 |
Description of Business (Detail
Description of Business (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Description of Business | |
Percentage of supply in domestic market | 25 |
Liquidity and Financial Condi_2
Liquidity and Financial Condition (Details) - USD ($) | Oct. 26, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Oct. 15, 2018 | Oct. 05, 2018 | Sep. 19, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Cash and Cash Equivalents | $ 4,292,328 | $ 3,887,923 | $ 8,406,917 | $ 17,180,594 | ||||
Investments Available for Sale | 13,410,151 | 24,648,459 | ||||||
Working Capital Net | 19,400,000 | |||||||
Accumulated Deficit | (263,012,321) | $ (240,262,376) | ||||||
Net cash used in operating activities | $ (14,621,900) | (16,302,524) | ||||||
Proceeds from the Issuance of Common Shares | $ 116,105 | |||||||
Common Shares, shares issued | 51,769,294 | 51,768,424 | ||||||
Issue Price of Unit | $ 4.22 | |||||||
Securities Purchase Agreement | Purchaser | Subsequent event | ||||||||
Proceeds from the Issuance of Common Shares | $ 22,000,000 | |||||||
Common Shares, shares issued | 0 | 5,541,562 | ||||||
Issue Price of Unit | $ 3.97 | |||||||
Number of additional shares available | 2,770,781 | |||||||
Warrants exercise price (in dollars per share) | $ 4.96 |
Basis of Presentation, Summar_4
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Revenue Recognition, PPE, Licensing and Research (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2014USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)agreementshares | Sep. 30, 2017USD ($)shares | Dec. 31, 2017USD ($) | |
Revenue Recognition | ||||||
Number of distribution and license agreements | agreement | 2 | |||||
Customers average payment term | 30 days | |||||
Distributors average payment term | 45 days | |||||
Impairment losses | $ 0 | |||||
Bad-debt expense | $ 0 | $ 0 | 0 | $ 0 | ||
Contract assets | 0 | 0 | ||||
Revenue performance obligation | 15,005,000 | $ 15,005,000 | ||||
Remaining performance obligation practical expedient | true | |||||
Research and Product Development | ||||||
Product development and research costs | 808,192 | 1,304,658 | $ 4,033,494 | 4,195,003 | ||
Investments Available for Sale | ||||||
Fair value of investments | 13,410,151 | 13,410,151 | $ 24,648,459 | |||
Realized gains | 2,411 | 57 | 6,050 | 57 | ||
Research and Development | ||||||
Research and Development Expense | 808,192 | 1,304,658 | 4,033,494 | 4,195,003 | ||
Stock-Based Compensation | ||||||
Compensation expense (in dollars) | 614,583 | 1,636,507 | $ 2,425,919 | $ 6,026,578 | ||
Loss Per Share | ||||||
Securities excluded from diluted loss per share calculation | shares | 9,341,855 | 7,806,501 | ||||
Baxter Healthcare Organization | ||||||
Revenue Recognition | ||||||
Upfront payment | $ 20,000,000 | |||||
Deferred drug license revenue | 500,000 | $ 1,500,000 | $ 1,500,000 | |||
Revenue performance obligation | 11,732,000 | $ 11,732,000 | ||||
Remaining performance obligation practical expedient | true | |||||
Licensing Fees | ||||||
Useful life | 10 years | |||||
Stock options | ||||||
Stock-Based Compensation | ||||||
Compensation expense (in dollars) | 427,944 | 1,071,653 | $ 967,377 | 3,275,339 | ||
Restricted stock awards | ||||||
Stock-Based Compensation | ||||||
Compensation expense (in dollars) | 20,222 | $ 564,854 | 1,292,125 | $ 2,751,239 | ||
Concentrate Products [Member] | ||||||
Revenue Recognition | ||||||
Reserve for returns | $ 0 | $ 0 | $ 0 |
Basis of Presentation, Summar_5
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Disaggregation Of Revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net Revenue | $ 16,672,416 | $ 14,626,904 | $ 46,534,358 | $ 42,462,265 |
United States [Member] | ||||
Net Revenue | 13,713,000 | 40,050,000 | ||
Rest Of World [Member] | ||||
Net Revenue | 2,959,000 | 6,484,000 | ||
Concentrate Products [Member] | ||||
Net Revenue | 16,604,000 | 46,329,000 | ||
Concentrate Products [Member] | United States [Member] | ||||
Net Revenue | 13,713,000 | 40,050,000 | ||
Concentrate Products [Member] | Rest Of World [Member] | ||||
Net Revenue | 2,891,000 | 6,279,000 | ||
License Fee [Member] | ||||
Net Revenue | 556,000 | 1,655,000 | ||
License Fee [Member] | Drug Revenue [Member] | ||||
Net Revenue | 68,000 | 205,000 | ||
License Fee [Member] | Drug Revenue [Member] | Rest Of World [Member] | ||||
Net Revenue | 68,000 | 205,000 | ||
License Fee [Member] | Concentrate Products [Member] | ||||
Net Revenue | 505,000 | 1,514,000 | ||
License Fee [Member] | Concentrate Products [Member] | United States [Member] | ||||
Net Revenue | 505,000 | 1,514,000 | ||
Product Sales [Member] | ||||
Net Revenue | $ 14,061,000 | $ 40,807,000 | ||
Product Sales [Member] | Concentrate Products [Member] | ||||
Net Revenue | 16,099,000 | 44,815,000 | ||
Product Sales [Member] | Concentrate Products [Member] | United States [Member] | ||||
Net Revenue | 13,208,000 | 38,536,000 | ||
Product Sales [Member] | Concentrate Products [Member] | Rest Of World [Member] | ||||
Net Revenue | $ 2,891,000 | $ 6,279,000 |
Basis of Presentation, Summar_6
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Contract Balances (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements | ||
Other Receivables | $ 7,593 | $ 5,544 |
Contract liabilities | $ 15,005 | $ 16,723 |
Basis of Presentation, Summar_7
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Loss Per Share (Details) - shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Net Earnings per Share | ||
Securities excluded from diluted loss per share calculation | 9,341,855 | 7,806,501 |
Stock options | ||
Net Earnings per Share | ||
Securities excluded from diluted loss per share calculation | 8,048,105 | 7,326,501 |
Restricted stock awards | ||
Net Earnings per Share | ||
Securities excluded from diluted loss per share calculation | 480,000 | |
Restricted stock units | ||
Net Earnings per Share | ||
Securities excluded from diluted loss per share calculation | 1,293,750 |
Investments In Available For _2
Investments In Available For Sale Securities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
INVESTMENTS IN AVAILABLE FOR SALE SECURITIES | |||||
Investments Available for Sale | $ 13,410,151 | $ 13,410,151 | $ 24,648,459 | ||
Unrealized losses | 157,982 | $ 0 | 0 | $ 76,399 | |
Unrealized gains | 0 | 248,628 | 96,591 | 35,274 | |
Realized gains | 2,411 | 57 | 6,050 | 57 | |
Realized losses | $ 99,439 | $ 199,758 | $ 228,064 | $ 704,752 |
Inventory (Details)
Inventory (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Inventory [Line Items] | |||||
Raw Materials | $ 4,122,432 | $ 4,122,432 | $ 10,604,232 | ||
Work in Process | 203,498 | 203,498 | 212,505 | ||
Finished Goods | 2,186,426 | 2,186,426 | 2,807,399 | ||
Total | 6,512,356 | 6,512,356 | 13,624,136 | ||
Inventory, Noncurrent | 1,865,834 | 1,865,834 | 5,986,752 | ||
Increase in inventory reserves | 100,000 | $ 700,000 | 7,800,000 | $ 800,000 | |
Triferic Finished Goods | |||||
Inventory [Line Items] | |||||
Finished goods inventory | 9,467,795 | 9,467,795 | 13,424,779 | ||
Inventory reserves | $ 6,900,000 | $ 6,900,000 | $ 3,460,801 |
Property And Equipment (Details
Property And Equipment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Property and equipment | |||||
Gross Property and Equipment | $ 8,866,900 | $ 8,866,900 | $ 11,919,120 | ||
Accumulated Depreciation | (6,199,140) | (6,199,140) | (9,370,142) | ||
Property, Plant and Equipment, Net, Total | 2,667,760 | 2,667,760 | 2,548,978 | ||
Depreciation expense | 185,579 | $ 125,839 | 466,729 | $ 384,835 | |
Leasehold Improvements | |||||
Property and equipment | |||||
Gross Property and Equipment | 909,846 | 909,846 | 824,087 | ||
Machinery and Equipment | |||||
Property and equipment | |||||
Gross Property and Equipment | 4,882,489 | 4,882,489 | 7,893,566 | ||
Information Technology & Office Equipment | |||||
Property and equipment | |||||
Gross Property and Equipment | 2,459,832 | 2,459,832 | 2,327,524 | ||
Laboratory Equipment | |||||
Property and equipment | |||||
Gross Property and Equipment | $ 614,733 | $ 614,733 | 631,666 | ||
Transportation | |||||
Property and equipment | |||||
Gross Property and Equipment | $ 242,277 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - USD ($) | Sep. 19, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Preferred Stock | |||
Preferred stock, Outstanding | 0 | 0 | |
Preferred stock, Authorized | 2,000,000 | 2,000,000 | |
Preferred Stock, Shares Issued | 0 | 0 | |
Common Stock | |||
Common stock issued on exercise of stock options (in shares) | 5,000 | ||
Amount of common stock issued on exercise of stock options | $ 15,450 | ||
Exercised (in dollars per share) | $ 3.09 | ||
Common stock repurchased (in shares) | 4,130 | ||
Amount of common stock repurchased | $ 17,428 | ||
Share price of common shares withheld | $ 4.22 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-based compensation expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Stock-based compensation expense | ||||
Allocated Share-based Compensation Expense | $ 614,583 | $ 1,636,507 | $ 2,425,919 | $ 6,026,578 |
Restricted stock awards | ||||
Stock-based compensation expense | ||||
Allocated Share-based Compensation Expense | 20,222 | 564,854 | 1,292,125 | 2,751,239 |
Stock options | ||||
Stock-based compensation expense | ||||
Allocated Share-based Compensation Expense | 427,944 | $ 1,071,653 | 967,377 | $ 3,275,339 |
Restricted stock units | ||||
Stock-based compensation expense | ||||
Allocated Share-based Compensation Expense | $ 166,417 | $ 166,417 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Awards (Details) - Restricted stock awards | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Number of Shares | |
Vested at December 31, 2017 (in shares) | shares | 1,380,000 |
Granted (in shares) | shares | |
Forfeited (in shares) | shares | (333,200) |
Vested at September 30, 2018 (in shares) | shares | 1,046,800 |
Weighted Average Grant Date Fair Value | |
Weighted Average Grant-Date Fair Value, Vested at December 31, 2017 | $ / shares | $ 7.27 |
Granted (in dollars per share) | $ / shares | |
Forfeited (in shares) | $ / shares | 5.70 |
Weighted Average Grant-Date Fair Value, Vested at September 30, 2018 | $ / shares | $ 7.77 |
Vesting period | 3 years |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Options (Details) - USD ($) | Sep. 19, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Shares Underlying Options | |||
Exercised (in shares) | (5,000) | ||
Weighted Average Exercise Price | |||
Exercised (in dollars per share) | $ 3.09 | ||
Stock options | |||
Shares Underlying Options | |||
Outstanding at the beginning of the period (in shares) | 6,906,001 | ||
Granted (in shares) | 1,337,271 | ||
Exercised (in shares) | (5,000) | ||
Forfeited (in shares) | (190,167) | ||
Outstanding at the end of the period (in shares) | 8,048,105 | 6,906,001 | |
Exercisable at June 30, 2018 | 6,248,160 | ||
Weighted Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 7.92 | ||
Granted (in dollars per share) | 4.96 | ||
Exercised (in dollars per share) | 6.59 | ||
Forfeited (in dollars per share) | 6.59 | ||
Outstanding at the end of the period (in dollars per share) | 7.46 | $ 7.92 | |
Exercise price (in dollars per share) | $ 7.90 | ||
Weighted Average Remaining Contractual Term | |||
Beginning Balance | 5 years 2 months 12 days | 5 years | |
Granted, Weighted Average Remaining Contractual Term | 9 years 4 months 24 days | ||
Exercisable at June 30, 2018 | 4 years 1 month 6 days | ||
Aggregate intrinsic Value | |||
Outstanding (in dollars) | $ 365,135 | ||
Intrinsic Value (in dollars) | $ 365,135 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of assumptions used in stock option valuation (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price | $ 6.09 | |
Expected stock price volatility | 67.50% | 66.30% |
Risk-free interest rate | 2.20% | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price | $ 4.52 | |
Risk-free interest rate | 2.70% | |
Term (years) | 5 years | 5 years 6 months |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price | $ 5.75 | |
Risk-free interest rate | 2.90% | |
Term (years) | 6 years 6 months | 6 years 6 months |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) | 9 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |
Unvested options were exercisable at an average | $ / shares | $ 5.92 |
Stock-based compensation expense related to unvested options not yet recognized | $ | $ 2,200,000 |
Stock options | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |
Granted (in shares) | 1,337,271 |
Additional stock-based compensation | $ | $ 162,000 |
Restricted stock units | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |
Unvested options were exercisable at an average | $ / shares | $ 4.70 |
Chief Executive Officer | Stock options | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |
Accelerated vesting of unvested stock options | 258,334 |
Chief Financial Officer | Stock options | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |
Accelerated vesting of unvested stock options | 71,667 |
Employees [Member] | Stock options | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |
Granted (in shares) | 949,146 |
Employees [Member] | Restricted stock units | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |
Granted (in shares) | 388,125 |
Employees [Member] | Performance Shares [Member] | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |
Granted (in shares) | 388,125 |
Employees [Member] | Performance Based Restricted Stock Units [Member] | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |
Granted (in shares) | 905,625 |
Settlement Agreement and Rela_2
Settlement Agreement and Related Director and Officer Insurance Receivable (Details) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Settlement Agreement and Related Director and Officer Insurance Receivable | |
Accrued Settlement Payable | $ 666,667 |
Settlement expenses paid | 800,000 |
Director and Officer Insurance Receivable | 500,000 |
Net settlement expense | $ 1,030,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Aug. 07, 2018USD ($)itemshares |
Loss Contingencies [Line Items] | |
Settlement payment agreement standstill period | 5 years |
Unvested shares forfeited | shares | 313,600 |
Litigation with Chiconi, Klema, Bagley and Boyd | |
Loss Contingencies [Line Items] | |
Litigation settlement amount | $ 1,500,000 |
Payment of litigation settlement amount | $ 83,333 |
Number of litigation settlement amount payments | item | 9 |
Litigation with Chiconi, Klema, Bagley and Boyd | Boyd [Member] | |
Loss Contingencies [Line Items] | |
Payment of litigation settlement amount | $ 30,000 |
Subsequent Events (Details)
Subsequent Events (Details) | Oct. 26, 2018USD ($)shares | Oct. 07, 2018USD ($)item | Oct. 05, 2018USD ($)$ / sharesshares | Sep. 30, 2017USD ($) | Sep. 30, 2018shares | Sep. 19, 2018$ / shares | Dec. 31, 2017shares |
SUBSEQUENT EVENTS | |||||||
Common Shares, shares issued | shares | 51,769,294 | 51,768,424 | |||||
Issue price (per unit) | $ / shares | $ 4.22 | ||||||
Proceeds from the Issuance of Common Shares | $ 116,105 | ||||||
Subsequent event | Executive Vice President [Member] | |||||||
SUBSEQUENT EVENTS | |||||||
Total payment due | $ 1,000,000 | ||||||
Number of quarterly installment payments | item | 4 | ||||||
Installment payment | $ 250,000 | ||||||
Securities Purchase Agreement | Purchaser | Subsequent event | |||||||
SUBSEQUENT EVENTS | |||||||
Common Shares, shares issued | shares | 0 | 5,541,562 | |||||
Number of shares for each unit | shares | 1 | ||||||
Percentage of common stock purchase by warrant | 50.00% | ||||||
Issue price (per unit) | $ / shares | $ 3.97 | ||||||
Period from issuance of warrants to exercisable (in months) | 6 months | ||||||
Exercise price (in dollars per share) | $ / shares | $ 4.96 | ||||||
Warrants term (in years) | 5 years | ||||||
Right to purchase additional units | $ 8,000,000 | ||||||
Proceeds from the Issuance of Common Shares | $ 22,000,000 |