Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 12, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'Imprimis Pharmaceuticals, Inc. | ' |
Entity Central Index Key | '0001360214 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 9,130,376 |
Document Fiscal Period Focus | 'Q2 | ' |
Document Fiscal Year Focus | '2014 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Current assets | ' | ' |
Cash and cash equivalents | $12,101,796 | $15,579,309 |
Restricted short-term investment | 150,151 | 50,097 |
Accounts receivable, net | 81,149 | ' |
Inventories | 172,750 | ' |
Prepaid expenses and other current assets | 324,245 | 105,067 |
Total current assets | 12,830,091 | 15,734,473 |
Intangible assets, net | 641,567 | ' |
Goodwill | 331,621 | ' |
Furniture and equipment, net | 75,767 | 26,892 |
TOTAL ASSETS | 13,879,046 | 15,761,365 |
Current liabilities | ' | ' |
Accounts payable and accrued expenses | 750,106 | 311,924 |
Accrued payroll and related liabilities | 553,109 | 338,703 |
Customer deposits | 617 | ' |
Current portion of contingent acquisition obligations | 31,466 | ' |
Current portion of capital lease obligation | 6,428 | ' |
Total current liabilities | 1,341,726 | 650,627 |
Capital lease obligation, net of current portion | 10,168 | ' |
Contingent acquisition obligations, net of current portion | 483,156 | ' |
TOTAL LIABILITIES | 1,835,050 | 650,627 |
STOCKHOLDERS' EQUITY | ' | ' |
Common stock, $0.001 par value, 395,000,000 shares authorized, 9,127,870 and 8,970,364 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively | 9,128 | 8,970 |
Additional paid-in capital | 48,703,148 | 46,849,160 |
Accumulated deficit | -36,668,280 | -31,747,392 |
TOTAL STOCKHOLDERS' EQUITY | 12,043,996 | 15,110,738 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $13,879,046 | $15,761,365 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 395,000,000 | 395,000,000 |
Common stock, shares issued | 9,127,870 | 8,970,364 |
Common stock, shares outstanding | 9,127,870 | 8,970,364 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Revenues: | ' | ' | ' | ' |
Pharmacy sales, net | $664,370 | ' | $664,370 | ' |
License revenues | 3,331 | 2,500 | 4,741 | 5,000 |
Total revenues | 667,701 | 2,500 | 669,111 | 5,000 |
Cost of pharmacy sales | -476,549 | ' | -476,549 | ' |
Gross profit | 191,152 | 2,500 | 192,562 | 5,000 |
Operating Expenses: | ' | ' | ' | ' |
Selling and marketing | 469,188 | ' | 825,896 | ' |
General and administrative | 2,289,233 | 1,556,145 | 4,209,255 | 2,576,094 |
Research and development | 35,571 | 677,347 | 95,723 | 1,132,447 |
Total operating expenses | 2,793,992 | 2,233,492 | 5,130,874 | 3,708,541 |
Loss from operations | -2,602,840 | -2,230,992 | -4,938,312 | -3,703,541 |
Other income (expense): | ' | ' | ' | ' |
Interest expense | -1,565 | ' | -1,565 | ' |
Interest income | 8,680 | 12,940 | 18,989 | 20,008 |
Total other income, net | 7,115 | 12,940 | 17,424 | 20,008 |
Net loss | ($2,595,725) | ($2,218,052) | ($4,920,888) | ($3,683,533) |
Basic and diluted net loss per share of common stock | ($0.28) | ($0.25) | ($0.54) | ($0.44) |
Weighted average number of shares of common stock outstanding, basic and diluted | 9,109,842 | 8,890,668 | 9,060,496 | 8,342,497 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' |
Net loss | ($4,920,888) | ($3,683,533) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation of furniture and equipment | 10,411 | 2,073 |
Amortization of intangible assets | 17,433 | ' |
Stock-based compensation and payments | 1,396,692 | 1,448,384 |
Changes in assets and liabilities, net of effects from acquisitions: | ' | ' |
Accounts receivable | -22,729 | ' |
Inventories | 40,440 | ' |
Prepaid expenses and other current assets | -215,625 | -278,956 |
Accounts payable and accrued expenses | 318,134 | 283,985 |
Accrued payroll and related liabilities | 178,930 | 163,617 |
Customer deposits | -11,699 | ' |
Deferred revenue | ' | 1,667 |
NET CASH USED IN OPERATING ACTIVITIES | -3,208,901 | -2,062,763 |
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' |
Purchase of restricted short-term investments | -100,000 | -50,000 |
Purchase of Pharmacy Creations, LLC, net of cash and advances | -636,374 | ' |
Purchases of furniture and equipment | -14,776 | -5,172 |
NET CASH USED IN INVESTING ACTIVITIES | -751,150 | -55,172 |
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' |
Cancelled common stock | ' | -192 |
Payments on capital lease obligation | -1,565 | ' |
Net proceeds from the exercise of warrants and stock options | 484,103 | ' |
Proceeds from issuance of common stock and warrants for cash, net of offering costs | ' | 10,052,832 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 482,538 | 10,052,640 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | -3,477,513 | 7,934,705 |
CASH AND CASH EQUIVALENTS, beginning of period | 15,579,309 | 10,035,615 |
CASH AND CASH EQUIVALENTS, end of period | 12,101,796 | 17,970,320 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ' | ' |
Cash paid for income taxes | 800 | 1,600 |
Cash paid for interest | 1,565 | ' |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ' | ' |
Reclassification of deferred offering costs in connection with equity offering | ' | 596,281 |
Issuance of common stock for consulting services included in accounts payable and accrued expenses | ' | $139,444 |
Overview_Basis_of_Presentation
Overview, Basis of Presentation and Summary of Significant Accounting Policies | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||||||||||||||
Overview, Basis of Presentation and Summary of Significant Accounting Policies | ' | ||||||||||||||||
NOTE 1. OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||
Company and Background | |||||||||||||||||
Imprimis Pharmaceuticals, Inc. (“Imprimis” or the “Company”) is a vertically-integrated specialty pharmaceutical company dedicated to delivering high quality, novel and customizable medicines to physicians and patients at accessible prices. Imprimis is pioneering a new commercial pathway using compounding pharmacies for the formulation and distribution of its proprietary drug therapies which include formulations in ophthalmology, wound management and urology. | |||||||||||||||||
On April 1, 2014, the Company acquired Pharmacy Creations, LLC (“PC”), a New Jersey based compounding pharmacy; effective with this acquisition the Company commenced sales and marketing efforts surrounding Imprimis’ portfolio of proprietary and non-proprietary drug formulations. | |||||||||||||||||
Basis of Presentation | |||||||||||||||||
Imprimis has prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. For further information, refer to the Company’s audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. | |||||||||||||||||
The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. | |||||||||||||||||
Business Combinations | |||||||||||||||||
The Company accounts for business combinations by recognizing the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at their fair values on the acquisition date. The purchase price allocation process requires management to make significant estimates and assumptions, especially at acquisition date with respect to intangible assets, estimated contingent consideration payments and pre-acquisition contingencies. Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to: | |||||||||||||||||
● | future expected cash flows from product sales, support agreements, consulting contracts, other customer contracts, and acquired developed technologies and patents; and | ||||||||||||||||
● | discount rates utilized in valuation estimates. | ||||||||||||||||
Unanticipated events and circumstances may occur which may affect the accuracy or validity of such assumptions, estimates or actual results. Additionally, any change in the fair value of the acquisition-related contingent consideration subsequent to the acquisition date, including changes from events after the acquisition date, such as changes in our estimate of the revenue targets, will be recognized in earnings in the period of the estimated fair value change. A change in fair value of the acquisition-related contingent consideration could have a material effect on the financial position, results of operations, or cash flows in the period of the change in estimate. | |||||||||||||||||
Research and Development | |||||||||||||||||
The Company expenses all costs related to research and development as they are incurred. Research and development expenses consist of expenses incurred in performing research and development activities including salaries and benefits, and other overhead expenses, and costs related to clinical trials, contract services and outsourced contracts. | |||||||||||||||||
Intellectual Property | |||||||||||||||||
The costs of acquiring intellectual property rights to be used in the research and development process, including licensing fees and milestone payments, are charged to research and development expense as incurred in situations where the Company has not identified an alternative future use for the acquired rights, and are capitalized in situations where the Company has identified an alternative future use. No costs associated with acquiring intellectual property rights have been capitalized to date. Costs of maintaining intellectual property rights are expensed as incurred. | |||||||||||||||||
Revenue Recognition and Deferred Revenue | |||||||||||||||||
The Company recognizes revenues when all of the following criteria have been met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. The Company began generating revenues upon the acquisition of PC in the second quarter of 2014, which includes sales of certain of our proprietary compounded drug formulations. | |||||||||||||||||
Product Revenues | |||||||||||||||||
Determination of criteria (3) and (4) is based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product has not been delivered or are subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required. | |||||||||||||||||
License Revenues | |||||||||||||||||
License arrangements may consist of non-refundable upfront license fees, data transfer fees, research reimbursement payments, exclusive licensed rights to patented or patent pending compounds, technology access fees, and various performance or sales milestones. These arrangements can be multiple element arrangements. | |||||||||||||||||
Non-refundable fees that are not contingent on any future performance by us, and require no consequential continuing involvement on our part, are recognized as revenue when the license term commences and the licensed data, technology and/or compounded drug preparations is delivered. Such deliverables may include physical quantities of compounded drug preparations, design of the compounded drug preparations and structure-activity relationships, the conceptual framework and mechanism of action, and rights to the patents or patents pending for such compounded drug preparations. We defer recognition of non-refundable fees if we have continuing performance obligations without which the technology, right, product or service conveyed in conjunction with the non-refundable fee has no utility to the licensee that is separate and independent of our performance under the other elements of the arrangement. In addition, if we have required continuing involvement through research and development services that are related to our proprietary know-how and expertise of the delivered technology, or can only be performed by us, then such up-front fees are deferred and recognized over the period of continuing involvement. Guaranteed minimum annual royalties are recognized on a straight-line basis over the applicable term. | |||||||||||||||||
During the three and six months ended June 30, 2014 and 2013, the Company recorded $3,331, $4,741 and $2,500, $5,000, respectively, in revenues, related to royalty payments. In January 2013, the Company entered into a license agreement with ResolutionMD, LLC granting ResolutionMD, LLC rights to its Accudel delivery technology to be used for anti-cellulite formulations. Under the license agreement, the Company received $10,000 as a guaranteed minimum royalty amount for the year ended December 31, 2013. The Company is due annual guaranteed minimum royalty payments and additional royalty payments based on a percent (generally, 5%-7%) of net sales of any products covered under the license agreement in excess of the guaranteed amounts. The license agreement with ResolutionMD, LLC, unless terminated earlier, has a term of ten years following the first commercial sale of a product that is covered under the license agreement. The Company does not anticipate that the license agreement with ResolutionMD, LLC will generate significant revenues for the 2014 fiscal year. | |||||||||||||||||
Cost of Sales | |||||||||||||||||
Cost of sales includes direct and indirect costs to manufacture formulations and products sold, including active pharmaceutical ingredients, personnel costs, packaging, storage, royalties (see Note 11), shipping and handling costs and the write-off of obsolete inventory. | |||||||||||||||||
Income Taxes | |||||||||||||||||
The Company accounts for income taxes under the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, “Income Taxes”, or ASC 740. As of June 30, 2014, there were no unrecognized tax benefits included in the condensed consolidated balance sheets that would, if recognized, affect the effective tax rate. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties in its condensed consolidated balance sheets at June 30, 2014 and December 31, 2013, and has not recognized interest and/or penalties in the condensed consolidated statements of operations for the periods ended June 30, 2014 and 2013. The Company is subject to taxation in the United States and California. The Company’s tax years for 2000 and forward are subject to examination by the federal and state tax authorities due to the carry forward of unutilized net operating losses. | |||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||
Cash equivalents include short-term, highly liquid investments with maturities of three months or less at the time of acquisition. | |||||||||||||||||
Concentrations of Credit Risk | |||||||||||||||||
The Company places its cash with financial institutions deemed by management to be of high credit quality. The Federal Deposit Insurance Corporation (“FDIC”) provides basic deposit coverage with limits up to $250,000 per owner. At June 30, 2014, the Company had approximately $11.8 million in cash deposits in excess of FDIC limits. | |||||||||||||||||
Accounts Receivable | |||||||||||||||||
The balance in accounts receivable consists of revenue amounts the Company has invoiced and recognized, but for which payment has not been received. Accounts receivable are presented net of an allowance for doubtful accounts in the amount of $3,957 as of June 30, 2014. | |||||||||||||||||
Inventories | |||||||||||||||||
Inventories are stated at the lower of cost or market. Cost is determined on a first-in, first-out (“FIFO”) basis. The Company evaluates the carrying value of inventories on a regular basis, based on the price expected to be obtained for products in their respective markets compared with historical cost. Write-downs of inventories are considered to be permanent reductions in the cost basis of inventories. | |||||||||||||||||
The Company also regularly evaluates its inventories for excess quantities and obsolescence (expiration), taking into account such factors as historical and anticipated future sales or use in production compared to quantities on hand and the remaining shelf life of products and active pharmaceutical ingredients on hand. The Company establishes reserves for excess and obsolete inventories as required based on its analyses. | |||||||||||||||||
Furniture and Equipment | |||||||||||||||||
Furniture and equipment is stated at cost less accumulated depreciation and amortization. Depreciation and amortization is calculated using the straight-line method over the estimated useful life of the asset. Leasehold improvements are amortized over the estimated useful life or remaining lease term, whichever is shorter. Computer software and hardware, and furniture and equipment are depreciated over three to five years. | |||||||||||||||||
Goodwill and Intangible Assets | |||||||||||||||||
The Company will review its goodwill and indefinite-lived intangible assets for impairment as of January 1 of each year or when an event or a change in circumstances indicates the fair value of a reporting unit may be below its carrying amount. Events or changes in circumstances considered as impairment indicators include but are not limited to the following: | |||||||||||||||||
● | significant underperformance of the Company’s business relative to expected operating results; | ||||||||||||||||
● | significant adverse economic and industry trends; | ||||||||||||||||
● | significant decline in the Company’s market capitalization for an extended period of time relative to net book value; and | ||||||||||||||||
● | expectations that a reporting unit will be sold or otherwise disposed. | ||||||||||||||||
The annual goodwill impairment test consists of a two-step process as follows: | |||||||||||||||||
Step 1. The Company compares the fair value of each reporting unit to its carrying amount, including the existing goodwill. The fair value of each reporting unit is determined using a discounted cash flow valuation analysis. The carrying value of each reporting unit is determined by specifically identifying and allocating the assets and liabilities to each reporting unit based on headcount, relative revenues, or other methods as deemed appropriate by management. If the carrying amount of a reporting unit exceeds its fair value, an indication exists that the reporting unit’s goodwill may be impaired and the Company then performs the second step of the impairment test. If the fair value of a reporting unit exceeds its carrying amount, no further analysis is required. | |||||||||||||||||
Step 2. If further analysis is required, the Company compares the implied fair value of the reporting unit’s goodwill, determined by allocating the reporting unit’s fair value to all of its assets and its liabilities in a manner similar to a purchase price allocation, to its carrying amount. If the carrying amount of the reporting unit’s goodwill exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess. | |||||||||||||||||
Impairment of Long-Lived Assets | |||||||||||||||||
Long-lived assets, such as furniture, and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the consolidated balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposal group classified as held-for-sale would be presented separately in the appropriate asset and liability sections of the consolidated balance sheet, if material. | |||||||||||||||||
During the three and six months ended June 30, 2014 and 2013, the Company did not recognize any impairment of long-lived assets. | |||||||||||||||||
Deferred Rent | |||||||||||||||||
The Company accounts for rent expense related to its operating leases by determining total minimum rent payments on the leases over their respective periods and recognizing the rent expense on a straight-line basis. The difference between the actual amount paid and the amount recorded as rent expense in each fiscal year is recorded as an adjustment to deferred rent. | |||||||||||||||||
Fair Value Measurements | |||||||||||||||||
Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability. GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The established fair value hierarchy prioritizes the use of inputs used in valuation methodologies into the following three levels: | |||||||||||||||||
● | Level 1: Applies to assets or liabilities for which there are quoted prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and must be used to measure fair value whenever available. | ||||||||||||||||
● | Level 2: Applies to assets or liabilities for which there are significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. | ||||||||||||||||
● | Level 3: Applies to assets or liabilities for which there are significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. For example, Level 3 inputs would relate to forecasts of future earnings and cash flows used in a discounted future cash flows method. | ||||||||||||||||
At June 30, 2014 and December 31, 2013, the Company did not have any financial assets or liabilities which are measured on a recurring basis. At June 30, 2014 and December 31, 2013, the Company’s financial instruments include cash and cash equivalents, restricted short-term investments, accounts receivable, accounts payable and accrued expenses, accrued payroll and related liabilities, customer deposits, and capital lease. The carrying amount of these financial instruments, except for the restricted short-term investment and capital lease, approximates fair value due to the short-term maturities of these instruments. The Company’s restricted short-term investments are carried at amortized cost which approximates fair value. Based on borrowing rates currently available to the Company, the carrying value of the capital lease approximates fair value. | |||||||||||||||||
Stock-Based Compensation | |||||||||||||||||
All stock-based payments to employees and consultants, including grants of stock options, warrants, restricted stock units (“RSUs”) and restricted stock, are recognized in the condensed consolidated financial statements based upon their fair values. The Company uses the Black-Scholes-Merton option pricing model and Monte Carlo Simulation to estimate the fair value of stock-based awards. The fair value is determined at the date of grant. The financial statement effect of forfeitures is estimated at the time of grant and revised, if necessary, if the actual effect differs from those estimates. | |||||||||||||||||
The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows FASB guidance. As such, the value of the applicable stock-based compensation is periodically remeasured and income or expense is recognized during their vesting terms. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is primarily recognized over the term of the consulting agreement. In accordance with FASB guidance, an asset acquired in exchange for the issuance of fully vested, nonforfeitable equity instruments should not be presented or classified as an offset to equity on the grantor’s balance sheet once the equity instrument is granted for accounting purposes. Accordingly, the Company records the fair value of nonforfeitable equity instruments issued for future consulting services as prepaid stock-based consulting expenses in its consolidated balance sheets. | |||||||||||||||||
The Company recorded stock-based compensation (including the amortization of stock-based prepaid consulting fees) related to equity instruments granted to employees, directors and consultants as follows: | |||||||||||||||||
For the | For the | For the | For the | ||||||||||||||
Three Months Ended | Three Months Ended | Six Months Ended | Six Months Ended | ||||||||||||||
30-Jun-14 | 30-Jun-13 | 30-Jun-14 | 30-Jun-13 | ||||||||||||||
Employees - selling and marketing | $ | 16,994 | $ | - | $ | 30,861 | $ | - | |||||||||
Employees - general and administrative | 561,733 | 378,895 | 1,105,000 | 464,898 | |||||||||||||
Employees - research and development | - | 44,619 | - | 111,750 | |||||||||||||
Directors - general and administrative | 42,147 | 45,458 | 84,293 | 248,250 | |||||||||||||
Consultants - selling and marketing | 14,730 | - | 30,783 | - | |||||||||||||
Consultants - general and administrative | 18,337 | 345,605 | 86,839 | 505,527 | |||||||||||||
Consultants - research and development | 4,814 | 180,559 | 8,916 | 117,959 | |||||||||||||
Total | $ | 658,755 | $ | 995,136 | $ | 1,346,692 | $ | 1,448,384 | |||||||||
During the six months ended June 30, 2014, the Company issued 6,868 shares of common stock, valued at $50,000 in connection with the resolution of a contract dispute. | |||||||||||||||||
Basic and Diluted Net Loss per Common Share | |||||||||||||||||
Basic net loss per common share is computed by dividing net loss attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders for the period by the weighted average number of common and common equivalent shares, such as stock options and warrants outstanding during the period. | |||||||||||||||||
Basic and diluted net loss applicable to common stock per share is computed using the weighted average number of shares of common stock outstanding during the period. Common stock equivalents (using the treasury stock or, “if converted” method) from convertible notes, preferred stock, stock options, unvested restricted stock units (“RSUs”) and warrants were 3,419,149 and 3,138,004 at June 30, 2014 and 2013, respectively, and are excluded from the calculation of diluted net loss per share for all periods presented because the effect is anti-dilutive. | |||||||||||||||||
The following table shows the computation of basic and diluted net loss per share of common stock for the three and six months ended June 30, 2014 and 2013: | |||||||||||||||||
For the | For the | For the | For the | ||||||||||||||
Three Months Ended | Three Months Ended | Six Months Ended | Six Months Ended | ||||||||||||||
30-Jun-14 | 30-Jun-13 | 30-Jun-14 | 30-Jun-13 | ||||||||||||||
Numerator – net loss | $ | (2,595,725 | ) | $ | (2,218,052 | ) | $ | (4,920,888 | ) | $ | (3,683,533 | ) | |||||
Denominator – weighted average number of shares of common stock outstanding, basic and diluted | 9,109,842 | 8,890,668 | 9,060,496 | 8,342,497 | |||||||||||||
Net loss per share, basic and diluted | $ | (0.28 | ) | $ | (0.25 | ) | $ | (0.54 | ) | $ | (0.44 | ) | |||||
Use of Estimates | |||||||||||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management are, among others, valuation of deferred taxes, goodwill and, intangible assets, recoverability of long-lived assets and goodwill, and valuation of stock-based compensation issued to employees and non-employees. Actual results could differ from those estimates. | |||||||||||||||||
Reclassifications | |||||||||||||||||
Certain prior period items and amounts have been reclassified to conform to the classifications used to prepare the 2014 condensed consolidated financial statements. The Company has classified certain expenses as selling and marketing whereas in prior periods certain selling and marketing expenses were included as an expense line item titled selling, general and administrative in the condensed consolidated statements of operations. These reclassifications had no material impact on the Company’s financial position, results of operations, or cash flows as previously reported. | |||||||||||||||||
Recently Adopted Accounting Pronouncements | |||||||||||||||||
In July 2013, the FASB issued ASU No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” ASU 2013-11 provides explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013, with an option for early adoption. This pronouncement is effective for reporting periods beginning on or after January 1, 2013. The adoption of ASU 2011-11 did not have a material impact on the Company’s condensed consolidated financial statements. | |||||||||||||||||
In June 2014, the FASB issued ASU No. 2014-10, “Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities”. The amendments in this update remove the definition of a development stage entity from ASC Topic 915, Development Stage Entities, thereby removing the distinction between development stage entities and other reporting entities from GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information on the statements of operations, cash flows, and stockholder’s equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. These amendments are effective for annual reporting periods beginning after December 15, 2014, with early application of the amendments permitted. The Company’s pharmacy operations commenced on April 1, 2014. This change in the nature of the Company’s operations included the recognition of significant revenues; as a result the Company is no longer defined as a development stage company for reporting dates beginning, April 1, 2014. With the change in the Company’s operations, revenue recognition and its immediate adoption of ASU No. 2014-10, the Company no longer presents or discloses any information required under ASC Topic 915. | |||||||||||||||||
Recently Announced Accounting Pronouncements | |||||||||||||||||
In May 2014, FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” The objective of ASU 2014-19 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle of ASU 2014-09 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the new guidance, an entity will (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the contract’s performance obligations; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB ASC. The new guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2016 for public companies. Early adoption is not permitted. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. |
Acquisition_Pharmacy_Creations
Acquisition - Pharmacy Creations, Llc | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Business Combinations [Abstract] | ' | ||||||||||||||||
Acquisition - Pharmacy Creations, Llc | ' | ||||||||||||||||
NOTE 2. ACQUISITION – PHARMACY CREATIONS, LLC | |||||||||||||||||
On April 1, 2014, the Company acquired all of the outstanding membership interests of PC (the “PC Acquisition”) from J. Scott Karolchyk and Bernard Covalesky (the “Sellers”), such that PC became a wholly-owned subsidiary of the Company. The acquisition of PC permits the Company to make and distribute its patent-pending proprietary drug formulations and other pharmaceutical preparations. | |||||||||||||||||
The transaction has been accounted for as a business combination and the financial results of PC have been included in the Company’s condensed consolidated financial statements for the period subsequent to its acquisition. | |||||||||||||||||
The estimated acquisition date fair value of consideration transferred, assets acquired and liabilities assumed for PC are presented below and represent the Company’s best estimates. | |||||||||||||||||
Fair Value of Consideration Transferred | |||||||||||||||||
At the closing of the PC Acquisition, the Company paid to the Sellers an aggregate cash purchase price of $600,000. In addition, the Sellers are entitled to receive additional contingent consideration upon the satisfaction of certain conditions: | |||||||||||||||||
● | A contingent cash payment of $50,000, payable if PC earns revenue of over $3,500,000 for the 12 month period ending March 31, 2015. | ||||||||||||||||
● | A contingent stock payment of up to an aggregate of 215,190 shares of the Company’s common stock, issuable only if the following revenue milestones are met: | ||||||||||||||||
● | if the Company earns revenue of over $7,500,000 during the 12 month period ending March 31, 2016, all 215,190 shares; | ||||||||||||||||
● | if the Company earns revenue of between $3,500,000 and $7,500,000 during the 12 month period ending March 31, 2016, an aggregate of that number of shares of Imprimis common stock equal to the amount that such revenue exceeds $3,500,000 divided by 18.5882, rounded down to the lower whole number (not to exceed 215,190 shares). | ||||||||||||||||
Management estimates that earnout payments will be made, however, it has applied a discount rate to represent the risk of these not occurring in determining the fair value. The total acquisition date fair value of the consideration to be transferred is estimated at approximately $1.1 million, as follows: | |||||||||||||||||
Cash payment to sellers at closing | $ | 600,000 | |||||||||||||||
Contingent common stock issuance to the Sellers | 483,156 | ||||||||||||||||
Contingent cash consideration to the Sellers | 31,466 | ||||||||||||||||
Total acquisition date fair value | $ | 1,114,622 | |||||||||||||||
A liability was recognized for an estimate of the acquisition date fair value of the future contingent common stock and cash payments and is included in the contingent acquisition obligations in the accompanying condensed consolidated balance sheet at June 30, 2014. | |||||||||||||||||
Allocation of Consideration Transferred | |||||||||||||||||
The identifiable assets acquired and liabilities assumed were recognized and measured as of the acquisition date based on their estimated fair values as of April 1, 2014, the acquisition date. The excess of the acquisition date fair value of consideration transferred over estimated fair value of the net tangible assets and intangible assets acquired was recorded as goodwill. | |||||||||||||||||
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. | |||||||||||||||||
Cash and cash equivalents | $ | 4,982 | |||||||||||||||
Accounts receivable | 58,420 | ||||||||||||||||
Prepaid expenses and other assets | 30,256 | ||||||||||||||||
Inventory | 213,190 | ||||||||||||||||
Property and equipment | 44,510 | ||||||||||||||||
Intangible assets | 659,000 | ||||||||||||||||
Total identifiable assets acquired | 1,010,358 | ||||||||||||||||
Accounts payable and accrued liabilities | 120,049 | ||||||||||||||||
Other liabilities | 107,308 | ||||||||||||||||
Total liabilities assumed | 227,357 | ||||||||||||||||
Total identifiable assets less liabilities assumed | 783,001 | ||||||||||||||||
Goodwill | 331,621 | ||||||||||||||||
Net assets acquired | $ | 1,114,622 | |||||||||||||||
The fair value adjustments made herein and the allocation of purchase price is preliminary. The final allocation will be based on estimates and appraisals that will be finalized within one year of the closing of the PC Acquisition and based on the Company’s final evaluation of PC’s assets and liabilities, including both tangible and intangible assets. The final allocation of purchase price and the resulting effect on net income loss may differ from the amounts included herein. If the Company’s final purchase price allocation differs from the allocation used in preparing these condensed consolidated financial statements, the Company’s tangible and intangible assets and net loss could be higher or lower. | |||||||||||||||||
Results of Operations | |||||||||||||||||
The amount of revenues and operating loss of PC included in the Company’s condensed consolidated statement of operations from the acquisition date through the period ended June 30, 2014 is as follows: | |||||||||||||||||
Total revenues | $ | 664,370 | |||||||||||||||
Operating loss | $ | (423,589 | ) | ||||||||||||||
Pro Forma Financial Information | |||||||||||||||||
The following table presents the Company’s unaudited pro forma results (including PC) for the three and six months ended June 30, 2014 and 2013 as though the companies had been combined as of the beginning of each of the periods presented. The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of each period presented nor is it indicative of results of operations which may occur in the future. The unaudited pro forma results presented include amortization charges for intangible assets and eliminations of intercompany transactions. | |||||||||||||||||
For the | For the | For the | For the | ||||||||||||||
Three Months Ended | Three Months Ended | Six Months Ended | Six Months Ended | ||||||||||||||
30-Jun-14 | 30-Jun-13 | 30-Jun-14 | 30-Jun-13 | ||||||||||||||
Total revenues | $ | 667,701 | $ | 744,299 | $ | 1,286,805 | $ | 1,453,050 | |||||||||
Net loss | $ | (2,595,725 | ) | $ | (2,054,878 | ) | $ | (4,854,258 | ) | $ | (3,374,915 | ) | |||||
The Company did not incur material acquisition expenses related to the PC Acquisition. | |||||||||||||||||
Intangible Assets | |||||||||||||||||
Management engaged a third-party valuation firm to assist in the determination of the fair value of the intangible assets. In determining the fair value of the intangible assets the Company considered, among other factors, the best use of acquired assets, analyses of historical financial performance and estimates of future performance of PC. The fair values of the identified intangible assets related to the customer relationships, trade name, non-competition covenant, and state pharmacy licenses. The fair value of customer relationships and non-competition covenant were calculated using the income approach. The fair value of the trade name and pharmacy licenses were calculated using the cost approach. The following table sets forth the components of identified intangible assets associated with the PC acquisition and their estimated useful lives. | |||||||||||||||||
Fair Value | Useful Life | ||||||||||||||||
Customer relationships | $ | 596,000 | 10 -15 years | ||||||||||||||
Trade Name | 5,000 | 5 years | |||||||||||||||
Non-compete covenant | 50,000 | 4 years | |||||||||||||||
Licenses | 8,000 | 25 years | |||||||||||||||
$ | 659,000 | ||||||||||||||||
The Company determined the useful lives of intangible assets based on the expected future cash flows and contractual lives associated with the respective asset. Trade names represent the fair value of the brand and name recognition associated with the marketing of PC’s formulations and services. Customer relationships represent the expected benefit from future contracts which, at the date of acquisition, were reasonably anticipated to continue given the history and operating practices of PC. Non-competition covenant clause represents the contractual period and expected degree of adverse economic impact that would exist in its absence. Licenses represent eight state pharmacy licenses PC held at the date of acquisition. | |||||||||||||||||
Goodwill | |||||||||||||||||
Of the total estimated purchase price, $331,621 was allocated to goodwill and is attributable to expected synergies between the combined companies, including access for the Company to distribute its patent-pending proprietary drug formulations through PC's market channels and the assembled workforce. Goodwill represents the excess of the purchase price of the acquired business over the fair value of the underlying net tangible and intangible assets acquired. Goodwill resulting from the PC Acquisition will be tested for impairment at least annually and more frequently if certain indicators are present. In the event the Company determines that the value of goodwill has become impaired, it will incur an accounting charge for the amount of the impairment during the fiscal quarter in which the determination is made. None of the goodwill is expected to be deductible for income tax purposes. |
Restricted_ShortTerm_Investmen
Restricted Short-Term Investment | 6 Months Ended |
Jun. 30, 2014 | |
Restricted Short-Term Investment | ' |
Restricted Short-Term Investment | ' |
NOTE 3. RESTRICTED SHORT-TERM INVESTMENTS | |
The restricted short-term investments at June 30, 2014 and December 31, 2013 consist of certificates of deposit, which are classified as held-to-maturity. At June 30, 2014 and December 31, 2013, the restricted short-term investments was recorded at amortized cost which approximates fair value. | |
At June 30, 2014 and December 31, 2013, the certificates of deposit of $150,151 and $50,097, respectively, were classified as a current asset. The certificates of deposit are required as collateral under the Company’s corporate credit card agreement and additional security for office space lease, and automatically renew every twelve months. |
Inventories
Inventories | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Inventory Disclosure [Abstract] | ' | ||||
Inventories | ' | ||||
NOTE 4. INVENTORIES | |||||
Inventories are comprised of over-the-counter (“OTC”) retail pharmacy products, commercial pharmaceutical products, related laboratory supplies and active pharmaceutical ingredients. The composition of inventories as of June 30, 2014 was as follows: | |||||
30-Jun-14 | |||||
Raw materials | $ | 164,127 | |||
Finished goods | 8,623 | ||||
Total inventories | $ | 172,750 |
Prepaid_Expenses_and_Other_Cur
Prepaid Expenses and Other Current Assets | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Prepaid Expenses And Other Current Assets | ' | ||||||||
Prepaid Expenses and Other Current Assets | ' | ||||||||
NOTE 5. PREPAID EXPENSES AND OTHER CURRENT ASSETS | |||||||||
Prepaid expenses and other current assets consisted of the following: | |||||||||
30-Jun-14 | |||||||||
(unaudited) | December 31, 2013 | ||||||||
Prepaid stock-based consulting expenses | $ | - | $ | 26,649 | |||||
Prepaid rent | 21,875 | 16,288 | |||||||
Prepaid insurance | 180,519 | 39,166 | |||||||
Other prepaid expenses and deposits | 121,851 | 22,964 | |||||||
Total prepaid expenses and other current assets | $ | 324,245 | $ | 105,067 |
Intangible_Assets_and_Goodwill
Intangible Assets and Goodwill | 6 Months Ended | ||||||||||||||
Jun. 30, 2014 | |||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||
Intangible Assets and Goodwill | ' | ||||||||||||||
NOTE 6. INTANGIBLE ASSETS AND GOODWILL | |||||||||||||||
The Company’s intangible assets at June 30, 2014 consist of the following: | |||||||||||||||
Amortization | |||||||||||||||
periods | Accumulated | Net | |||||||||||||
(in years) | Cost | amortization | Carrying value | ||||||||||||
Customer relationships | 15-Oct | $ | 596,000 | $ | (9,933 | ) | $ | 586,067 | |||||||
Trade name | 5 | 5,000 | (250 | ) | 4,750 | ||||||||||
Non-compete | 4 | 50,000 | (6,250 | ) | 43,750 | ||||||||||
Licenses | 25 | 8,000 | (1,000 | ) | 7,000 | ||||||||||
$ | 659,000 | $ | (17,433 | ) | $ | 641,567 | |||||||||
Amortization expenses for intangible assets for the three and six months ended June 30, 2014 was as follows: | |||||||||||||||
For the | For the | ||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
30-Jun-14 | 30-Jun-14 | ||||||||||||||
Customer relationships | $ | 250 | $ | 250 | |||||||||||
Trade name | 9,933 | 9,933 | |||||||||||||
Non-compete | 6,250 | 6,250 | |||||||||||||
Licenses | 1,000 | 1,000 | |||||||||||||
$ | 17,433 | $ | 17,433 | ||||||||||||
Estimated future amortization expense for the Company’s intangible assets as June 30, 2014 is as follows: | |||||||||||||||
Years ending December 31, | |||||||||||||||
Remainder of 2014 | $ | 23,600 | |||||||||||||
2015 | $ | 53,500 | |||||||||||||
2016 | $ | 53,500 | |||||||||||||
2017 | $ | 53,500 | |||||||||||||
2018 | $ | 44,100 | |||||||||||||
The changes in the carrying value of the Company’s goodwill during the six months ended June 30, 2014 were as follows: | |||||||||||||||
Balance at January 1, 2014: | |||||||||||||||
Goodwill | $ | - | |||||||||||||
Acquisition of PC | 331,621 | ||||||||||||||
Balance at June 30, 2014 | $ | 331,621 |
Accounts_Payable_and_Accrued_E
Accounts Payable and Accrued Expenses | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Accounts Payable and Accrued Expenses | ' | ||||||||
NOTE 7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |||||||||
Accounts payable and accrued expenses consisted of the following: | |||||||||
30-Jun-14 | |||||||||
(unaudited) | 31-Dec-13 | ||||||||
Accounts payable | $ | 750,106 | $ | 261,924 | |||||
Other accrued expenses | - | 50,000 | |||||||
Total accounts payable and accrued expenses | $ | 750,106 | $ | 311,924 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2014 | |
Debt Disclosure [Abstract] | ' |
Debt | ' |
NOTE 8. DEBT | |
Line of Credit | |
PC entered into a working capital line of credit agreement with a financial institution on March 21, 2008 and subsequently renewed the agreement on September 6, 2013. The line of credit had a maturity date of September 1, 2016. The line of credit agreement allowed PC to borrow of up to $75,000 and was secured by a first security interest on all business assets. PC was required to pay regular monthly payments of all accrued unpaid interest due monthly, with interest on the line of credit calculated as the greater of one of the following: (a) the Prime Rate (as defined and published in the Wall Street Journal) plus 1.00% per annum, or (b) 4.25% per annum. The line of credit agreement was terminated following the acquisition of PC, and no amounts were borrowed, paid or outstanding during the period ended June 30, 2014 following the Company’s acquisition of PC. |
Stockholders_Equity_and_Stockb
Stockholders' Equity and Stock-based Compensation | 6 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||||||
Stockholders' Equity and Stock-based Compensation | ' | ||||||||||||||||||||
NOTE 9. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION | |||||||||||||||||||||
Common Stock | |||||||||||||||||||||
During April 2014, the Company issued 6,868 shares of common stock, valued at $50,000, in connection with the resolution of a contract dispute. | |||||||||||||||||||||
During the six months ended June 30, 2014, the Company issued a total of 121,045 shares of common stock for gross proceeds of $446,610 for stock option exercises. | |||||||||||||||||||||
During the six months ended June 30, 2014, the Company issued 23,265 shares of common stock in connection with the exercise of common stock options to purchase 44,164 shares of common stock with exercise prices of $3.60 - $4.27 per share pursuant to cashless exercise provisions. | |||||||||||||||||||||
During the six months ended June 30, 2014, the Company issued 6,328 shares of common stock for gross proceeds of $37,493 for warrant exercises. | |||||||||||||||||||||
Preferred Stock | |||||||||||||||||||||
At June 30, 2014, the Company had 5,000,000 shares of preferred stock, $0.001 par value, authorized and no shares of preferred stock issued and outstanding. | |||||||||||||||||||||
Stock Option Plan | |||||||||||||||||||||
On September 17, 2007, the Company’s Board of Directors and stockholders adopted the Company’s 2007 Incentive Stock and Awards Plan, which was subsequently amended on November 5, 2008, February 26, 2012, July 18, 2012 , May 2, 2013 and September 27, 2013 (as amended, the “Plan”). As of June 30, 2014, the Plan provides for the issuance of a maximum of an aggregate of 5,000,000 shares of the Company’s common stock. The purpose of the Plan is to provide an incentive to attract and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons in the Company’s development and financial success. Under the Plan, the Company is authorized to issue incentive stock options intended to qualify under Section 422 of the Internal Revenue Code, non-qualified stock options and restricted stock. The Plan is administered by the Compensation Committee of the Company’s Board of Directors. | |||||||||||||||||||||
A summary of the Plan activity with respect to options to purchase common stock for the six months ended June 30, 2014 is as follows: | |||||||||||||||||||||
Number of shares | Weighted Avg. Exercise Price | Weighted Avg. Remaining Contractual Life | Aggregate Intrinsic Value | ||||||||||||||||||
Options outstanding - January 1, 2014 | 1,328,790 | $ | 5.31 | ||||||||||||||||||
Options granted | 225,886 | $ | 6.6 | ||||||||||||||||||
Options exercised | (165,209 | ) | $ | 3.69 | |||||||||||||||||
Options cancelled/forfeit | (75,000 | ) | $ | 6.3 | |||||||||||||||||
Options outstanding - June 30, 2014 | 1,314,467 | $ | 5.66 | 6.41 | $ | 2,532,926 | |||||||||||||||
Options exercisable | 795,441 | $ | 4.99 | 4.67 | $ | 2,046,478 | |||||||||||||||
Options vested and expected to vest | 1,262,564 | $ | 5.64 | 6.31 | $ | 2,484,281 | |||||||||||||||
The aggregate intrinsic value in the table above represents the total pre-tax amount of the proceeds, net of exercise price, which would have been received by option holders if all option holders had exercised and immediately sold all options with an exercise price lower than the market price on June 30, 2014, based on the closing price of the Company’s common stock of $6.94 on that date. The intrinsic value of stock options exercised during the six months ended June 30, 2014 was $644,113. | |||||||||||||||||||||
During the six months ended June 30, 2014, the Company granted stock options to certain employees, directors and consultants. The stock options were granted with an exercise price equal to the current market price of the Company’s common stock, as reported by the applicable quotation system of securities exchange on which the common stock was then quoted or listed, at the grant date and have contractual terms ranging from 5 to 10 years. Vesting terms for options granted to employees, directors and consultants typically included one of the following vesting schedules: 25% or 33% of the shares subject to the option vest and become exercisable on the first anniversary of the grant date and the remaining 75% or 67%, respectively, of the shares subject to the option vest and become exercisable quarterly in equal installments thereafter over two or three years, respectively; quarterly vesting over a three year period; annual vesting over three years; or monthly, quarterly or 100% vesting associated with the provision or completion of services provided under contracts with consultants. Certain option awards provide for accelerated vesting if there is a change in control (as defined in the Plan) and in the event of certain modifications to the option award agreement. | |||||||||||||||||||||
The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option pricing model. Prior to April 1, 2013, expected volatilities were based on historical volatility of the Company’s common stock and other factors. Following April 1, 2013, the expected volatility is based on the historical volatilities of the common stock of comparable publicly traded companies based on the Company’s belief that it has significantly changed its business operations and focus, and as a result, it currently has limited relevant historical data regarding the volatility of its stock price on which to base a meaningful estimate of expected volatility. The expected term of options granted was determined in accordance with the “simplified approach” as the Company has limited, relevant, historical data on employee exercises and post-vesting employment termination behavior. The expected risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The financial statement effect of forfeitures is estimated at the time of grant and revised, if necessary, if the actual effect differs from those estimates. For option grants to employees and directors, the Company assigns a forfeiture factor of 10%. These factors could change in the future, affecting the determination of stock-based compensation expense in future periods. Utilizing these assumptions, the fair value is determined at the date of grant. | |||||||||||||||||||||
The table below illustrates the fair value per share determined by the Black-Scholes-Merton option pricing model with the following assumptions used for valuing options granted to employees: | |||||||||||||||||||||
2014 | |||||||||||||||||||||
Weighted-average fair value of options granted | $ | 5.16 | |||||||||||||||||||
Expected terms (in years) | 5.81 - 6.91 | ||||||||||||||||||||
Expected volatility | 100 - 102% | ||||||||||||||||||||
Risk-free interest rate | 1.37 - 1.65% | ||||||||||||||||||||
Dividend yield | - | ||||||||||||||||||||
The table below illustrates the fair value per share determined by the Black-Scholes-Merton option pricing model with the following assumptions used for valuing options granted to consultants: | |||||||||||||||||||||
2014 | |||||||||||||||||||||
Weighted-average fair value of options granted | $ | 6.15 | |||||||||||||||||||
Expected terms (in years) | 2.54 - 10 | ||||||||||||||||||||
Expected volatility | 80 - 97% | ||||||||||||||||||||
Risk-free interest rate | 0.10 - 1.64% | ||||||||||||||||||||
Dividend yield | - | ||||||||||||||||||||
The following table summarizes information about stock options outstanding and exercisable at June 30, 2014: | |||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||
Weighted | |||||||||||||||||||||
Average | Weighted | Weighted | |||||||||||||||||||
Remaining | Average | Average | |||||||||||||||||||
Number | Contractual | Exercise | Number | Exercise | |||||||||||||||||
Range of Exercise Prices | Outstanding | Life in Years | Price | Exercisable | Price | ||||||||||||||||
$2.40 -$3.20 | 250,000 | 5.07 | $ | 2.8 | 250,000 | $ | 2.8 | ||||||||||||||
$3.60 - $4.51 | 515,107 | 4.95 | $ | 4.25 | 375,359 | $ | 4.33 | ||||||||||||||
$5.49 - $7.71 | 249,225 | 9.28 | $ | 6.67 | 35,030 | $ | 6.02 | ||||||||||||||
$8.06 - $10.75 | 293,335 | 7.73 | $ | 8.99 | 128,252 | $ | 9.02 | ||||||||||||||
28.00 - $80.00 | 6,800 | 5.63 | $ | 40.86 | 6,800 | $ | 40.86 | ||||||||||||||
1,314,467 | 6.41 | $ | 5.66 | 795,441 | $ | 4.99 | |||||||||||||||
As of June 30, 2014, there was approximately $2,684,000 of total unrecognized compensation expense related to unvested stock options granted under the Plan. That expense is expected to be recognized over the weighted-average remaining vesting period of 2.48 years. The stock-based compensation for all stock options was $318,823 and $643,117 during the three and six months ended June 30, 2014, respectively. | |||||||||||||||||||||
Restricted Stock Units | |||||||||||||||||||||
Restricted stock unit, or RSU, awards are granted subject to certain vesting requirements and other restrictions, including performance and market based vesting criteria. The grant-date fair value of the RSUs, which has been determined based upon the market value of the Company’s shares on the grant date, is expensed over the vesting period. Unvested portions of RSUs issued to consultants are remeasured on an interim basis until vesting criteria is met. On May 2, 2013, the Board of Directors of the Company amended and restated the Plan to provide for the issuance of RSUs under the Plan. | |||||||||||||||||||||
During March 2014, the Company terminated its agreement with a consultant that provided for the grant of 100,000 RSUs that had vesting criteria based on the satisfaction of certain market-based conditions subject to the consultant’s continued service, among other things. Upon termination of the agreement, all 100,000 RSUs were forfeited and deemed reconveyed to the Company. | |||||||||||||||||||||
A summary of the Company’s RSU activity and related information for the six months ended June 30, 2014 is as follows: | |||||||||||||||||||||
Number of RSUs | Weighted Average Grant Date Fair Value | ||||||||||||||||||||
RSUs outstanding - January 1, 2014 | 1,389,960 | $ | 3.19 | ||||||||||||||||||
RSUs granted | - | $ | - | ||||||||||||||||||
RSUs vested | - | $ | - | ||||||||||||||||||
RSUs cancelled/forfeited | (100,000 | ) | $ | (2.88 | ) | ||||||||||||||||
Balance at June 30, 2014 | 1,289,960 | $ | 3.22 | ||||||||||||||||||
As of June 30, 2014, the total unrecognized compensation expense related to unvested RSUs was approximately $2,418,000 which is expected to be recognized over a weighted-average period of 1.80 years, based on estimated vesting schedules. The stock-based compensation for RSU’s during the three months and six months ended June 30, 2014 was $339,932 and $676,926, respectively. | |||||||||||||||||||||
Warrants | |||||||||||||||||||||
From time to time, the Company issues warrants to purchase shares of the Company’s common stock to investors, note holders, underwriters and to non-employees for services rendered or to be rendered in the future. | |||||||||||||||||||||
A summary of the activity of the warrants for the six months ended June 30, 2014 is as follows: | |||||||||||||||||||||
Number of Shares Subject to Warrants Outstanding | Weighted Avg. | ||||||||||||||||||||
Exercise Price | |||||||||||||||||||||
Warrants outstanding - January 1, 2014 | 821,050 | $ | 5.94 | ||||||||||||||||||
Granted | - | $ | - | ||||||||||||||||||
Exercised | (6,328 | ) | $ | 5.93 | |||||||||||||||||
Expired | - | $ | - | ||||||||||||||||||
Warrants outstanding and exercisable - June 30, 2014 | 814,722 | $ | 5.94 | ||||||||||||||||||
Weighted average remaining contractual life of the outstanding warrants in years - June 30, 2014 | 1.7 | ||||||||||||||||||||
The fair value of each warrant is estimated on the date of grant using the Black-Scholes-Merton option pricing model. The intrinsic value of warrants exercised during the six months ended June 30, 2014 was $8,701. | |||||||||||||||||||||
A list of the warrants outstanding as of June 30, 2014 is included in the table below: | |||||||||||||||||||||
Warrants Outstanding | Warrants Exercisable | ||||||||||||||||||||
Warrants | Exercise | Warrants | Expiration | ||||||||||||||||||
Warrant Series | Issue Date | Outstanding | Price | Exercisable | Date | ||||||||||||||||
DermaStar | 4/25/12 | 48,262 | $ | 5.93 | 48,262 | 4/25/15 | |||||||||||||||
April PPM | 4/25/12 | 496,600 | $ | 5.93 | 496,600 | 4/25/15 | |||||||||||||||
Underwriter Warrants | 2/7/13 | 179,860 | $ | 5.25 | 179,860 | 2/7/18 | |||||||||||||||
IR Consultant | 2/28/13 | 30,000 | $ | 5.25 | 30,000 | 2/28/16 | |||||||||||||||
IR Consultant | 7/19/13 | 60,000 | $ | 8.5 | 60,000 | 7/19/18 | |||||||||||||||
814,722 | $ | 5.94 | 814,722 | ||||||||||||||||||
The stock-based compensation for warrants was $26,649 for the six months ended June 30, 2014. |
Employee_Savings_Plan
Employee Savings Plan | 6 Months Ended |
Jun. 30, 2014 | |
Compensation and Retirement Disclosure [Abstract] | ' |
Employee Savings Plan | ' |
NOTE 10. EMPLOYEE SAVINGS PLAN | |
The Company has established an employee savings plan pursuant to Section 401(k) of the Internal Revenue Code, effective January 1, 2014. The plan allows participating employees to deposit into tax deferred investment accounts up to 100% of their salary, subject to annual limits. The Company makes contributions to the plan in an amount not less than 3% of the participants’ annual cash compensation, subject to annual limits. The Company contributed approximately $33,000 to the plan during the six months ended June 30, 2014. |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Commitments and Contingencies | ' | ||||
NOTE 11. COMMITMENTS AND CONTINGENCIES | |||||
Capital Lease | |||||
The Company leases equipment under a capital lease with an interest rate of 4.25% per annum. At June 30, 2014, future payments under this capital lease are as follows: | |||||
Years ending December 31, | |||||
Remainder of 2014 | $ | 3,505 | |||
2015 | 7,009 | ||||
2016 | 7,009 | ||||
Total minimum lease payments | 17,523 | ||||
Less amount representing interest | (927 | ) | |||
Present value of future minimum lease payments | 16,596 | ||||
Less current portion | (6,428 | ) | |||
Capital lease obligation, net of current portion | $ | 10,168 | |||
The value of the equipment under capital lease as of June 30, 2014 was $18,913, with related accumulated depreciation of $3,153. | |||||
Operating Leases | |||||
In June 2014, the Company entered into a lease agreement for 7,565 square feet of office space from September 1, 2014 to October 31, 2018, effective September 1, 2014. Monthly rent begins on September 1, 2014 in the amount of $20,426, with a 3% increase in the base rent amount on an annual basis. The lease agreement allows for the monthly rent amount to be abated for two months at various times during the lease agreement. | |||||
In April 2013, the Company entered into a lease agreement for 3,874 square feet of office space from May 1, 2013 to September 30, 2016, effective May 1, 2013. Monthly rent began on May 1, 2013 in the amount of $10,406, with a 3% increase in the base rent amount on an annual basis. The lease agreement allows for the monthly rent amount to be abated for five months at various times during the lease agreement. | |||||
Once the Company relocates to the new office space (7,565 square feet), effective September 1, 2014, the Company’s intention is to sublet the 3,874 square feet of its current offices through its remaining lease term. | |||||
In January 2010, PC entered into a lease agreement for 3,137 square feet of office and laboratory space from January 1, 2010 to December 31, 2015. Monthly rent began on January 1, 2010 in the amount of $3,594. | |||||
Legal | |||||
In the ordinary course of business, the Company may face various claims brought by third parties and the Company may, from time to time, make claims or take legal actions to assert the Company’s rights, including intellectual property rights, contractual disputes and other commercial disputes. Any of these claims could subject the Company to litigation. Management believes the outcomes of currently pending claims are not likely to have a material effect on the Company’s condensed consolidated financial position and results of operations. | |||||
Indemnities and Guarantees | |||||
In addition to the indemnification provisions contained in the Company’s charter documents, the Company generally enters into separate indemnification agreements with the Company’s directors and officers. These agreements require the Company, among other things, to indemnify the director or officer against specified expenses and liabilities, such as attorneys’ fees, judgments, fines and settlements, paid by the individual in connection with any action, suit or proceeding arising out of the individual’s status or service as the Company’s director or officer, other than liabilities arising from willful misconduct or conduct that is knowingly fraudulent or deliberately dishonest, and to advance expenses incurred by the individual in connection with any proceeding against the individual with respect to which the individual may be entitled to indemnification by the Company. The Company also indemnifies its lessors in connection with its facility leases for certain claims arising from the use of the facilities. These guarantees and indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated nor incurred any payments for these obligations and, therefore, no liabilities have been recorded for these indemnities and guarantees in the accompanying condensed consolidated balance sheets. | |||||
PCCA License Agreement | |||||
Professional Compounding Centers of America, or PCCA, has granted to the Company and its affiliates certain exclusive rights under PCCA’s proprietary formulations, other technologies and data, and the Company has agreed to pay to PCCA certain royalties on net sales relating to the sale of certain future products, which royalties range from 4.5% to 9% for each product, subject to certain minimum royalty payments. PCCA may terminate the PCCA License Agreement if the Company fails to commence efforts to research and develop future products within certain time periods, as set forth in the PCCA License Agreement. | |||||
PCCA Strategic Alliance Agreement | |||||
On February 18, 2013, the Company entered into a Strategic Alliance Agreement with PCCA. Under this agreement, PCCA has agreed that during the term of the agreement, it will not introduce any of PCCA’s members or customers meeting certain criteria (the “Member/Customers”) to any third party whereby such third party licenses or otherwise acquires the intellectual property rights of such Member/Customer, without first presenting such an opportunity to the Company. PCCA may, but is not required to, present such opportunities to the Company, use reasonable efforts to facilitate an introductory meeting between the Member/Customer and the Company, and to further provide certain key technical assistance to a potential development project associated with the Member/Customer’s intellectual property rights. In the event the Company and a Member/Customer introduced to the Company by PCCA enter into a commercial agreement for the license or acquisition of the intellectual property rights owned by the Member/Customer, PCCA will be entitled to receive certain cash fees up to an aggregate of $100,000, as well as a commission based on net sales, if any, generated by the Company as a result of the acquired intellectual property rights. The agreement has a term of one year and is automatically extended for successive one year periods unless either party gives the other written notice of non-renewal. This agreement automatically renewed for a one-year term on February 18, 2014. | |||||
Asset Purchase Agreements | |||||
The Company has acquired intellectual property rights related to certain proprietary innovations from certain inventors (the “Inventors”) through multiple asset purchase agreements. The asset purchase agreements provide that the Inventors will cooperate with the Company in obtaining patent protection for the acquired intellectual property and that the Company will use commercially reasonable efforts to research, develop and commercialize a product based on the acquired intellectual property. In addition, the Company has acquired a right of first refusal on additional intellectual property and drug development opportunities presented by these Inventors. | |||||
In consideration for the acquisition of the intellectual property rights, the Company is obligated to make payments to the Inventors based on the completion of certain milestones, generally consisting of: (1) a payment payable within 30 days after the issuance of the first patent in the United States arising from the acquired intellectual property (if any); (2) a payment payable within 30 days after the Company files the first Investigational New Drug application (“IND”) with the FDA for the first product arising from the acquired intellectual property (if any); (3) for certain of the Inventors, a payment payable within 30 days after the Company files the first New Drug application with the FDA for the first product arising from the acquired intellectual property (if any); and (4) certain royalty payments based on the net receipts received by the Company in connection with the sale or licensing of any product based on the acquired intellectual property (if any), after deducting (among other things) the Company’s development costs associated with such product. If, following five years after the date of the applicable asset purchase agreement, the Company either (a) for certain of the Inventors, has not filed an IND or, for the remaining Inventors, has not initiated a study where data is derived, or (b) has failed to generate royalty payments to the Inventors for any product based on the acquired intellectual property, the Inventors may terminate the applicable asset purchase agreement and request that the Company re-assign the acquired technology to the Inventors. | |||||
Novel Drug and Eye Care Northwest Asset Purchase Agreement – Related Party | |||||
On August 8, 2013, the Company acquired intellectual property rights related to certain proprietary innovations from the compounding pharmacy operations of Novel Drug Solutions, LLC (“NDS”) and from Eye Care Northwest, Inc. (together referred to as the “Sellers”) pursuant to an Asset Purchase Agreement, as amended (the “ECN APA”). As part of this acquisition the Company has acquired intellectual property assets, including a provisional patent application related to injectable ophthalmological compositions having anti-bacterial and anti-inflammatory properties for the prevention of post-ophthalmic surgery complications. In addition, under the ECN APA, the Company has a right of first refusal on any of the Sellers’ additional intellectual property and drug development opportunities. The ECN APA provides that the Sellers will cooperate with us in obtaining patent protection for the acquired intellectual property, among other things, and that we will use commercially reasonable efforts to research, develop and commercialize a product based on the acquired intellectual property. | |||||
In consideration for the acquisition, the Company is obligated to make the following payments to NDS: (1) one payment payable within 30 days after the issuance of the first patent in the United States arising from the acquired intellectual property (if any); (2) one payment payable within 30 days after the Company files the first IND with the FDA for the first product arising from the acquired intellectual property (if any); (3) one payment payable within 30 days after the Company files the first New Drug application with the FDA for the first product; and (4) certain royalty payments based on the net receipts received by the Company in connection with the sale or licensing of any product based on the acquired intellectual property (if any), after deducting (among other things) the Company’s development costs associated with such product. If following five years of the date of the ECN APA the Company either has not filed an IND or has failed to generate royalty payments to NDS for any product based on the acquired intellectual property, NDS may terminate the ECN APA and request that the Company re-assign the acquired technology to NDS. | |||||
NDS is owned by the former owners of PC and other full-time employees of the Company. During the six months ended June 30, 2014 the Company did not make any payments to NDS, and no amounts are due and payable to NDS at June 30, 2014. |
Segment_Information
Segment Information | 6 Months Ended |
Jun. 30, 2014 | |
Segment Reporting [Abstract] | ' |
Segment Information | ' |
NOTE 12. SEGMENT INFORMATION | |
The Company operates the business on the basis of a single reportable segment, which is the business of providing sterile and non-sterile pharmaceutical compounding services. The Company’s chief operating decision-maker is the Chief Executive Officer, who evaluates the Company as a single operating segment. | |
The Company categorizes revenues by geographic area based on selling location. All operations are currently located in the United States; therefore, total revenues for 2014 and 2013 are attributed to the United States. All long-lived assets at June 30, 2014 are located in the United States. | |
The Company sells its compounded formulations to a large number of customers. Less than 10% of the Company’s total pharmacy sales were derived from a single customer for the three and six months ended June 30, 2014. | |
The Company receives its active pharmaceutical ingredients from three main suppliers. These suppliers accounted for 90% of drug and chemical purchases during the three and six months ended June 30, 2014. |
Subsequent_Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
NOTE 13. SUBSEQUENT EVENTS | |
The Company has performed an evaluation of events occurring subsequent to June 30, 2014 through the filing date of this Quarterly Report. Based on our evaluation, nothing other than the events described below need to be disclosed. | |
From July 1, 2014 through the filing date of this Quarterly Report, the Company issued a total of 2,506 shares of common stock for gross proceeds of $9,619 for stock option exercises. |
Overview_Basis_of_Presentation1
Overview, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
Company and Background | ' | ||||||||||||||||
Company and Background | |||||||||||||||||
Imprimis Pharmaceuticals, Inc. (“Imprimis” or the “Company”) is a vertically-integrated specialty pharmaceutical company dedicated to delivering high quality, novel and customizable medicines to physicians and patients at accessible prices. Imprimis is pioneering a new commercial pathway using compounding pharmacies for the formulation and distribution of its proprietary drug therapies which include formulations in ophthalmology, wound management and urology. | |||||||||||||||||
On April 1, 2014, the Company acquired Pharmacy Creations, LLC (“PC”), a New Jersey based compounding pharmacy; effective with this acquisition the Company commenced sales and marketing efforts surrounding Imprimis’ portfolio of proprietary and non-proprietary drug formulations. | |||||||||||||||||
Basis of Presentation | ' | ||||||||||||||||
Basis of Presentation | |||||||||||||||||
Imprimis has prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. For further information, refer to the Company’s audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. | |||||||||||||||||
The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. | |||||||||||||||||
Business Combinations | ' | ||||||||||||||||
Business Combinations | |||||||||||||||||
The Company accounts for business combinations by recognizing the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at their fair values on the acquisition date. The purchase price allocation process requires management to make significant estimates and assumptions, especially at acquisition date with respect to intangible assets, estimated contingent consideration payments and pre-acquisition contingencies. Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to: | |||||||||||||||||
● | future expected cash flows from product sales, support agreements, consulting contracts, other customer contracts, and acquired developed technologies and patents; and | ||||||||||||||||
● | discount rates utilized in valuation estimates. | ||||||||||||||||
Unanticipated events and circumstances may occur which may affect the accuracy or validity of such assumptions, estimates or actual results. Additionally, any change in the fair value of the acquisition-related contingent consideration subsequent to the acquisition date, including changes from events after the acquisition date, such as changes in our estimate of the revenue targets, will be recognized in earnings in the period of the estimated fair value change. A change in fair value of the acquisition-related contingent consideration could have a material effect on the financial position, results of operations, or cash flows in the period of the change in estimate. | |||||||||||||||||
Research and Development | ' | ||||||||||||||||
Research and Development | |||||||||||||||||
The Company expenses all costs related to research and development as they are incurred. Research and development expenses consist of expenses incurred in performing research and development activities including salaries and benefits, and other overhead expenses, and costs related to clinical trials, contract services and outsourced contracts. | |||||||||||||||||
Intellectual Property | ' | ||||||||||||||||
Intellectual Property | |||||||||||||||||
The costs of acquiring intellectual property rights to be used in the research and development process, including licensing fees and milestone payments, are charged to research and development expense as incurred in situations where the Company has not identified an alternative future use for the acquired rights, and are capitalized in situations where the Company has identified an alternative future use. No costs associated with acquiring intellectual property rights have been capitalized to date. Costs of maintaining intellectual property rights are expensed as incurred. | |||||||||||||||||
Revenue Recognition and Deferred Revenue | ' | ||||||||||||||||
Revenue Recognition and Deferred Revenue | |||||||||||||||||
The Company recognizes revenues when all of the following criteria have been met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. The Company began generating revenues upon the acquisition of PC in the second quarter of 2014, which includes sales of certain of our proprietary compounded drug formulations. | |||||||||||||||||
Product Revenues | |||||||||||||||||
Determination of criteria (3) and (4) is based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product has not been delivered or are subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required. | |||||||||||||||||
License Revenues | |||||||||||||||||
License arrangements may consist of non-refundable upfront license fees, data transfer fees, research reimbursement payments, exclusive licensed rights to patented or patent pending compounds, technology access fees, and various performance or sales milestones. These arrangements can be multiple element arrangements. | |||||||||||||||||
Non-refundable fees that are not contingent on any future performance by us, and require no consequential continuing involvement on our part, are recognized as revenue when the license term commences and the licensed data, technology and/or compounded drug preparations is delivered. Such deliverables may include physical quantities of compounded drug preparations, design of the compounded drug preparations and structure-activity relationships, the conceptual framework and mechanism of action, and rights to the patents or patents pending for such compounded drug preparations. We defer recognition of non-refundable fees if we have continuing performance obligations without which the technology, right, product or service conveyed in conjunction with the non-refundable fee has no utility to the licensee that is separate and independent of our performance under the other elements of the arrangement. In addition, if we have required continuing involvement through research and development services that are related to our proprietary know-how and expertise of the delivered technology, or can only be performed by us, then such up-front fees are deferred and recognized over the period of continuing involvement. Guaranteed minimum annual royalties are recognized on a straight-line basis over the applicable term. | |||||||||||||||||
During the three and six months ended June 30, 2014 and 2013, the Company recorded $3,331, $4,741 and $2,500, $5,000, respectively, in revenues, related to royalty payments. In January 2013, the Company entered into a license agreement with ResolutionMD, LLC granting ResolutionMD, LLC rights to its Accudel delivery technology to be used for anti-cellulite formulations. Under the license agreement, the Company received $10,000 as a guaranteed minimum royalty amount for the year ended December 31, 2013. The Company is due annual guaranteed minimum royalty payments and additional royalty payments based on a percent (generally, 5%-7%) of net sales of any products covered under the license agreement in excess of the guaranteed amounts. The license agreement with ResolutionMD, LLC, unless terminated earlier, has a term of ten years following the first commercial sale of a product that is covered under the license agreement. The Company does not anticipate that the license agreement with ResolutionMD, LLC will generate significant revenues for the 2014 fiscal year. | |||||||||||||||||
Cost of Sales | ' | ||||||||||||||||
Cost of Sales | |||||||||||||||||
Cost of sales includes direct and indirect costs to manufacture formulations and products sold, including active pharmaceutical ingredients, personnel costs, packaging, storage, royalties (see Note 11), shipping and handling costs and the write-off of obsolete inventory. | |||||||||||||||||
Income Taxes | ' | ||||||||||||||||
Income Taxes | |||||||||||||||||
The Company accounts for income taxes under the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, “Income Taxes”, or ASC 740. As of June 30, 2014, there were no unrecognized tax benefits included in the condensed consolidated balance sheets that would, if recognized, affect the effective tax rate. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties in its condensed consolidated balance sheets at June 30, 2014 and December 31, 2013, and has not recognized interest and/or penalties in the condensed consolidated statements of operations for the periods ended June 30, 2014 and 2013. The Company is subject to taxation in the United States and California. The Company’s tax years for 2000 and forward are subject to examination by the federal and state tax authorities due to the carry forward of unutilized net operating losses. | |||||||||||||||||
Cash and Cash Equivalents | ' | ||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||
Cash equivalents include short-term, highly liquid investments with maturities of three months or less at the time of acquisition. | |||||||||||||||||
Concentrations of Credit Risk | ' | ||||||||||||||||
Concentrations of Credit Risk | |||||||||||||||||
The Company places its cash with financial institutions deemed by management to be of high credit quality. The Federal Deposit Insurance Corporation (“FDIC”) provides basic deposit coverage with limits up to $250,000 per owner. At June 30, 2014, the Company had approximately $11.8 million in cash deposits in excess of FDIC limits. | |||||||||||||||||
Accounts Receivable | ' | ||||||||||||||||
Accounts Receivable | |||||||||||||||||
The balance in accounts receivable consists of revenue amounts the Company has invoiced and recognized, but for which payment has not been received. Accounts receivable are presented net of an allowance for doubtful accounts in the amount of $3,957 as of June 30, 2014. | |||||||||||||||||
Inventories | ' | ||||||||||||||||
Inventories | |||||||||||||||||
Inventories are stated at the lower of cost or market. Cost is determined on a first-in, first-out (“FIFO”) basis. The Company evaluates the carrying value of inventories on a regular basis, based on the price expected to be obtained for products in their respective markets compared with historical cost. Write-downs of inventories are considered to be permanent reductions in the cost basis of inventories. | |||||||||||||||||
The Company also regularly evaluates its inventories for excess quantities and obsolescence (expiration), taking into account such factors as historical and anticipated future sales or use in production compared to quantities on hand and the remaining shelf life of products and active pharmaceutical ingredients on hand. The Company establishes reserves for excess and obsolete inventories as required based on its analyses. | |||||||||||||||||
Furniture and Equipment | ' | ||||||||||||||||
Furniture and Equipment | |||||||||||||||||
Furniture and equipment is stated at cost less accumulated depreciation and amortization. Depreciation and amortization is calculated using the straight-line method over the estimated useful life of the asset. Leasehold improvements are amortized over the estimated useful life or remaining lease term, whichever is shorter. Computer software and hardware, and furniture and equipment are depreciated over three to five years. | |||||||||||||||||
Goodwill and Intangible Assets | ' | ||||||||||||||||
Goodwill and Intangible Assets | |||||||||||||||||
The Company will review its goodwill and indefinite-lived intangible assets for impairment as of January 1 of each year or when an event or a change in circumstances indicates the fair value of a reporting unit may be below its carrying amount. Events or changes in circumstances considered as impairment indicators include but are not limited to the following: | |||||||||||||||||
● | significant underperformance of the Company’s business relative to expected operating results; | ||||||||||||||||
● | significant adverse economic and industry trends; | ||||||||||||||||
● | significant decline in the Company’s market capitalization for an extended period of time relative to net book value; and | ||||||||||||||||
● | expectations that a reporting unit will be sold or otherwise disposed. | ||||||||||||||||
The annual goodwill impairment test consists of a two-step process as follows: | |||||||||||||||||
Step 1. The Company compares the fair value of each reporting unit to its carrying amount, including the existing goodwill. The fair value of each reporting unit is determined using a discounted cash flow valuation analysis. The carrying value of each reporting unit is determined by specifically identifying and allocating the assets and liabilities to each reporting unit based on headcount, relative revenues, or other methods as deemed appropriate by management. If the carrying amount of a reporting unit exceeds its fair value, an indication exists that the reporting unit’s goodwill may be impaired and the Company then performs the second step of the impairment test. If the fair value of a reporting unit exceeds its carrying amount, no further analysis is required. | |||||||||||||||||
Step 2. If further analysis is required, the Company compares the implied fair value of the reporting unit’s goodwill, determined by allocating the reporting unit’s fair value to all of its assets and its liabilities in a manner similar to a purchase price allocation, to its carrying amount. If the carrying amount of the reporting unit’s goodwill exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess. | |||||||||||||||||
Impairment of Long-Lived Assets | ' | ||||||||||||||||
Impairment of Long-Lived Assets | |||||||||||||||||
Long-lived assets, such as furniture and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the consolidated balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposal group classified as held-for-sale would be presented separately in the appropriate asset and liability sections of the consolidated balance sheet, if material. | |||||||||||||||||
During the three and six months ended June 30, 2014 and 2013, the Company did not recognize any impairment of long-lived assets. | |||||||||||||||||
Deferred Rent | ' | ||||||||||||||||
Deferred Rent | |||||||||||||||||
The Company accounts for rent expense related to its operating leases by determining total minimum rent payments on the leases over their respective periods and recognizing the rent expense on a straight-line basis. The difference between the actual amount paid and the amount recorded as rent expense in each fiscal year is recorded as an adjustment to deferred rent. | |||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
Fair Value Measurements | |||||||||||||||||
Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability. GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The established fair value hierarchy prioritizes the use of inputs used in valuation methodologies into the following three levels: | |||||||||||||||||
● | Level 1: Applies to assets or liabilities for which there are quoted prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and must be used to measure fair value whenever available. | ||||||||||||||||
● | Level 2: Applies to assets or liabilities for which there are significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. | ||||||||||||||||
● | Level 3: Applies to assets or liabilities for which there are significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. For example, Level 3 inputs would relate to forecasts of future earnings and cash flows used in a discounted future cash flows method. | ||||||||||||||||
At June 30, 2014 and December 31, 2013, the Company did not have any financial assets or liabilities which are measured on a recurring basis. At June 30, 2014 and December 31, 2013, the Company’s financial instruments include cash and cash equivalents, restricted short-term investments, accounts receivable, accounts payable and accrued expenses, accrued payroll and related liabilities, customer deposits, and capital lease. The carrying amount of these financial instruments, except for the restricted short-term investment and capital lease, approximates fair value due to the short-term maturities of these instruments. The Company’s restricted short-term investments are carried at amortized cost which approximates fair value. Based on borrowing rates currently available to the Company, the carrying value of the capital lease approximates fair value. | |||||||||||||||||
Stock-Based Compensation | ' | ||||||||||||||||
Stock-Based Compensation | |||||||||||||||||
All stock-based payments to employees and consultants, including grants of stock options, warrants, restricted stock units (“RSUs”) and restricted stock, are recognized in the condensed consolidated financial statements based upon their fair values. The Company uses the Black-Scholes-Merton option pricing model and Monte Carlo Simulation to estimate the fair value of stock-based awards. The fair value is determined at the date of grant. The financial statement effect of forfeitures is estimated at the time of grant and revised, if necessary, if the actual effect differs from those estimates. | |||||||||||||||||
The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows FASB guidance. As such, the value of the applicable stock-based compensation is periodically remeasured and income or expense is recognized during their vesting terms. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is primarily recognized over the term of the consulting agreement. In accordance with FASB guidance, an asset acquired in exchange for the issuance of fully vested, nonforfeitable equity instruments should not be presented or classified as an offset to equity on the grantor’s balance sheet once the equity instrument is granted for accounting purposes. Accordingly, the Company records the fair value of nonforfeitable equity instruments issued for future consulting services as prepaid stock-based consulting expenses in its consolidated balance sheets. | |||||||||||||||||
The Company recorded stock-based compensation (including the amortization of stock-based prepaid consulting fees) related to equity instruments granted to employees, directors and consultants as follows: | |||||||||||||||||
For the | For the | For the | For the | ||||||||||||||
Three Months Ended | Three Months Ended | Six Months Ended | Six Months Ended | ||||||||||||||
30-Jun-14 | 30-Jun-13 | 30-Jun-14 | 30-Jun-13 | ||||||||||||||
Employees - selling and marketing | $ | 16,994 | $ | - | $ | 30,861 | $ | - | |||||||||
Employees - general and administrative | 561,733 | 378,895 | 1,105,000 | 464,898 | |||||||||||||
Employees - research and development | - | 44,619 | - | 111,750 | |||||||||||||
Directors - general and administrative | 42,147 | 45,458 | 84,293 | 248,250 | |||||||||||||
Consultants - selling and marketing | 14,730 | - | 30,783 | - | |||||||||||||
Consultants - general and administrative | 18,337 | 345,605 | 86,839 | 505,527 | |||||||||||||
Consultants - research and development | 4,814 | 180,559 | 8,916 | 117,959 | |||||||||||||
Total | $ | 658,755 | $ | 995,136 | $ | 1,346,692 | $ | 1,448,384 | |||||||||
During the six months ended June 30, 2014, the Company issued 6,868 shares of common stock, valued at $50,000 in connection with the resolution of a contract dispute. | |||||||||||||||||
Basic and Diluted Net Loss per Common Share | ' | ||||||||||||||||
Basic and Diluted Net Loss per Common Share | |||||||||||||||||
Basic net loss per common share is computed by dividing net loss attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders for the period by the weighted average number of common and common equivalent shares, such as stock options and warrants outstanding during the period. | |||||||||||||||||
Basic and diluted net loss applicable to common stock per share is computed using the weighted average number of shares of common stock outstanding during the period. Common stock equivalents (using the treasury stock or, “if converted” method) from convertible notes, preferred stock, stock options, unvested restricted stock units (“RSUs”) and warrants were 3,419,149 and 3,138,004 at June 30, 2014 and 2013, respectively, and are excluded from the calculation of diluted net loss per share for all periods presented because the effect is anti-dilutive. | |||||||||||||||||
The following table shows the computation of basic and diluted net loss per share of common stock for the three and six months ended June 30, 2014 and 2013: | |||||||||||||||||
For the | For the | For the | For the | ||||||||||||||
Three Months Ended | Three Months Ended | Six Months Ended | Six Months Ended | ||||||||||||||
30-Jun-14 | 30-Jun-13 | 30-Jun-14 | 30-Jun-13 | ||||||||||||||
Numerator – net loss | $ | (2,595,725 | ) | $ | (2,218,052 | ) | $ | (4,920,888 | ) | $ | (3,683,533 | ) | |||||
Denominator – weighted average number of shares of common stock outstanding, basic and diluted | 9,109,842 | 8,890,668 | 9,060,496 | 8,342,497 | |||||||||||||
Net loss per share, basic and diluted | $ | (0.28 | ) | $ | (0.25 | ) | $ | (0.54 | ) | $ | (0.44 | ) | |||||
Use of Estimates | ' | ||||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management are, among others, valuation of deferred taxes, goodwill and, intangible assets, recoverability of long-lived assets and goodwill, and valuation of stock-based compensation issued to employees and non-employees. Actual results could differ from those estimates. | |||||||||||||||||
Reclassifications | ' | ||||||||||||||||
Reclassifications | |||||||||||||||||
Certain prior period items and amounts have been reclassified to conform to the classifications used to prepare the 2014 condensed consolidated financial statements. The Company has classified certain expenses as selling and marketing whereas in prior periods certain selling and marketing expenses were included as an expense line item titled selling, general and administrative in the condensed consolidated statements of operations. These reclassifications had no material impact on the Company’s financial position, results of operations, or cash flows as previously reported. | |||||||||||||||||
Recently Adopted Accounting Pronouncements | ' | ||||||||||||||||
Recently Adopted Accounting Pronouncements | |||||||||||||||||
In July 2013, the FASB issued ASU No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” ASU 2013-11 provides explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013, with an option for early adoption. This pronouncement is effective for reporting periods beginning on or after January 1, 2013. The adoption of ASU 2011-11 did not have a material impact on the Company’s condensed consolidated financial statements. | |||||||||||||||||
In June 2014, the FASB issued ASU No. 2014-10, “Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities”. The amendments in this update remove the definition of a development stage entity from ASC Topic 915, Development Stage Entities, thereby removing the distinction between development stage entities and other reporting entities from GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information on the statements of operations, cash flows, and stockholder’s equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. These amendments are effective for annual reporting periods beginning after December 15, 2014, with early application of the amendments permitted. The Company’s pharmacy operations commenced on April 1, 2014. This change in the nature of the Company’s operations included the recognition of significant revenues; as a result the Company is no longer defined as a development stage company for reporting dates beginning April 1, 2014. With the change in the Company’s operations, revenue recognition and its immediate adoption of ASU No. 2014-10, the Company no longer presents or discloses any information required under ASC Topic 915. | |||||||||||||||||
Recently Announced Accounting Pronouncements | ' | ||||||||||||||||
Recently Announced Accounting Pronouncements | |||||||||||||||||
In May 2014, FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” The objective of ASU 2014-19 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle of ASU 2014-09 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the new guidance, an entity will (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the contract’s performance obligations; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB ASC. The new guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2016 for public companies. Early adoption is not permitted. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements. |
Overview_Basis_of_Presentation2
Overview, Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
Schedule of Stock Based Compensation and Equity Instruments | ' | ||||||||||||||||
The Company recorded stock-based compensation (including the amortization of stock-based prepaid consulting fees) related to equity instruments granted to employees, directors and consultants as follows: | |||||||||||||||||
For the | For the | For the | For the | ||||||||||||||
Three Months Ended | Three Months Ended | Six Months Ended | Six Months Ended | ||||||||||||||
30-Jun-14 | 30-Jun-13 | 30-Jun-14 | 30-Jun-13 | ||||||||||||||
Employees - selling and marketing | $ | 16,994 | $ | - | $ | 30,861 | $ | - | |||||||||
Employees - general and administrative | 561,733 | 378,895 | 1,105,000 | 464,898 | |||||||||||||
Employees - research and development | - | 44,619 | - | 111,750 | |||||||||||||
Directors - general and administrative | 42,147 | 45,458 | 84,293 | 248,250 | |||||||||||||
Consultants - selling and marketing | 14,730 | - | 30,783 | - | |||||||||||||
Consultants - general and administrative | 18,337 | 345,605 | 86,839 | 505,527 | |||||||||||||
Consultants - research and development | 4,814 | 180,559 | 8,916 | 117,959 | |||||||||||||
Total | $ | 658,755 | $ | 995,136 | $ | 1,346,692 | $ | 1,448,384 | |||||||||
Schedule of Basic and Diluted Earnings Per Common Share | ' | ||||||||||||||||
The following table shows the computation of basic and diluted net loss per share of common stock for the three and six months ended June 30, 2014 and 2013: | |||||||||||||||||
For the | For the | For the | For the | ||||||||||||||
Three Months Ended | Three Months Ended | Six Months Ended | Six Months Ended | ||||||||||||||
30-Jun-14 | 30-Jun-13 | 30-Jun-14 | 30-Jun-13 | ||||||||||||||
Numerator – net loss | $ | (2,595,725 | ) | $ | (2,218,052 | ) | $ | (4,920,888 | ) | $ | (3,683,533 | ) | |||||
Denominator – weighted average number of shares of common stock outstanding, basic and diluted | 9,109,842 | 8,890,668 | 9,060,496 | 8,342,497 | |||||||||||||
Net loss per share, basic and diluted | $ | (0.28 | ) | $ | (0.25 | ) | $ | (0.54 | ) | $ | (0.44 | ) |
Acquisition_Pharmacy_Creations1
Acquisition - Pharmacy Creations, Llc (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Business Combinations [Abstract] | ' | ||||||||||||||||
Schedule of Acquisition Date Fair Value of Consideration | ' | ||||||||||||||||
The total acquisition date fair value of the consideration to be transferred is estimated at approximately $1.1 million, as follows: | |||||||||||||||||
Cash payment to sellers at closing | $ | 600,000 | |||||||||||||||
Contingent common stock issuance to the Sellers | 483,156 | ||||||||||||||||
Contingent cash consideration to the Sellers | 31,466 | ||||||||||||||||
Total acquisition date fair value | $ | 1,114,622 | |||||||||||||||
Schedule of Estimated Fair Value of Assets Acquired and Liabilities Assumed | ' | ||||||||||||||||
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. | |||||||||||||||||
Cash and cash equivalents | $ | 4,982 | |||||||||||||||
Accounts receivable | 58,420 | ||||||||||||||||
Prepaid expenses and other assets | 30,256 | ||||||||||||||||
Inventory | 213,190 | ||||||||||||||||
Property and equipment | 44,510 | ||||||||||||||||
Intangible assets | 659,000 | ||||||||||||||||
Total identifiable assets acquired | 1,010,358 | ||||||||||||||||
Accounts payable and accrued liabilities | 120,049 | ||||||||||||||||
Other liabilities | 107,308 | ||||||||||||||||
Total liabilities assumed | 227,357 | ||||||||||||||||
Total identifiable assets less liabilities assumed | 783,001 | ||||||||||||||||
Goodwill | 331,621 | ||||||||||||||||
Net assets acquired | $ | 1,114,622 | |||||||||||||||
Schedule of Result of Operation from Acquisition | ' | ||||||||||||||||
The amount of revenues and operating loss of PC included in the Company’s condensed consolidated statement of operations from the acquisition date through the period ended June 30, 2014 is as follows: | |||||||||||||||||
Total revenues | $ | 664,370 | |||||||||||||||
Operating loss | $ | (423,589 | ) | ||||||||||||||
Schedule of Pro Forma Financial Information | ' | ||||||||||||||||
The unaudited pro forma results presented include amortization charges for intangible assets and eliminations of intercompany transactions. | |||||||||||||||||
For the | For the | For the | For the | ||||||||||||||
Three Months Ended | Three Months Ended | Six Months Ended | Six Months Ended | ||||||||||||||
30-Jun-14 | 30-Jun-13 | 30-Jun-14 | 30-Jun-13 | ||||||||||||||
Total revenues | $ | 667,701 | $ | 744,299 | $ | 1,286,805 | $ | 1,453,050 | |||||||||
Net loss | $ | (2,595,725 | ) | $ | (2,054,878 | ) | $ | (4,854,258 | ) | $ | (3,374,915 | ) | |||||
Schedule of Intangible Assets Acquisition | ' | ||||||||||||||||
The following table sets forth the components of identified intangible assets associated with the PC acquisition and their estimated useful lives. | |||||||||||||||||
Fair Value | Useful Life | ||||||||||||||||
Customer relationships | $ | 596,000 | 10 - 15 years | ||||||||||||||
Trade Name | 5,000 | 5 years | |||||||||||||||
Non-compete covenant | 50,000 | 4 years | |||||||||||||||
Licenses | 8,000 | 25 years | |||||||||||||||
$ | 659,000 |
Inventories_Tables
Inventories (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Inventory Disclosure [Abstract] | ' | ||||
Schedule of Inventories | ' | ||||
The composition of inventories as of June 30, 2014 was as follows: | |||||
30-Jun-14 | |||||
Raw materials | $ | 164,127 | |||
Finished goods | 8,623 | ||||
Total inventories | $ | 172,750 |
Prepaid_Expenses_and_Other_Cur1
Prepaid Expenses and Other Current Assets (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Prepaid Expenses And Other Current Assets | ' | ||||||||
Schedule of Prepaid Expenses and Other Current Assets | ' | ||||||||
Prepaid expenses and other current assets consisted of the following: | |||||||||
30-Jun-14 | |||||||||
(unaudited) | December 31, 2013 | ||||||||
Prepaid stock-based consulting expenses | $ | - | $ | 26,649 | |||||
Prepaid rent | 21,875 | 16,288 | |||||||
Prepaid insurance | 180,519 | 39,166 | |||||||
Other prepaid expenses and deposits | 121,851 | 22,964 | |||||||
Total prepaid expenses and other current assets | $ | 324,245 | $ | 105,067 |
Intangible_Assets_and_Goodwill1
Intangible Assets and Goodwill (Tables) | 6 Months Ended | ||||||||||||||
Jun. 30, 2014 | |||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||
Schedule of Intangible Assets | ' | ||||||||||||||
The Company’s intangible assets at June 30, 2014 consist of the following: | |||||||||||||||
Amortization | |||||||||||||||
periods | Accumulated | Net | |||||||||||||
(in years) | Cost | amortization | Carrying value | ||||||||||||
Customer relationships | 15-Oct | $ | 596,000 | $ | (9,933 | ) | $ | 586,067 | |||||||
Trade name | 5 | 5,000 | (250 | ) | 4,750 | ||||||||||
Non-compete | 4 | 50,000 | (6,250 | ) | 43,750 | ||||||||||
Licenses | 25 | 8,000 | (1,000 | ) | 7,000 | ||||||||||
$ | 659,000 | $ | (17,433 | ) | $ | 641,567 | |||||||||
Schedule of Amortization Expenses for Intangible Assets | ' | ||||||||||||||
Amortization expenses for intangible assets for the three and six months ended June 30, 2014 was as follows: | |||||||||||||||
For the | For the | ||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
30-Jun-14 | 30-Jun-14 | ||||||||||||||
Customer relationships | $ | 250 | $ | 250 | |||||||||||
Trade name | 9,933 | 9,933 | |||||||||||||
Non-compete | 6,250 | 6,250 | |||||||||||||
Licenses | 1,000 | 1,000 | |||||||||||||
$ | 17,433 | $ | 17,433 | ||||||||||||
Schedule of Estimated Future Amortization Expense | ' | ||||||||||||||
Estimated future amortization expense for the Company’s intangible assets as June 30, 2014 is as follows: | |||||||||||||||
Years ending December 31, | |||||||||||||||
Remainder of 2014 | $ | 23,600 | |||||||||||||
2015 | $ | 53,500 | |||||||||||||
2016 | $ | 53,500 | |||||||||||||
2017 | $ | 53,500 | |||||||||||||
2018 | $ | 44,100 | |||||||||||||
Schedule of Changes in Carrying Value of Goodwill | ' | ||||||||||||||
The changes in the carrying value of the Company’s goodwill during the six months ended June 30, 2014 were as follows: | |||||||||||||||
Balance at January 1, 2014: | |||||||||||||||
Goodwill | $ | - | |||||||||||||
Acquisition of PC | 331,621 | ||||||||||||||
Balance at June 30, 2014 | $ | 331,621 |
Accounts_Payable_and_Accrued_E1
Accounts Payable and Accrued Expenses (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Schedule of Accounts Payable and Accrued Expenses | ' | ||||||||
Accounts payable and accrued expenses consisted of the following: | |||||||||
30-Jun-14 | |||||||||
(unaudited) | 31-Dec-13 | ||||||||
Accounts payable | $ | 750,106 | $ | 261,924 | |||||
Other accrued expenses | - | 50,000 | |||||||
Total accounts payable and accrued expenses | $ | 750,106 | $ | 311,924 |
Stockholders_Equity_and_Stockb1
Stockholders' Equity and Stock-based Compensation (Tables) | 6 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||||||
Schedule of Stock Option Plan Activity | ' | ||||||||||||||||||||
A summary of the Plan activity with respect to options to purchase common stock for the six months ended June 30, 2014 is as follows: | |||||||||||||||||||||
Number of shares | Weighted Avg. Exercise Price | Weighted Avg. Remaining Contractual Life | Aggregate Intrinsic Value | ||||||||||||||||||
Options outstanding - January 1, 2014 | 1,328,790 | $ | 5.31 | ||||||||||||||||||
Options granted | 225,886 | $ | 6.6 | ||||||||||||||||||
Options exercised | (165,209 | ) | $ | 3.69 | |||||||||||||||||
Options cancelled/forfeit | (75,000 | ) | $ | 6.3 | |||||||||||||||||
Options outstanding - June 30, 2014 | 1,314,467 | $ | 5.66 | 6.41 | $ | 2,532,926 | |||||||||||||||
Options exercisable | 795,441 | $ | 4.99 | 4.67 | $ | 2,046,478 | |||||||||||||||
Options vested and expected to vest | 1,262,564 | $ | 5.64 | 6.31 | $ | 2,484,281 | |||||||||||||||
Schedule of Fair Value Assumption | ' | ||||||||||||||||||||
The table below illustrates the fair value per share determined by the Black-Scholes-Merton option pricing model with the following assumptions used for valuing options granted to employees: | |||||||||||||||||||||
2014 | |||||||||||||||||||||
Weighted-average fair value of options granted | $ | 5.16 | |||||||||||||||||||
Expected terms (in years) | 5.81 - 6.91 | ||||||||||||||||||||
Expected volatility | 100 - 102% | ||||||||||||||||||||
Risk-free interest rate | 1.37 - 1.65% | ||||||||||||||||||||
Dividend yield | - | ||||||||||||||||||||
The table below illustrates the fair value per share determined by the Black-Scholes-Merton option pricing model with the following assumptions used for valuing options granted to consultants: | |||||||||||||||||||||
2014 | |||||||||||||||||||||
Weighted-average fair value of options granted | $ | 6.15 | |||||||||||||||||||
Expected terms (in years) | 2.54 - 10 | ||||||||||||||||||||
Expected volatility | 80 - 97% | ||||||||||||||||||||
Risk-free interest rate | 0.10 - 1.64% | ||||||||||||||||||||
Dividend yield | - | ||||||||||||||||||||
Schedule of Shares Outstanding and Exercisable | ' | ||||||||||||||||||||
The following table summarizes information about stock options outstanding and exercisable at June 30, 2014: | |||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||
Weighted | |||||||||||||||||||||
Average | Weighted | Weighted | |||||||||||||||||||
Remaining | Average | Average | |||||||||||||||||||
Number | Contractual | Exercise | Number | Exercise | |||||||||||||||||
Range of Exercise Prices | Outstanding | Life in Years | Price | Exercisable | Price | ||||||||||||||||
$2.40 - $3.20 | 250,000 | 5.07 | $ | 2.8 | 250,000 | $ | 2.8 | ||||||||||||||
$3.60 - $4.51 | 515,107 | 4.95 | $ | 4.25 | 375,359 | $ | 4.33 | ||||||||||||||
$5.49 - $7.71 | 249,225 | 9.28 | $ | 6.67 | 35,030 | $ | 6.02 | ||||||||||||||
$8.06 - $10.75 | 293,335 | 7.73 | $ | 8.99 | 128,252 | $ | 9.02 | ||||||||||||||
28.00 - $80.00 | 6,800 | 5.63 | $ | 40.86 | 6,800 | $ | 40.86 | ||||||||||||||
1,314,467 | 6.41 | $ | 5.66 | 795,441 | $ | 4.99 | |||||||||||||||
Schedule of Restricted Stock Units Activity | ' | ||||||||||||||||||||
A summary of the Company’s RSU activity and related information for the six months ended June 30, 2014 is as follows: | |||||||||||||||||||||
Number of RSUs | Weighted Average Grant Date Fair Value | ||||||||||||||||||||
RSUs outstanding - January 1, 2014 | 1,389,960 | $ | 3.19 | ||||||||||||||||||
RSUs granted | - | $ | - | ||||||||||||||||||
RSUs vested | - | $ | - | ||||||||||||||||||
RSUs cancelled/forfeited | (100,000 | ) | $ | (2.88 | ) | ||||||||||||||||
Balance at June 30, 2014 | 1,289,960 | $ | 3.22 | ||||||||||||||||||
Schedule of Warrants Activity | ' | ||||||||||||||||||||
A summary of the activity of the warrants for the six months ended June 30, 2014 is as follows: | |||||||||||||||||||||
Number of Shares Subject to Warrants Outstanding | Weighted Avg. | ||||||||||||||||||||
Exercise Price | |||||||||||||||||||||
Warrants outstanding - January 1, 2014 | 821,050 | $ | 5.94 | ||||||||||||||||||
Granted | - | $ | - | ||||||||||||||||||
Exercised | (6,328 | ) | $ | 5.93 | |||||||||||||||||
Expired | - | $ | - | ||||||||||||||||||
Warrants outstanding and exercisable - June 30, 2014 | 814,722 | $ | 5.94 | ||||||||||||||||||
Weighted average remaining contractual life of the outstanding warrants in years - June 30, 2014 | 1.7 | ||||||||||||||||||||
Schedule of Warrants Outstanding and Warrants Exercisable | ' | ||||||||||||||||||||
A list of the warrants outstanding as of June 30, 2014 is included in the table below: | |||||||||||||||||||||
Warrants Outstanding | Warrants Exercisable | ||||||||||||||||||||
Warrants | Exercise | Warrants | Expiration | ||||||||||||||||||
Warrant Series | Issue Date | Outstanding | Price | Exercisable | Date | ||||||||||||||||
DermaStar | 4/25/12 | 48,262 | $ | 5.93 | 48,262 | 4/25/15 | |||||||||||||||
April PPM | 4/25/12 | 496,600 | $ | 5.93 | 496,600 | 4/25/15 | |||||||||||||||
Underwriter Warrants | 2/7/13 | 179,860 | $ | 5.25 | 179,860 | 2/7/18 | |||||||||||||||
IR Consultant | 2/28/13 | 30,000 | $ | 5.25 | 30,000 | 2/28/16 | |||||||||||||||
IR Consultant | 7/19/13 | 60,000 | $ | 8.5 | 60,000 | 7/19/18 | |||||||||||||||
814,722 | $ | 5.94 | 814,722 |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Compensation and Retirement Disclosure [Abstract] | ' | ||||
Schedule of Lease Equipment Under Capital Lease | ' | ||||
The Company leases equipment under a capital lease with an interest rate of 4.25% per annum. At June 30, 2014, future payments under this capital lease are as follows: | |||||
Years ending December 31, | |||||
Remainder of 2014 | $ | 3,505 | |||
2015 | 7,009 | ||||
2016 | 7,009 | ||||
Total minimum lease payments | 17,523 | ||||
Less amount representing interest | (927 | ) | |||
Present value of future minimum lease payments | 16,596 | ||||
Less current portion | (6,428 | ) | |||
Capital lease obligation, net of current portion | $ | 10,168 |
Overview_Basis_of_Presentation3
Overview, Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Minimum [Member] | Maximum [Member] | ||||||
Revenue | $3,331 | $2,500 | $4,741 | $5,000 | ' | ' | ' |
Guaranteed minimum royalty amount | ' | ' | ' | ' | ' | 10,000 | ' |
Additional royalty payments based on percent of net sales | ' | ' | ' | ' | ' | 5.00% | 7.00% |
Deposit coverage limits by FDIC, per owner | ' | ' | 250,000 | ' | ' | ' | ' |
Cash deposits in excess of FDIC limits | ' | ' | 11,800,000 | ' | ' | ' | ' |
Accounts receivable, net of allowance for doubtful accounts | 3,957 | ' | 3,957 | ' | ' | ' | ' |
Impairment of long-lived assets | ' | ' | 0 | 0 | ' | ' | ' |
Number of common stock issued during period for contract dispute, shares | ' | ' | 6,868 | ' | ' | ' | ' |
Number of common stock issued during period for contract dispute, value | ' | ' | 50,000 | ' | ' | ' | ' |
Common stock equivalents, dilutive instruments | ' | ' | 3,419,149 | 3,138,004 | ' | ' | ' |
Unrecognized tax benefits | $0 | ' | $0 | ' | $0 | ' | ' |
Overview_Basis_of_Presentation4
Overview, Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Basic and Diluted Earnings Per Common Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Accounting Policies [Abstract] | ' | ' | ' | ' |
Numerator - net loss | ($2,595,725) | ($2,218,052) | ($4,920,888) | ($3,683,533) |
Denominator - weighted average number of shares outstanding, basic and diluted | 9,109,842 | 8,890,668 | 9,060,496 | 8,342,497 |
Net loss per share, basic and diluted | ($0.28) | ($0.25) | ($0.54) | ($0.44) |
Overview_Basis_of_Presentation5
Overview, Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Stock Based Compensation and Equity Intruments (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Compensation Expenses | $658,755 | $995,136 | $1,346,692 | $1,448,384 |
Employees Selling And Marketing [Member] | ' | ' | ' | ' |
Compensation Expenses | 16,994 | ' | 30,861 | ' |
Employees General And Administrative [Member] | ' | ' | ' | ' |
Compensation Expenses | 561,733 | 378,895 | 1,105,000 | 464,898 |
Employees Research And Development [Member] | ' | ' | ' | ' |
Compensation Expenses | ' | 44,619 | ' | 111,750 |
Directors General And Administrative [Member] | ' | ' | ' | ' |
Compensation Expenses | 42,147 | 45,458 | 84,293 | 248,250 |
Consultants Selling And Marketing [Member] | ' | ' | ' | ' |
Compensation Expenses | 14,730 | ' | 30,783 | ' |
Consultants General And Administrative [Member] | ' | ' | ' | ' |
Compensation Expenses | 18,337 | 345,605 | 86,839 | 505,527 |
Consultants Research And Development [Member] | ' | ' | ' | ' |
Compensation Expenses | $4,814 | $180,559 | $8,916 | $117,959 |
Acquisition_Pharmacy_Creations2
Acquisition - Pharmacy Creations, Llc (Details Narrative) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Cash paid for business acquisition | $636,374 | ' |
Pharmacy Creations, LLC [Member] | ' | ' |
Cash paid for business acquisition | 600,000 | ' |
Contingent cash payment | 50,000 | ' |
Expected revenue | 3,500,000 | ' |
Expected revenue date | 31-Mar-15 | ' |
Maximum number of common stock applied for contingent stock payment | 215,190 | ' |
Condition for contingent stock payment | ' | ' |
if the Company earns revenue of over $7,500,000 during the 12 month period ending March 31, 2016, all 215,190 shares; | ||
if the Company earns revenue of between $3,500,000 and $7,500,000 during the 12 month period ending March 31, 2016, an aggregate of that number of shares of Imprimis common stock equal to the amount that such revenue exceeds $3,500,000 divided by 18.5882, rounded down to the lower whole number (not to exceed 215,190 shares). | ||
Business acquisition, total fair value transferred | 1,114,622 | ' |
Business combination purchase price allocation for good will | 331,621 | ' |
Pharmacy Creations, LLC [Member] | Minimum [Member] | Period Ending March 31, 2016 | ' | ' |
Expected revenue | 3,500,000 | ' |
Expected revenue date | 31-Mar-16 | ' |
Pharmacy Creations, LLC [Member] | Maximum [Member] | Period Ending March 31, 2016 | ' | ' |
Expected revenue | $7,500,000 | ' |
Expected revenue date | 31-Mar-16 | ' |
Acquisition_Pharmacy_Creations3
Acquisition - Pharmacy Creations, Llc - Schedule of Acquisition Date Fair Value of Consideration (Details) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Cash payment to sellers at closing | $636,374 | ' |
Pharmacy Creations, LLC [Member] | ' | ' |
Cash payment to sellers at closing | 600,000 | ' |
Contingent common stock issuance to the Sellers | 483,156 | ' |
Contingent cash consideration to the Sellers | 31,466 | ' |
Total acquisition date fair value | $1,114,622 | ' |
Acquisition_Pharmacy_Creations4
Acquisition - Pharmacy Creations, Llc - Schedule of Estimated Fair Value of Assets Acquired and Liabilities Assumed (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Goodwill | $331,621 | ' |
Pharmacy Creations, LLC [Member] | ' | ' |
Cash and cash equivalents | 4,982 | ' |
Accounts receivable | 58,420 | ' |
Prepaid expenses and other assets | 30,256 | ' |
Inventory | 213,190 | ' |
Property and equipment | 44,510 | ' |
Intangible assets | 659,000 | ' |
Total identifiable assets acquired | 1,010,358 | ' |
Accounts payable and accrued liabilities | 120,049 | ' |
Other liabilities | 107,308 | ' |
Total liabilities assumed | 227,357 | ' |
Total identifiable assets less liabilities assumed | 783,001 | ' |
Goodwill | 331,621 | ' |
Net assets acquired | $1,114,622 | ' |
Acquisition_Pharmacy_Creations5
Acquisition - Pharmacy Creations, Llc - Schedule of Result of Operation from Acquisition (Details) (Pharmacy Creations, LLC [Member], USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Pharmacy Creations, LLC [Member] | ' |
Total revenues | $664,370 |
Operating loss | ($423,589) |
Acquisition_Pharmacy_Creations6
Acquisition - Pharmacy Creations, Llc - Schedule of Pro Forma Financial Information (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Business Combinations [Abstract] | ' | ' | ' | ' |
Total revenues | $667,701 | $744,299 | $1,286,805 | $1,453,050 |
Net loss | ($2,595,725) | ($2,054,878) | ($4,854,258) | ($3,374,915) |
Acquisition_Pharmacy_Creations7
Acquisition - Pharmacy Creations, Llc - Schedule of Intangible Assets Acquisition (Details) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Fair Value | $659,000 |
Customer Relationships [Member] | ' |
Fair Value | 596,000 |
Customer Relationships [Member] | Minimum [Member] | ' |
Useful Life | '10 years |
Customer Relationships [Member] | Maximum [Member] | ' |
Useful Life | '15 years |
Trade Name [Member] | ' |
Fair Value | 5,000 |
Useful Life | '5 years |
Non-Compete Covenant [Member] | ' |
Fair Value | 50,000 |
Useful Life | '4 years |
Licensing [Member] | ' |
Fair Value | $8,000 |
Useful Life | '25 years |
Restricted_ShortTerm_Investmen1
Restricted Short-Term Investment (Details Narrative) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Restricted Short-Term Investment | ' | ' |
Certificate of deposit | $150,151 | $50,097 |
Inventories_Schedule_of_Invent
Inventories - Schedule of Inventories (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Inventory Disclosure [Abstract] | ' | ' |
Raw materials | $164,127 | ' |
Finished goods | 8,623 | ' |
Total inventories | $172,750 | ' |
Prepaid_Expenses_and_Other_Cur2
Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Prepaid Expenses And Other Current Assets | ' | ' |
Prepaid stock-based consulting expenses | ' | $26,649 |
Prepaid rent | 21,875 | 16,288 |
Prepaid insurance | 180,519 | 39,166 |
Other prepaid expenses and deposits | 121,851 | 22,964 |
Total prepaid expenses and other current assets | $324,245 | $105,067 |
Intangible_Assets_and_Goodwill2
Intangible Assets and Goodwill - Schedule of Intangible Assets (Details) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Cost | 659,000 |
Accumulated amortization | -17,433 |
Net Carrying value | 641,567 |
Customer Relationships [Member] | ' |
Cost | 596,000 |
Accumulated amortization | -9,933 |
Net Carrying value | 586,067 |
Customer Relationships [Member] | Minimum [Member] | ' |
Amortization periods (in years) | '10 years |
Customer Relationships [Member] | Maximum [Member] | ' |
Amortization periods (in years) | '15 years |
Trade Name [Member] | ' |
Amortization periods (in years) | '5 years |
Cost | 5,000 |
Accumulated amortization | -250 |
Net Carrying value | 4,750 |
Non-Compete Covenant [Member] | ' |
Amortization periods (in years) | '4 years |
Cost | 50,000 |
Accumulated amortization | -6,250 |
Net Carrying value | 43,750 |
Licensing [Member] | ' |
Amortization periods (in years) | '25 years |
Cost | 8,000 |
Accumulated amortization | -1,000 |
Net Carrying value | 7,000 |
Intangible_Assets_and_Goodwill3
Intangible Assets and Goodwill - Schedule of Amortization Expenses for Intangible Assets (Details) (USD $) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2014 | Jun. 30, 2014 | |
Amortization of intangible assets | $17,433 | $17,433 |
Customer Relationships [Member] | ' | ' |
Amortization of intangible assets | 250 | 250 |
Trade Name [Member] | ' | ' |
Amortization of intangible assets | 9,933 | 9,933 |
Non-Compete Covenant [Member] | ' | ' |
Amortization of intangible assets | 6,250 | 6,250 |
Licensing [Member] | ' | ' |
Amortization of intangible assets | $1,000 | $1,000 |
Intangible_Assets_and_Goodwill4
Intangible Assets and Goodwill - Schedule of Estimated Future Amortization Expense (Details) (USD $) | Jun. 30, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | ' |
Remainder of 2014 | $23,600 |
2015 | 53,500 |
2016 | 53,500 |
2017 | 53,500 |
2018 | $44,100 |
Intangible_Assets_and_Goodwill5
Intangible Assets and Goodwill - Schedule of Changes in Carrying Value of Goodwill (Details) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ' |
Goodwill, Beginning | ' |
Goodwill | ' |
Acquisition of PC | 331,621 |
Goodwill, Ending | $331,621 |
Accounts_Payable_and_Accrued_E2
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Debt Disclosure [Abstract] | ' | ' |
Accounts payable | $750,106 | $261,924 |
Other accrued expenses | ' | 50,000 |
Total accounts payable and accrued expenses | $750,106 | $311,924 |
Debt_Details_Narrative
Debt (Details Narrative) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Apr. 13, 2009 | |
Debt Disclosure [Abstract] | ' | ' |
Line of credits borrowing limit maximum | $75,000 | ' |
Line of credit facility interest rate description | ' | ' |
PC was required to pay regular monthly payments of all accrued unpaid interest due monthly, with interest on the line of credit calculated as the greater of one of the following: (a) the Prime Rate (as defined and published in the Wall Street Journal) plus 1.00% per annum, or (b) 4.25% per annum. The line of credit agreement was terminated following the acquisition of PC, and no amounts were borrowed, paid or outstanding during the period ended June 30, 2014 following the Company’s acquisition of PC. | ||
Borrowed term loan | ' | $168,000 |
Debt maturity date | 1-May-14 | ' |
Term loan interest rate description | ' | ' |
PC was required to pay regular monthly principal and interest payments with the interest on the term loan calculated as the greater of one of the following: (a) the Prime Rate (as defined and published in the Wall Street Journal) plus 1.50% per annum, or (b) 4.25% per annum. The term loan was secured by a first security interest on all business assets and the term loan was personally guaranteed by the members of PC. The term loan was terminated following the acquisition of PC, and no amounts were borrowed, paid or outstanding during the period ended June 30, 2014 following the Company’s acquisition of PC. |
Stockholders_Equity_and_Stockb2
Stockholders' Equity and Stock-based Compensation (Details Narrative) (USD $) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Apr. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Apr. 02, 2013 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | |
Employees And Directors [Member] | 2007 Incentive Stock And Awards Plan [Member] | Restricted Stock Units [Member] | Restricted Stock Units [Member] | Restricted Stock Units [Member] | Warrant [Member] | Minimum [Member] | Maximum [Member] | ||||
Common stock issued shares | 6,868 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock issued shares value | $50,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued upon exercise of stock options, shares | ' | ' | 121,045 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued upon exercise of stock options | ' | ' | 446,610 | ' | ' | ' | ' | ' | ' | ' | ' |
Additional shares issued upon exercise of stock options, shares | ' | ' | 23,265 | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise of common stock option to purchase of common stock | ' | ' | 44,164 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued upon warrants exercise | ' | ' | 6,328 | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from warrants exercise | ' | ' | 37,493 | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock exercise price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3.60 | $4.27 |
Preferred stock, shares authorized | ' | 5,000,000 | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, par value | ' | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, shares issued | ' | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, shares outstanding | ' | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum number of common stock issuance under the plan | ' | ' | ' | ' | 5,000,000 | ' | ' | ' | ' | ' | ' |
stock option exercise price | ' | ' | $6.94 | ' | ' | ' | ' | ' | ' | ' | ' |
Intrinsic value of stock options exercised | ' | ' | 644,113 | ' | ' | ' | ' | ' | ' | ' | ' |
Contractual term of stock options granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | '10 years |
Stock options granted vesting terms | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vesting terms for options granted to employees, directors and consultants typically included one of the following vesting schedules: 25% or 33% of the shares subject to the option vest and become exercisable on the first anniversary of the grant date and the remaining 75% or 67%, respectively, of the shares subject to the option vest and become exercisable quarterly in equal installments thereafter over two or three years, respectively; quarterly vesting over a three year period; annual vesting over three years; or monthly, quarterly or 100% vesting associated with the provision or completion of services provided under contracts with consultants. | |||||||||||
Percentage of forfeiture factor | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' |
Total unrecognized compensation expense related to unvested stock options granted under the Plan | ' | 2,684,000 | 2,684,000 | ' | ' | ' | 2,418,000 | 2,418,000 | ' | ' | ' |
Expense expected to recognize over the weighted-average remaining vesting period | ' | ' | '2 years 5 months 23 days | ' | ' | ' | ' | '1 year 9 months 18 days | ' | ' | ' |
Stock-based compensation | ' | 318,823 | 643,117 | ' | ' | ' | 339,932 | 676,926 | 26,649 | ' | ' |
RSUs were forfeited | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' |
Intrinsic value of warrants exercised | ' | ' | $8,701 | ' | ' | ' | ' | ' | ' | ' | ' |
Stockholders_Equity_and_Stockb3
Stockholders' Equity and Stock-based Compensation - Schedule of Stock Option Plan Activity (Details) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Number of shares, Options exercised | 121,045 |
Number of shares, Outstanding, Ending balance | 1,314,467 |
Weighted Avg. Remaining Contractual Life, Options outstanding | '6 years 4 months 28 days |
Stock Option Plan [Member] | ' |
Number of shares, Outstanding, Beginning balance | 1,328,790 |
Number of shares, Options granted | 225,886 |
Number of shares, Options exercised | -165,209 |
Number of shares, Options cancelled/forfeit | -75,000 |
Number of shares, Outstanding, Ending balance | -1,314,467 |
Number of shares, Options exercisable | 795,441 |
Number of shares, Options vested and expected to vest | 1,262,564 |
Weighted Avg. Exercise Price, Outstanding, Beginning balance | 5.31 |
Weighted Avg. Exercise Price, Options granted | 6.6 |
Weighted Avg. Exercise Price, Options exercised | 3.69 |
Weighted Avg. Exercise Price, Options cancelled/forfeit | 6.3 |
Weighted Avg. Exercise Price, Outstanding, Ending balance | 5.66 |
Weighted Avg. Exercise Price, Exercisable Ending Balance | 4.99 |
Weighted Avg. Exercise Price, Vested and expected to vest - end of period | 5.64 |
Weighted Avg. Remaining Contractual Life, Options outstanding | '6 years 4 months 28 days |
Weighted Avg. Remaining Contractual Life, Options exercisable | '4 years 8 months 1 day |
Weighted Avg. Remaining Contractual Life, Options vested and expected to vest | '6 years 3 months 22 days |
Aggregate Intrinsic Value, Options outstanding | 2,532,926 |
Aggregate Intrinsic Value, Options exercisable | 2,046,478 |
Aggregate Intrinsic Value, Options vested and expected to vest | 2,484,281 |
Stockholders_Equity_and_Stockb4
Stockholders' Equity and Stock-based Compensation - Schedule of Fair Value Assumption (Details) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Options Granted To Employees [Member] | ' |
Weighted-average fair value of options granted | $5.16 |
Expected volatility, minimum | 100.00% |
Expected volatility, maximum | 102.00% |
Risk-free interest rate, minimum | 1.37% |
Risk-free interest rate, maximum | 1.65% |
Dividend yield | 0.00% |
Options Granted To Employees [Member] | Minimum [Member] | ' |
Expected terms (in years) | '5 years 9 months 22 days |
Options Granted To Employees [Member] | Maximum [Member] | ' |
Expected terms (in years) | '6 years 10 months 28 days |
Options Granted To Consultants [Member] | ' |
Weighted-average fair value of options granted | $6.15 |
Expected volatility, minimum | 80.00% |
Expected volatility, maximum | 97.00% |
Risk-free interest rate, minimum | 0.10% |
Risk-free interest rate, maximum | 1.64% |
Dividend yield | 0.00% |
Options Granted To Consultants [Member] | Minimum [Member] | ' |
Expected terms (in years) | '2 years 6 months 15 days |
Options Granted To Consultants [Member] | Maximum [Member] | ' |
Expected terms (in years) | '10 years |
Stockholders_Equity_and_Stockb5
Stockholders' Equity and Stock-based Compensation - Schedule of Shares Outstanding and Exercisable (Details) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Number of Options Outstanding | 1,314,467 |
Weighted Average Remaining Contractual Life in Years | '6 years 4 months 28 days |
Weighted Average Exercise Price | $5.66 |
Number Exercisable | 795,441 |
Weighted Average Exercisable Exercise Price | $4.99 |
Range One [Member] | ' |
Range of Exercise Prices, minimum | $2.40 |
Range of Exercise Prices, maximum | $3.20 |
Number of Options Outstanding | 250,000 |
Weighted Average Remaining Contractual Life in Years | '5 years 26 days |
Weighted Average Exercise Price | $2.80 |
Number Exercisable | 250,000 |
Weighted Average Exercisable Exercise Price | $2.80 |
Range Two [Member] | ' |
Range of Exercise Prices, minimum | $3.60 |
Range of Exercise Prices, maximum | $4.51 |
Number of Options Outstanding | 515,107 |
Weighted Average Remaining Contractual Life in Years | '4 years 11 months 12 days |
Weighted Average Exercise Price | $4.25 |
Number Exercisable | 375,359 |
Weighted Average Exercisable Exercise Price | $4.33 |
Range Three [Member] | ' |
Range of Exercise Prices, minimum | $5.49 |
Range of Exercise Prices, maximum | $7.71 |
Number of Options Outstanding | 249,225 |
Weighted Average Remaining Contractual Life in Years | '9 years 3 months 11 days |
Weighted Average Exercise Price | $6.67 |
Number Exercisable | 35,030 |
Weighted Average Exercisable Exercise Price | $6.02 |
Range Four [Member] | ' |
Range of Exercise Prices, minimum | $8.06 |
Range of Exercise Prices, maximum | $10.75 |
Number of Options Outstanding | 293,335 |
Weighted Average Remaining Contractual Life in Years | '7 years 8 months 23 days |
Weighted Average Exercise Price | $8.99 |
Number Exercisable | 128,252 |
Weighted Average Exercisable Exercise Price | $9.02 |
Range Five [Member] | ' |
Range of Exercise Prices, minimum | $28 |
Range of Exercise Prices, maximum | $80 |
Number of Options Outstanding | 6,800 |
Weighted Average Remaining Contractual Life in Years | '5 years 7 months 17 days |
Weighted Average Exercise Price | $40.86 |
Number Exercisable | 6,800 |
Weighted Average Exercisable Exercise Price | $40.86 |
Stockholders_Equity_and_Stockb6
Stockholders' Equity and Stock-based Compensation - Schedule of Restricted Stock Units Activity (Details) (Restricted Stock Units [Member], USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Restricted Stock Units [Member] | ' |
Number of RSUs, Outstanding, Beginning balance | 1,389,960 |
Number of RSUs granted | ' |
Number of RSUs vested | ' |
Number of RSUs cancelled/forfeit | -100,000 |
Number of RSUs, Outstanding, Ending balance | 1,289,960 |
Weighted Average Grant Date Fair Value, Beginning balance | $3.19 |
Weighted Average Grant Date Fair Value, RSUs granted | ' |
Weighted Average Grant Date Fair Value, RSUs vested | ' |
Weighted Average Grant Date Fair Value, RSUs cancelled/forfeit | ($2.88) |
Weighted Average Grant Date Fair Value, Ending balance | $3.22 |
Stockholders_Equity_and_Stockb7
Stockholders' Equity and Stock-based Compensation - Schedule of Warrants Activity (Details) (Warrant [Member], USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Warrant [Member] | ' |
Number of shares, Outstanding, Beginning balance | 821,050 |
Number of Shares Subject to Warrants Outstanding, Granted | ' |
Number of Shares Subject to Warrants Outstanding, Exercised | -6,328 |
Number of Shares Subject to Warrants Outstanding, Expired | ' |
Number of shares, Outstanding, Ending balance | 814,722 |
Weighted average remaining contractual life of the outstanding warrants in years | '1 year 8 months 12 days |
Weighted Avg. Exercise Price, Outstanding, Beginning balance | $5.94 |
Weighted Avg. Exercise Price, Granted | ' |
Weighted Avg. Exercise Price, Exercised | $5.93 |
Weighted Avg. Exercise Price, Expired | ' |
Weighted Avg. Exercise Price, Outstanding, Ending balance | $5.94 |
Stockholders_Equity_and_Stockb8
Stockholders' Equity and Stock-based Compensation - Schedule of Warrants Outstanding and Warrants Exercisable (Details) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Derma Star [Member] | ' |
Issue Date | 25-Apr-12 |
Warrants Outstanding | 48,262 |
Exercise Price | $5.93 |
Warrants Exercisable | 48,262 |
Expiration Date | 25-Apr-15 |
April PPM [Member] | ' |
Issue Date | 25-Apr-12 |
Warrants Outstanding | 496,600 |
Exercise Price | $5.93 |
Warrants Exercisable | 496,600 |
Expiration Date | 25-Apr-15 |
Underwriter Warrants [Member] | ' |
Issue Date | 7-Feb-13 |
Warrants Outstanding | 179,860 |
Exercise Price | $5.25 |
Warrants Exercisable | 179,860 |
Expiration Date | 7-Feb-18 |
IR Consultant [Member] | ' |
Issue Date | 28-Feb-13 |
Warrants Outstanding | 30,000 |
Exercise Price | $5.25 |
Warrants Exercisable | 30,000 |
Expiration Date | 28-Feb-16 |
IR Consultant [Member] | ' |
Issue Date | 19-Jul-13 |
Warrants Outstanding | 60,000 |
Exercise Price | $8.50 |
Warrants Exercisable | 60,000 |
Expiration Date | 19-Jul-18 |
Warrant [Member] | ' |
Warrants Outstanding | 814,722 |
Exercise Price | $5.94 |
Warrants Exercisable | 814,722 |
Employee_Savings_Plan_Details_
Employee Savings Plan (Details Narrative) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Compensation and Retirement Disclosure [Abstract] | ' |
Percentage of salary deposits in tax deferred investment account | 100.00% |
Percentage of contributions made by the company | 3.00% |
Contributions by the company | $33,000 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details Narrative) (USD $) | 1 Months Ended | 6 Months Ended | 1 Months Ended | ||||
Jun. 30, 2014 | Apr. 30, 2013 | Jun. 30, 2014 | Feb. 18, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jan. 31, 2010 | |
sqft | sqft | sqft | Minimum [Member] | Maximum [Member] | Pharmacy Creations, LLC [Member] | ||
sqft | |||||||
Leases equipment under capital lease with interest rate | 4.25% | ' | 4.25% | ' | ' | ' | ' |
Lease agreement for office space (Square feet) | 7,565 | 3,874 | 7,565 | ' | ' | ' | 3,137 |
Operating lease Expiry | 31-Oct-18 | 30-Sep-16 | ' | ' | ' | ' | 31-Dec-15 |
Operating lease, monthly rental | $20,426 | $10,406 | ' | ' | ' | ' | $3,594 |
Operating lease, rent increase percentage | 3.00% | 3.00% | 3.00% | ' | ' | ' | ' |
Operating lease description | ' | ' | ' | ' | ' | ' | ' |
Once the Company relocates to the new office space (7,565 square feet), effective September 1, 2014, the Company’s intention is to sublet the 3,874 square feet of its current offices through its remaining lease term. | |||||||
Royalties range percentage | ' | ' | ' | ' | 4.50% | 9.00% | ' |
Maximum aggregate value of cash fees | ' | ' | ' | $100,000 | ' | ' | ' |
Commitments_and_Contingencies_2
Commitments and Contingencies - Schedule of Lease Equipment Under Capital Lease (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Compensation and Retirement Disclosure [Abstract] | ' | ' |
Remainder of 2014 | $3,505 | ' |
2015 | 7,009 | ' |
2016 | 7,009 | ' |
Total minimum lease payments | 17,523 | ' |
Less amount representing interest | -927 | ' |
Present value of future minimum lease payments | 16,596 | ' |
Less current portion | 6,428 | ' |
Capital lease obligation, net of current portion | $10,168 | ' |
Segment_Information_Details_Na
Segment Information (Details Narrative) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2014 | Jun. 30, 2014 | |
Segment Reporting [Abstract] | ' | ' |
Percentage of sales derived from single customer | 10.00% | 10.00% |
Percentage of drug and chemical purchases from three main suppliers | 90.00% | 90.00% |
Subsequent_Events_Details_Narr
Subsequent Events (Details Narrative) (USD $) | 6 Months Ended | 0 Months Ended |
Jun. 30, 2014 | Jul. 01, 2014 | |
Subsequent Event [Member] | ||
Shares issued upon exercise of stock options | 121,045 | 2,506 |
Shares issued upon exercise of stock options | $446,610 | $9,619 |