Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jun. 30, 2020 | Aug. 10, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ELITE PHARMACEUTICALS INC /NV/ | |
Entity Central Index Key | 0001053369 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding | 846,954,821 | |
Entity Incorporation State Country Code | NV | |
Entity File Number | 001-15697 | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Current assets: | ||
Cash | $ 2,787,640 | $ 1,131,728 |
Accounts receivable, net of allowance for doubtful accounts of $-0-, respectively | 4,370,171 | 4,106,846 |
Inventory | 5,566,403 | 4,142,472 |
Prepaid expenses and other current assets | 526,880 | 870,233 |
Total current assets | 13,251,094 | 10,251,279 |
Property and equipment, net of accumulated depreciation of $11,224,823 and $10,957,334, respectively | 7,142,327 | 7,227,648 |
Intangible assets, net of accumulated depreciation of $-0-, respectively | 6,634,035 | 6,634,035 |
Operating lease – right-of-use asset | 313,750 | 363,282 |
Other assets: | ||
Restricted cash - debt service for NJEDA bonds | 404,993 | 404,802 |
Security deposits | 75,534 | 75,534 |
Total other assets | 480,527 | 480,336 |
Total assets | 27,821,733 | 24,956,580 |
Current liabilities | ||
Accounts payable | 2,074,144 | 1,577,860 |
Accrued expenses | 4,564,651 | 4,821,132 |
Deferred revenue, current portion | 13,333 | 180,000 |
Bonds payable, current portion, net of bond issuance costs | 90,822 | 90,822 |
Loans payable, net current portion | 479,864 | 561,550 |
Lease obligation - operating lease | 212,447 | 208,184 |
Senior secured promissory note - related party, current portion | 1,200,000 | 1,200,000 |
Total current liabilities | 8,635,261 | 8,639,548 |
Long-term liabilities: | ||
Deferred revenue, net of current portion | 55,558 | 58,891 |
Bonds payable, net of current portion and bond issuance costs | 1,340,034 | 1,336,489 |
Loans payable, net of current portion | 1,596,005 | 463,902 |
Lease obligation - operating lease, net of current portion | 112,237 | 167,109 |
Derivative financial instruments - warrants | 4,257,971 | 3,599,378 |
Other long-term liabilities | 35,976 | 35,442 |
Total long-term liabilities | 7,397,781 | 5,661,211 |
Total liabilities | 16,033,042 | 14,300,759 |
Shareholders' equity: | ||
Series J convertible preferred stock; par value of $0.01 50 shares authorized; 24.0344 issued and outstanding as of June 30, 2020 and March 31, 2020 | 13,903,960 | 13,903,960 |
Common stock; par value $0.001; 1,445,000,000 shares authorized; 841,078,964 shares issued and 840,978,964 outstanding as of June 30, 2019; 824,946,559 shares issued and 824,846,559 shares outstanding as of March 31, 2019 | 841,081 | 840,507 |
Additional paid-in capital | 150,319,552 | 150,264,605 |
Treasury stock; 100,000 shares as of June 30, 2020 and March 31, 2019; at cost | (306,841) | (306,841) |
Accumulated deficit | (152,969,061) | (154,046,410) |
Total shareholders' equity | 11,788,691 | 10,655,821 |
Total liabilities and shareholders' equity | $ 27,821,733 | $ 24,956,580 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable, current | $ 0 | $ 0 |
Accumulated depreciation | 11,224,823 | 10,957,334 |
Accumulated amortization on intangible assets | $ 0 | $ 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,445,000,000 | 1,445,000,000 |
Common stock, shares issued | 841,078,964 | 824,946,559 |
Common stock, shares outstanding | 840,978,964 | 824,846,559 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50 | 50 |
Preferred stock, shares issued | 24.0344 | 24.0344 |
Preferred stock, shares outstanding | 24.0344 | 24.0344 |
Treasury stock, shares | 100,000 | 100,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||
Manufacturing fees | $ 6,637,239 | $ 2,927,358 |
Licensing fees | 901,505 | 431,882 |
Total revenue | 7,538,744 | 3,359,240 |
Cost of revenue | 4,562,350 | 2,060,286 |
Gross profit | 2,976,394 | 1,298,954 |
Operating expenses: | ||
Research and development | 943,879 | 1,408,036 |
General and administrative | 868,777 | 681,476 |
Non-cash compensation through issuance of stock options | 5,521 | 26,194 |
Depreciation and amortization | 327,617 | 330,953 |
Total operating expenses | 2,145,794 | 2,446,659 |
Income (loss) from operations | 830,600 | (1,147,705) |
Other income (expense): | ||
Interest expense and amortization of debt issuance costs | (79,431) | (97,670) |
Gain on sale of fixed assets | 38,090 | |
Change in fair value of derivative instruments | (658,593) | 1,522,031 |
Interest income | 276 | 3,046 |
Other (expense) income, net | (699,658) | 1,427,407 |
Income from operations before net benefit from sale of state net operating loss credits | 130,942 | 279,702 |
Net benefit from sale of state net operating loss credits | 946,407 | |
Net income attributable to common shareholders | $ 1,077,349 | $ 279,702 |
Basic net income per share attributable to common shareholders | $ 0 | $ 0 |
Diluted net income (loss) per share attributable to common shareholders | $ 0 | $ 0 |
Basic weighted average Common Stock outstanding | 840,504,367 | 827,524,981 |
Diluted weighted average Common Stock outstanding | 1,001,130,122 | 827,524,981 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements Of Shareholders’ Equity (Unaudited) - USD ($) | Series J Preferred Stock | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Total |
Balance at Mar. 31, 2019 | $ 824,949 | $ 148,780,087 | $ (306,841) | $ (151,806,059) | $ (2,507,864) | |
Balance, Shares at Mar. 31, 2019 | 824,946,559 | 100,000 | ||||
Net loss | 279,702 | 279,702 | ||||
Common Stock sold pursuant to the Lincoln Park purchase agreement | $ 4,000 | 336,300 | 340,300 | |||
Common Stock sold pursuant to the Lincoln Park purchase agreement, Shares | 4,000,000 | |||||
Common Stock issued as additional commitment shares pursuant to the LPC purchase agreement | $ 47 | 4,153 | 4,200 | |||
Common Stock issued as additional commitment shares pursuant to the LPC purchase agreement, Shares | 47,136 | |||||
Costs associated with raising capital | (4,200) | (4,200) | ||||
Non-cash compensation through the issuance of employee stock options | 26,194 | 26,194 | ||||
Balance at Jun. 30, 2019 | $ 828,996 | 149,142,534 | $ (306,841) | (151,526,357) | (1,861,668) | |
Balance, Shares at Jun. 30, 2019 | 828,993,695 | 100,000 | ||||
Balance at Mar. 31, 2020 | $ 13,903,960 | $ 840,507 | 150,264,605 | $ (306,841) | (154,046,410) | 10,655,821 |
Balance, Shares at Mar. 31, 2020 | 24 | 840,504,367 | 100,000 | |||
Net loss | 1,077,349 | 1,077,349 | ||||
Non-cash compensation through the issuance of employee stock options | 5,521 | 5,521 | ||||
Sharesissued in payment of salaries | $ 574 | 49,426 | 50,000 | |||
Sharesissued in payment of salaries, Shares | 574,597 | |||||
Balance at Jun. 30, 2020 | $ 13,903,960 | $ 841,081 | $ 150,319,552 | $ (306,841) | $ (152,969,061) | $ 11,788,691 |
Balance, Shares at Jun. 30, 2020 | 24 | 841,078,964 | 100,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements Of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 1,077,349 | $ 279,702 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 327,617 | 330,953 |
Amortization of operating leases - right-of-use assets | 49,532 | (46,635) |
Gain on the disposal of property and equipment | (38,090) | |
Change in fair value of derivative financial instruments - warrants | 658,593 | (1,522,031) |
Non-cash compensation accrued | 236,415 | 216,250 |
Non-cash compensation through the issuance of employee stock options | 5,521 | 26,194 |
Non-cash rent expense and lease accretion | 534 | 506 |
Change in operating assets and liabilities: | ||
Accounts receivable | (263,325) | 322,951 |
Inventory | (1,423,931) | (23,991) |
Prepaid expenses and other current assets | 343,355 | 320,250 |
Accounts payable, accrued expenses and other current liabilities | 53,385 | 415,638 |
Deferred revenue and customer deposits | (170,000) | (178,128) |
Lease obligations - operating leases | (49,532) | 46,614 |
Net cash provided by operating activities | 807,423 | 188,273 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (14,000) | (2,978) |
Proceeds from disposal of property and equipment | 51,276 | |
Net cash provided by (used in) investing activities | 37,276 | (2,978) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from the issuance of stock | 340,300 | |
Other loan proceeds | 1,013,480 | |
Other loan payments | (202,076) | (226,290) |
Net cash provided by financing activities | 811,404 | 114,010 |
Net change in cash and restricted cash | 1,656,103 | 299,305 |
Cash and restricted cash, beginning of period | 1,536,530 | 2,675,768 |
Cash and restricted cash, end of period | 3,192,633 | 2,975,073 |
Supplemental disclosure of cash and non-cash transactions: | ||
Cash paid for interest | 24,342 | 20,237 |
Financing of equipment purchases and insurance renewal | 237,926 | 226,290 |
Stock issued in payment of salaries | 50,000 | |
Commitment shares issued to Lincoln Park Capital | 4,200 | |
Supplemental non-cash amounts of lease liabilities arising from obtaining right-of-use assets | $ 554,088 | $ 554,088 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Overview Elite Pharmaceuticals, Inc. (the "Company" or "Elite") was incorporated on October 1, 1997 under the laws of the State of Delaware, and its wholly-owned subsidiary Elite Laboratories, Inc. ("Elite Labs") which was incorporated on August 23, 1990 under the laws of the State of Delaware. On January 5, 2012, Elite Pharmaceuticals was reincorporated under the laws of the State of Nevada. Elite Labs engages primarily in researching, developing and licensing proprietary orally administered, controlled-release drug delivery systems and products with abuse deterrent capabilities and the manufacture of generic, oral dose pharmaceuticals. The Company is equipped to manufacture controlled-release products on a contract basis for third parties and itself, if and when the products are approved. These products include drugs that cover therapeutic areas for pain, allergy, bariatric and infection. Research and development activities are done so with an objective of developing products that will secure marketing approvals from the United States Food and Drug Administration ("FDA"), and thereafter, commercially exploiting such products. Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and in conformity with the instructions on Form 10-Q and Rule 8-03 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission ("SEC"). The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Elite Laboratories, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, which are, in the opinion of management, necessary for a fair presentation of such statements. The results of operations for the three months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the entire year. Segment Information Financial Accounting Standards Board ("FASB") Accounting Standards Codification 280 ("ASC 280"), Segment Reporting The Company's chief operating decision maker is the Chief Executive Officer, who reviews the financial performance and the results of operations of the segments prepared in accordance with GAAP when making decisions about allocating resources and assessing performance of the Company. The Company has determined that its reportable segments are products whose marketing approvals were secured via an Abbreviated New Drug Applications ("ANDA") and products whose marketing approvals were secured via a New Drug Application ("NDA"). ANDA products are referred to as generic pharmaceuticals and NDA products are referred to as branded pharmaceuticals. There are currently no intersegment revenues. Asset information by operating segment is not presented below since the chief operating decision maker does not review this information by segment. The reporting segments follow the same accounting policies used in the preparation of the Company's condensed unaudited consolidated financial statements. Please see Note 15 for further details. Revenue Recognition The Company generates revenue from the development of pain management products, manufacturing of a line of generic pharmaceutical products with approved ANDA, commercialization of products either by license and the collection of royalties, or through the manufacture of formulations and the development of new products and the expansion of licensing agreements with other pharmaceutical companies, including co-development projects, joint ventures and other collaborations. The Company also generates revenue through its focus on the development of various types of drug products, including branded drug products which require NDAs. Under ASC 606, Revenue from Contacts with Customers Nature of goods and services The following is a description of the Company's goods and services from which the Company generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each, as applicable: a) Manufacturing Fees The Company is equipped to manufacture controlled-release products on a contract basis for third parties, if, and when, the products are approved. These products include products using controlled-release drug technology and products utilizing abuse deterrent technologies. The Company also develops and markets (either on its own or by license to other companies) generic and proprietary controlled-release and abuse deterrent pharmaceutical products. The Company recognizes revenue when the customer obtains control of the Company's product based on the contractual shipping terms of the contract. Revenue on product are presented gross because the Company is primarily responsible for fulfilling the promise to provide the product, is responsible to ensure that the product is produced in accordance with the related supply agreement and bears risk of loss while the inventory is in-transit to the commercial partner. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products to a customer. b) License Fees The Company enters into licensing and development agreements, which may include multiple revenue generating activities, including milestones payments, licensing fees, product sales and services. The Company analyzes each element of its licensing and development agreements in accordance with ASC 606 to determine appropriate revenue recognition. The terms of the license agreement may include payment to the Company of licensing fees, non-refundable upfront license fees, milestone payments if specified objectives are achieved, and/or royalties on product sales. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. The Company recognizes revenue from non-refundable upfront payments at a point in time, typically upon fulfilling the delivery of the associated intellectual property to the customer. For those milestone payments which are contingent on the occurrence of particular future events (for example, payments due upon a product receiving FDA approval), the Company determined that these need to be considered for inclusion in the calculation of total consideration from the contract as a component of variable consideration using the most-likely amount method. As such, the Company assesses each milestone to determine the probability and substance behind achieving each milestone. Given the inherent uncertainty of the occurrence of future events, the Company will not recognize revenue from the milestone until there is not a high probability of a reversal of revenue, which typically occurs near or upon achievement of the event. Significant management judgment is required to determine the level of effort required under an arrangement and the period over which the Company expects to complete its performance obligations under the arrangement. If the Company cannot reasonably estimate when its performance obligations either are completed or become inconsequential, then revenue recognition is deferred until the Company can reasonably make such estimates. Revenue is then recognized over the remaining estimated period of performance using the cumulative catch-up method. When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the practical expedient in ASC 606-10-32-18, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. None of the Company's contracts contained a significant financing component as of June 30, 2020. In accordance with ASC 606-10-55-65, royalties are recognized when the subsequent sale of the customer's products occurs. The Company entered into a sales and distribution licensing agreement with Epic Pharma LLC, ("Epic") dated June 4, 2015 (the "2015 Epic License Agreement"), which has been determined to satisfy the criteria for consideration as a collaborative agreement, and is accounted for accordingly, in accordance with GAAP. The 2015 Epic License Agreement expired on June 4, 2020 without renewal. The Company entered into a Master Development and License Agreement with SunGen Pharma LLC dated August 24, 2016 (the "SunGen Agreement"), which has been determined to satisfy the criteria for consideration as a collaborative agreement, and is accounted for accordingly, in accordance with GAAP. On April 3, 2020, Elite and SunGen mutually agreed to discontinue any further joint product development activities. Disaggregation of revenue In the following table, revenue is disaggregated by type of revenue generated by the Company and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the reportable segments: For the Three Months Ended June 30, 2020 2019 NDA: Licensing fees $ 166,167 $ 250,000 Total NDA revenue 166,167 250,000 ANDA: Manufacturing fees 6,637,239 2,927,358 Licensing fees 735,338 181,882 Total ANDA revenue 7,372,577 3,109,240 Total revenue $ 7,538,744 $ 3,359,240 Cash The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and money market instruments. The Company places its cash and cash equivalents with high-quality, U.S. financial institutions and, to date has not experienced losses on any of its balances. Restricted Cash As of June 30, 2020, and March 31, 2020, the Company had $404,993 and $404,802, of restricted cash, respectively, related to debt service reserve in regard to the New Jersey Economic Development Authority ("NJEDA") bonds (see Note 5). Accounts Receivable Accounts receivable are comprised of balances due from customers, net of estimated allowances for uncollectible accounts. In determining collectability, historical trends are evaluated, and specific customer issues are reviewed on a periodic basis to arrive at appropriate allowances. Inventory Inventory is recorded at the lower of cost or market on specific identification by lot number basis. Long-Lived Assets The Company periodically evaluates the fair value of long-lived assets, which include property and equipment and intangibles, whenever events or changes in circumstances indicate that its carrying amounts may not be recoverable. Property and equipment are stated at cost. Depreciation is provided on the straight-line method based on the estimated useful lives of the respective assets which range from three to forty years. Major repairs or improvements are capitalized. Minor replacements and maintenance and repairs which do not improve or extend asset lives are expensed currently. Upon retirement or other disposition of assets, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss, if any, is recognized in income. Intangible Assets The Company capitalizes certain costs to acquire intangible assets; if such assets are determined to have a finite useful life they are amortized on a straight-line basis over the estimated useful life. Costs to acquire indefinite lived intangible assets, such as costs related to ANDAs are capitalized accordingly. The Company tests its intangible assets for impairment at least annually (as of March 31st) and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others and without limitation: a significant decline in the Company's expected future cash flows; a sustained, significant decline in the Company's stock price and market capitalization; a significant adverse change in legal factors or in the business climate of the Company's segments; unanticipated competition; and slower growth rates. As of June 30, 2020, the Company did not identify any indicators of impairment. Please also see Note 4 for further details on intangible assets. Research and Development Research and development expenditures are charged to expense as incurred. Contingencies Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company's condensed consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Where applicable, the Company records a valuation allowance to reduce any deferred tax assets that it determines will not be realizable in the future. The Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on income tax returns it files if such tax position is more likely than not to be sustained on examination by the taxing authorities, based on the technical merits of the position. These tax benefits are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company operates in multiple tax jurisdictions within the United States of America. The Company remains subject to examination in all tax jurisdiction until the applicable statutes of limitation expire. As of June 30, 2020, a summary of the tax years that remain subject to examination in our major tax jurisdictions are: United States – Federal, 2016 and forward, and State, 2012 and forward. The Company did not record unrecognized tax positions for the three months ended June 30, 2020 and 2019. Warrants and Preferred Shares The accounting treatment of warrants and preferred share series issued is determined pursuant to the guidance provided by ASC 470, Debt Distinguishing Liabilities from Equity Derivatives and Hedging Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation In accordance with the Company's Director compensation policy and certain employment contracts, director's fees and a portion of employee's salaries are to be paid via the issuance of shares of the Company's common stock, in lieu of cash, with the valuation of such share being calculated on a quarterly basis and equal to the average closing price of the Company's common stock. Earnings (Loss) Per Share Attributable to Common Shareholders' The Company follows ASC 260, Earnings Per Share The following is the computation of earnings (loss) per share applicable to common shareholders for the periods indicated: For the Three Months Ended June 30, 2020 2019 Numerator Net income attributable to common shareholders – basic $ 1,077,349 $ 279,702 Effect of dilutive instrument on net income — (1,522,031 ) Net income (loss) attributable to common shareholders - diluted $ 1,077,349 $ (1,242,329 ) Denominator Weighted average shares of common stock outstanding - basic 840,504,367 827,524,981 Dilutive effect of stock options and convertible securities (1) 160,625,755 — Weighted average shares of common stock outstanding - diluted 1,001,130,122 827,524,981 Net income (loss) per share attributable to common shareholders Basic $ 0.00 $ 0.00 Diluted $ 0.00 $ (0.00 ) (1) Fair Value of Financial Instruments ASC 820, Fair Value Measurements and Disclosures ASC 820 defines fair value as the price 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. ASC 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC 820 are described as follows: ● Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date. ● Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. ● Level 3 – Inputs that are unobservable for the asset or liability. Measured on a Recurring Basis The following table presents information about our liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fell: Amount at Fair Value Measurement Using Fair Value Level 1 Level 2 Level 3 June 30, 2020 Liabilities Derivative financial instruments – warrants $ 4,257,971 $ — $ — $ 4,257,971 March 31, 2020 Liabilities Derivative financial instruments - warrants $ 3,599,378 $ — $ — $ 3,599,378 See Note 11, for specific inputs used in determining fair value. The carrying amounts of the Company's financial assets and liabilities, such as cash, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses, approximate their fair values because of the short maturity of these instruments. Based upon current borrowing rates with similar maturities the carrying value of long-term debt approximates fair value. Non-Financial Assets that are Measured at Fair Value on a Non-Recurring Basis Non-financial assets such as intangible assets, and property and equipment are measured at fair value only when an impairment loss is recognized. The Company did not record an impairment charge related to these assets in the periods presented. Treasury Stock The Company records treasury stock at the cost to acquire it and includes treasury stock as a component of shareholders' deficit. Recently Adopted Accounting Pronouncements In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (ASC 808), Clarifying the Interaction between ASC 808 and ASC 606 ("ASU 2018-18"). The ASU clarifies when transactions between collaborative participants are in the scope of ASC 606. The ASU also provides some guidance on presentation of transactions not in the scope of ASC 606. ASU 2018-18 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those years. The Company is not materially impacted by the implementation of this pronouncement. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses". This update requires immediate recognition of management's estimates of current expected credit losses ("CECL"). Under the prior model, losses were recognized only as they were incurred. The new model is applicable to all financial instruments that are not accounted for at fair value through net income. The standard is effective for fiscal years beginning after December 15, 2022 for public entities qualifying as smaller reporting companies. Early adoption is permitted. The Company is currently assessing the impact of this update on the consolidated financial statements and does not expect a material impact on the consolidated financial statements. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures. |
Inventory
Inventory | 3 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 2. INVENTORY Inventory consisted of the following: June 30, March 31, Finished goods $ 141,338 $ 138,981 Work-in-progress 119,375 677,824 Raw materials 5,305,690 3,325,667 5,566,403 4,142,472 Less: Inventory reserve — — $ 5,566,403 $ 4,142,472 |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 3. PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following: June 30, March 31, Land, building and improvements $ 5,277,073 $ 5,260,524 Laboratory, manufacturing, warehouse and transportation equipment 12,333,373 12,167,754 Office equipment and software 373,601 373,601 Furniture and fixtures 383,103 383,103 18,367,150 18,184,982 Less: Accumulated depreciation (11,224,823 ) (10,957,334 ) $ 7,142,327 $ 7,227,648 Depreciation expense was $324,071 and $327,408 for the three months ended June 30, 2020 and 2019, respectively. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 4. INTANGIBLE ASSETS The following table summarizes the Company's intangible assets: June 30, 2020 Estimated Gross Useful Carrying Accumulated Net Book Life Amount Additions Reductions Amortization Value Patent application costs * $ 465,684 $ — $ — $ — $ 465,684 ANDA acquisition costs Indefinite 6,168,351 — — — 6,168,351 $ 6,634,035 $ — $ — $ — $ 6,634,035 March 31, 2020 Estimated Gross Useful Carrying Accumulated Net Book Life Amount Additions Reductions Amortization Value Patent application costs * $ 465,684 $ — $ — $ — $ 465,684 ANDA acquisition costs Indefinite 6,168,351 — — — 6,168,351 $ 6,634,035 $ — $ — $ — $ 6,634,035 * Patent application costs were incurred in relation to the Company's abuse deterrent opioid technology. Amortization of the patent costs will begin upon the issuance of marketing authorization by the FDA. Amortization will then be calculated on a straight-line basis through the expiry of the related patent(s). |
NJEDA Bonds
NJEDA Bonds | 3 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
NJEDA BONDS | NOTE 5. NJEDA BONDS During August 2005, the Company refinanced a bond issue occurring in 1999 through the issuance of Series A and B Notes tax-exempt bonds (the "NJEDA Bonds" and/or "Bonds"). During July 2014, the Company retired all outstanding Series B Notes, at par, along with all accrued interest due and owed. In relation to the Series A Notes, the Company is required to maintain a debt service reserve. The debt service reserve is classified as restricted cash on the accompanying unaudited condensed consolidated balance sheets. The NJEDA Bonds require the Company to make an annual principal payment on September 1st based on the amount specified in the loan documents and semi-annual interest payments on March 1st and September 1st, equal to interest due on the outstanding principal. The annual interest rate on the Series A Note is 6.5%. The NJEDA Bonds are collateralized by a first lien on the Company's facility and equipment acquired with the proceeds of the original and refinanced bonds. The following tables summarize the Company's bonds payable liability: June 30, March 31, Gross bonds payable NJEDA Bonds - Series A Notes $ 1,575,000 $ 1,575,000 Less: Current portion of bonds payable (prior to deduction of bond offering costs) (105,000 ) (105,000 ) Long-term portion of bonds payable (prior to deduction of bond offering costs) $ 1,470,000 $ 1,470,000 Bond offering costs $ 354,454 $ 354,454 Less: Accumulated amortization (210,310 ) (206,765 ) Bond offering costs, net $ 144,144 $ 147,689 Current portion of bonds payable - net of bond offering costs Current portions of bonds payable $ 105,000 $ 105,000 Less: Bonds offering costs to be amortized in the next 12 months (14,178 ) (14,178 ) Current portion of bonds payable, net of bond offering costs $ 90,822 $ 90,822 Long term portion of bonds payable - net of bond offering costs Long term portion of bonds payable 1,470,000 $ 1,470,000 Less: Bond offering costs to be amortized subsequent to the next 12 months (129,966 ) (133,511 ) Long term portion of bonds payable, net of bond offering costs $ 1,340,034 $ 1,336,489 Amortization expense was $3,545 for the three months ended June 30, 2020 and 2019. |
Loans Payable
Loans Payable | 3 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
LOANS PAYABLE | NOTE 6. LOANS PAYABLE Loans payable consisted of the following: June 30, March 31, 2020 Equipment and insurance financing loans payable, between 3.5% and 12.73% interest and maturing between July 2020 and December 2023 $ 1,062,389 $ 1,025,452 Loans received pursuant to the Payroll Protection Program Term Note 1,013,480 — Less: Current portion of loans payable (479,864 ) (561,550 ) Long-term portion of loans payable $ 1,596,005 $ 463,902 The interest expense associated with the loans payable was $17,880 and $24,087 for the three months ended June 30, 2020 and 2019, respectively. 2020 Paycheck Protection Program Term Note In April 2020, the Company entered into a Paycheck Protection Program Term Note (the "PPP Note") with TD Bank, NA in the amount of $1,013,480. The PPP Note was issued to the Company pursuant to the Coronavirus, Aid, Relief, and Economic Security Act's (the "CARES Act") (P.L. 116-136) Paycheck Protection Program (the "Program"). Under the Program, all or a portion of the PPP Note may be forgiven in accordance with the Program requirements. The PPP Note carries a maturity date of April 2022, at a 1% interest rate. No payments are required for six months from the date of issuance. The amount of the forgiveness shall be calculated (and may be reduced) in accordance with the requirements of the Program, including the provisions of the CARES Act. No more than 25% of the amount forgiven can be attributable to non-payroll costs, as defined in the Program. |
Related Party Secured Promissor
Related Party Secured Promissory Note with Mikah Pharma LLC | 3 Months Ended |
Jun. 30, 2020 | |
Epic Pharma Llc [Member] | |
RELATED PARTY SECURED PROMISSORY NOTE WITH MIKAH PHARMA LLC | NOTE 7. RELATED PARTY SECURED PROMISSORY NOTE WITH MIKAH PHARMA LLC For consideration of the assets acquired on May 15, 2017, the Company issued a Secured Promissory Note (the "Note") to Mikah for the principal sum of $1,200,000. The Note matures on December 31, 2020 at which time the Company shall pay the outstanding principal balance of the Note. Interest shall be computed on the unpaid principal amount at the per annum rate of ten percent (10%); provided, upon the occurrence of an Event of Default as defined within the Note, the principal balance shall bear interest from the date of such occurrence until the date of actual payment at the per annum rate of fifteen percent (15%). All interest payable hereunder shall be computed on the basis of actual days elapsed and a year of 360 days. Installment payments of interest on the outstanding principal shall be paid as follows: quarterly commencing August 1, 2017 and on November 1, February 1, May 1 and August 1 of each year thereafter. No principal or interest payments have been made on the Note since its issuance. All unpaid principal and accrued but unpaid interest shall be due and payable in full on the Maturity Date. The interest expense associated with the Note was $30,000 for the three months ended June 30, 2020 and 2019. Accrued interest due and owing on this note was $375,000 and $345,000 as of June 30, 2020 and March 31, 2020, respectively. |
Deferred Revenue
Deferred Revenue | 3 Months Ended |
Jun. 30, 2020 | |
Deferred Revenue Disclosure [Abstract] | |
DEFERRED REVENUE | NOTE 8. DEFERRED REVENUE Deferred revenues in the aggregate amount of $68,891 as of June 30, 2020, were comprised of a current component of $13,333 and a long-term component of $55,558. Deferred revenues in the aggregate amount of $238,891 as of March 31, 2020, were comprised of a current component of $180,000 and a long-term component of $58,891. These line items represent the unamortized amounts of a $200,000 advance payment received for a TAGI licensing agreement with a fifteen-year term beginning in September 2010 and ending in August 2025 and the $5,000,000 advance payment Epic Collaborative Agreement with a five-year term beginning in June 2015 and ending in May 2020. These advance payments were recorded as deferred revenue when received and are earned, on a straight-line basis over the life of the licenses. The current component is equal to the amount of revenue to be earned during the 12-month period immediately subsequent to the balance date and the long-term component is equal to the amount of revenue to be earned thereafter. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 9. COMMITMENTS AND CONTINGENCIES Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company's condensed consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. Operating Leases – 135 Ludlow Ave. The Company entered into an operating lease for a portion of a one-story warehouse, located at 135 Ludlow Avenue, Northvale, New Jersey (the "135 Ludlow Ave. lease"). The 135 Ludlow Ave. lease is for approximately 15,000 square feet of floor space and began on July 1, 2010. During July 2014, the Company modified the 135 Ludlow Ave. lease in which the Company was permitted to occupy the entire 35,000 square feet of floor space in the building ("135 Ludlow Ave. modified lease"). The 135 Ludlow Ave. modified lease includes an initial term, which expired on December 31, 2016 with two tenant renewal options of five years each, at the sole discretion of the Company. On June 22, 2016, the Company exercised the first of these renewal options, with such option including a term that begins on January 1, 2017 and expires on December 31, 2021. The 135 Ludlow Ave. property required significant leasehold improvements and qualifications, as a prerequisite, for its intended future use. Manufacturing, packaging, warehousing and regulatory activities are currently conducted at this location. Additional renovations and construction to further expand the Company's manufacturing resources are in progress. The Company assesses whether an arrangement is a lease or contains a lease at inception. For arrangements considered leases or that contain a lease that is accounted for separately, the Company determines the classification and initial measurement of the right-of-use asset and lease liability at the lease commencement date, which is the date that the underlying asset becomes available for use. The Company has elected to account for non-lease components associated with our leases and lease components as a single lease component. The Company recognizes a right-of-use asset, which represents the Company's right to use the underlying asset for the lease term, and a lease liability, which represents the present value of the Company's obligation to make payments arising over the lease term. The present value of the lease payments is calculated using either the implicit interest rate in the lease or an incremental borrowing rate. Lease assets and liabilities are classified as follows on the condensed consolidated balance sheet: Lease Classification As of Assets Operating Operating lease – right-of-use asset $ 313,750 Total leased assets $ 313,750 Liabilities Current Operating Lease obligation – operating lease $ 212,447 Long-term Operating Lease obligation – operating lease, net of current portion 112,237 Total lease liabilities $ 324,684 Rent expense is recorded on the straight-line basis. Rent expense under the 135 Ludlow Ave. modified lease for the three months ended June 30, 2020 and 2019 was $55,986 and $54,888, respectively. Rent expense is recorded in general and administrative expense in the unaudited condensed consolidated statements of operations. The table below show the future minimum rental payments, exclusive of taxes, insurance and other costs, under the 135 Ludlow Ave. modified lease: Years ending March 31, Amount 2021 $ 169,077 2022 171,315 Total future minimum lease payments 340,392 Less: interest (15,708 ) Present value of lease payments $ 324,684 The weighted-average remaining lease term and the weighted-average discount rate of our lease was as follows: Lease Term and Discount Rate June 30, Remaining lease term (years) Operating leases 1.5 Discount rate Operating leases 6 % The Company has an obligation for the restoration of its leased facility and the removal or dismantlement of certain property and equipment as a result of its business operation in accordance with ASC 410, Asset Retirement and Environmental Obligations – Asset Retirement Obligations |
Preferred Stock
Preferred Stock | 3 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
PREFERRED STOCK | NOTE 10. PREFERRED STOCK Series J convertible preferred stock On April 28, 2017, the Company created the Series J Convertible Preferred Stock ("Series J Preferred") in conjunction with the Certificate of Designations ("Series J COD"). A total of 50 shares of Series J Preferred were authorized, 24.0344 shares are issued and outstanding, with a stated value of $1,000,000 per share and a par value of $0.01 as of June 30, 2020. The issued shares were pursuant to an Exchange Agreement with Nasrat Hakim, ("Hakim") a related party and the Company's President, CEO and Chairman of the Board of Directors Pursuant to the Exchange Agreement the Company exchanged 158,017,321 shares of Common Stock for 24.0344 shares of Series J Preferred and warrants to purchase 79,008,661 shares of common stock at $0.1521 per share. The aggregate stated value of the Series J Preferred issued was equal to the aggregate value of the shares of common stock exchanged, with such value of each share of Common Stock exchanged being equal to the closing price of the Common Stock on April 27, 2017. In connection with the Exchange Agreement, the Company also issued warrants to purchase 79,008,661 shares of common stock at $0.1521 per share, and such warrants are classified as liabilities on the accompanying unaudited condensed consolidated balance sheet as of June 30, 2020 (See Note 11). Each Series J Preferred is convertible at the option of the holder into shares of common stock. The number of common shares is calculated by dividing the Stated Value of such share of Series J Preferred by the Conversion Price. The conversion price for the Series J Preferred is $0.1521, subject to adjustment as discussed below. Based on the current conversion price, the Series J Preferred is convertible into 158,017,321 shares of common stock. The conversion price is subject to the following adjustments: (i) stock dividends and splits, (ii) sale or grant of shares below the conversion price, (iii) pro rata distributions; or (iv) fundamental changes (merger, consolidation, or sale of all or substantially all assets). The holders of the Series J Preferred shall have voting rights on any matter presented to the shareholders of the Company for their action or consideration at any meeting of shareholders of the Company (or by written consent of shareholders in lieu of meeting). Each holder shall be entitled to cast the number of votes equal to the number of whole shares of common stock into which the shares of Series J Preferred held by the holder are convertible as of the record date for determining the shareholders entitled to vote on such matter. At issuance the Company determined that the Series J Preferred host instrument was more akin to equity than debt and that the above identified conversion feature, subject to adjustments, was clearly and closely related to the host instrument, and accordingly bifurcation and classification of the conversion feature as a derivative liability was not required. The Company has accounted for the Series J Preferred as contingently redeemable preferred stock for which redemption is not probable. The Series J Preferred was initially measured at its fair value, $13,903,960 at April 28, 2017. Increase in Authorized Shares An amendment to the Company's Articles of Incorporation to increase the number of shares of common stock the Company is authorized to issue from 995,000,000 shares to 1,445,000,000 shares was approved at the Company's Annual Meeting of Shareholders held on December 4, 2019. Prior to the approval of the increase in the number of authorized shares, there were insufficient authorized shares if the Series J Preferred Stock were converted. As a result, the shares were classified in mezzanine equity. After the approval of the increase in the number of authorized shares, there are now sufficient authorized shares in the event of a full conversion of Series J Preferred Stock. With the approval of the increase in the number of authorized shares, there is no longer the presumption that a cash settlement will be required. Therefore, the Series J Preferred has been reclassified from mezzanine equity to permanent equity at its current carrying amount of $13,903,960 on the accompanying consolidated balance sheet. On June 23, 2020, the Company held a Special Meeting of Shareholders, with such including a proposal for shareholders to again vote on the above referenced amendment to the Company's Articles of Incorporation. This proposal was also passed by shareholder vote. |
Derivative Financial Instrument
Derivative Financial Instruments - Warrants | 3 Months Ended |
Jun. 30, 2020 | |
Derivative Financial Instruments Warrants Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS - WARRANTS | NOTE 11. DERIVATIVE FINANCIAL INSTRUMENTS – WARRANTS The Company evaluates and accounts for its freestanding instruments in accordance with ASC 815, Accounting for Derivative Instruments and Hedging Activities The Company issued warrants, with a term of ten years, to affiliates in connection with an exchange agreement dated April 28, 2017, as further described in this note below. A summary of warrant activity is as follows: June 30, 2020 March 31, 2020 Warrant Shares Weighted Average Exercise Warrant Shares Weighted Average Exercise Balance at beginning of period 79,008,661 $ 0.1521 79,008,661 $ 0.1521 Warrants granted pursuant to the issuance of Series J convertible preferred shares — — $ — Warrants exercised, forfeited and/or expired, net — — $ — Balance at end of period 79,008,661 $ 0.1521 79,008,661 $ 0.1521 On April 28, 2017, the Company entered into an exchange agreement (the "Exchange Agreement" "Series J Preferred Securities" The Series J Warrants are exercisable for a period of 10 years from the date of issuance, commencing April 28, 2020. The initial exercise price is $0.1521 per share and the Series J Warrants can be exercised for cash or on a cashless basis. The exercise price is subject to adjustment for any issuances or deemed issuances of common stock or common stock equivalents at an effective price below the then exercise price. Such exercise price adjustment feature prohibits the Company from being able to conclude the warrants are indexed to its own stock and thus such warrants are classified as liabilities and measured initially and subsequently at fair value. The Series J Warrants also provide for other standard adjustments upon the happening of certain customary events. The fair value of the warrants issued by the Company pursuant to the issuance of Series J convertible preferred shares (79,008,661 warrant shares) was calculated using a Black-Scholes model instead of a Monte Carlo Simulation because the probability with the shareholder approval provisions was no longer a factor. The following assumptions were used in the Black-Scholes model to calculate the fair value of warrants issued by the Company pursuant to the issuance of Series J convertible preferred shares (79,008,661 warrant shares): June 30, March 31, Fair value of the Company's common stock $ 0.0830 $ 0.0720 Volatility 84.73 % 83.81 % Initial exercise price $ 0.1521 $ 0.1521 Warrant term (in years) 6.8 7.1 Risk free rate 0.49 % 0.55 % The changes in warrants (Level 3 financial instruments) measured at fair value on a recurring basis for the three months ended June 30, 2020 were as follows: Balance at March 30, 2020 $ 3,599,378 Change in fair value of derivative financial instruments - warrants 658,593 Balance at June 30, 2020 $ 4,257,971 |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Jun. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 12. SHAREHOLDERS' EQUITY Lincoln Park Capital – May 1, 2017 Purchase Agreement On May 1, 2017, the Company entered into a purchase agreement (the " 2017 LPC Purchase Agreement 2017 LPC Registration Rights Agreement Under the terms and subject to the conditions of the 2017 LPC Purchase Agreement, the Company has the right to sell to and Lincoln Park is obligated to purchase up to $40 million in shares of common stock, subject to certain limitations, from time to time, over the 36-month period commencing on June 5, 2017. The Company may direct Lincoln Park, at its sole discretion and subject to certain conditions, to purchase up to 500,000 shares of common stock on any business day, provided that at least one business day has passed since the most recent purchase, increasing to up to 1,000,000 shares, depending upon the closing sale price of the common stock (such purchases, " Regular Purchases In connection with the 2017 LPC Purchase Agreement, the Company issued to Lincoln Park 5,540,551 shares of common stock and is required to issue up to 5,540,551 additional shares of Common Stock pro rata as the Company requires Lincoln Park to purchase shares under the 2017 LPC Purchase Agreement over the term of the agreement. Lincoln Park has represented to the Company, among other things, that it is an "accredited investor" (as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the "Securities Act")). The Company sold the securities in reliance upon an exemption from registration contained in Section 4(a)(2) under the Securities Act. The securities sold may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The 2017 LPC Purchase Agreement and the 2017 LPC Registration Rights Agreement contain customary representations, warranties, agreements and conditions to completing future sale transactions, indemnification rights and obligations of the parties. The Company has the right to terminate the 2017 LPC Purchase Agreement at any time, at no cost or penalty. Actual sales of shares of common stock to Lincoln Park under the 2017 LPC Purchase Agreement will depend on a variety of factors to be determined by us from time to time, including, among others, market conditions, the trading price of the Common Stock and determinations by us as to the appropriate sources of funding for us and our operations. There are no trading volume requirements or, other than the limitation on beneficial ownership discussed above, restrictions under the 2017 LPC Purchase Agreement. Lincoln Park has no right to require any sales by the Company but is obligated to make purchases from the Company as directed in accordance with the 2017 LPC Purchase Agreement. Lincoln Park has covenanted not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of the Company's shares. The net proceeds received by the Company under the 2017 LPC Purchase Agreement will depend on the frequency and prices at which the Company sells shares of common stock to Lincoln Park. A registration statement on form S-3 was filed with the SEC on May 10, 2017 and was declared effective on June 5, 2017. The Company, from time to time and at the Company's sole discretion but no more frequently than every other business day, could direct Lincoln Park to purchase (a "Regular Purchase") up to 500,000 shares of common stock on any such business day, increasing up to 1,000,000 shares, depending upon the closing sale price of the common stock, provided that in no event shall Lincoln Park purchase more than $760,000 worth of common stock on any single business day. The purchase price of shares of common stock related to the future Regular Purchase funding will be based on the prevailing market prices of such shares at the time of sales (or over a period of up to ten business days leading up to such time), but in no event, will shares be sold to Lincoln Park on a day the Common Stock closing price is less than the floor price of $0.10 per share, subject to adjustment. In addition to Regular Purchases, on any business day on which the Company has properly submitted a Regular Purchase notice and the closing sale price is not below $0.15, the Company may purchase (an "Accelerated Purchase") an additional "accelerated amount" under certain circumstances. The amount of any Accelerated Purchase cannot exceed the lesser of three times the number of purchase shares purchased pursuant to the corresponding Regular Purchase; and 30% of the aggregate shares of the Company's common stock traded during normal trading hours on the purchase date. The purchase price per share for each such Accelerated Purchase will be equal to the lower of (i) 97% of the volume weighted average price during the purchase date; or (ii) the closing sale price of the Company's common stock on the purchase date. In the case of both Regular Purchases and Accelerated Purchases, the purchase price per share will be equitably adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction occurring during the business days used to compute the purchase price. Other than as set forth above, there are no trading volume requirements or restrictions under the Purchase Agreement, and the Company will control the timing and amount of any sales of the Company's common stock to Lincoln Park. The Company's sales of shares of common stock to Lincoln Park under the Purchase Agreement are limited to no more than the number of shares that would result in the beneficial ownership by Lincoln Park and its affiliates, at any single point in time, of more than 9.99% of the then outstanding shares of common stock. The Purchase Agreement and the Registration Rights Agreement contain customary representations, warranties, agreements, and conditions to completing future sale transactions, indemnification rights and obligations of the parties. The Company has the right to terminate the Purchase Agreement at any time, at no cost or penalty. Actual sales of shares of common stock to Lincoln Park under the Purchase Agreement will depend on a variety of factors to be determined by the Company from time to time, including, without limitation, market conditions, the trading price of the Common Stock and determinations by the Company as to appropriate sources of funding for the Company and its operations. There are no trading volume requirements or restrictions under the Purchase Agreement. Lincoln Park has no right to require any sales by the Company but is obligated to make purchases from the Company as it directs in accordance with the Purchase Agreement. Lincoln Park has covenanted not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of Company shares. During the three months ended June 30, 2020, there were no shares sold to Lincoln Park pursuant to the 2017 LPC Agreement. In addition, there were no shares issued to Lincoln Park as additional commitment shares, pursuant to the 2017 LPC Agreement. During the three months ended June 30, 2019, a total of 4,000,000 shares were sold to Lincoln Park pursuant to the 2017 LPC Agreement for net proceeds totaling $340,300. In addition, 47,136 shares were issued to Lincoln Park as additional commitment shares, pursuant to the 2017 LPC Agreement. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 13. STOCK-BASED COMPENSATION Part of the compensation paid by the Company to its Directors and employees consists of the issuance of common stock or via the granting of options to purchase common stock. Stock-based Director Compensation The Company's Director compensation policy was instituted in October 2009 and further revised in January 2016, includes provisions that a portion of director's fees are to be paid via the issuance of shares of the Company's common stock, in lieu of cash, with the valuation of such shares being calculated on quarterly basis and equal to the average closing price of the Company's common stock. During the three months ended June 30, 2020, the Company did not issue any shares of common stock to its Directors in payment of director's fees. During the three months ended June 30, 2020, the Company accrued director's fees totaling $22,500, which will be paid via cash payments totaling $7,500 and the issuance of 179,518 shares of Common Stock. As of June 30, 2020, the Company owed its Directors a total of $75,000 in cash payments and 1,729,860 shares of Common Stock in payment of director fees totaling $150,000 due and owing. The Company anticipates that these shares of Common Stock will be issued prior to the end of the current fiscal year. Stock-based Employee/Consultant Compensation Employment contracts with the Company's President and Chief Executive Officer, Chief Financial Officer and certain other employees and engagement contracts with certain consultants include provisions for a portion of each employee's salaries or consultant's fees to be paid via the issuance of shares of the Company's Common Stock, in lieu of cash, with the valuation of such shares being calculated on a quarterly basis and equal to the average closing price of the Company's Common Stock. During the three months ended June 30, 2020, the Company issued 574,597 shares of Common Stock in payment of salaries totaling $50,000 pursuant to the employment contract of the Company's Executive Vice President of Operations. During the three months ended June 30, 2020, the Company did not issue any shares pursuant to the engagement contracts with certain consultants. During the three months ended June 30, 2020, the Company accrued salaries totaling $201,250 owed to the Company's President and Chief Executive Officer, Chief Financial Officer and certain other employees which will be paid via the issuance of 2,407,767 shares of Common Stock. As of June 30, 2020, the Company owed its President and Chief Executive Officer, Chief Financial Officer and certain other employees' salaries totaling $2,462,500 which will be paid via the issuance of 26,668,099 shares of Common Stock. Options Under its 2014 Stock Option Plan and prior options plans, the Company may grant stock options to officers, selected employees, as well as members of the Board of Directors and advisory board members. All options have generally been granted at a price equal to or greater than the fair market value of the Company's Common Stock at the date of the grant. Generally, options are granted with a vesting period of up to three years and expire ten years from the date of grant. Shares Weighted Weighted Average Aggregate Intrinsic Outstanding at March 31, 2020 5,375,000 $ 0.14 4.1 $ 6,000 Forfeited and expired — Outstanding at June 30, 2020 5,375,000 $ 0.14 3.8 $ 6,000 Exercisable at June 30, 2020 4,953,334 $ 0.14 3.8 $ 6,000 The aggregate intrinsic value for outstanding options is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company common stock as of June 30, 2020 and March 31, 2020 of $0.06 and $0.07, respectively. |
Concentrations and Credit Risk
Concentrations and Credit Risk | 3 Months Ended |
Jun. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS AND CREDIT RISK | NOTE 14. CONCENTRATIONS AND CREDIT RISK Revenues Two customers accounted for substantially all the Company's revenues for the three months ended June 30, 2020. These two customers accounted for approximately 73% and 19% of revenues each, respectively. Four customers accounted for substantially all the Company's revenues for the three months ended June 30, 2019. These four customers accounted for approximately 39%, 30%, 14% and 12% of revenues each, respectively. Accounts Receivable Two customers accounted for substantially all of the Company's accounts receivable as of June 30, 2020. These two customers accounted for approximately 70% and 14% of accounts receivable each, respectively. Four customers accounted for substantially all the Company's accounts receivable as of March 31, 2020. These four customers accounted for approximately 73%, 13%, 8%, and 5% of accounts receivable each, respectively. Purchasing Three suppliers accounted for more than 81% of the Company's purchases of raw materials for the three months ended June 30, 2020. These three suppliers accounted for approximately 63%, 14% and 4% of purchases each, respectively. Three suppliers accounted for more than 83% of the Company's purchases of raw materials for the three months ended June 30, 2019. These three suppliers accounted for approximately 49%, 19%, and 15% of purchases each, respectively. |
Segment Results
Segment Results | 3 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT RESULTS | NOTE 15. SEGMENT RESULTS FASB ASC 280-10-50 requires use of the "management approach" model for segment reporting. The management approach is based on the way a company's management organized segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. The Company has determined that its reportable segments are Abbreviated New Drug Applications for generic products and NDAs for branded products. The Company identified its reporting segments based on the marketing authorization relating to each and the financial information used by its chief operating decision maker to make decisions regarding the allocation of resources to and the financial performance of the reporting segments. Asset information by operating segment is not presented below since the chief operating decision maker does not review this information by segment. The reporting segments follow the same accounting policies used in the preparation of the Company's unaudited condensed consolidated financial statements. The following represents selected information for the Company's reportable segments: For the Three Months Ended June 30, 2020 2019 Operating Income (Loss) by Segment ANDA $ 1,869,491 $ (652,395 ) NDA 153,784 207,704 $ 2,023,275 $ (444,691 ) The table below reconciles the Company's operating income (loss) by segment to income from operations before provision for income taxes as reported in the Company's unaudited condensed consolidated statements of operations. For the Three Months Ended June 30, 2020 2019 Operating income (loss) by segment $ 2,023,275 $ (444,691 ) Corporate unallocated costs (585,032 ) (207,117 ) Interest income 276 3,046 Interest expense and amortization of debt issuance costs (79,431 ) (97,670 ) Depreciation and amortization expense (327,617 ) (330,953 ) Significant non-cash items (241,936 ) (164,944 ) Change in fair value of derivative instruments (658,593 ) 1,522,031 Income from operations $ 130,942 $ 279,702 |
Collaborative Agreement with Ep
Collaborative Agreement with Epic Pharma LLC | 3 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
COLLABORATIVE AGREEMENT WITH EPIC PHARMA LLC | NOTE 16. COLLABORATIVE AGREEMENT WITH EPIC PHARMA LLC On June 4, 2015, the Company executed an exclusive License Agreement (the “2015 SequestOx™ License Agreement”) with Epic Pharma LLC (“Epic”), to market and sell in the U.S., SequestOx™, an immediate release oxycodone with sequestered naltrexone capsule, owned by us. Epic will have the exclusive right to market ELI-200 and its various dosage forms as listed in Schedule A of the Agreement. Epic is responsible for all regulatory and pharmacovigilance matters related to the products. Pursuant to the 2015 SequestOx™ License Agreement, Epic will pay us non-refundable milestone payments totaling $15 million, with such amount representing the cost of an exclusive license to SequestOx™, the cost of developing the product, the filing of an NDA with the FDA and the receipt of the approval letter for the NDA from the FDA. The 2015 SequestOx™ License Agreement expired on June 4, 2020. During the term of this agreement, the Company received $7.5 million in non-refundable payments, with such amount consisting of $5 million due and owing on the execution date of the 2015 SequestOx™ License Agreement and $2.5 million being earned upon the Company’s filing of an NDA with the FDA for the relevant product in January 2016. The remaining $7.5 million in non-refundable payments required FDA approval of the relevant product, a milestone that was not achieved prior to the expiration of the agreement. |
Collaborative Agreement with Su
Collaborative Agreement with Sungen Pharma LLC | 3 Months Ended |
Jun. 30, 2020 | |
Collaborative Agreement with Sungen Pharma LLC [Abstract] | |
COLLABORATIVE AGREEMENT WITH SUNGEN PHARMA LLC | NOTE 17. COLLABORATIVE AGREEMENT WITH SUNGEN PHARMA LLC On August 24, 2016, as amended we entered into an agreement with SunGen Pharma LLC (“SunGen”) (the “SunGen Agreement”) to undertake and engage in the research, development, sales and marketing of eight generic pharmaceutical products. Two of the products are classified as CNS stimulants (the “CNS Products”), two of the products are classified as beta blockers and the remaining four products consist of antidepressants, antibiotics and antispasmodics. The Company has received approval from the FDA for Amphetamine IR Tablets, Amphetamine ER Capsules and has filed an ANDA for an antibiotic product. Under the terms of the SunGen Agreement, Elite and SunGen will share in the responsibilities and costs in the development of these products and will share in the profits from sales of the Products. Upon approval, the know-how and intellectual property rights to the products will be owned jointly by Elite and SunGen. SunGen shall have the exclusive right to market and sell the Beta Blocker Products using SunGen’s label and Elite shall have the exclusive right to market and sell the CNS Products using Elite’s label. Elite will manufacture and package all four products on a cost-plus basis. On December 10, 2018, the Company received approval from the FDA for Amphetamine IR Tablets, a generic version of Adderall®, an immediate-release mixed salt of a single entity Amphetamine product (Dextroamphetamine Saccharate, Amphetamine Aspartate, Dextroamphetamine Sulfate, Amphetamine Sulfate) with strengths of 5 mg, 7.5 mg, 10 mg, 12.5 mg, 15 mg, 20 mg, and 30 mg tablets. The product is a central nervous system stimulant and is indicated for the treatment of Attention Deficit Hyperactivity Disorder (ADHD) and Narcolepsy. The product is jointly owned by Elite and SunGen. Elite manufactures and packages this product, at the Northvale Facility, on a cost-plus basis, and it is currently sold pursuant to the Lannett Alliance, with the first commercial shipment of this product occurring in April 2019. Please see the section below titled “Strategic Marketing Alliance with Lannett Company Inc.” for further details on the Lannett Alliance. On January 3, 2019, the Company filed an ANDA with the FDA for a generic version of an antibiotic product. According to QVIA (formerly QuintilesIMS Health) data, the branded product for this antibiotic and its equivalents had total annual U.S. sales of approximately $94 million for the twelve months ending September 30, 2018. The product is jointly owned by Elite and SunGen. Upon approval by the FDA of this ANDA, Elite will manufacture and package the product on a cost-plus basis. The ANDA is currently under review by the FDA. On December 12, 2019, the Company received approval from the FDA for Amphetamine ER Capsules, a generic version of Adderall XR®, an extended-release mixed salt of a single entity Amphetamine product (Dextroamphetamine Saccharate, Amphetamine Aspartate, Dextroamphetamine Sulfate, Amphetamine Sulfate) with strengths of 5mg, 10mg, 15mg, 20mg, 25mg and 30mg capsules. The product is a central nervous system stimulant and is indicated for the treatment of Attention Deficit Hyperactivity Disorder (ADHD). The product is jointly owned by Elite and SunGen. Elite manufactures and packages this product, at the Northvale Facility, on a cost-plus basis and it is currently sold pursuant to the Lannett Alliance, with the first commercial shipment of this product occurring in March 2020. Please see the section below titled “Strategic Marketing Alliance with Lannett Company Inc.” for further details on the Lannett Alliance. On April 3, 2020, the Company and SunGen mutually agreed to discontinue any further joint product development activities. In May 2020, SunGen, under an asset purchase agreement, assigned its rights and obligations under the Master Development and License Agreement for Amphetamine IR and Amphetamine ER to Mikah Pharmaceuticals. The ANDAs for Amphetamine IR and Amphetamine ER are now registered under Elite’s name. Mikah will now be Elite’s partner with respect to Amphetamine IR and ER and will assume all the rights and obligations for these products from SunGen. |
Related Party Transaction Agree
Related Party Transaction Agreements With Epic Pharma LLC | 3 Months Ended |
Jun. 30, 2020 | |
Epic Pharma Llc [Member] | |
RELATED PARTY TRANSACTION AGREEMENTS WITH EPIC PHARMA LLC | NOTE 18. RELATED PARTY TRANSACTION AGREEMENTS WITH EPIC PHARMA LLC The Company has entered into two agreements with Epic which constitute agreements with a related party due to the management of Epic including a member on our Board of Directors at the time such agreements were executed. On June 4, 2015, the Company entered into the 2015 Epic License Agreement (please see Note 16 above). The 2015 Epic License Agreement includes milestone payments totaling $10 million upon the filing with and approval of an NDA with the FDA. The Company has determined these milestones to be substantive, with such assessment being made at the inception of the 2015 Epic License Agreement, and based on the following: ● The Company’s performance is required to achieve each milestone; and ● The milestones will relate to past performance, when achieved; and ● The milestones are reasonable relative to all of the deliverables and payment terms within the 2015 Epic License Agreement The 2015 SequestOx™ License Agreement expired on June 4, 2020. During the term of this agreement, the Company received $7.5 million in non-refundable payments, with such amount consisting of $5 million due and owing on the execution date of the 2015 SequestOx™ License Agreement and $2.5 million being earned upon the Company’s filing of an NDA with the FDA for the relevant product in January 2016. The remaining $7.5 million in non-refundable payments required FDA approval of the relevant product, a milestone that was not achieved prior to the expiration of the agreement. This transaction is not to be considered as an arms-length transaction. Please also note that, effective April 7, 2016, all Directors on the Company’s Board of Directors that were also owners/managers of Epic had resigned as Directors of the Company and all current members of the Company’s Board of Directors have no relationship to Epic. Accordingly, Epic no longer qualifies as a party that is related to the Company. |
Manufacturing, License and Deve
Manufacturing, License and Development Agreements | 3 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
MANUFACTURING, LICENSE AND DEVELOPMENT AGREEMENTS | NOTE 19. MANUFACTURING, LICENSE AND DEVELOPMENT AGREEMENTS The Company has entered into the following active agreements: ● License agreement with Precision Dose, dated September 10, 2010 (the “Precision Dose License Agreement”); ● Development and License Agreement with SunGen (the “SunGen Agreement”); ● Strategic Marketing Alliance with Glenmark Pharmaceuticals, Inc. USA dated May 29, 2018 (the “Glenmark Alliance”) ● Strategic Marketing Alliance with Lannett Company. Inc. dated March 11, 2019 (the “Lannett-SunGen Product Alliance”); and ● Strategic Marketing Alliance with Lannett Company. Inc. dated April 9, 2019 (the “Lannett-Elite Product Alliance”). The Precision Dose Agreement provides for the marketing and distribution, by Precision Dose and its wholly owned subsidiary, TAGI Pharma, of Phentermine 37.5mg tablets (launched in April 2011), Phentermine 15mg capsules (launched in April 2013), Phentermine 30mg capsules (launched in April 2013), Hydromorphone 8mg tablets (launched in March 2012), Naltrexone 50mg tablets (launched in September 2013) and certain additional products that require approval from the FDA which has not been received. Precision Dose will have the exclusive right to market these products in the United States and Puerto Rico and a non-exclusive right to market the products in Canada. Pursuant to the Precision Dose License Agreement, Elite received $200k at signing, and is receiving milestone payments and a license fee which is based on profits achieved from the commercial sale of the products included in the agreement. Revenue from the $200k payment made upon signing of the Precision Dose Agreement is being recognized over the life of the Precision Dose Agreement. The milestones, totaling $500k (with $405k already received), consist of amounts due upon the first shipment of each identified product, as follows: Phentermine 37.5mg tablets ($145k), Phentermine 15 & 30mg capsules ($45k), Hydromorphone 8mg ($125k), Naltrexone 50mg ($95k) and the balance of $95k due in relation to the first shipment of generic products which still require marketing authorizations from the FDA, and to which there can be no assurances of such marketing authorizations being granted and accordingly there can be no assurances that the Company will earn and receive these milestone amounts. These milestones have been determined to be substantive, with such determination being made by the Company after assessments based on the following: ● The Company’s performance is required to achieve each milestone; and ● The milestones will relate to past performance, when achieved; and ● The milestones are reasonable relative to all of the deliverables and payment terms within the Precision Dose License Agreement. The license fees provided for in the Precision Dose Agreement are calculated as a percentage of net sales dollars realized from commercial sales of the related products. Net sales dollars consist of gross invoiced sales less those costs and deductions directly attributable to each invoiced sale, including, without limitation, cost of goods sold, cash discounts, Medicaid rebates, state program rebates, price adjustments, returns, short date adjustments, charge backs, promotions, and marketing costs. The rate applied to the net sales dollars to determine license fees due to the Company is equal to an amount negotiated and agreed to by the parties to the Precision Dose License Agreement, with the following significant factors, inputs, assumptions, and methods, without limitation, being considered by either or both parties: ● Assessment of the opportunity for each generic product in the market, including consideration of the following, without limitation: market size, number of competitors, the current and estimated future regulatory, legislative, and social environment for each generic product, and the maturity of the market; ● Assessment of various avenues for monetizing the generic products, including the various combinations of sites of manufacture and marketing options; ● Capabilities of each party with regards to various factors, including, one or more of the following: manufacturing resources, marketing resources, financial resources, distribution capabilities, ownership structure, personnel, assessment of operational efficiencies and stability, company culture and image; ● Stage of development of each generic product, all of which did not have FDA approval at the time of the discussions/negotiations and an assessment of the risks, probability, and time frame for achieving marketing authorizations from the FDA for the products; ● Assessment of consideration offered by Precision and other entities with whom discussions were conducted; and ● Comparison of the above factors among the various entities with whom the Company was engaged in discussions relating to the commercialization of the generic products. The SunGen Agreement provides for the research, development, sales and marketing of eight generic pharmaceutical products. Two of the products are classified as CNS stimulants (the “CNS Products”), two of the products are classified as beta blockers and the remaining four products consist of antidepressants, antibiotics and antispasmodics. To date, the Company has filed ANDAs with the FDA for the two CNS Products and one antibiotic identified in the SunGen Agreement. The Company received FDA approval of the ANDA filed for the first CNS Product in December 2018 and achieved commercial launch in April 2019, with such product being marketed pursuant to the Lannett Alliance. The Company received FDA approval of the ANDA filed for the second CNS Product in December 2019 and achieved commercial launch in March 2020, with such product being marketed pursuant to the Lannett Alliance. Under the terms of the SunGen Agreement, Elite and SunGen will share in the responsibilities and costs in the development of these products and will share substantially in the profits from sales. Upon approval, the know-how and intellectual property rights to the products will be owned jointly by Elite and SunGen. Three of the eight products will be jointly owned, three products will be owned by SunGen, with Elite having exclusive marketing rights and the remaining two products will be owned by Elite, with SunGen having exclusive marketing rights. Elite will manufacture and package all eight products on a cost-plus basis. On April 3, 2020, Elite and SunGen mutually agreed to discontinue any further joint product development activities under the SunGen Agreement, with joint development of the remaining generic pharmaceutical products identified in the SunGen Agreement being discontinued. In May 2020, SunGen, under an asset purchase agreement, assigned its rights and obligations under the Master Development and License Agreement for Amphetamine IR and Amphetamine ER to Mikah Pharmaceuticals. The ANDAs for Amphetamine IR and Amphetamine ER are now registered under Elite’s name. Mikah will now be Elite’s partner with respect to Amphetamine IR and ER and will assume all the rights and obligations for these products from SunGen. The Glenmark Alliance, provides for the manufacture by Elite and exclusive marketing by Glenmark of Isradipine capsules, Trimipramine capsules and Methadone Tablets, and semi-exclusive marketing rights for Phendimetrazine tablets. All marketing rights relating to Methadone Tablets were terminated by mutual agreement in January 2020 and all marketing rights relating to Phendimetrazine Tablets were terminated by mutual agreement in February 2020. In addition to the purchase prices for the products, Elite will receive license fees well in excess of 50% of gross profits. Gross profit is defined as net sales less the price paid to Elite for the products, distribution fees (less than 10%) and shipping costs. The Agreement has an initial term of three years and automatically renews for one-year periods absent prior written notice of non-renewal. In addition to customary termination provisions, the Agreement permits Glenmark to terminate with regard to a product on at least three months’ prior written notice if it determines to stop marketing and selling such product, and it permits Elite to terminate with regard to a product if at any time after the first twelvemonths from the first commercial sale, the average license fee paid by Glenmark for such product is less than $100,000 for a six-month sales period. Pursuant to Lannett-SunGen Product Alliance with Lannett Company Inc. (“Lannett”), Lannett will be the exclusive U.S. marketer and distributor for Amphetamine IR Tablets and Amphetamine ER Capsules. Elite will manufacture and Lannett will purchase the products from Elite and then sell and distribute them. In addition to the purchase prices for the products, Elite will receive license fees in excess of 50% of net profits, which will be shared equally with SunGen, pursuant to the SunGen Agreement. The Lannett-SunGen Product Alliance has an initial term of three years and automatically renews for one-year periods absent prior written notice of non-renewal. In addition to customary termination provisions, the Agreement permits Lannett to terminate with regard to a product on at least six months’ prior written notice, and it permits Elite or Lannett to terminate with regard to a product if at any time after the first twelve months from the first commercial sale, the average license fee paid by Lannett for such product is less than $300,000 for a six month sales period. In addition to manufacturing fees and license fees, Lannett also paid a milestone, of $750,000 upon the March 2020 commercial launch of Amphetamine ER Capsules. This milestone payment was shared equally by Elite and SunGen, pursuant to the SunGen Agreement. The first commercial shipment of Amphetamine IR Tablets, a generic version of Adderall®, with strengths of 5mg, 7.5mg, 10mg, 12.5mg, 15mg, 20mg and 30mg, pursuant to the Lannett-SunGen Product Alliance occurred in April 2019. The first commercial shipment of Amphetamine ER Capsules, a generic version of Adderall XR®, with strengths of 5mg, 10mg, 15mg, 20mg, 25mg and 30mg, pursuant to the Lannett-SunGen Product Alliance occurred in March 2020. Pursuant to the Lannett-Elite Product Alliance, Lannett is the exclusive U.S. marketer and distributor for Dantrolene Capsules. Elite manufactures and Lannett purchases, markets and distributes this product. In addition to the purchase prices for the products, Elite receives license fees in excess of 50% of net profits. Net profits are defined as net sales less the price paid to Elite for the products, distribution fees (less than 10%) and shipping costs. The Lannett-Elite Product Alliance has an initial term of three years and automatically renews for one-year periods absent prior written notice of non-renewal. In addition to customary termination provisions, the Agreement permits Lannett to terminate with regard to a product on at least six months’ prior written notice and it permits Elite or Lannett to terminate with regard to a product if at any time after the first twelve months from the first commercial sale, the average license fee paid by Lannett for such product is less than $300,000 for a six month sales period. The first commercial shipment of Dantrolene Capsules occurred in June 2019. |
Related Party Agreements with M
Related Party Agreements with Mikah Pharma LLC | 3 Months Ended |
Jun. 30, 2020 | |
Mikah Pharma LLC [Member] | |
RELATED PARTY AGREEMENTS WITH MIKAH PHARMA LLC | NOTE 20. RELATED PARTY AGREEMENTS WITH MIKAH PHARMA LLC On December 3, 2018, the Company executed a development agreement with Mikah, pursuant to which Mikah and the Company will collaborate to develop and commercialize generic products including formulation development, analytical method development, bioequivalence studies and manufacture of development batches of generic products. As of the date of this report, the Company has incurred costs which are $53,214 in excess of advanced payments received to date from Mikah. This balance due from Mikah is included in the financial statement line of prepaid expenses and other current assets on the accompanying consolidated balance sheet. |
Income Taxes
Income Taxes | 3 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 21. INCOME TAXES Sale of New Jersey Net Operating Loss In April 2020, Elite Laboratories Inc., a wholly owned subsidiary of Elite Pharmaceuticals Inc., received final approval from the New Jersey Economic Development Authority for the sale of net tax benefits of $607,635 relating to New Jersey net operating losses and net tax benefits of $338,772, relating to R&D tax credits. The Company sold the net tax benefits approved for sale for total proceeds of $946,407. |
Covid-19 Update
Covid-19 Update | 3 Months Ended |
Jun. 30, 2020 | |
Collaborative Agreement with Sungen Pharma LLC [Abstract] | |
COVID-19 UPDATE | NOTE 22. COVID-19 UPDATE In December 2019, the Novel Corona Virus, COVID-19 was reported to have emerged in Wuhan, China. In March 2020, the World Health Organization (“WHO”) declared the COVID-19 outbreak a global pandemic. Governments at the national, state and local level in the United States, and globally, have implemented aggressive actions to reduce the spread of the virus, with such actions including, without limitation, lockdown and shelter in place orders, limitations on non-essential gatherings of people, suspension of all non-essential travel, and ordering certain businesses and governmental agencies to cease non-essential operations at physical locations. The Company’s business is deemed essential and it has continued to operate in all aspects of its pharmaceutical manufacturing, distribution, product development, regulatory compliance and other activities. The Company’s management has developed and implemented a range of measures to address the risks, uncertainties, and operational challenges associated with operating in a COVID-19 environment. The Company is closely monitoring the rapidly evolving and changing situation and are implementing plans intended to limit the impact of COVID-19 on our business so that the Company can continue to manufacture those medicines used by end user patients. Actions the Company has taken to date are, without limitation, further described below. Workforce The Company has taken and will continue to take, proactive measures to provide for the well-being of our workforce while continuing to safely produce pharmaceutical products. The Company has implemented alternative working practices, which include, without limitation, modified schedules, shift rotation and work at home abilities for appropriate employees to best ensure adequate social distancing. In addition, the Company increased our already thorough cleaning protocols throughout our facilities and have prohibited visits from non-essential visitors. Certain of these measures have resulted in increased costs. Manufacturing and Supply Chain During the three months ended June 30, 2020, and as of the date of this Quarterly Report on Form 10-Q, the Company has not experience material, detrimental issues related to COVID-19 in our manufacturing, supply chain, quality assurance and regulatory compliance activities, and have been able to operate without interruption. The Company has taken, and plan to continue to take, commercially practical measures to keep our facility open. Our supply chains remain intact and operational, and the Company is in regular communications with our suppliers and third-party partners. Please note, however, that a prolonging of the current situation relating to COVID-19 may result in an increased risk of interruption in our supply chain in the future, with no assurances given as the materiality of such future interruption on our business, financial condition, results of operations and cash flows. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 23. SUBSEQUENT EVENTS The Company has evaluated subsequent events from the condensed consolidated balance sheet date through August 14, 2020 and identified the following material subsequent events: Lincoln Park Capital Transaction - July 8, 2020 Purchase Agreement On July 8, 2020, the Company entered into a purchase agreement (the "2020 LPC Purchase Agreement"), and a registration rights agreement (the "2020 LPC Registration Rights Agreement"), with Lincoln Park Capital Fund, LLC ("Lincoln Park"), pursuant to which Lincoln Park has committed to purchase up to $25.0 million of the Company's common stock, $0.001 par value per share, from time to time over the term of the 2020 LPC Purchase Agreement, at the Company's direction. Under the terms and subject to the conditions of the 2020 LPC Purchase Agreement, the Company has the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park is obligated to purchase, up to $25.0 million of the Company's Common Stock. Sales of Common Stock by the Company, if any, will be subject to certain limitations set forth in the 2020 LPC Purchase Agreement, and may occur from time to time, at the Company's sole discretion, over the 36-month period commencing on July 27, 2020, the date that the registration statement covering the resale of the shares of Common Stock that have been and may be issued under the 2020 LPC Purchase Agreement was declared effective by the Securities and Exchange Commission (the "SEC") and the other conditions to Lincoln Park's obligation to purchase such shares set forth in the Purchase Agreement, all of which are outside of Lincoln Park's control, were satisfied. Under the 2020 LPC Purchase Agreement, the Company may direct Lincoln Park to purchase up to 500,000 shares of Common Stock on such business day (each, a "Regular Purchase"), provided, however, that (i) the Regular Purchase may be increased to up to 600,000 shares, provided that the closing sale price of the Common Stock is not below $0.15 on the purchase date; (ii) the Regular Purchase may be increased to up to 700,000 shares, provided that the closing sale price of the Common Stock is not below $0.20 on the purchase date; (iii) the Regular Purchase may be increased to up to 800,000 shares, provided that the closing sale price of the Common Stock is not below $0.25 on the purchase date; and (iv) the Regular Purchase may be increased to up to 900,000 shares, provided that the closing sale price of the Common Stock is not below $0.30 on the purchase date. In each case, Lincoln Park's maximum dollar commitment in any single Regular Purchase may not exceed $1,000,000. The purchase price per share for each such Regular Purchase will be based on an agreed upon fixed discount to the prevailing market prices of the Company's Common Stock immediately preceding the time of sale. In addition to Regular Purchases, the Company may also direct Lincoln Park to purchase other amounts as accelerated purchases and as additional accelerated purchases if the closing sale price of the Common Stock is not less than $0.03 per share at such times as set forth in the 2020 LPC Purchase Agreement. There are no upper limits on the price per share that Lincoln Park must pay for shares of Common Stock. The above-referenced share amount limitations and closing sale price thresholds are subject to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction as provided in the 2020 LPC Purchase Agreement. Lincoln Park has no right to require the Company to sell any shares of Common Stock to Lincoln Park, but Lincoln Park is obligated to make purchases as the Company directs, subject to satisfaction of the conditions set forth in the 2020 LPC Purchase Agreement. Actual sales of shares of Common Stock to Lincoln Park will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the Common Stock and determinations by the Company as to the appropriate sources of funding for the Company and its operations. In all instances, the Company may not sell shares of its Common Stock to Lincoln Park under the 2020 LPC Purchase Agreement if it would result in Lincoln Park beneficially owning more than 4.99% of its Common Stock. The net proceeds under the 2020 LPC Purchase Agreement to the Company will depend on the frequency and prices at which the Company sells shares of its stock to Lincoln Park. The Company expects that any proceeds received by the Company from such sales to Lincoln Park will be used for research and product development, general corporate purposes and working capital requirements. As consideration for Lincoln Park's irrevocable commitment to purchase Common Stock upon the terms of and subject to satisfaction of the conditions set forth in the 2020 LPC Purchase Agreement, upon execution of the 2020 LPC Purchase Agreement, the Company issued to Lincoln Park 5,975,857 shares of Common Stock as commitment shares, and the Company has agreed to issue up to 5,975,857 additional shares of Common Stock as additional commitment shares, on a pro rata basis at such times during the term of the 2020 LPC Purchase Agreement as the Company may direct Lincoln Park to purchase shares of Common Stock under the 2020 LPC Purchase Agreement. The Company has agreed with Lincoln Park that it will not enter into any "variable rate" transactions as defined in the 2020 LPC Purchase Agreement with any third party for a period set forth in the 2020 LPC Purchase Agreement. Lincoln Park has covenanted not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of the Company's Common Stock. The 2020 LPC Purchase Agreement and the 2020 LPC Registration Rights Agreement contain customary representations, warranties, agreements and conditions to completing future sale transactions, indemnification rights and obligations of the parties. The Company has the right to terminate the 2020 LPC Purchase Agreement at any time, at no cost or penalty. During any "event of default" under the 2020 LPC Purchase Agreement, all of which are outside of Lincoln Park's control, Lincoln Park does not have the right to terminate the 2020 LPC Purchase Agreement; however, the Company may not deliver a notice directing Lincoln Park to make purchases of Common Stock, until such event of default is cured. In addition, in the event of bankruptcy proceedings by the Company, the 2020 LPC Purchase Agreement will automatically terminate. In addition, in the event of bankruptcy proceedings against the Company, the 2020 LPC Purchase Agreement will terminate if the proceedings are not discharged within 90 days. The Company did not issue any shares of its common stock pursuant to the 2020 LPC Purchase Agreement during the three months ended June 30, 2020. As noted above subsequent to June 30, 2020, the Company issued an aggregate of 5,975,857 shares of Common Stock to Lincoln Park as initial commitment shares. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and in conformity with the instructions on Form 10-Q and Rule 8-03 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission ("SEC"). The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Elite Laboratories, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, which are, in the opinion of management, necessary for a fair presentation of such statements. The results of operations for the three months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the entire year. |
Segment Information | Segment Information Financial Accounting Standards Board ("FASB") Accounting Standards Codification 280 ("ASC 280"), Segment Reporting The Company's chief operating decision maker is the Chief Executive Officer, who reviews the financial performance and the results of operations of the segments prepared in accordance with GAAP when making decisions about allocating resources and assessing performance of the Company. The Company has determined that its reportable segments are products whose marketing approvals were secured via an Abbreviated New Drug Applications ("ANDA") and products whose marketing approvals were secured via a New Drug Application ("NDA"). ANDA products are referred to as generic pharmaceuticals and NDA products are referred to as branded pharmaceuticals. There are currently no intersegment revenues. Asset information by operating segment is not presented below since the chief operating decision maker does not review this information by segment. The reporting segments follow the same accounting policies used in the preparation of the Company's condensed unaudited consolidated financial statements. Please see Note 15 for further details. |
Revenue Recognition | Revenue Recognition The Company generates revenue from the development of pain management products, manufacturing of a line of generic pharmaceutical products with approved ANDA, commercialization of products either by license and the collection of royalties, or through the manufacture of formulations and the development of new products and the expansion of licensing agreements with other pharmaceutical companies, including co-development projects, joint ventures and other collaborations. The Company also generates revenue through its focus on the development of various types of drug products, including branded drug products which require NDAs. Under ASC 606, Revenue from Contacts with Customers |
Nature of goods and services | Nature of goods and services The following is a description of the Company's goods and services from which the Company generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each, as applicable: a) Manufacturing Fees The Company is equipped to manufacture controlled-release products on a contract basis for third parties, if, and when, the products are approved. These products include products using controlled-release drug technology and products utilizing abuse deterrent technologies. The Company also develops and markets (either on its own or by license to other companies) generic and proprietary controlled-release and abuse deterrent pharmaceutical products. The Company recognizes revenue when the customer obtains control of the Company's product based on the contractual shipping terms of the contract. Revenue on product are presented gross because the Company is primarily responsible for fulfilling the promise to provide the product, is responsible to ensure that the product is produced in accordance with the related supply agreement and bears risk of loss while the inventory is in-transit to the commercial partner. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products to a customer. b) License Fees The Company enters into licensing and development agreements, which may include multiple revenue generating activities, including milestones payments, licensing fees, product sales and services. The Company analyzes each element of its licensing and development agreements in accordance with ASC 606 to determine appropriate revenue recognition. The terms of the license agreement may include payment to the Company of licensing fees, non-refundable upfront license fees, milestone payments if specified objectives are achieved, and/or royalties on product sales. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. The Company recognizes revenue from non-refundable upfront payments at a point in time, typically upon fulfilling the delivery of the associated intellectual property to the customer. For those milestone payments which are contingent on the occurrence of particular future events (for example, payments due upon a product receiving FDA approval), the Company determined that these need to be considered for inclusion in the calculation of total consideration from the contract as a component of variable consideration using the most-likely amount method. As such, the Company assesses each milestone to determine the probability and substance behind achieving each milestone. Given the inherent uncertainty of the occurrence of future events, the Company will not recognize revenue from the milestone until there is not a high probability of a reversal of revenue, which typically occurs near or upon achievement of the event. Significant management judgment is required to determine the level of effort required under an arrangement and the period over which the Company expects to complete its performance obligations under the arrangement. If the Company cannot reasonably estimate when its performance obligations either are completed or become inconsequential, then revenue recognition is deferred until the Company can reasonably make such estimates. Revenue is then recognized over the remaining estimated period of performance using the cumulative catch-up method. When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the practical expedient in ASC 606-10-32-18, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. None of the Company's contracts contained a significant financing component as of June 30, 2020. In accordance with ASC 606-10-55-65, royalties are recognized when the subsequent sale of the customer's products occurs. The Company entered into a sales and distribution licensing agreement with Epic Pharma LLC, ("Epic") dated June 4, 2015 (the "2015 Epic License Agreement"), which has been determined to satisfy the criteria for consideration as a collaborative agreement, and is accounted for accordingly, in accordance with GAAP. The 2015 Epic License Agreement expired on June 4, 2020 without renewal. The Company entered into a Master Development and License Agreement with SunGen Pharma LLC dated August 24, 2016 (the "SunGen Agreement"), which has been determined to satisfy the criteria for consideration as a collaborative agreement, and is accounted for accordingly, in accordance with GAAP. On April 3, 2020, Elite and SunGen mutually agreed to discontinue any further joint product development activities. |
Disaggregation of revenue | Disaggregation of revenue In the following table, revenue is disaggregated by type of revenue generated by the Company and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the reportable segments: For the Three Months Ended June 30, 2020 2019 NDA: Licensing fees $ 166,167 $ 250,000 Total NDA revenue 166,167 250,000 ANDA: Manufacturing fees 6,637,239 2,927,358 Licensing fees 735,338 181,882 Total ANDA revenue 7,372,577 3,109,240 Total revenue $ 7,538,744 $ 3,359,240 |
Cash | Cash The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and money market instruments. The Company places its cash and cash equivalents with high-quality, U.S. financial institutions and, to date has not experienced losses on any of its balances. |
Restricted Cash | Restricted Cash As of June 30, 2020, and March 31, 2020, the Company had $404,993 and $404,802, of restricted cash, respectively, related to debt service reserve in regard to the New Jersey Economic Development Authority ("NJEDA") bonds (see Note 5). |
Accounts Receivable | Accounts Receivable Accounts receivable are comprised of balances due from customers, net of estimated allowances for uncollectible accounts. In determining collectability, historical trends are evaluated, and specific customer issues are reviewed on a periodic basis to arrive at appropriate allowances. |
Inventory | Inventory Inventory is recorded at the lower of cost or market on specific identification by lot number basis. |
Long-Lived Assets | Long-Lived Assets The Company periodically evaluates the fair value of long-lived assets, which include property and equipment and intangibles, whenever events or changes in circumstances indicate that its carrying amounts may not be recoverable. Property and equipment are stated at cost. Depreciation is provided on the straight-line method based on the estimated useful lives of the respective assets which range from three to forty years. Major repairs or improvements are capitalized. Minor replacements and maintenance and repairs which do not improve or extend asset lives are expensed currently. Upon retirement or other disposition of assets, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss, if any, is recognized in income. |
Intangible Assets | Intangible Assets The Company capitalizes certain costs to acquire intangible assets; if such assets are determined to have a finite useful life they are amortized on a straight-line basis over the estimated useful life. Costs to acquire indefinite lived intangible assets, such as costs related to ANDAs are capitalized accordingly. The Company tests its intangible assets for impairment at least annually (as of March 31st) and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others and without limitation: a significant decline in the Company's expected future cash flows; a sustained, significant decline in the Company's stock price and market capitalization; a significant adverse change in legal factors or in the business climate of the Company's segments; unanticipated competition; and slower growth rates. As of June 30, 2020, the Company did not identify any indicators of impairment. Please also see Note 4 for further details on intangible assets. |
Research and Development | Research and Development Research and development expenditures are charged to expense as incurred. |
Contingencies | Contingencies Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company's condensed consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Where applicable, the Company records a valuation allowance to reduce any deferred tax assets that it determines will not be realizable in the future. The Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on income tax returns it files if such tax position is more likely than not to be sustained on examination by the taxing authorities, based on the technical merits of the position. These tax benefits are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company operates in multiple tax jurisdictions within the United States of America. The Company remains subject to examination in all tax jurisdiction until the applicable statutes of limitation expire. As of June 30, 2020, a summary of the tax years that remain subject to examination in our major tax jurisdictions are: United States – Federal, 2016 and forward, and State, 2012 and forward. The Company did not record unrecognized tax positions for the three months ended June 30, 2020 and 2019. |
Warrants and Preferred Shares | Warrants and Preferred Shares The accounting treatment of warrants and preferred share series issued is determined pursuant to the guidance provided by ASC 470, Debt Distinguishing Liabilities from Equity Derivatives and Hedging |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation In accordance with the Company's Director compensation policy and certain employment contracts, director's fees and a portion of employee's salaries are to be paid via the issuance of shares of the Company's common stock, in lieu of cash, with the valuation of such share being calculated on a quarterly basis and equal to the average closing price of the Company's common stock. |
Earnings (Loss) Per Share Attributable to Common Shareholders’ | Earnings (Loss) Per Share Attributable to Common Shareholders' The Company follows ASC 260, Earnings Per Share The following is the computation of earnings (loss) per share applicable to common shareholders for the periods indicated: For the Three Months Ended June 30, 2020 2019 Numerator Net income attributable to common shareholders – basic $ 1,077,349 $ 279,702 Effect of dilutive instrument on net income — (1,522,031 ) Net income (loss) attributable to common shareholders - diluted $ 1,077,349 $ (1,242,329 ) Denominator Weighted average shares of common stock outstanding - basic 840,504,367 827,524,981 Dilutive effect of stock options and convertible securities (1) 160,625,755 — Weighted average shares of common stock outstanding - diluted 1,001,130,122 827,524,981 Net income (loss) per share attributable to common shareholders Basic $ 0.00 $ 0.00 Diluted $ 0.00 $ (0.00 ) (1) |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC 820, Fair Value Measurements and Disclosures ASC 820 defines fair value as the price 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. ASC 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC 820 are described as follows: ● Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date. ● Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. ● Level 3 – Inputs that are unobservable for the asset or liability. Measured on a Recurring Basis The following table presents information about our liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fell: Amount at Fair Value Measurement Using Fair Value Level 1 Level 2 Level 3 June 30, 2020 Liabilities Derivative financial instruments – warrants $ 4,257,971 $ — $ — $ 4,257,971 March 31, 2020 Liabilities Derivative financial instruments - warrants $ 3,599,378 $ — $ — $ 3,599,378 See Note 11, for specific inputs used in determining fair value. The carrying amounts of the Company's financial assets and liabilities, such as cash, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses, approximate their fair values because of the short maturity of these instruments. Based upon current borrowing rates with similar maturities the carrying value of long-term debt approximates fair value. Non-Financial Assets that are Measured at Fair Value on a Non-Recurring Basis Non-financial assets such as intangible assets, and property and equipment are measured at fair value only when an impairment loss is recognized. The Company did not record an impairment charge related to these assets in the periods presented. |
Treasury Stock | Treasury Stock The Company records treasury stock at the cost to acquire it and includes treasury stock as a component of shareholders' deficit. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (ASC 808), Clarifying the Interaction between ASC 808 and ASC 606 ("ASU 2018-18"). The ASU clarifies when transactions between collaborative participants are in the scope of ASC 606. The ASU also provides some guidance on presentation of transactions not in the scope of ASC 606. ASU 2018-18 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those years. The Company is not materially impacted by the implementation of this pronouncement. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses". This update requires immediate recognition of management's estimates of current expected credit losses ("CECL"). Under the prior model, losses were recognized only as they were incurred. The new model is applicable to all financial instruments that are not accounted for at fair value through net income. The standard is effective for fiscal years beginning after December 15, 2022 for public entities qualifying as smaller reporting companies. Early adoption is permitted. The Company is currently assessing the impact of this update on the consolidated financial statements and does not expect a material impact on the consolidated financial statements. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of disaggregation of revenue | For the Three Months Ended June 30, 2020 2019 NDA: Licensing fees $ 166,167 $ 250,000 Total NDA revenue 166,167 250,000 ANDA: Manufacturing fees 6,637,239 2,927,358 Licensing fees 735,338 181,882 Total ANDA revenue 7,372,577 3,109,240 Total revenue $ 7,538,744 $ 3,359,240 |
Schedule of earnings (loss) per share applicable to common shareholders | For the Three Months Ended June 30, 2020 2019 Numerator Net income attributable to common shareholders – basic $ 1,077,349 $ 279,702 Effect of dilutive instrument on net income — (1,522,031 ) Net income (loss) attributable to common shareholders - diluted $ 1,077,349 $ (1,242,329 ) Denominator Weighted average shares of common stock outstanding - basic 840,504,367 827,524,981 Dilutive effect of stock options and convertible securities (1) 160,625,755 — Weighted average shares of common stock outstanding - diluted 1,001,130,122 827,524,981 Net income (loss) per share attributable to common shareholders Basic $ 0.00 $ 0.00 Diluted $ 0.00 $ (0.00 ) (1) |
Schedule of liabilities measured at fair value on a recurring basis | Amount at Fair Value Measurement Using Fair Value Level 1 Level 2 Level 3 June 30, 2020 Liabilities Derivative financial instruments – warrants $ 4,257,971 $ — $ — $ 4,257,971 March 31, 2020 Liabilities Derivative financial instruments - warrants $ 3,599,378 $ — $ — $ 3,599,378 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | June 30, March 31, Finished goods $ 141,338 $ 138,981 Work-in-progress 119,375 677,824 Raw materials 5,305,690 3,325,667 5,566,403 4,142,472 Less: Inventory reserve — — $ 5,566,403 $ 4,142,472 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | June 30, March 31, Land, building and improvements $ 5,277,073 $ 5,260,524 Laboratory, manufacturing, warehouse and transportation equipment 12,333,373 12,167,754 Office equipment and software 373,601 373,601 Furniture and fixtures 383,103 383,103 18,367,150 18,184,982 Less: Accumulated depreciation (11,224,823 ) (10,957,334 ) $ 7,142,327 $ 7,227,648 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | June 30, 2020 Estimated Gross Useful Carrying Accumulated Net Book Life Amount Additions Reductions Amortization Value Patent application costs * $ 465,684 $ — $ — $ — $ 465,684 ANDA acquisition costs Indefinite 6,168,351 — — — 6,168,351 $ 6,634,035 $ — $ — $ — $ 6,634,035 March 31, 2020 Estimated Gross Useful Carrying Accumulated Net Book Life Amount Additions Reductions Amortization Value Patent application costs * $ 465,684 $ — $ — $ — $ 465,684 ANDA acquisition costs Indefinite 6,168,351 — — — 6,168,351 $ 6,634,035 $ — $ — $ — $ 6,634,035 * Patent application costs were incurred in relation to the Company's abuse deterrent opioid technology. Amortization of the patent costs will begin upon the issuance of marketing authorization by the FDA. Amortization will then be calculated on a straight-line basis through the expiry of the related patent(s). |
NJEDA Bonds (Tables)
NJEDA Bonds (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of bonds payable liability | June 30, March 31, Gross bonds payable NJEDA Bonds - Series A Notes $ 1,575,000 $ 1,575,000 Less: Current portion of bonds payable (prior to deduction of bond offering costs) (105,000 ) (105,000 ) Long-term portion of bonds payable (prior to deduction of bond offering costs) $ 1,470,000 $ 1,470,000 Bond offering costs $ 354,454 $ 354,454 Less: Accumulated amortization (210,310 ) (206,765 ) Bond offering costs, net $ 144,144 $ 147,689 Current portion of bonds payable - net of bond offering costs Current portions of bonds payable $ 105,000 $ 105,000 Less: Bonds offering costs to be amortized in the next 12 months (14,178 ) (14,178 ) Current portion of bonds payable, net of bond offering costs $ 90,822 $ 90,822 Long term portion of bonds payable - net of bond offering costs Long term portion of bonds payable 1,470,000 $ 1,470,000 Less: Bond offering costs to be amortized subsequent to the next 12 months (129,966 ) (133,511 ) Long term portion of bonds payable, net of bond offering costs $ 1,340,034 $ 1,336,489 |
Loans Payable (Tables)
Loans Payable (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of loans payable | June 30, March 31, 2020 Equipment and insurance financing loans payable, between 3.5% and 12.73% interest and maturing between July 2020 and December 2023 $ 1,062,389 $ 1,025,452 Loans received pursuant to the Payroll Protection Program Term Note 1,013,480 — Less: Current portion of loans payable (479,864 ) (561,550 ) Long-term portion of loans payable $ 1,596,005 $ 463,902 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of lease assets and liabilities | Lease Classification As of Assets Operating Operating lease – right-of-use asset $ 313,750 Total leased assets $ 313,750 Liabilities Current Operating Lease obligation – operating lease $ 212,447 Long-term Operating Lease obligation – operating lease, net of current portion 112,237 Total lease liabilities $ 324,684 |
Schedule of the future minimum rental payments | Years ending March 31, Amount 2021 $ 169,077 2022 171,315 Total future minimum lease payments 340,392 Less: interest (15,708 ) Present value of lease payments $ 324,684 |
Schedule of weighted-average remaining lease term and the weighted-average discount rate | Lease Term and Discount Rate June 30, Remaining lease term (years) Operating leases 1.5 Discount rate Operating leases 6 % |
Derivative Financial Instrume_2
Derivative Financial Instruments - Warrants (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Derivative Liabilities Warrants Disclosure [Abstract] | |
Schedule of warrant activity | June 30, 2020 March 31, 2020 Warrant Shares Weighted Average Exercise Warrant Shares Weighted Average Exercise Balance at beginning of period 79,008,661 $ 0.1521 79,008,661 $ 0.1521 Warrants granted pursuant to the issuance of Series J convertible preferred shares — — $ — Warrants exercised, forfeited and/or expired, net — — $ — Balance at end of period 79,008,661 $ 0.1521 79,008,661 $ 0.1521 |
Schedule of the fair value of the warrants issued | June 30, March 31, Fair value of the Company's common stock $ 0.0830 $ 0.0720 Volatility 84.73 % 83.81 % Initial exercise price $ 0.1521 $ 0.1521 Warrant term (in years) 6.8 7.1 Risk free rate 0.49 % 0.55 % |
Schedule of changes in warrants measured at fair value on a recurring basis | Balance at March 30, 2020 $ 3,599,378 Change in fair value of derivative financial instruments - warrants 658,593 Balance at June 30, 2020 $ 4,257,971 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock option plan | Shares Weighted Weighted Average Aggregate Intrinsic Outstanding at March 31, 2020 5,375,000 $ 0.14 4.1 $ 6,000 Forfeited and expired — Outstanding at June 30, 2020 5,375,000 $ 0.14 3.8 $ 6,000 Exercisable at June 30, 2020 4,953,334 $ 0.14 3.8 $ 6,000 |
Segment Results (Tables)
Segment Results (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of selected information for reportable segments | For the Three Months Ended June 30, 2020 2019 Operating Income (Loss) by Segment ANDA $ 1,869,491 $ (652,395 ) NDA 153,784 207,704 $ 2,023,275 $ (444,691 ) |
Schedule of operating loss by segment to (loss) income from operations | For the Three Months Ended June 30, 2020 2019 Operating income (loss) by segment $ 2,023,275 $ (444,691 ) Corporate unallocated costs (585,032 ) (207,117 ) Interest income 276 3,046 Interest expense and amortization of debt issuance costs (79,431 ) (97,670 ) Depreciation and amortization expense (327,617 ) (330,953 ) Significant non-cash items (241,936 ) (164,944 ) Change in fair value of derivative instruments (658,593 ) 1,522,031 Income from operations $ 130,942 $ 279,702 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues | $ 7,538,744 | $ 3,359,240 |
NDA [Member] | Licensing fees [Member] | ||
Revenues | 166,167 | 250,000 |
ANDA [Member] | Licensing fees [Member] | ||
Revenues | 735,338 | 181,882 |
ANDA [Member] | Manufacturing fees [Member] | ||
Revenues | $ 6,637,239 | $ 2,927,358 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | 3 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | ||
Numerator | |||
Net income attributable to common shareholders – basic | $ 1,077,349 | $ 279,702 | |
Effect of dilutive instrument on net income | (1,522,031) | ||
Net income (loss) attributable to common shareholders - diluted | $ 1,077,349 | $ (1,242,329) | |
Denominator | |||
Weighted average shares of common stock outstanding - basic | 840,504,367 | 827,524,981 | |
Dilutive effect of stock options and convertible securities | [1] | 160,625,755 | |
Weighted average shares of common stock outstanding - diluted | 1,001,130,122 | 827,524,981 | |
Net income (loss) per share attributable to common shareholders | |||
Basic | $ 0 | $ 0 | |
Diluted | $ 0 | $ 0 | |
[1] | Equivalent common shares of 79,008,661 related to the conversion of warrants are excluded and 2,766,566 related to stock options from the calculation of diluted net income per share for the three months ended June 30, 2020, since their effect is antidulitive. Equivalent common shares of 158,017,321 related to the conversion of Series J Preferred Stock, 79,008,661 related to the conversion of warrants and 6,098,000 related to stock options are excluded from the calculation of diluted net loss per share for the three months ended June 30, 2019, since their effect is antidilutive. |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Derivative financial instruments - warrants | $ 4,257,971 | $ 3,599,378 |
Level 1 [Member] | ||
Derivative financial instruments - warrants | ||
Level 2 [Member] | ||
Derivative financial instruments - warrants | ||
Level 3 [Member] | ||
Derivative financial instruments - warrants | $ 4,257,971 | $ 3,599,378 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Mar. 31, 2020 | |
Summary of Significant Accounting Policies (Textual) | ||
Restricted cash | $ 404,993 | $ 404,802 |
Tax benefits, description | The Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on income tax returns it files if such tax position is more likely than not to be sustained on examination by the taxing authorities, based on the technical merits of the position. These tax benefits are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. | |
Operating leases and lease liabilities | $ 324,684 | |
Equivalent common shares | 79,008,661 | |
Conversion of warrants | 2,766,566 | |
Series J Preferred Stock [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Equivalent common shares | 158,017,321 | |
Conversion of warrants | 79,008,661 | |
Related to stock options | 6,098,000 |
Inventory (Details)
Inventory (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 141,338 | $ 138,981 |
Work-in-progress | 119,375 | 677,824 |
Raw materials | 5,305,690 | 3,325,667 |
Inventory, gross | 5,566,403 | 4,142,472 |
Less: Inventory reserve | ||
Inventory, net | $ 5,566,403 | $ 4,142,472 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 18,367,150 | $ 18,184,982 |
Less: Accumulated depreciation | (11,224,823) | (10,957,334) |
Property and equipment, net | 7,142,327 | 7,227,648 |
Land, building and improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 5,277,073 | 5,260,524 |
Laboratory, manufacturing, warehouse and transportation equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 12,333,373 | 12,167,754 |
Office equipment and software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 373,601 | 373,601 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 383,103 | $ 383,103 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details Textual) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Property and Equipment, Net (Textual) | ||
Depreciation expense | $ 324,071 | $ 327,408 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Mar. 31, 2020 | |||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | $ 6,634,035 | $ 6,634,035 | ||
Additions | ||||
Reductions | ||||
Accumulated Amortization | 0 | 0 | ||
Net Book Value | $ 6,634,035 | $ 6,634,035 | ||
Patent application costs [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life | [1] | 0 Years | 0 Years | |
Gross Carrying Amount | $ 465,684 | $ 465,684 | ||
Additions | ||||
Reductions | ||||
Accumulated Amortization | ||||
Net Book Value | $ 465,684 | $ 465,684 | ||
ANDA acquisition costs [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life | Indefinite | Indefinite | [1] | |
Gross Carrying Amount | $ 6,168,351 | $ 6,168,351 | ||
Additions | ||||
Reductions | ||||
Accumulated Amortization | ||||
Net Book Value | $ 6,168,351 | $ 6,168,351 | ||
[1] | Patent application costs were incurred in relation to the Company's abuse deterrent opioid technology. Amortization of the patent costs will begin upon the issuance of marketing authorization by the FDA. Amortization will then be calculated on a straight-line basis through the expiry of the related patent(s). |
NJEDA Bonds (Details)
NJEDA Bonds (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Njeda Bonds [Line Items] | ||
Less: Current portion of bonds payable (prior to deduction of bond offering costs) | $ (90,822) | $ (90,822) |
Long-term portion of bonds payable (prior to deduction of bond offering costs) | 1,340,034 | 1,336,489 |
NJEDA Bonds Current [Member] | ||
Njeda Bonds [Line Items] | ||
Bonds payable | 105,000 | 105,000 |
Less: Bond offering costs to be amortized | (14,178) | (14,178) |
Bonds payable, net of bond offering costs | 90,822 | 90,822 |
NJEDA Bonds Non-Current [Member] | ||
Njeda Bonds [Line Items] | ||
Bonds payable | 1,470,000 | 1,470,000 |
Less: Bond offering costs to be amortized | (129,966) | (133,511) |
Bonds payable, net of bond offering costs | 1,340,034 | 1,336,489 |
NJEDA Bonds Series A Notes [Member] | ||
Njeda Bonds [Line Items] | ||
NJEDA Bonds - Series A Notes | 1,575,000 | 1,575,000 |
Less: Current portion of bonds payable (prior to deduction of bond offering costs) | (105,000) | (105,000) |
Long-term portion of bonds payable (prior to deduction of bond offering costs) | 1,470,000 | 1,470,000 |
Bond offering costs | 354,454 | 354,454 |
Less: Accumulated amortization | (210,310) | 206,765 |
Bond offering costs, net | $ 144,144 | $ 147,689 |
NJEDA Bonds (Details Textual)
NJEDA Bonds (Details Textual) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
NJEDA Bonds [Member] | ||
NJEDA Bonds (Textual) | ||
Amortization expense | $ 3,545 | $ 3,545 |
Series Note [Member] | ||
NJEDA Bonds (Textual) | ||
Annual interest rate | 6.50% |
Loans Payable (Details)
Loans Payable (Details) - USD ($) | Jun. 30, 2020 | Apr. 30, 2020 | Mar. 31, 2020 |
Debt Disclosure [Abstract] | |||
Equipment and insurance financing loanspayable, between 3.5% and 12.73% interest and maturing between March 2020 and July 2024 | $ 1,062,389 | $ 1,013,480 | $ 1,025,452 |
Loans received pursuant to the Payroll Protection Program Term Note | 1,013,480 | ||
Less: Current portion of loans payable | (479,864) | (561,550) | |
Long-term portion of loans payable | $ 1,596,005 | $ 463,902 |
Loans Payable (Details Textual)
Loans Payable (Details Textual) - USD ($) | 3 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Apr. 30, 2020 | Mar. 31, 2020 | |
Loans Payable (Textual) | ||||
Interest expense | $ 17,880 | $ 24,087 | ||
Interest rate | 25.00% | 1.00% | ||
Note amount | $ 1,062,389 | $ 1,013,480 | $ 1,025,452 |
Related Party Secured Promiss_2
Related Party Secured Promissory Note with Mikah Pharma LLC (Details) - USD ($) | May 15, 2017 | Jun. 30, 2020 | Jun. 30, 2019 | Apr. 30, 2020 | Mar. 31, 2020 |
Interest rate | 25.00% | 1.00% | |||
Interest expense, total | $ 79,431 | $ 97,670 | |||
Secured Promissory Note [Member] | |||||
Principal amount | $ 1,200,000 | ||||
Maturity date | Dec. 31, 2020 | ||||
Interest rate | 10.00% | 15.00% | |||
Interest expense, total | $ 30,000 | $ 30,000 | |||
Accrued interest | 375,000 | $ 345,000 | |||
Future funding | $ 1,545,000 |
Deferred Revenue (Details)
Deferred Revenue (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Mar. 31, 2020 | |
Deferred Revenue (Textual) | ||
Deferred revenues | $ 68,891 | $ 238,891 |
Deferred revenues current component | 13,333 | 180,000 |
Deferred revenues long-term component | $ 55,558 | $ 58,891 |
Epic Collaborative Agreement [Member] | ||
Deferred Revenue (Textual) | ||
Deferred revenues term, description | Five-year term beginning in June 2015 and ending in May 2020. | |
Advance payment of deferred revenue | $ 5,000,000 | |
TAGI licensing agreement [Member] | ||
Deferred Revenue (Textual) | ||
Deferred revenues term, description | Fifteen-year term beginning in September 2010 and ending in August 2025 | |
Advance payment of deferred revenue | $ 200,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Asset | ||
Operating lease – right-of-use asset | $ 313,750 | $ 363,282 |
Total leased assets | 313,750 | |
Liabilities | ||
Lease obligation - operating lease | 212,447 | 208,184 |
Lease obligation - operating lease, net of current portion | 112,237 | $ 167,109 |
Total lease liabilities | $ 324,684 |
Commitments and Contingencies_3
Commitments and Contingencies (Details 1) | Jun. 30, 2020USD ($) |
Years ending March 31, | |
2021 | $ 169,077 |
2022 | 171,315 |
Total future minimum lease payments | 340,392 |
Less: interest | (15,708) |
Present value of lease payments | $ 324,684 |
Commitments and Contingencies_4
Commitments and Contingencies (Details 2) | Jun. 30, 2020 |
Lease Term and Discount Rate | |
Remaining lease term (years) Operating leases | 1 year 6 months |
Discount rate Operating leases | 6.00% |
Commitments and Contingencies_5
Commitments and Contingencies (Details Textual) | 3 Months Ended | ||||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2020USD ($) | Jul. 31, 2014a | Jul. 01, 2010a | |
Commitments and Contingencies (Textual) | |||||
Operating lease, terms | Lease includes an initial term, which expired on December 31, 2016 with two tenant renewal options of five years each, at the sole discretion of the Company. On June 22, 2016, the Company exercised the first of these renewal options, with such option including a term that begins on January 1, 2017 and expires on December 31, 2021. | ||||
General and Administrative Expense [Member] | |||||
Commitments and Contingencies (Textual) | |||||
Rent expense | $ | $ 55,986 | $ 54,888 | |||
Other Noncurrent Liabilities [Member] | |||||
Commitments and Contingencies (Textual) | |||||
Other long-term liabilities | $ | $ 35,976 | $ 35,442 | |||
Property Subject to Operating Lease [Member] | Warehouse [Member] | |||||
Commitments and Contingencies (Textual) | |||||
Building floor space | a | 15,000 | ||||
July 2014 Modification Agreement [Member] | Property Subject to Operating Lease [Member] | Warehouse [Member] | |||||
Commitments and Contingencies (Textual) | |||||
Building floor space | a | 35,000 |
Preferred Stock (Details Textua
Preferred Stock (Details Textual) - USD ($) | 3 Months Ended | |||
Jun. 30, 2020 | Mar. 31, 2020 | Dec. 04, 2019 | Apr. 28, 2017 | |
Mezzanine Equity (Textual) | ||||
Preferred stock share authorized | 50 | 50 | ||
Preferred stock shares issued | 24.0344 | 24.0344 | ||
Preferred stock shares outstanding | 24.0344 | 24.0344 | ||
Convertible preferred stock par value per share | $ 0.01 | |||
Convertible preferred stock stated value | $ 1,000,000 | |||
Conversion of stock, shares converted | 79,008,661 | |||
Preferred stock par value | $ 0.01 | $ 0.01 | ||
Carrying value of Series J convertible preferred stock | $ 13,903,960 | $ 13,903,960 | ||
Increased number of common stock shares authorized | 1,445,000,000 | 1,445,000,000 | ||
Maximum [Member] | ||||
Mezzanine Equity (Textual) | ||||
Increased number of common stock shares authorized | 1,445,000,000 | |||
Minimum [Member] | ||||
Mezzanine Equity (Textual) | ||||
Increased number of common stock shares authorized | 995,000,000 | |||
Series J Convertible preferred stock [Member] | ||||
Mezzanine Equity (Textual) | ||||
Convertible preferred stock par value per share | $ 0.01 | |||
Convertible preferred stock stated value | $ 1,000,000 | |||
Preferred stock conversion price per share | $ 0.1521 | |||
Conversion of stock, shares converted | 158,017,321 | |||
Shares of common stock per share | $ 0.1521 | |||
Shares of common stock | 158,017,321 | |||
Fair value measured | $ 13,903,960 | |||
Series J Convertible preferred stock [Member] | Nasrat Hakim [Member] | ||||
Mezzanine Equity (Textual) | ||||
Warrants to purchase | 79,008,661 | 79,008,661 | ||
Shares of common stock per share | $ 0.1521 | $ 0.1521 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Warrants (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Mar. 31, 2020 | |
Derivative Liabilities Warrants Disclosure [Abstract] | ||
Warrant Shares, Balance at beginning of period | 79,008,661 | 79,008,661 |
Warrant Shares, Warrants granted pursuant to the issuance of Series J convertible preferred shares | ||
Warrant Shares, Warrants exercised, forfeited and/or expired, net | ||
Warrant Shares, Balance at end of period | 79,008,661 | 79,008,661 |
Weighted Average Exercise Price, Balance at beginning of period | $ 0.1521 | $ 0.1521 |
Weighted Average Exercise Price, Warrants granted pursuant to the issuance of Series J convertible preferred shares | ||
Weighted Average Exercise Price, Warrants exercised, forfeited and/or expired, net | ||
Weighted Average Exercise Price, Balance at end of period | $ 0.1521 | $ 0.1521 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Warrants (Details 1) - $ / shares | 3 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Mar. 31, 2020 | |
Volatility | 84.73% | 83.81% |
Estimated life (in years) | 6 years 9 months 18 days | 7 years 1 month 6 days |
Risk free rate | 0.49% | 0.55% |
Warrant [Member] | ||
Fair value of the Company’s common stock | $ 0.0830 | $ 0.0720 |
Initial exercise price | $ 0.1521 | $ 0.1521 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Warrants (Details 2) - Level 3 [Member] - Warrants [Member] | 3 Months Ended |
Jun. 30, 2020USD ($) | |
Balance at March 30, 2020 | $ 3,599,378 |
Change in fair value of derivative financial instruments - warrants | 658,593 |
Balance at June 30, 2020 | $ 4,257,971 |
Derivative Financial Instrume_6
Derivative Financial Instruments - Warrants (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended |
Apr. 28, 2017 | Jun. 30, 2020 | |
Derivative Financial Instruments - Warrants (Textual) | ||
Conversion of stock, shares converted | 79,008,661 | |
Warrant expiration period | 10 years | |
Fair Value of Warrants, Description | The fair value of the warrants issued by the Company pursuant to the issuance of Series J convertible preferred shares (79,008,661 warrant shares) was calculated using a Black-Scholes model instead of a Monte Carlo Simulation because the probability with the shareholder approval provisions was no longer a factor. The following assumptions were used in the Black-Scholes model to calculate the fair value of warrants issued by the Company pursuant to the issuance of Series J convertible preferred shares (79,008,661 warrant shares). | |
Series J Warrant [Member] | ||
Derivative Financial Instruments - Warrants (Textual) | ||
Initial exercise price | $ 0.1521 | |
Series J Convertible preferred stock [Member] | ||
Derivative Financial Instruments - Warrants (Textual) | ||
Conversion of stock, shares converted | 158,017,321 | |
Initial exercise price | $ 0.1521 | |
Nasrat Hakim [Member] | ||
Derivative Financial Instruments - Warrants (Textual) | ||
Warrant shares | 79,008,661 | |
Nasrat Hakim [Member] | Series J Convertible preferred stock [Member] | ||
Derivative Financial Instruments - Warrants (Textual) | ||
Conversion of stock, shares issued | 23.0344 | |
Warrant shares | 79,008,661 | |
Conversion of stock, shares converted | 158,017,321 | |
Fair value of the warrants | $ 6,474,674 |
Shareholders' Equity (Details T
Shareholders' Equity (Details Textual) - USD ($) | Jun. 05, 2017 | May 01, 2017 | Jun. 30, 2020 | Jun. 30, 2019 |
Class of Stock [Line Items] | ||||
Proceeds from issuance stock | $ 340,300 | |||
Common stock traded percent | 30.00% | |||
Common stock weighted average price percent | 97.00% | |||
Sale of stock price per share | $ 0.15 | |||
Lincoln Park [Member] | ||||
Class of Stock [Line Items] | ||||
Purchase of common stock, Shares | 0 | 4,000,000 | ||
Purchase of common stock, amount | $ 340,300 | |||
Common stock additional shares issued | 0 | 47,136 | ||
Common stock traded percent | 9.99% | |||
Description of sale of stock | The Company may direct Lincoln Park, at its sole discretion and subject to certain conditions, to purchase up to 500,000 shares of common stock on any business day, provided that at least one business day has passed since the most recent purchase, increasing to up to 1,000,000 shares, depending upon the closing sale price of the common stock (such purchases, "Regular Purchases"). However, in no event shall a Regular Purchase be more than $1,000,000. | The Company, from time to time and at the Company's sole discretion but no more frequently than every other business day, could direct Lincoln Park to purchase (a "Regular Purchase") up to 500,000 shares of common stock on any such business day, increasing up to 1,000,000 shares, depending upon the closing sale price of the common stock, provided that in no event shall Lincoln Park purchase more than $760,000 worth of common stock on any single business day. The purchase price of shares of common stock related to the future Regular Purchase funding will be based on the prevailing market prices of such shares at the time of sales (or over a period of up to ten business days leading up to such time), but in no event, will shares be sold to Lincoln Park on a day the Common Stock closing price is less than the floor price of $0.10 per share, subject to adjustment. | ||
Lincoln Park Capital Fund, LLC [Member] | ||||
Class of Stock [Line Items] | ||||
Shares, issued | 40,000,000 | 5,540,551 | ||
Common stock shares | 500,000 | |||
Purchase of common stock increasing shares per purchase | 1,000,000 | |||
Maximum common stock value directed to purchase | $ 1,000,000 | |||
Common stock additional shares issued | 5,540,551 | |||
Common stock weighted average price percent | 4.99% |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) | 3 Months Ended |
Jun. 30, 2020USD ($)$ / sharesshares | |
Equity [Abstract] | |
Shares Underlying Options, Outstanding at Beginning | 5,375,000 |
Shares Underlying Options, Forfeited and expired | |
Shares Underlying Options, Outstanding at Ending | 5,375,000 |
Shares Underlying Options, Exercisable | 4,953,334 |
Weighted Average Exercise Price, Outstanding at Beginning | $ / shares | $ 0.14 |
Weighted Average Exercise Price, Outstanding at Ending | $ / shares | 0.14 |
Weighted Average Exercise Price, Options Exercisable | $ / shares | $ 0.14 |
Weighted Average Remaining Contractual Term (in years), Outstanding at Beginning | 4 years 1 month 6 days |
Weighted Average Remaining Contractual Term (in years), Outstanding at Ending | 3 years 9 months 18 days |
Weighted Average Remaining Contractual Term (in years), Exercisable | 3 years 9 months 18 days |
Aggregate Intrinsic Value, Outstanding at Beginning | $ | $ 6,000 |
Aggregate Intrinsic Value, Outstanding at Ending | $ | 6,000 |
Aggregate Intrinsic Value, Exercisable | $ | $ 6,000 |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details Textual) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Mar. 31, 2020 | |
Stock-Based Compensation (Textual) | ||
Noninterest expense directors fees | $ 2,462,500 | |
Price difference between exercise price and quoted price | $ 0.06 | $ 0.07 |
Payment of employee salaries | 26,668,099 | |
Employee Stock [Member] | ||
Stock-Based Compensation (Textual) | ||
Payment of employee salaries | 574,597 | |
Payment of salaries | $ 50,000 | |
Director [Member] | Common Stock [Member] | ||
Stock-Based Compensation (Textual) | ||
Issuance of shares of common stock | 179,518 | |
Noninterest expense directors fees | $ 150,000 | |
Shares for payment of directors fees outstanding | 1,729,860 | |
Accrued directors fees | $ 22,500 | |
Cash payment made to director fees | 7,500 | |
Due to officers or stockholders | $ 75,000 | |
Chief Executive Officer [Member] | Common Stock [Member] | ||
Stock-Based Compensation (Textual) | ||
Payment of employee salaries | 201,250 | |
Management [Member] | Common Stock [Member] | ||
Stock-Based Compensation (Textual) | ||
Payment of employee salaries | 2,407,767 |
Concentrations and Credit Risk
Concentrations and Credit Risk (Details) | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2020SuppliersCustomers | Jun. 30, 2019SuppliersCustomers | Mar. 31, 2020Customers | |
Revenues [Member] | Customer One [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 73.00% | 39.00% | |
Number of customers | 2 | 4 | |
Revenues [Member] | Customer Two [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 19.00% | 30.00% | |
Number of customers | 2 | 4 | |
Revenues [Member] | Customer Three [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 14.00% | ||
Number of customers | 4 | ||
Revenues [Member] | Customer Four [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 12.00% | ||
Number of customers | 4 | ||
Accounts Receivable [Member] | Customer One [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 70.00% | 73.00% | |
Number of customers | 2 | 4 | |
Accounts Receivable [Member] | Customer Two [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 14.00% | 13.00% | |
Number of customers | 2 | 4 | |
Accounts Receivable [Member] | Customer Three [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 8.00% | ||
Number of customers | 4 | ||
Accounts Receivable [Member] | Customer Four [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 5.00% | ||
Number of customers | 4 | ||
Purchasing [Member] | Supplier [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 81.00% | 83.00% | |
Purchasing [Member] | Supplier One [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 63.00% | 49.00% | |
Number of suppliers | Suppliers | 3 | 3 | |
Purchasing [Member] | Supplier Two [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 14.00% | 19.00% | |
Number of suppliers | Suppliers | 3 | 3 | |
Purchasing [Member] | Supplier Three [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 4.00% | 15.00% | |
Number of suppliers | Suppliers | 3 | 3 |
Segment Results (Details)
Segment Results (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue by Segment | ||
Revenue by Segment | $ 7,538,744 | $ 3,359,240 |
Operating Income (Loss) by Segment | ||
Operating Income (Loss) by Segment | 830,600 | (1,147,705) |
ANDA [Member] | ||
Operating Income (Loss) by Segment | ||
Operating Income (Loss) by Segment | 1,869,491 | (652,395) |
NDA [Member] | ||
Operating Income (Loss) by Segment | ||
Operating Income (Loss) by Segment | 153,784 | 207,704 |
Business Segment [Member] | ||
Operating Income (Loss) by Segment | ||
Operating Income (Loss) by Segment | $ 2,023,275 | $ (444,691) |
Segment Results (Details 1)
Segment Results (Details 1) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating income (loss) by segment | $ 830,600 | $ (1,147,705) |
Interest income | 276 | 3,046 |
Depreciation and amortization expense | (327,617) | (330,953) |
Income from operations | 130,942 | 279,702 |
Business Segment [Member] | ||
Operating income (loss) by segment | 2,023,275 | (444,691) |
Corporate unallocated costs | (585,032) | (207,117) |
Interest income | 276 | 3,046 |
Interest expense and amortization of debt issuance costs | (79,431) | (97,670) |
Depreciation and amortization expense | (327,617) | (330,953) |
Significant non-cash items | (241,936) | (164,944) |
Change in fair value of derivative instruments | (658,593) | 1,522,031 |
Income from operations | $ 130,942 | $ 279,702 |
Collaborative Agreement with _2
Collaborative Agreement with Epic Pharma LLC (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2016 | Jun. 04, 2015 | Jun. 30, 2020 | |
Collaborative Agreement with Epic Pharma LLC (Textual) | |||
Additional due | $ 946,407 | ||
2015 SequestOx License Agreement [Member] | |||
Collaborative Agreement with Epic Pharma LLC (Textual) | |||
Elite received non-refundable payments totaling | 7,500,000 | ||
Remaining non-refundable payments | 7,500,000 | ||
Additional due | $ 5,000,000 | ||
Non-refundable milestone | $ 2,500,000 | ||
Description of license agreement expiration | The 2015 SequestOx™ License Agreement expired on June 4, 2020. | ||
Collaborative Arrangement [Member] | |||
Collaborative Agreement with Epic Pharma LLC (Textual) | |||
Revenues recognition milestone method, description | The Company executed an exclusive License Agreement (the “2015 SequestOx™ License Agreement”) with Epic Pharma LLC (“Epic”), to market and sell in the U.S., SequestOx™, an immediate release oxycodone with sequestered naltrexone capsule, owned by us. Epic will have the exclusive right to market ELI-200 and its various dosage forms as listed in Schedule A of the Agreement. Epic is responsible for all regulatory and pharmacovigilance matters related to the products. Pursuant to the 2015 SequestOx™ License Agreement, Epic will pay us non-refundable milestone payments totaling $15 million, with such amount representing the cost of an exclusive license to SequestOx™, the cost of developing the product, the filing of an NDA with the FDA and the receipt of the approval letter for the NDA from the FDA. |
Collaborative Agreement with _3
Collaborative Agreement with Sungen Pharma LLC (Details) | 12 Months Ended |
Sep. 30, 2018USD ($) | |
Collaborative Agreement with Sungen Pharma LLC (Textual) | |
Total annual U.S. sales | $ 94,000,000 |
Related Party Transaction Agr_2
Related Party Transaction Agreements with Epic Pharma LLC (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2016 | Jun. 04, 2015 | Jun. 30, 2020 | |
Related Party Transaction Agreements with Epic Pharma LLC (Textual) | |||
Additional due | $ 946,407 | ||
2015 SequestOx License Agreement [Member] | |||
Related Party Transaction Agreements with Epic Pharma LLC (Textual) | |||
Elite received non-refundable payments totaling | 7,500,000 | ||
Remaining non-refundable payments | 7,500,000 | ||
Additional due | $ 5,000,000 | ||
Non-refundable milestone | $ 2,500,000 | ||
2015 Epic License Agreement [Member] | |||
Related Party Transaction Agreements with Epic Pharma LLC (Textual) | |||
Milestone payments | $ 10,000,000 |
Manufacturing, License and De_2
Manufacturing, License and Development Agreements (Details) | 3 Months Ended |
Jun. 30, 2020USD ($) | |
Manufacturing, License and Development Agreements (Textual) | |
Milestone method, description | The milestones, totaling $500k (with $405k already received), consist of amounts due upon the first shipment of each identified product, as follows: Phentermine 37.5mg tablets ($145k), Phentermine 15 & 30mg capsules ($45k), Hydromorphone 8mg ($125k), Naltrexone 50mg ($95k) and the balance of $95k due in relation to the first shipment of generic products which still require marketing authorizations from the FDA, and to which there can be no assurances of such marketing authorizations being granted and accordingly there can be no assurances that the Company will earn and receive these milestone amounts. |
Glenmark Alliance [Member] | |
Manufacturing, License and Development Agreements (Textual) | |
Milestone method, description | The Glenmark Alliance, provides for the manufacture by Elite and exclusive marketing by Glenmark of Isradipine capsules, Trimipramine capsules and Methadone Tablets, and semi-exclusive marketing rights for Phendimetrazine tablets. All marketing rights relating to Methadone Tablets were terminated by mutual agreement in January 2020 and all marketing rights relating to Phendimetrazine Tablets were terminated by mutual agreement in February 2020. In addition to the purchase prices for the products, Elite will receive license fees well in excess of 50% of gross profits. Gross profit is defined as net sales less the price paid to Elite for the products, distribution fees (less than 10%) and shipping costs. The Agreement has an initial term of three years and automatically renews for one-year periods absent prior written notice of non-renewal. In addition to customary termination provisions, the Agreement permits Glenmark to terminate with regard to a product on at least three months’ prior written notice if it determines to stop marketing and selling such product, and it permits Elite to terminate with regard to a product if at any time after the first twelvemonths from the first commercial sale, the average license fee paid by Glenmark for such product is less than $100,000 for a six-month sales period. |
Lannett-SunGen Product Alliance [Member] | |
Manufacturing, License and Development Agreements (Textual) | |
Milestone method, description | Lannett-SunGen Product Alliance with Lannett Company Inc. (“Lannett”), Lannett will be the exclusive U.S. marketer and distributor for Amphetamine IR Tablets and Amphetamine ER Capsules. Elite will manufacture and Lannett will purchase the products from Elite and then sell and distribute them. In addition to the purchase prices for the products, Elite will receive license fees in excess of 50% of net profits, which will be shared equally with SunGen, pursuant to the SunGen Agreement. The Lannett-SunGen Product Alliance has an initial term of three years and automatically renews for one-year periods absent prior written notice of non-renewal. In addition to customary termination provisions, the Agreement permits Lannett to terminate with regard to a product on at least six months’ prior written notice, and it permits Elite or Lannett to terminate with regard to a product if at any time after the first twelve months from the first commercial sale, the average license fee paid by Lannett for such product is less than $300,000 for a six month sales period. In addition to manufacturing fees and license fees, Lannett also paid a milestone, of $750,000 upon the March 2020 commercial launch of Amphetamine ER Capsules. This milestone payment was shared equally by Elite and SunGen, pursuant to the SunGen Agreement. |
Lannett-Elite Product Alliance [Member] | |
Manufacturing, License and Development Agreements (Textual) | |
Milestone method, description | Lannett-Elite Product Alliance, Lannett is the exclusive U.S. marketer and distributor for Dantrolene Capsules. Elite manufactures and Lannett purchases, markets and distributes this product. In addition to the purchase prices for the products, Elite receives license fees in excess of 50% of net profits. Net profits are defined as net sales less the price paid to Elite for the products, distribution fees (less than 10%) and shipping costs. The Lannett-Elite Product Alliance has an initial term of three years and automatically renews for one-year periods absent prior written notice of non-renewal. In addition to customary termination provisions, the Agreement permits Lannett to terminate with regard to a product on at least six months’ prior written notice and it permits Elite or Lannett to terminate with regard to a product if at any time after the first twelve months from the first commercial sale, the average license fee paid by Lannett for such product is less than $300,000 for a six month sales period. The first commercial shipment of Dantrolene Capsules occurred in June 2019. |
Precision Dose Agreement [Member] | |
Manufacturing, License and Development Agreements (Textual) | |
Milestone method, description | The Precision Dose Agreement provides for the marketing and distribution, by Precision Dose and its wholly owned subsidiary, TAGI Pharma, of Phentermine 37.5mg tablets (launched in April 2011), Phentermine 15mg capsules (launched in April 2013), Phentermine 30mg capsules (launched in April 2013), Hydromorphone 8mg tablets (launched in March 2012), Naltrexone 50mg tablets (launched in September 2013) and certain additional products that require approval from the FDA which has not been received. Precision Dose will have the exclusive right to market these products in the United States and Puerto Rico and a non-exclusive right to market the products in Canada. Pursuant to the Precision Dose License Agreement, Elite received $200k at signing, and is receiving milestone payments and a license fee which is based on profits achieved from the commercial sale of the products included in the agreement. |
Revenue | $ 200,000 |
Related Party Agreements with_2
Related Party Agreements with Mikah Pharma LLC (Details) | Dec. 03, 2018USD ($) |
Mikah [Member] | |
Advance payment for purchase received | $ 53,214 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended |
Jun. 30, 2020USD ($) | |
Income Tax (Textual) | |
Sale of net tax benefits | $ 607,635 |
Operating losses net tax | 338,772 |
Total proceeds | $ 946,407 |
Subsequent Events (Details)
Subsequent Events (Details) - shares | Jul. 08, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Common Stock [Member] | |||
Subsequent Events (Textual) | |||
Share issued | 4,000,000 | ||
2020 LPC Purchase Agreement [Member] | |||
Subsequent Events (Textual) | |||
Initial commitment shares | 5,975,857 | ||
2020 LPC Purchase Agreement [Member] | Subsequent Events [Member] | |||
Subsequent Events (Textual) | |||
Purchase agreement, description | The Company entered into a purchase agreement (the "2020 LPC Purchase Agreement"), and a registration rights agreement (the "2020 LPC Registration Rights Agreement"), with Lincoln Park Capital Fund, LLC ("Lincoln Park"), pursuant to which Lincoln Park has committed to purchase up to $25.0 million of the Company's common stock, $0.001 par value per share, from time to time over the term of the 2020 LPC Purchase Agreement, at the Company's direction. Under the terms and subject to the conditions of the 2020 LPC Purchase Agreement, the Company has the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park is obligated to purchase, up to $25.0 million of the Company's Common Stock. Sales of Common Stock by the Company, if any, will be subject to certain limitations set forth in the 2020 LPC Purchase Agreement, and may occur from time to time, at the Company's sole discretion, over the 36-month period commencing on July 27, 2020, the date that the registration statement covering the resale of the shares of Common Stock that have been and may be issued under the 2020 LPC Purchase Agreement was declared effective by the Securities and Exchange Commission (the "SEC") and the other conditions to Lincoln Park's obligation to purchase such shares set forth in the Purchase Agreement, all of which are outside of Lincoln Park's control, were satisfied. Under the 2020 LPC Purchase Agreement, the Company may direct Lincoln Park to purchase up to 500,000 shares of Common Stock on such business day (each, a "Regular Purchase"), provided, however, that (i) the Regular Purchase may be increased to up to 600,000 shares, provided that the closing sale price of the Common Stock is not below $0.15 on the purchase date; (ii) the Regular Purchase may be increased to up to 700,000 shares, provided that the closing sale price of the Common Stock is not below $0.20 on the purchase date; (iii) the Regular Purchase may be increased to up to 800,000 shares, provided that the closing sale price of the Common Stock is not below $0.25 on the purchase date; and (iv) the Regular Purchase may be increased to up to 900,000 shares, provided that the closing sale price of the Common Stock is not below $0.30 on the purchase date. In each case, Lincoln Park's maximum dollar commitment in any single Regular Purchase may not exceed $1,000,000. The purchase price per share for each such Regular Purchase will be based on an agreed upon fixed discount to the prevailing market prices of the Company's Common Stock immediately preceding the time of sale. In addition to Regular Purchases, the Company may also direct Lincoln Park to purchase other amounts as accelerated purchases and as additional accelerated purchases if the closing sale price of the Common Stock is not less than $0.03 per share at such times as set forth in the 2020 LPC Purchase Agreement. There are no upper limits on the price per share that Lincoln Park must pay for shares of Common Stock. The above-referenced share amount limitations and closing sale price thresholds are subject to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction as provided in the 2020 LPC Purchase Agreement. | ||
Common stock ownership percentage | 4.99% | ||
2020 LPC Purchase Agreement [Member] | Subsequent Events [Member] | Common Stock [Member] | |||
Subsequent Events (Textual) | |||
Share issued | 5,975,857 | ||
Additional commitment shares issued | 5,975,857 |