Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 08, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | ROCKWELL MEDICAL, INC. | |
Entity Central Index Key | 0001041024 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
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 | 57,565,370 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and Cash Equivalents | $ 20,919,518 | $ 22,713,980 |
Investments Available for Sale | 6,876,221 | 10,818,059 |
Accounts Receivable, net of a reserve of $2,240 in 2019 and $2,104 in 2018 | 6,711,410 | 6,979,514 |
Insurance Receivable | 371,217 | |
Net Inventory | 4,001,570 | 4,038,778 |
Prepaid and Other Current Assets | 1,680,818 | 1,903,682 |
Total Current Assets | 40,189,537 | 46,825,230 |
Property and Equipment, net | 2,572,680 | 2,638,293 |
Inventory, Non-Current | 1,501,000 | 1,637,000 |
Right of Use Assets, net | 3,005,792 | |
Goodwill | 920,745 | 920,745 |
Other Non-current Assets | 555,310 | 536,516 |
Total Assets | 48,745,064 | 52,557,784 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Accounts Payable | 4,522,225 | 4,492,071 |
Accrued Liabilities | 6,272,040 | 5,129,761 |
Settlement Payable | 166,669 | 416,668 |
Lease Liability - Current | 1,680,475 | |
Deferred License Revenue - Current | 2,248,062 | 2,252,868 |
Customer Deposits | 240,239 | 63,143 |
Other Current Liability - Related Party | 600,000 | 850,000 |
Total Current Liabilities | 15,729,710 | 13,204,511 |
Lease Liability - Long-Term | 1,336,319 | |
Deferred License Revenue - Long-Term | 11,517,988 | 12,076,399 |
Total Liabilities | 28,584,017 | 25,280,910 |
Commitments and Contingencies (See Note 14) | ||
Shareholders' Equity: | ||
Preferred Shares, no par value, no shares issued and outstanding at March 31, 2019 and December 31, 2018 | ||
Common Shares, no par value, 57,128,327 and 57,034,154 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | 301,171,733 | 299,601,960 |
Accumulated Deficit | (281,066,581) | (272,388,234) |
Accumulated Other Comprehensive Income | 55,895 | 63,148 |
Total Shareholders' Equity | 20,161,047 | 27,276,874 |
Total Liabilities And Shareholders' Equity | $ 48,745,064 | $ 52,557,784 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Allowance for reserve, accounts receivable (in dollars) | $ 2,240 | $ 2,104 |
Preferred Shares, par value (in dollars per share) | $ 0 | $ 0 |
Preferred Shares, shares issued | 0 | 0 |
Preferred Shares, shares outstanding | 0 | 0 |
Common Shares, par value (in dollars per share) | $ 0 | $ 0 |
Common Shares, shares issued | 57,128,327 | 57,034,154 |
Common Shares, shares outstanding | 57,128,327 | 57,034,154 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Net Sales | $ 15,559,439 | $ 14,948,579 |
Cost of Sales | 14,549,047 | 15,669,072 |
Gross Profit (Loss) | 1,010,392 | (720,493) |
Selling and Marketing | 3,102,378 | 215,083 |
General and Administrative | 6,220,499 | 3,116,872 |
Research and Product Development | 497,276 | 1,666,356 |
Operating Loss | (8,809,761) | (5,718,804) |
Other Income (Expense) | ||
Realized Gain (Loss) on Investments | 13,888 | (2,892) |
Interest Income | 117,526 | 175,307 |
Other Income | (3,132) | |
Total Other Income (Expense) | 131,414 | 169,283 |
Net Loss | $ (8,678,347) | $ (5,549,521) |
Basic and Diluted Net Loss per Share | $ (0.15) | $ (0.11) |
Basic and Diluted Weighted Average Shares Outstanding (in shares) | 57,098,947 | 51,288,424 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||
Net Loss | $ (8,678,347) | $ (5,549,521) |
Unrealized Loss on Available-for-Sale Debt Instrument Investments | (7,161) | (189,995) |
Foreign Currency Translation Adjustments | (92) | (2,485) |
Comprehensive Loss | $ (8,685,600) | $ (5,742,001) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - 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 | |||
Increase (Decrease) in Shareholders' Equity | ||||
Net Loss | (5,549,521) | (5,549,521) | ||
Unrealized Loss on Available-for-Sale Debt Instrument Investments | (189,995) | (189,995) | ||
Foreign Currency Translation Adjustments | (2,485) | (2,485) | ||
Stock-based compensation | $ 446,003 | 446,003 | ||
Balance at Mar. 31, 2018 | $ 273,656,910 | (245,811,897) | (227,863) | 27,617,150 |
Balance (in shares) at Mar. 31, 2018 | 51,768,424 | |||
Balance at Dec. 31, 2018 | $ 299,601,960 | (272,388,234) | 63,148 | $ 27,276,874 |
Balance (in shares) at Dec. 31, 2018 | 57,034,154 | 57,034,154 | ||
Increase (Decrease) in Shareholders' Equity | ||||
Net Loss | (8,678,347) | $ (8,678,347) | ||
Unrealized Loss on Available-for-Sale Debt Instrument Investments | (7,161) | (7,161) | ||
Foreign Currency Translation Adjustments | (92) | (92) | ||
Exercise of Employee Stock Option | $ 147,900 | $ 147,900 | ||
Exercise of Employee Stock Option (in shares) | 30,000 | 30,000 | ||
Delivery of common stock underlying restricted stock units, net of tax | $ (95,429) | $ (95,429) | ||
Delivery of common stock underlying restricted stock units, net of tax (in shares) | 64,173 | |||
Stock-based compensation | $ 1,517,302 | 1,517,302 | ||
Balance at Mar. 31, 2019 | $ 301,171,733 | $ (281,066,581) | $ 55,895 | $ 20,161,047 |
Balance (in shares) at Mar. 31, 2019 | 57,128,327 | 57,128,327 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash Flows From Operating Activities: | ||
Net Loss | $ (8,678,347) | $ (5,549,521) |
Adjustments To Reconcile Net Loss To Net Cash Used In Operating Activities: | ||
Depreciation and Amortization | 187,527 | 129,076 |
Stock-based Compensation | 1,517,302 | 446,003 |
Increase in Inventory Reserves | 11,000 | 2,046,954 |
Amortization of Right of Use Asset | 478,442 | |
Loss on Disposal of Assets | 3,083 | |
Realized (Gain) Loss on Sale of Investments Available-for-Sale | (13,888) | 2,892 |
Foreign Currency Translation Adjustment | (92) | (2,446) |
Changes in Assets and Liabilities: | ||
Decrease in Accounts Receivable | 268,104 | 295,973 |
Decrease in Insurance Receivable | 371,217 | |
Decrease in Inventory | 162,208 | 59,427 |
Decrease in Other Assets | 203,982 | 238,438 |
Increase (Decrease) in Accounts Payable | 30,154 | (209,208) |
Decrease in Settlement Payable | (249,999) | |
Decrease in Lease Liability | (467,440) | |
Increase (Decrease) in Other Liabilities | 1,319,375 | (1,494,969) |
Decrease in Deferred License Revenue | (563,217) | (572,709) |
Changes in Assets and Liabilities | 1,074,384 | (1,683,048) |
Cash Used In Operating Activities | (5,423,672) | (4,607,007) |
Cash Flows From Investing Activities: | ||
Purchase of Investments Available-for-Sale | (8,812,954) | (1,416,665) |
Sale of Investments Available-for-Sale | 12,761,519 | 1,050,554 |
Purchase of Equipment | (121,826) | (155,712) |
Purchase of Research and Development Licenses (Related Party) | (250,000) | |
Cash Provided By (Used In) Investing Activities | 3,576,739 | (521,823) |
Cash Flows From Financing Activities: | ||
Proceeds from the Exercise of Employee Stock Options | 147,900 | |
Repurchase of Common Shares to Pay Employee Withholding Taxes | (95,429) | |
Cash Provided By Financing Activities | 52,471 | |
Decrease In Cash and Cash Equivalents | (1,794,462) | (5,128,830) |
Cash At Beginning Of Period | 22,713,980 | 8,406,917 |
Cash At End Of Period | 20,919,518 | 3,278,087 |
Supplemental Cash Flow Information: | ||
Change in Unrealized Loss on Marketable Securities Available-for-Sale | (7,161) | $ (189,995) |
Delivery of Common Stock Underlying Restricted Stock Units | $ 273,830 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2019 | |
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 and hemodialysis. We are also a manufacturer of hemodialysis concentrates for dialysis providers and distributors in the United States and abroad. We supply the 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. |
Going Concern
Going Concern | 3 Months Ended |
Mar. 31, 2019 | |
Going Concern | |
Going Concern | 2. Going Concern As of March 31, 2019, the Company had approximate balances of $20.9 million of cash and cash equivalents, $6.9 million of investments available-for-sale, working capital of $24.5 million and an accumulated deficit of $281.1 million. Net cash used in operating activities for the three months ended March 31, 2019 was approximately $5.4 million. The Company will require significant additional capital to sustain its operations and make the investments it needs to execute upon its longer-term business plan. The Company’s existing liquidity is not sufficient to fund its operations and anticipated capital expenditures within one year of the issuance of the accompanying condensed consolidated financial statements. On March 22, 2019, the Company entered into a sales agreement with Cantor Fitzgerald & Co. (the “Agent”), pursuant to which the Company may offer and sell from time to time shares of the Company’s common stock, no par value, through the Agent up to $40,000,000. We are not required to sell any shares at any time during the term of the facility. Our ability to sell common stock under the facility may be limited by several factors including, among other things, the trading volume of our common stock and certain black-out periods that we may impose upon the facility, among other things. The Company intends to seek additional equity or debt financing; however, there are currently no commitments in place for further financing nor is there any assurance that such financing will be available to the Company on favorable terms, if at all. The Company’s recurring operating losses, net operating cash flow deficits, and an accumulated deficit, raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of the accompanying condensed consolidated financial statements. The condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has not made any adjustments to the accompanying condensed consolidated financial statements related to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Basis of Presentation, Summary
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2019 | |
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 unaudited condensed consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and on the same basis as the Company prepares its annual audited consolidated financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of such interim results. The results for the condensed consolidated statement of operations are not necessarily indicative of results to be expected for the year ending December 31, 2019 or for any future interim period. The condensed consolidated balance sheet at March 31, 2019 has been derived from unaudited financial statements; however, it does not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2018 and notes thereto included in the Company’s annual report on Form 10-K filed on March 18, 2019. 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. Certain reclassifications have been made to the 2018 financial statements and notes to conform to the 2019 presentation. 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. Significant Accounting Policies Other than leases, there have been no material changes in the Company’s significant accounting policies to those previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Leases Effective January 1, 2019, the Company accounts for its leases under Accounting Standards Codification (“ASC”) 842, Leases . Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases, and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. Variable lease expenses, if any, are recorded when incurred. In calculating the right of use asset and lease liability, the Company elects to combine lease and non-lease components. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election, and recognizes rent expense on a straight-line basis over the lease term. The Company continues to account for leases in the prior period financial statements in accordance with ASC Topic 840. 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 are 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 months ended March 31, 2019 and 2018 were as follows: As of March 31, 2019 2018 Options to purchase common stock 8,289,605 6,881,001 Unvested restricted stock awards 146,800 480,000 Unvested restricted stock units 1,461,917 - 9,898,322 7,361,001 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 February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which amended the guidance on accounting for leases. The FASB issued this update to increase transparency and comparability among organizations. This update requires the recognition of lease assets and lease liabilities on the balance sheet and the disclosure of key information about leasing arrangements. The Company adopted this ASU effective January 1, 2019 using the additional (optional) approach by recording a right of use asset and a lease liability of approximately $3.5 million; there was no effect on opening retained earnings, and the Company continues to account for leases in the prior period consolidated financial statements under ASC Topic 840. In adopting the new standard, the Company elected to apply the practical expedients regarding identification of leases, lease classification, indirect costs, and the combination of lease and non-lease components. In June 2018, the FASB issued ASU 2018-17, Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under ASU 2018-17, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption of Topic 606. The Company adopted this new standard on January 1, 2019 and the adoption did not have a material impact on its condensed consolidated financial statements and related disclosures. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2019 | |
Revenue Recognition | |
Revenue Recognition | 4. Revenue Recognition The Company recognizes revenue under 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 March 31, 2019 Products By Geographic Area Total U.S. Rest of World Drug Revenues License Fee – Over time $ 68 $ — $ 68 Concentrate Products Product Sales – Point-in-time 14,996 12,923 2,073 License Fee – Point-in-time 495 495 — Total Concentrate Products 15,491 13,418 2,073 Net Revenue $ 15,559 $ 13,418 $ 2,141 Three Months Ended March 31, 2018 Products By Geographic Area Total U.S. Rest of World Drug Revenues License Fee – Over time $ 68 — $ 68 Concentrate Products Product Sales – Point-in-time 14,376 12,472 1,904 License Fee – Point-in-time 504 504 — Total Concentrate Products 14,880 12,976 1,904 Net Revenue $ 14,948 $ 12,976 $ 1,972 Contract balances The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers. In thousands of US dollars ($) March 31, 2019 December 31, 2018 Receivables, which are included in "Trade and other receivables" $ 6,711 $ 6,980 Contract liabilities $ 13,766 $ 14,329 There were no impairment losses recognized related to any receivables arising from the Company’s contracts with customers for the three months ended March 31, 2019 and 2018. For the three months ended March 31, 2019 and March 31, 2018, the Company did not recognize material bad-debt expense and there were no material contract assets recorded on the condensed consolidated balance sheet as of March 31, 2019 and December 31, 2018. The Company does not generally accept returns of its concentrate products and no reserve for returns of concentrate products was established as of March 31, 2019 or December 31, 2018. 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 months ended March 31, 2019, 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 $13.8 million as of March 31, 2019. 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 $10.6 million, which will be amortized through expiration of the agreement on October 2, 2024. |
Investments - Available-for-Sal
Investments - Available-for-Sale | 3 Months Ended |
Mar. 31, 2019 | |
Investments - Available-for-Sale | |
Investments - Available-for-Sale | 5. Investments - Available-for-Sale Investments available-for-sale consisted of the following as of March 31, 2019 and December 31, 2018: March 31, 2019 Amortized Cost Unrealized Gain Unrealized Loss Fair Value Available-for-Sale Securities Bonds $ 6,869,060 $ 7,210 $ (49) $ 6,876,221 December 31, 2018 Amortized Cost Unrealized Gain Unrealized Loss Fair Value Available-for-Sale Securities Bonds $ 10,801,836 $ 17,415 $ (1,192) $ 10,818,059 The fair value of investments available-for-sale are determined using quoted market prices from daily exchange-traded markets based on the closing price as of the balance sheet date and are classified as Level 1, as described in Note 3, Fair Value Measurement to our condensed consolidated financial statements. As of March 31, 2019 and December 31, 2018, the amortized cost and estimated fair value of our available-for-sale securities were due in one year or less. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2019 | |
Inventory | |
Inventory | 6. Inventory Components of inventory, net of reserves as of March 31, 2019 and December 31, 2018 are as follows: March 31, December 31, 2019 2018 Raw Materials $ 3,344,878 $ 3,621,548 Work in Process 240,402 256,129 Finished Goods 1,917,290 1,798,101 Total $ 5,502,570 $ 5,675,778 As of March 31, 2019 and December 31, 2018, we classified $1.5 million and $1.6 million, respectively, of inventory as non-current, all of which was related to Triferic or the active pharmaceutical ingredient for Triferic. As of March 31, 2019 and December 31, 2018 we had total Triferic inventory aggregating $5.5 million and $8.0 million respectively, against which we had reserved $3.4 million and $5.8 million respectively. The $2.1 million net value of Triferic inventory consisted of $0.4 million of Dialysate Triferic finished goods sellable through 2020, and $1.7 million of Triferic API with estimated useful lives extending through 2023. |
Property And Equipment
Property And Equipment | 3 Months Ended |
Mar. 31, 2019 | |
Property and Equipment | |
Property and Equipment | 7. Property and Equipment As of March 31, 2019 and December 31 2018, the Company’s property and equipment consisted of the following: March 31, December 31, 2019 2018 Leasehold Improvements $ 1,040,890 $ 929,849 Machinery and Equipment 4,723,090 4,800,774 Information Technology & Office Equipment 1,664,568 2,459,832 Laboratory Equipment 668,977 668,977 8,097,525 8,859,432 Accumulated Depreciation (5,524,845) (6,221,139) Net Property and Equipment $ 2,572,680 $ 2,638,293 Depreciation expense for the three months ended March 31, 2019 and 2018, totaled $0.2 million and $0.1 million. |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Accrued Liabilities | |
Accrued Liabilities | 8. Accrued Liabilities Accrued liabilities as of March 31, 2019 and December 31, 2018 consisted of the following: March 31, December 31, 2019 2018 Accrued Research & Development Expense $ 99,259 $ 86,820 Accrued Compensation and Benefits 1,810,456 1,525,599 Accrued Legal Expenses 1,054,924 170,334 Accrued Marketing Expenses 771,656 5,000 Other Accrued Liabilities 2,535,745 3,342,008 Total Accrued Liabilities $ 6,272,040 $ 5,129,761 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity | |
Stockholders' Equity | 10. Shareholders’ Equity Preferred Stock As of March 31, 2019 and December 31, 2018, there were 2,000,000 shares of preferred stock authorized and no shares of preferred stock issued or outstanding. Common Stock During the three months ended March 31, 2019, 30,000 vested employee stock options were exercised for cash proceeds of $147,900, at a weighted average exercise price of $4.93. Controlled Equity Offering On March 22, 2019, the Company entered into a sales agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. (the “Agent”), pursuant to which the Company may offer and sell from time to time shares of the Company’s common stock, no par value, through the Agent. The offering and sale of up to $40,000,000 of the shares has been registered under the Securities Act of 1933, as amended, pursuant to the Company’s registration statement on Form S-3 (File No. 333-227363), which was originally filed with the SEC on September 14, 2018 and declared effective by the SEC on October 1, 2018. The base prospectus contained within the registration statement, and a prospectus supplement that was filed with the SEC on March 22, 2019. Sales of the shares, if any, pursuant to the Sales Agreement, may be made in sales deemed to be a “at the market offering” as defined in Rule 415 (a)(14) of the Securities Act, including sales made directly through the Nasdaq Global Market or on any other existing trading market for the Company’s common stock. The Company intends to use the proceeds from the offering for working capital and other general corporate purposes. The Company may suspend or terminate the Sales Agreement at any time. During the three months ended March 31, 2019, the Company did not sell any shares of common stock under the Sales Agreement. As of March 31, 2019, $40 million of common stock remained available to be sold under this facility. Subsequent to March 31, 2019, the Company sold 437,043 shares of its common stock for gross proceeds of $2,296,235, at a weighted average selling price of approximately $5.25. The Company paid $57,406 in commissions related to the sale of the common shares. Restricted Common Stock During the three months ended March 31, 2019, 98,500 shares of common stock related to fully vested restricted stock units were delivered to an officer of the Company. The Company withheld 34,327 of these common shares at a fair value of $95,429 to cover the officer’s withholding taxes related to the vesting of restricted stock units. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Stock-Based Compensation | |
Stock-Based Compensation | 11. Stock-Based Compensation The Company recognized total stock-based compensation expense during the three months ended March 31, 2019 and 2018 as follows: Three Months Ended March 31, 2019 2018 Service based awards: Restricted stock awards $ - $ 240,827 Restricted stock units 344,351 - Stock option awards 652,024 205,176 996,375 446,003 Performance based awards: Restricted stock units 398,388 - Stock option awards 122,539 - 520,927 - Total $ 1,517,302 $ 446,003 Restricted Stock A summary of the Company’s restricted stock awards during the three months ended March 31, 2019 is as follows: Weighted Average Grant-Date Number of Shares Fair Value Unvested at December 31, 2018 $ 5.70 Unvested at March 31, 2019 $ 5.70 A summary of the Company’s restricted stock awards during the three months ended March 31, 2018 is as follows: Weighted Average Grant-Date Number of Shares Fair Value Unvested at December 31, 2017 480,000 $ 7.27 Unvested at March 31, 2018 480,000 $ 7.27 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 of 20 months. As of March 31, 2019 unvested restricted stock awards of 146,800 were related to performance based awards. Service Based Restricted Stock Units A summary of the Company’s service based restricted stock units during the three months ended March 31, 2019 is as follows: Weighted Average Grant-Date Number of Shares Fair Value Unvested at December 31, 2018 472,959 $ 4.32 Unvested at March 31, 2019 472,959 $ 4.32 The fair value of service based restricted stock units are measured based on their fair value on the date of grant and amortized over the vesting period. The vesting periods range from 1-3 years. Stock-based compensation expense of $0.3 million was recognized during the three months ended March 31, 2019. No stock-based compensation was recognized during the three months ended March 31, 2018, since there were no service based restricted stock units granted during that period. As of March 31, 2019, the unrecognized stock-based compensation expense was $1.3 million. Performance Based Restricted Stock Units A summary of the Company’s performance based restricted stock units during the three months ended March 31, 2019 is as follows: Weighted Average Grant-Date Number of Shares Fair Value Unvested at December 31, 2018 988,958 $ 4.48 Unvested at March 31, 2019 988,958 $ 4.48 Stock-based compensation expense recognized for performance based restricted stock units was $0.4 million during the three months ended March 31, 2019. No stock-based compensation was recognized during the three months ended March 31, 2018, since there were no performance based restricted stock units granted during that period. As of March 31, 2019, the unrecognized stock-based compensation expense related to performance restricted stock units was $2.3 million. Service Based Stock Options The fair value of the service based stock options granted for the three months ended March 31, 2019 were based on the following assumptions: March 31, 2019 Exercise price $3.08 - $6.21 Expected stock price volatility 67.5% - 68.4% Risk-free interest rate 2.5% - 2.6% Term (years) 5.5 -6.5 A summary of the Company’s service based stock option activity for the three months ended March 31, 2019 is as follows: Weighted Weighted Average Shares Average Remaining Aggregate Underlying Exercise Contractual Intrinsic Options Price Term Value Outstanding at December 31, 2018 7,856,480 $ 7.50 5.2 $ - Granted 75,000 $ 3.49 9.8 Exercised (30,000) $ 4.93 - Outstanding at March 31, 2019 7,901,480 $ 7.47 5.0 $ 1,959,736 Exercisable at March 31, 2019 6,707,693 $ 8.05 4.2 $ 206,872 A summary of the Company’s service based stock option activity for the three months ended March 31, 2018 is as follows: Weighted Weighted Average Shares Average Remaining Aggregate Underlying Exercise Contractual Intrinsic Options Price Term Value Outstanding at December 31, 2017 6,906,001 $ 7.92 5.1 $ 976,335 Forfeited (25,000) $ 8.23 - Outstanding at March 31, 2018 6,881,001 $ 7.92 4.8 $ - Exercisable at March 31, 2018 6,323,160 $ 7.90 4.5 $ 738,740 The aggregate intrinsic value in the table above is calculated as the difference between the closing price of our common stock and the exercise price of the stock options that had strike prices below the closing price. During the three months ended March 31, 2019, the Company granted to certain employees stock options to purchase up to 75,000 shares of common stock. The vested options were exercisable at an average price of $8.05 per share and the unvested options were exercisable at an average of $4.23 per share. As of March 31, 2019 and 2018, stock-based compensation expense of $0.7 million and $0.2 million was recognized, respectively. As of March 31, 2019, total stock-based compensation expense related to unvested options not yet recognized totaled approximately $2.2 million. Performance Based Stock Options A summary of the performance based stock options for the three months ended March 31, 2019, is as follows: Weighted Average Exercise Number of Shares Price Outstanding at December 31, 2018 388,125 $ 4.70 Outstanding at March 31, 2019 388,125 $ 4.70 Exercisable at March 31, 2019 - $ - Stock-based compensation expense recognized for performance based stock options was $0.1 million during the three months ended March 31, 2019. No stock-based compensation was recognized during the three months ended March 31, 2018, since there were no performance based stock options granted during that period. As of March 31, 2019, the unrecognized stock-based compensation expense related to performance based stock options was $0.8 million. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions | |
Related Party Transactions | 12. Related Party Transactions Product License Agreements The Company is a party to an in-license agreement for exclusive worldwide rights to certain patents and information related to our Triferic® product. On October 7, 2018, the Company entered into a Master Services and IP Agreement (the “Charak MSA”) with Charak, LLC and Dr. Ajay Gupta (collectively “Charak”), who serves as Executive Vice President and Chief Scientific Officer of the Company. Pursuant to the MSA, the parties entered into three additional agreements described below related to the license of certain soluble ferric pyrophosphate (“SFP”) intellectual property owned by Charak, as well as the Employment Agreement (defined below). The Charak MSA provides for a payment of $1.0 million 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 Charak MSA. The Company recorded $1.1 million as Research and Development Expense – License Acquired (Related Party) for the twelve months ended December 31, 2018. As of March 31, 2019, the Company paid two of the quarterly installments totaling $500,000 and accrued $100,000 for the reimbursement of certain legal expenses. As of March 31, 2019 and December 31, 2018, the Company accrued $600,000 and $850,000, respectively, as a related party payable on the condensed consolidated balance sheet. Pursuant to the Charak MSA, the aforementioned parties entered into an Amendment, dated as of October 7, 2018 (the “Charak Amendment”), to the Licensing Agreement between the Company and Charak, dated January 7, 2002, as amended (the “2002 Agreement”), under which Charak granted the Company an exclusive, worldwide, non-transferable license to commercialize SFP for the treatment of patients with renal failure. The Charak Amendment amends the royalty payments due to Charak under the 2002 Agreement such that the Company is liable to pay Charak royalties on net sales by the Company of products developed under the license, which includes the Company’s Triferic® product, at a specified rate until December 31, 2021 and thereafter at a reduced rate from January 1, 2022 until February 1, 2034. Additionally, the Company shall pay Charak a percentage of any sublicense income during the term of the agreement, which amount shall not be less than a minimum specified percentage of net sales of the licensed products by the sublicensee in jurisdictions where there exists a valid claim, on a country-by-country basis, and be no less than a lower rate of the net sales of the licensed products by the sublicensee in jurisdictions where there exists no valid claim, on a country-by-country basis. Also pursuant to the Charak MSA, the Company and Charak entered into a Commercialization and Technology License Agreement IV Triferic®, dated as of October 7, 2018 (the “IV Agreement”), under which Charak granted the Company an exclusive, sublicensable, royalty-bearing license to SFP for the purpose of commercializing certain intravenous-delivered products incorporating SFP for the treatment of iron disorders worldwide for a term that expires on the later of February 1, 2034 or upon the expiration or termination of a valid claim of a licensed patent. The Company is liable to pay Charak royalties on net sales by the Company of products developed under the license at a specified rate until December 31, 2021. From January 1, 2022 until February 1, 2034, the Company is liable to pay Charak a base royalty at a reduced rate on net sales and an additional royalty on net sales while there exists a valid claim of a licensed patent, on a country-by-country basis. The Company shall also pay to Charak a percentage of any sublicense income received during the term of the IV Agreement, which amount shall not be less than a minimum specified percentage of net sales of the licensed products by the sublicensee in jurisdictions where there exists a valid claim, on a country-by-country basis, and not be less than a lower rate of the net sales of the licensed products by the sublicensee in jurisdictions where there exists no valid claim, on a country-by-country basis. Also pursuant to the Charak MSA, the Company and Charak entered into a Technology License Agreement TPN Triferic®, dated as of October 7, 2018 (the “TPN Agreement”), pursuant to which Charak granted the Company an exclusive, sublicensable, royalty-bearing license to SFP for the purpose of commercializing worldwide certain parenteral nutritional (TPN”) products incorporating SFP. The license grant under the TPN Agreement continues for a term that expires on the later of February 1, 2034 or upon the expiration or termination of a valid claim of a licensed patent. During the term of the TPN Agreement, the Company is liable to pay Charak a base royalty on net sales and an additional royalty on net sales while there exists a valid claim of a licensed patent, on a country-by-country basis. The Company shall also pay to Charak a percentage of any sublicense income received during the term of the TPN Agreement, which amount shall not be less than a minimum royalty on net sales of the licensed products by the sublicensee in jurisdictions where there exists a valid claim, on a country-by-country basis, and not be less than a lower rate of the net sales of the licensed products by the sublicensee in jurisdictions where there exists no valid claim, on a country-by-country basis. The transaction was accounted for as an asset acquisition pursuant to ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business, as the majority of the fair value of the assets acquired was concentrated in a group of similar assets, and the acquired assets did not have outputs or employees. The assets acquired under the MSA include a license of SFP. Because SFP has not yet received regulatory approval, the $1.1 million purchase price paid and accrued for these assets has been expensed in the Company’s statement of operations for the year ended December 31, 2018. In addition, the potential milestone payments are not yet considered probable, and no milestone payments have been accrued at March 31, 2019. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases | |
Leases | 13. Leases We lease our production facilities and administrative offices as well as certain equipment used in our operations including leases on transportation equipment used in the delivery of our products. The lease terms range from monthly to seven years. We occupy a 51,000 square foot facility and a 17,500 square foot facility in Wixom, Michigan under a lease expiring in August 2021. We also occupy two other manufacturing facilities, a 51,000 square foot facility in Grapevine, Texas under a lease expiring in December 2020, and a 57,000 square foot facility in Greer, South Carolina under a lease expiring February 2020. In addition, we occupy a 1,408 square foot office space in Greer, South Carolina under a lease expiring April 2021 and on December 28, 2018 we executed a lease for 4,100 square feet of office space in Hackensack, New Jersey with a lease term commencing in June 2019 and expiring on July 1, 2024. At March 31, 2019, the Company had operating lease liabilities of $3.0 million and right of use assets of $3.0 million, which are included in the consolidated balance sheet. The following summarizes quantitative information about the Company’s operating leases: Three Months Ended March 31, 2019 Operating leases Operating lease cost $ 534,967 Variable lease cost 89,844 Operating lease expense 624,811 Short-term lease rent expense 4,192 Total rent expense $ 629,003 Other information Operating cash flows from operating leases $ 523,965 Right of use assets exchanged for operating lease liabilities $ 3,484,234 Weighted-average remaining lease term – operating leases 1.6 years Weighted-average discount rate – operating leases Future minimum rental payments under operating lease agreements are as follows: Nine months ended December 31, 2019 $ 1,398,078 Year ending December 31, 2020 1,186,720 Year ending December 31, 2021 562,506 Year ending December 31, 2022 96,006 Year ending December 31, 2023 3,440 Total $ 3,246,750 Less present value discount (229,956) Operating lease liabilities $ 3,016,794 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies. | |
Commitments and Contingencies | Note 14. Commitments and Contingencies Litigation SEC Investigation As a follow up to certain prior inquiries, the Company received a subpoena from the SEC during the Company’s quarter ended September 30, 2018 requesting, among other things, certain information and documents relating to the status of the Company’s request to CMS for separate reimbursement status for Dialysate Triferic, the Company’s reserving methodology for expiring Triferic inventory, and the basis for the Board’s termination of the former CEO and CFO. The Company is cooperating with the SEC and is responding to the SEC’s requests for documents and information. 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. On December 10, 2018, lead Plaintiffs filed a consolidated amended complaint, which included the same allegations as the initial complaints and asserted claims on behalf of a putative class consisting of person who purchased the Company’s securities between November 8, 2017 and June 26, 2018. On February 18, 2019, the Company answered the consolidated amended complaint. The lawsuits seek damages allegedly sustained by the class and an award of plaintiffs’ costs and attorney fees. The case is at an early stage with no significant pre-trial proceedings (such, as substantive motions or discovery) having occurred. The Company believes it has defenses to the claims of liability and damages and is responding accordingly. On April 23, 2019, Plaintiff Bill Le Clair filed a verified stockholder derivative complaint in the United States District Court in the Easter District of New York, purportedly on behalf of nominal defendant Rockwell and against certain of its current and former directors (the “Individual Defendants”). The Complaint asserts causes of actions against the Individual Defendants for breach of fiduciary duty, waste of corporate assets, and unjust enrichment. The Complaint alleges the Individual Defendants breached duties by, among other things, permitting alleged misstatements to be made in public filings regarding the status of separate reimbursement for Triferic from CMS, the adequacy of Rockwell’s reserves, and the adequacy of Rockwell’s internal controls. The case is at an early stage, and the Company anticipates filing a motion to dismiss the action. The Company has tendered the class action and derivative action to its D&O insurance carrier(s) for defense and indemnity under its applicable insurance policies. The Company maintains a $1.0 million self-insured retention under the applicable insurance policies, which can be exhausted by payment of expenses or indemnity. The Company also has received requests from shareholders to investigate issues relating in part to allegations raised in the securities and derivative lawsuits. The Audit Committee of the Board of Directors engaged independent counsel to investigate these issues. The investigation concluded among other things that there was no merit to the claims raised in the shareholder requests and the investigation has been concluded. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
SUBSEQUENT EVENTS | |
Subsequent Events | Note 15. Subsequent Events In April 2019, we entered into an agreement with a contract research organization for the conduct of a pediatric clinical trial for Triferic. On May 6, 2019, the Company announced the commencement of commercial sales of Dialysate Triferic in the United States. The Company does not expect material sales of Dialysate Triferic in the second quarter of 2019. |
Basis of Presentation, Summar_2
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and on the same basis as the Company prepares its annual audited consolidated financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of such interim results. The results for the condensed consolidated statement of operations are not necessarily indicative of results to be expected for the year ending December 31, 2019 or for any future interim period. The condensed consolidated balance sheet at March 31, 2019 has been derived from unaudited financial statements; however, it does not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2018 and notes thereto included in the Company’s annual report on Form 10-K filed on March 18, 2019. 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. Certain reclassifications have been made to the 2018 financial statements and notes to conform to the 2019 presentation. |
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. |
Leases | Leases Effective January 1, 2019, the Company accounts for its leases under Accounting Standards Codification (“ASC”) 842, Leases . Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases, and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. Variable lease expenses, if any, are recorded when incurred. In calculating the right of use asset and lease liability, the Company elects to combine lease and non-lease components. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election, and recognizes rent expense on a straight-line basis over the lease term. The Company continues to account for leases in the prior period financial statements in accordance with ASC Topic 840. |
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 are 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 months ended March 31, 2019 and 2018 were as follows: As of March 31, 2019 2018 Options to purchase common stock 8,289,605 6,881,001 Unvested restricted stock awards 146,800 480,000 Unvested restricted stock units 1,461,917 - 9,898,322 7,361,001 |
Adoption of 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 February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which amended the guidance on accounting for leases. The FASB issued this update to increase transparency and comparability among organizations. This update requires the recognition of lease assets and lease liabilities on the balance sheet and the disclosure of key information about leasing arrangements. The Company adopted this ASU effective January 1, 2019 using the additional (optional) approach by recording a right of use asset and a lease liability of approximately $3.5 million; there was no effect on opening retained earnings, and the Company continues to account for leases in the prior period consolidated financial statements under ASC Topic 840. In adopting the new standard, the Company elected to apply the practical expedients regarding identification of leases, lease classification, indirect costs, and the combination of lease and non-lease components. In June 2018, the FASB issued ASU 2018-17, Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under ASU 2018-17, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption of Topic 606. The Company adopted this new standard on January 1, 2019 and the adoption did not have a material impact on its condensed consolidated financial statements and related disclosures. |
Basis of Presentation, Summar_3
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements | |
Summary of potentially dilutive securities | As of March 31, 2019 2018 Options to purchase common stock 8,289,605 6,881,001 Unvested restricted stock awards 146,800 480,000 Unvested restricted stock units 1,461,917 - 9,898,322 7,361,001 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue Recognition | |
Disaggregation Of Revenue | In thousands of US dollars ($) Three Months Ended March 31, 2019 Products By Geographic Area Total U.S. Rest of World Drug Revenues License Fee – Over time $ 68 $ — $ 68 Concentrate Products Product Sales – Point-in-time 14,996 12,923 2,073 License Fee – Point-in-time 495 495 — Total Concentrate Products 15,491 13,418 2,073 Net Revenue $ 15,559 $ 13,418 $ 2,141 Three Months Ended March 31, 2018 Products By Geographic Area Total U.S. Rest of World Drug Revenues License Fee – Over time $ 68 — $ 68 Concentrate Products Product Sales – Point-in-time 14,376 12,472 1,904 License Fee – Point-in-time 504 504 — Total Concentrate Products 14,880 12,976 1,904 Net Revenue $ 14,948 $ 12,976 $ 1,972 |
Contract Balances | In thousands of US dollars ($) March 31, 2019 December 31, 2018 Receivables, which are included in "Trade and other receivables" $ 6,711 $ 6,980 Contract liabilities $ 13,766 $ 14,329 |
Investments - Available-for-S_2
Investments - Available-for-Sale (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments - Available-for-Sale | |
Investments Available for Sale | March 31, 2019 Amortized Cost Unrealized Gain Unrealized Loss Fair Value Available-for-Sale Securities Bonds $ 6,869,060 $ 7,210 $ (49) $ 6,876,221 December 31, 2018 Amortized Cost Unrealized Gain Unrealized Loss Fair Value Available-for-Sale Securities Bonds $ 10,801,836 $ 17,415 $ (1,192) $ 10,818,059 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory | |
Schedule components of inventory | March 31, December 31, 2019 2018 Raw Materials $ 3,344,878 $ 3,621,548 Work in Process 240,402 256,129 Finished Goods 1,917,290 1,798,101 Total $ 5,502,570 $ 5,675,778 |
Property And Equipment (Tables)
Property And Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property and Equipment | |
Schedule of major classes of property and equipment, stated at cost | March 31, December 31, 2019 2018 Leasehold Improvements $ 1,040,890 $ 929,849 Machinery and Equipment 4,723,090 4,800,774 Information Technology & Office Equipment 1,664,568 2,459,832 Laboratory Equipment 668,977 668,977 8,097,525 8,859,432 Accumulated Depreciation (5,524,845) (6,221,139) Net Property and Equipment $ 2,572,680 $ 2,638,293 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accrued Liabilities | |
Schedule of accrued liabilities | March 31, December 31, 2019 2018 Accrued Research & Development Expense $ 99,259 $ 86,820 Accrued Compensation and Benefits 1,810,456 1,525,599 Accrued Legal Expenses 1,054,924 170,334 Accrued Marketing Expenses 771,656 5,000 Other Accrued Liabilities 2,535,745 3,342,008 Total Accrued Liabilities $ 6,272,040 $ 5,129,761 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Schedule of total stock-based compensation expense | Three Months Ended March 31, 2019 2018 Service based awards: Restricted stock awards $ - $ 240,827 Restricted stock units 344,351 - Stock option awards 652,024 205,176 996,375 446,003 Performance based awards: Restricted stock units 398,388 - Stock option awards 122,539 - 520,927 - Total $ 1,517,302 $ 446,003 |
Schedule of restricted stock award | A summary of the Company’s restricted stock awards during the three months ended March 31, 2019 is as follows: Weighted Average Grant-Date Number of Shares Fair Value Unvested at December 31, 2018 $ 5.70 Unvested at March 31, 2019 $ 5.70 A summary of the Company’s restricted stock awards during the three months ended March 31, 2018 is as follows: Weighted Average Grant-Date Number of Shares Fair Value Unvested at December 31, 2017 480,000 $ 7.27 Unvested at March 31, 2018 480,000 $ 7.27 |
Restricted stock units - Service based awards | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Schedule of restricted stock award | Weighted Average Grant-Date Number of Shares Fair Value Unvested at December 31, 2018 472,959 $ 4.32 Unvested at March 31, 2019 472,959 $ 4.32 |
Restricted stock units - Performance based awards | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Schedule of restricted stock award | Weighted Average Grant-Date Number of Shares Fair Value Unvested at December 31, 2018 988,958 $ 4.48 Unvested at March 31, 2019 988,958 $ 4.48 |
Stock option awards - Service based awards | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Schedule of stock options activity | A summary of the Company’s service based stock option activity for the three months ended March 31, 2019 is as follows: Weighted Weighted Average Shares Average Remaining Aggregate Underlying Exercise Contractual Intrinsic Options Price Term Value Outstanding at December 31, 2018 7,856,480 $ 7.50 5.2 $ - Granted 75,000 $ 3.49 9.8 Exercised (30,000) $ 4.93 - Outstanding at March 31, 2019 7,901,480 $ 7.47 5.0 $ 1,959,736 Exercisable at March 31, 2019 6,707,693 $ 8.05 4.2 $ 206,872 A summary of the Company’s service based stock option activity for the three months ended March 31, 2018 is as follows: Weighted Weighted Average Shares Average Remaining Aggregate Underlying Exercise Contractual Intrinsic Options Price Term Value Outstanding at December 31, 2017 6,906,001 $ 7.92 5.1 $ 976,335 Forfeited (25,000) $ 8.23 - Outstanding at March 31, 2018 6,881,001 $ 7.92 4.8 $ - Exercisable at March 31, 2018 6,323,160 $ 7.90 4.5 $ 738,740 |
Schedule of Stock Option Assumptions | March 31, 2019 Exercise price $3.08 - $6.21 Expected stock price volatility 67.5% - 68.4% Risk-free interest rate 2.5% - 2.6% Term (years) 5.5 -6.5 |
Stock option awards - Performance based awards | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Schedule of Stock Option Assumptions | Weighted Average Exercise Number of Shares Price Outstanding at December 31, 2018 388,125 $ 4.70 Outstanding at March 31, 2019 388,125 $ 4.70 Exercisable at March 31, 2019 - $ - |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases | |
Summary of Operating Leases | Three Months Ended March 31, 2019 Operating leases Operating lease cost $ 534,967 Variable lease cost 89,844 Operating lease expense 624,811 Short-term lease rent expense 4,192 Total rent expense $ 629,003 Other information Operating cash flows from operating leases $ 523,965 Right of use assets exchanged for operating lease liabilities $ 3,484,234 Weighted-average remaining lease term – operating leases 1.6 years Weighted-average discount rate – operating leases |
Future Minimum Rental Payments Under Operating Leases | Nine months ended December 31, 2019 $ 1,398,078 Year ending December 31, 2020 1,186,720 Year ending December 31, 2021 562,506 Year ending December 31, 2022 96,006 Year ending December 31, 2023 3,440 Total $ 3,246,750 Less present value discount (229,956) Operating lease liabilities $ 3,016,794 |
Going Concern (Details)
Going Concern (Details) - USD ($) | Mar. 22, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Cash and Cash Equivalents | $ 20,919,518 | $ 3,278,087 | $ 22,713,980 | $ 8,406,917 | |
Investments Available for Sale | 6,876,221 | 10,818,059 | |||
Working Capital Net | 24,500,000 | ||||
Accumulated Deficit | (281,066,581) | $ (272,388,234) | |||
Net cash used in operating activities | $ (5,423,672) | $ (4,607,007) | |||
Common stock, no par value( per share) | $ 0 | ||||
Sales Agreement, Threshold Sale Of Shares | $ 40,000,000 | ||||
Maximum | |||||
Sales Agreement, Threshold Sale Of Shares | $ 40,000,000 |
Basis of Presentation, Summar_4
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Loss Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net Earnings per Share | ||
Securities excluded from diluted loss per share calculation | 9,898,322 | 7,361,001 |
Employee stock options | ||
Net Earnings per Share | ||
Securities excluded from diluted loss per share calculation | 8,289,605 | 6,881,001 |
Restricted stock awards | ||
Net Earnings per Share | ||
Securities excluded from diluted loss per share calculation | 146,800 | 480,000 |
Restricted stock units | ||
Net Earnings per Share | ||
Securities excluded from diluted loss per share calculation | 1,461,917 |
Basis of Presentation, Summar_5
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Adoption of Recent Accounting Pronouncements (Details) - USD ($) | Mar. 31, 2019 | Jan. 01, 2019 | Jan. 01, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease Right of use assets | $ 3,005,792 | ||
Operating lease liabilities | $ 3,016,794 | ||
ASU 2016-02 | Restatement Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease Right of use assets | $ 3,500,000 | ||
Operating lease liabilities | $ 3,500,000 |
Revenue Recognition - Nature of
Revenue Recognition - Nature of goods and services (Details) | 3 Months Ended |
Mar. 31, 2019agreement | |
Revenue Recognition | |
Number of distribution and license agreements | 2 |
Customers average payment term | 30 days |
Distributors average payment term | 45 days |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Net Revenue | $ 15,559,439 | $ 14,948,579 |
Concentrate Products [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net Revenue | 15,491,000 | 14,880,000 |
Product License Agreements | Drug Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net Revenue | 68,000 | 68,000 |
Product License Agreements | Concentrate Products [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net Revenue | 495,000 | 504,000 |
Product Sales [Member] | Concentrate Products [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net Revenue | 14,996,000 | 14,376,000 |
Rest Of World [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net Revenue | 2,141,000 | 1,972,000 |
Rest Of World [Member] | Concentrate Products [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net Revenue | 2,073,000 | 1,904,000 |
Rest Of World [Member] | Product License Agreements | Drug Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net Revenue | 68,000 | 68,000 |
Rest Of World [Member] | Product Sales [Member] | Concentrate Products [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net Revenue | 2,073,000 | 1,904,000 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Net Revenue | 13,418,000 | 12,976,000 |
United States | Concentrate Products [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net Revenue | 13,418,000 | 12,976,000 |
United States | Product License Agreements | Concentrate Products [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net Revenue | 495,000 | 504,000 |
United States | Product Sales [Member] | Concentrate Products [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net Revenue | $ 12,923,000 | $ 12,472,000 |
Revenue Recognition - Contract
Revenue Recognition - Contract Balances (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Revenue Recognition | ||
Other Receivables | $ 6,711 | $ 6,980 |
Contract liabilities | $ 13,766 | $ 14,329 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Revenue Recognition [Line Items] | |||
Impairment losses | $ 0 | $ 0 | |
Bad-debt expense | 0 | $ 0 | |
Contract assets | 0 | $ 0 | |
Revenue performance obligation | $ 13,800,000 | ||
Remaining performance obligation practical expedient | true | ||
Concentrate Products [Member] | |||
Revenue Recognition [Line Items] | |||
Reserve for returns | $ 0 | $ 0 | |
Baxter Healthcare Organization | |||
Revenue Recognition [Line Items] | |||
Revenue performance obligation | $ 10,600,000 |
Investments - Available-for-S_3
Investments - Available-for-Sale (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Investments - Available-for-Sale | ||
Investment securities available for sale | $ 6,869,060 | $ 10,801,836 |
Unrealized gains | 7,210 | 17,415 |
Unrealized losses | (49) | (1,192) |
Fair value of investments | $ 6,876,221 | $ 10,818,059 |
Inventory (Details)
Inventory (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Inventory [Line Items] | ||
Raw Materials | $ 3,344,878 | $ 3,621,548 |
Work in Process | 240,402 | 256,129 |
Finished Goods | 1,917,290 | 1,798,101 |
Total | 5,502,570 | 5,675,778 |
Inventory, Noncurrent | 1,501,000 | 1,637,000 |
Net Inventory | 4,001,570 | 4,038,778 |
Triferic Finished Goods | ||
Inventory [Line Items] | ||
Inventory, Noncurrent | 1,500,000 | 1,600,000 |
Net Inventory | 2,100,000 | |
finished goods sellable through 2020 | 400,000 | |
finished goods sellable through 2023 | 1,700,000 | |
Triferic Finished And Raw Goods [Member] | ||
Inventory [Line Items] | ||
Finished goods inventory | 5,500,000 | 8,000,000 |
Inventory reserve | $ 3,400,000 | $ 5,800,000 |
Property And Equipment (Details
Property And Equipment (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Property and equipment | |||
Gross Property and Equipment | $ 8,097,525 | $ 8,859,432 | |
Accumulated Depreciation | (5,524,845) | (6,221,139) | |
Property, Plant and Equipment, Net, Total | 2,572,680 | 2,638,293 | |
Depreciation expense | 200,000 | $ 100,000 | |
Leasehold Improvements | |||
Property and equipment | |||
Gross Property and Equipment | 1,040,890 | 929,849 | |
Machinery and Equipment | |||
Property and equipment | |||
Gross Property and Equipment | 4,723,090 | 4,800,774 | |
Information Technology & Office Equipment | |||
Property and equipment | |||
Gross Property and Equipment | 1,664,568 | 2,459,832 | |
Laboratory Equipment | |||
Property and equipment | |||
Gross Property and Equipment | $ 668,977 | $ 668,977 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Accrued Liabilities | ||
Accrued Research & Development Expense | $ 99,259 | $ 86,820 |
Accrued Compensation and Benefits | 1,810,456 | 1,525,599 |
Accrued Legal Expenses | 1,054,924 | 170,334 |
Accrued Marketing Expenses | 771,656 | 5,000 |
Other Accrued Liabilities | 2,535,745 | 3,342,008 |
Total Accrued Liabilities | $ 6,272,040 | $ 5,129,761 |
Deferred Revenue (Details)
Deferred Revenue (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Oct. 31, 2014 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2016 | Dec. 31, 2018 | |
Deferred Revenue Arrangement [Line Items] | |||||
Upfront payment | $ 4 | ||||
Wanbang Biopharmaceutical | |||||
Deferred Revenue Arrangement [Line Items] | |||||
Distribution agreement term | 10 years | ||||
Recognized deferred revenue | $ 0.1 | $ 0.1 | |||
Deferred Revenue | 3.1 | $ 3.2 | |||
Baxter Healthcare Organization | |||||
Deferred Revenue Arrangement [Line Items] | |||||
Upfront payment | $ 20 | ||||
Recognized deferred revenue | 0.5 | $ 0.5 | |||
Deferred Revenue | $ 10.6 | $ 11.1 | |||
Deferred Revenue Benefit Percentage | 25.00% | ||||
Partial Refund | $ 6.6 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - USD ($) | Apr. 11, 2019 | Mar. 22, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
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) | 30,000 | |||
Amount of common stock issued on exercise of stock options | $ 147,900 | |||
Exercised (in dollars per share) | $ 4.93 | |||
Common shares sold | 57,128,327 | 57,034,154 | ||
Common Stock, Par or Stated Value Per Share | $ 0 | |||
Sales Agreement, Threshold Sale Of Shares | $ 40,000,000 | |||
Common stock available for sale | $ 40,000,000 | |||
Maximum | ||||
Common Stock | ||||
Sales Agreement, Threshold Sale Of Shares | $ 40,000,000 | |||
Restricted stock units | Officer [Member] | ||||
Common Stock | ||||
Vested (in shares) | 98,500 | |||
Withheld common shares (in shares) | 34,327 | |||
Cost of withheld common shares | $ 95,429 | |||
Subsequent event | ||||
Common Stock | ||||
Exercised (in dollars per share) | $ 5.25 | |||
Common shares sold | 437,043 | |||
Proceeds from the Issuance of Common Shares | $ 2,296,235 | |||
Common Share Issuance Costs | $ 57,406 |
Stock-Based Compensation - Shar
Stock-Based Compensation - Share-based compensation expense (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total share-based compensation expense | $ 1,517,302 | $ 446,003 |
Service based awards | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total share-based compensation expense | 996,375 | 446,003 |
Restricted stock awards - Service based awards | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total share-based compensation expense | 240,827 | |
Restricted stock units - Service based awards | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total share-based compensation expense | 344,351 | |
Stock option awards - Service based awards | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total share-based compensation expense | 652,024 | 205,176 |
Performance based awards | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total share-based compensation expense | 520,927 | |
Restricted stock units - Performance based awards | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total share-based compensation expense | 398,388 | 0 |
Stock option awards - Performance based awards | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total share-based compensation expense | $ 122,539 | $ 0 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Awards (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Weighted Average Grant Date Fair Value | ||||
Stock based compensation expenses | $ 1,517,302 | $ 446,003 | ||
Restricted stock awards | ||||
Number of Shares | ||||
Unvested, Number of Shares | 146,800 | 146,800 | ||
Weighted Average Grant Date Fair Value | ||||
Unvested, Weighted Average Grant-Date Fair Value | $ 5.70 | $ 5.70 | ||
Vesting period | 20 months | |||
Restricted stock awards - Performance based | ||||
Number of Shares | ||||
Unvested, Number of Shares | 146,800 | 480,000 | 480,000 | |
Weighted Average Grant Date Fair Value | ||||
Unvested, Weighted Average Grant-Date Fair Value | $ 7.27 | $ 7.27 |
Stock-Based Compensation - Serv
Stock-Based Compensation - Service Based Restricted Stock Units (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | |
Weighted Average Grant Date Fair Value | |||
Stock based compensation expenses | $ 1,517,302 | $ 446,003 | |
Restricted stock units - Service based awards | |||
Number of Shares | |||
Outstanding at beginning of period (in shares) | 472,959 | ||
Granted (in shares) | 0 | ||
Outstanding at end of period (in shares) | 472,959 | ||
Weighted Average Grant Date Fair Value | |||
Outstanding at beginning of period (in dollars per share) | $ 4.32 | ||
Unvested, Weighted Average Grant-Date Fair Value | $ 4.32 | $ 4.32 | |
Stock based compensation expenses | $ 300,000 | $ 0 | |
Granted (in shares) | 0 | ||
Unrecognized stock-based compensation expenses | $ 1,300,000 | ||
Minimum | Restricted stock units - Service based awards | |||
Weighted Average Grant Date Fair Value | |||
Vesting period | 1 year | ||
Maximum | Restricted stock units - Service based awards | |||
Weighted Average Grant Date Fair Value | |||
Vesting period | 3 years |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Based Restricted Stock Units (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Fair value assumptions: | ||
Stock based compensation expenses | $ 1,517,302 | $ 446,003 |
Restricted stock units - Performance based awards | ||
Number of Shares | ||
Outstanding at beginning of period (in shares) | 988,958 | |
Granted (in shares) | 0 | |
Outstanding at end of period (in shares) | 988,958 | |
Weighted Average Grant Date Fair Value | ||
Outstanding at beginning of period (in dollars per share) | $ 4.48 | |
Outstanding at end of period (in dollars per share) | $ 4.48 | |
Fair value assumptions: | ||
Stock based compensation expenses | $ 398,388 | $ 0 |
Granted (in shares) | 0 | |
Unrecognized stock-based compensation expenses | $ 2,300,000 |
Stock-Based Compensation - Se_2
Stock-Based Compensation - Service Based Stock Options - Fair value assumptions (Details) - Stock option awards - Service based awards | 3 Months Ended |
Mar. 31, 2019$ / shares | |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price | $ 3.08 |
Expected stock price volatility | 67.50% |
Risk-free interest rate | 2.50% |
Term (years) | 5 years 6 months |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price | $ 6.21 |
Expected stock price volatility | 68.40% |
Risk-free interest rate | 2.60% |
Term (years) | 6 years 6 months |
Stock-Based Compensation - Se_3
Stock-Based Compensation - Service Based Stock Options (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Shares Underlying Options | ||||
Outstanding at the beginning of the period (in shares) | 6,906,001 | 6,906,001 | ||
Exercised (in shares) | (30,000) | |||
Forfeited (in shares) | (25,000) | |||
Outstanding at the end of the period (in shares) | 6,881,001 | 6,906,001 | ||
Exercisable, Shares underlying | 6,323,160 | |||
Weighted Average Exercise Price | ||||
Outstanding at the beginning of the period (in dollars per share) | $ 7.92 | $ 7.92 | ||
Exercised (in dollars per share) | $ 4.93 | |||
Forfeited (in dollars per share) | 8.23 | |||
Outstanding at the end of the period (in dollars per share) | 7.92 | $ 7.92 | ||
Exercise price (in dollars per share) | $ 7.90 | |||
Weighted Average Remaining Contractual Term | ||||
Outstanding, Weighted Average Remaining Contractual Term | 4 years 9 months 18 days | 5 years 1 month 6 days | ||
Exercisable, Weighted Average Remaining Contractual Term | 4 years 6 months | |||
Aggregate intrinsic Value | ||||
Outstanding (in dollars) | $ 976,335 | |||
Intrinsic Value (in dollars) | $ 738,740 | |||
Stock option awards - Service based awards | ||||
Shares Underlying Options | ||||
Outstanding at the beginning of the period (in shares) | 7,856,480 | |||
Granted (in shares) | 75,000 | |||
Exercised (in shares) | (30,000) | |||
Outstanding at the end of the period (in shares) | 7,901,480 | 7,856,480 | ||
Exercisable, Shares underlying | 6,707,693 | |||
Weighted Average Exercise Price | ||||
Outstanding at the beginning of the period (in dollars per share) | $ 7.50 | |||
Granted (in dollars per share) | 3.49 | |||
Exercised (in dollars per share) | 4.93 | |||
Outstanding at the end of the period (in dollars per share) | 7.47 | $ 7.50 | ||
Exercise price (in dollars per share) | $ 8.05 | |||
Weighted Average Remaining Contractual Term | ||||
Outstanding, Weighted Average Remaining Contractual Term | 5 years | 5 years 2 months 12 days | ||
Granted, Weighted Average Remaining Contractual Term | 9 years 9 months 18 days | |||
Exercisable, Weighted Average Remaining Contractual Term | 4 years 2 months 12 days | |||
Aggregate intrinsic Value | ||||
Outstanding (in dollars) | $ 1,959,736 | |||
Intrinsic Value (in dollars) | $ 206,872 |
Stock-Based Compensation - Se_4
Stock-Based Compensation - Service Based Stock Options - Others (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | $ 1,517,302 | $ 446,003 |
Stock option awards - Service based awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | 652,024 | $ 205,176 |
Unrecognized stock-based compensation expenses | $ 2,200,000 | |
Employee stock options | Stock option awards - Service based awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 75,000 | |
Vested options exercisable at an average price | $ 8.05 | |
Unvested options exercisable at an average price | $ 4.23 |
Stock-Based Compensation - Pe_2
Stock-Based Compensation - Performance Based Stock Options (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Number of Shares | ||
Outstanding at the beginning of the period (in shares) | 6,906,001 | |
Outstanding at the end of the period (in shares) | 6,881,001 | |
Exercisable at end of period (in shares) | 6,323,160 | |
Weighted Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 7.92 | |
Outstanding at the end of the period (in dollars per share) | 7.92 | |
Exercise price (in dollars per share) | $ 7.90 | |
Fair value assumptions: | ||
Stock based compensation expenses | $ 1,517,302 | $ 446,003 |
Stock option awards - Performance based awards | ||
Number of Shares | ||
Outstanding at the beginning of the period (in shares) | 388,125 | |
Granted (in shares) | 0 | |
Outstanding at the end of the period (in shares) | 388,125 | |
Weighted Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 4.70 | |
Outstanding at the end of the period (in dollars per share) | $ 4.70 | |
Fair value assumptions: | ||
Stock based compensation expenses | $ 122,539 | $ 0 |
Granted (in shares) | 0 | |
Unrecognized stock-based compensation expenses | $ 800,000 |
Related Party Transactions (Det
Related Party Transactions (Details) | Oct. 07, 2018USD ($)installmentitem | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jul. 15, 2019USD ($) | Apr. 15, 2019USD ($) | Jan. 15, 2019USD ($) | Oct. 15, 2018USD ($) |
Number of additional agreements | item | 3 | ||||||
Product development and research costs | $ 1,100,000 | ||||||
Master services and IP agreements | |||||||
Milestone payments | $ 0 | ||||||
Executive Vice President and Chief Scientific Officer [Member] | |||||||
Total amount due | $ 1,000,000 | 600,000 | $ 850,000 | $ 250,000 | $ 250,000 | $ 250,000 | $ 250,000 |
Number of quarterly installment payments | installment | 4 | ||||||
Installment paid | 500,000 | ||||||
Related Party Transactions Accrued Reimbursement of Legal Expenses | $ 100,000 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 3 Months Ended |
Mar. 31, 2019USD ($)ft² | |
Lessee, Lease, Description [Line Items] | |
Operating lease liabilities | $ | $ 3,016,794 |
Operating lease Right of use assets | $ | $ 3,005,792 |
Grapevine, Texas | |
Lessee, Lease, Description [Line Items] | |
Facility sqft. | 51,000 |
Hackensack, New Jersey | |
Lessee, Lease, Description [Line Items] | |
Facility sqft. | 4,100 |
Lease Facility One | Wixom, Michigan | |
Lessee, Lease, Description [Line Items] | |
Facility sqft. | 51,000 |
Lease Facility One | Greer, South Carolina | |
Lessee, Lease, Description [Line Items] | |
Facility sqft. | 57,000 |
Lease Facility Two | Wixom, Michigan | |
Lessee, Lease, Description [Line Items] | |
Facility sqft. | 17,500 |
Lease Facility Two | Greer, South Carolina | |
Lessee, Lease, Description [Line Items] | |
Facility sqft. | 1,408 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lease Term | 1 month |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lease Term | 7 years |
Leases - Summary of Operating L
Leases - Summary of Operating Leases (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases | |
Operating lease cost | $ 534,967 |
Variable lease cost | 89,844 |
Operating lease expense | 624,811 |
Short-term lease rent expense | 4,192 |
Total rent expense | 629,003 |
Operating cash flows from operating leases | 523,965 |
Right of use assets exchanged for operating lease liabilities | $ 3,484,234 |
Weighted-average remaining lease term – operating leases | 1 year 7 months 6 days |
Weighted-average discount rate – operating leases | 6.80% |
Leases - Future Minimum Rental
Leases - Future Minimum Rental Payments Under Operating Leases (Details) | Mar. 31, 2019USD ($) |
Leases | |
Nine months ended December 31, 2019 | $ 1,398,078 |
Year ending December 31, 2020 | 1,186,720 |
Year ending December 31, 2021 | 562,506 |
Year ending December 31, 2022 | 96,006 |
Year ending December 31, 2023 | 3,440 |
Total | 3,246,750 |
Less present value discount | (229,956) |
Operating lease liabilities | $ 3,016,794 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Commitments and Contingencies. | |
Self insurance retention | $ 1 |