Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 11, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | Imprimis Pharmaceuticals, Inc. | |
Entity Central Index Key | 1,360,214 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 9,594,507 | |
Trading Symbol | IMMY | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,015 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $ 10,051 | $ 8,211 |
Restricted short-term investments | 150 | 150 |
Accounts receivable, net | 579 | 81 |
Inventories | 793 | 373 |
Prepaid expenses and other current assets | 436 | 241 |
Total current assets | 12,009 | 9,056 |
Intangible assets, net | 3,064 | 611 |
Goodwill | 1,180 | 332 |
Furniture and equipment, net | 601 | 243 |
TOTAL ASSETS | 16,854 | 10,242 |
Current liabilities | ||
Accounts payable and accrued expenses | 1,181 | 787 |
Accrued payroll and related liabilities | 707 | 716 |
Customer deposits | 73 | $ 2 |
Current portion of deferred acquisition obligation and accrued interest | 196 | |
Current portion of contingent acquisition obligation | 483 | $ 31 |
Current portion of capital lease obligations | 27 | 24 |
Total current liabilities | 2,667 | 1,560 |
Capital lease obligations, net of current portion | $ 8 | 19 |
Contingent acquisition obligation | $ 483 | |
Deferred acquisition obligation, net of current portion | $ 355 | |
Accrued expenses, net of current portion | 523 | $ 30 |
Note payable and paid-in-kind interest, net of unamortized debt discount and issuance costs | 8,061 | |
TOTAL LIABILITIES | $ 11,614 | $ 2,092 |
Commitments and contingencies | ||
STOCKHOLDERS' EQUITY | ||
Common stock, $0.001 par value, 90,000,000 shares authorized, 9,551,189 and 9,258,231 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively | $ 10 | $ 9 |
Additional paid-in capital | 53,918 | 50,006 |
Accumulated deficit | (48,688) | (41,865) |
TOTAL STOCKHOLDERS' EQUITY | 5,240 | 8,150 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 16,854 | $ 10,242 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 9,551,189 | 9,258,231 |
Common stock, shares outstanding | 9,551,189 | 9,258,231 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenues: | ||||
Sales, net | $ 1,917 | $ 664 | $ 3,479 | $ 664 |
License revenues | 50 | 3 | 51 | 5 |
Total revenues | 1,967 | 667 | 3,530 | 669 |
Cost of sales | (1,050) | (476) | (2,057) | (476) |
Gross profit | 917 | 191 | 1,473 | 193 |
Operating expenses: | ||||
Selling and marketing | 1,630 | 469 | 2,642 | 826 |
General and administrative | 2,743 | 2,289 | 5,223 | 4,209 |
Research and development | 25 | 36 | 206 | 96 |
Total operating expenses | 4,398 | 2,794 | 8,071 | 5,131 |
Loss from operations | (3,481) | (2,603) | (6,598) | (4,938) |
Other income (expense): | ||||
Interest income (expense), net | $ (249) | $ 7 | (256) | $ 17 |
Other income | 31 | |||
Total other income (expenses), net | $ (249) | $ 7 | (225) | $ 17 |
Net loss | $ (3,730) | $ (2,596) | $ (6,823) | $ (4,921) |
Basic and diluted net loss per share of common stock | $ (0.39) | $ (0.28) | $ (0.72) | $ (0.54) |
Weighted average number of shares of common stock outstanding, basic and diluted | 9,501,730 | 9,109,842 | 9,419,956 | 9,060,496 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (6,823) | $ (4,921) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization of furniture and equipment | 102 | 11 |
Amortization of intangible assets | 176 | $ 18 |
Amortization of debt issuance costs and discount | 70 | |
Paid-in-kind added to principal of note payable | 28 | |
Non-cash gain on contingent acquisition obligations | (31) | |
Stock-based compensation | 1,361 | $ 1,397 |
Changes in assets and liabilities, net of effects from acquisitions: | ||
Accounts receivable | (99) | (23) |
Inventories | (188) | 40 |
Prepaid expenses and other current assets | (195) | (216) |
Accounts payable and accrued expenses | 121 | 318 |
Accrued payroll and related liabilities | (40) | 179 |
Customer deposits | 71 | (12) |
NET CASH USED IN OPERATING ACTIVITIES | (5,447) | $ (3,209) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of Park Compounding, net of cash | $ (3,005) | |
Purchase of restricted short-term investment | $ (100) | |
Purchase of Pharmacy Creations, LLC, net of cash and advances | (636) | |
Purchases of furniture and equipment | $ (208) | (15) |
NET CASH USED IN INVESTING ACTIVITIES | (3,213) | (751) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Payments on capital lease obligation | (11) | $ (1) |
Payments on Park deferred acquisition obligation | (40) | |
Proceeds from note payable, net of issuance costs and fees | 9,303 | |
Net proceeds from exercise of warrants and stock options | 1,248 | $ 484 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 10,500 | 483 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 1,840 | (3,477) |
CASH AND CASH EQUIVALENTS, beginning of period | 8,211 | 15,579 |
CASH AND CASH EQUIVALENTS, end of period | 10,051 | 12,102 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for income taxes | 1 | 1 |
Cash paid for interest | 68 | $ 2 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Issuance of stock options for consulting services included in accounts payable and accrued expenses | 39 | |
Issuance of common stock and deferred obligations in the purchase of Park Compounding | 1,016 | |
Estimated relative fair value of warrants issued in connection with note payable | 840 | |
Final fee on note payable recorded as debt discount and included in accrued expenses | $ 500 |
Description of Business and Bas
Description of Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Company and Background Imprimis Pharmaceuticals, Inc. (together with its subsidiaries, unless the context indicates or otherwise requires, the Company or Imprimis) is a pharmaceutical company focused on developing and commercializing innovative and high quality proprietary compounded drug therapies and making these therapies available to physicians and patients at accessible prices. The Company owns, markets and sells a portfolio of proprietary combination formulations in ophthalmology and urology that it believes may offer competitive advantages and serve unmet needs in the marketplace. The Companys ophthalmology formulation portfolio, led by its Dropless Therapy injectable and LessDrops topical formulations, serves the multi-billion dollar eye drop market and is designed to address patient compliance issues and provide other medical and economic benefits to physicians and patients. The Company recently launched its urology business, headed by its Defeat IC campaign, which includes a patented compounded formulation for patients suffering from interstitial cystitis, and the ED Free campaign, which includes lyophilized compounded formulations for men with erectile dysfunction. The Company is also developing additional complementary proprietary compounded formulations to add to its ophthalmology and urology formulation portfolios. Imprimis makes, dispenses and sells its proprietary compounded formulations, as well as other non-proprietary products, through its wholly-owned compounding pharmacies. On April 1, 2014, the Company acquired Pharmacy Creations, LLC (PC), a New Jersey based compounding pharmacy, on January 1, 2015, the Company acquired South Coast Specialty Compounding, Inc. D/B/A Park Compounding (Park), a California based compounding pharmacy and on August 4, 2015, the Company acquired JT Pharmacy, Inc. D/B/A Central Allen Pharmacy (CAP), a Texas based compounding pharmacy. Effective with the acquisition of PC, the Company commenced sales and marketing efforts for Imprimis portfolio of proprietary and non-proprietary compounded 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 audited financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015 or for any other period. For further information, refer to the Companys audited consolidated financial statements and footnotes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 2014. The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Liquidity We have incurred significant operating losses and negative cash flows from operations since our inception. The Company incurred net losses of approximately $6,823 and $4,921 for the six months ended June 30, 2015 and 2014, respectively, and had an accumulated deficit of approximately $48,688 and $41,865 as of June 30, 2015 and December 31, 2014, respectively. In addition, the Company used cash in operating activities of approximately $5,447 and $3,209 for the six months ended June 30, 2015 and 2014, respectively. While there is no assurance, we believe that cash and cash equivalents and restricted investments of approximately $10,201 at June 30, 2015 will be sufficient to sustain our planned level of operations for at least the next twelve months. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following represents an update for the six months ended June 30, 2015 to the significant accounting policies described in the Companys Annual Report on Form 10-K for the year ended December 31, 2014. 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 per owner. At June 30, 2015, the Company had approximately $9,801 in cash deposits in excess of FDIC limits. Accounts Receivable Accounts receivable are stated net of allowances for doubtful accounts and contractual adjustments. The accounts receivable balance primarily includes amounts due from customers the Company has invoiced or from third-party providers (e.g., insurance companies and governmental agencies), but for which payment has not been received. Charges to bad debt are based on both historical write-offs and specifically identified receivables. Contractual adjustments are determined by the amount expected to be collected from third-party providers. Accounts receivable are presented net of allowances for doubtful accounts and contractual adjustments in the amount of $183 and $4 as of June 30, 2015 and December 31, 2014, respectively. 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 include sales of certain of the Companys proprietary compounded drug formulations and non-proprietary formulations and products. Product Revenues Determination of criteria (3) and (4) is based on managements 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 during which the related sales are recorded. The Company will defer any revenues received for a product that has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered and no refund will be required. License Revenues License arrangements may consist of non-refundable upfront license fees, data transfer fees, research reimbursement payments, exclusive license 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 the Company and require no consequential continuing involvement on the part of the Company are recognized as revenue when the license term commences and the licensed data, technology, compounded drug preparation and/or other deliverable 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 patent applications for such compounded drug preparations. The Company defers recognition of non-refundable fees if it has 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 and that are separate and independent of the Companys performance under the other elements of the arrangement. In addition, if the Companys continued involvement is required, through research and development services that are related to its proprietary know-how and expertise of the delivered technology or can only be performed by the Company, then such non-refundable 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. Business Combinations We account 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 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 development technologies and patents; and ● discount rates utilized in valuation estimates. Unanticipated events and circumstances may occur that 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 relevant revenue or other 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 or the occurrence of events that cause results to differ from our estimates or assumptions could have a material effect on the consolidated statements of operations, financial position and cash flows in the period of the change in the estimate. Goodwill and Intangible Assets The Company reviews its goodwill and indefinite-lived intangible assets for impairment as of January 1 of each year and 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 Companys business relative to expected operating results; ● significant adverse economic and industry trends; ● significant decline in the Companys 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 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 amount 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 units 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 units goodwill, determined by allocating the reporting units 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 units goodwill exceeds its fair value, an impairment loss will be recognized in an amount equal to the 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 in 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 condensed 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 condensed consolidated balance sheet, if material. During the three and six months ended June 30, 2015 and 2014, the Company did not recognize any impairment of long-lived assets. Debt Issuance Costs and Debt Discount Debt issuance costs and the debt discount are recorded net of note payable in the condensed consolidated balance sheet. Amortization expense of debt issuance costs and the debt discount is calculated using the interest method over the term of the debt and is recorded in interest expense in the accompanying condensed consolidated statement of operations. 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 entitys 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, 2015 and December 31, 2014, the Company did not have any financial assets or liabilities that are measured on a recurring basis. At June 30, 2015 and December 31, 2014, the Companys financial instruments included cash and cash equivalents, restricted short-term investments, accounts receivable, accounts payable and accrued expenses, accrued payroll and related liabilities, customer deposits, deferred acquisition obligations, note payable and capital leases. The carrying amount of these financial instruments, except for deferred acquisition obligations, note payable, and the capital leases, approximates fair value due to the short-term maturities of these instruments. The Companys restricted short-term investments are carried at amortized cost, which approximates fair value. Based on borrowing rates currently available to the Company, the carrying values of the deferred acquisition obligations, note payable, and capital leases approximate their respective fair values. Third Party Billing and Collection Agreements In connection with its acquisition of Park, the Company entered into a billing and collection agreement with a third party to assist in the billing and collection of workers compensation claims. Under the terms of the agreement, the Company is obligated to pay a fixed fee to the third party equal to 55% of the amounts billed and collected under the workers compensation claims. The Company accrues for such fees in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheet. Total billing and collection management expense under this agreement for the three and six months ended June 30, 2015 was $15 and $21, and is included in selling and marketing expenses in the accompanying condensed consolidated statement of operations. The amount due under the agreement as of June 30, 2015 was $54. Stock-Based Compensation All stock-based payments to employees, directors 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 estimated 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 estimated 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 Companys accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows Financial Accounting Standards Board (FASB) guidance. As such, the value of the applicable stock-based compensation is periodically remeasured and income or expense is recognized during the vesting terms of the equity instruments. The measurement date for the estimated fair value of the equity instruments issued is 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 vendors performance is complete. In the case of equity instruments issued to consultants, the estimated fair value of the equity instrument is primarily recognized over the term of the consulting agreement. According to 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 grantors balance sheet once the equity instrument is granted for accounting purposes. Accordingly, the Company records the estimated fair value of nonforfeitable equity instruments issued for future consulting services as prepaid stock-based consulting expenses in its condensed consolidated balance sheets. Income Taxes The Company accounts for income taxes under the provisions of FASB Accounting Standards Codification (ASC) 740, Income Taxes 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 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 deferred acquisition obligations, stock options, RSUs and warrants were 3,014,919 and 3,419,149 at June 30, 2015 and 2014, respectively, and are excluded from the calculation of diluted net loss per share for all periods presented because the effect is anti-dilutive. Common stock equivalents at June 30, 2015 included 28,633 shares of common stock underlying RSUs awarded to directors that had vested, but the issuance and delivery of these shares are deferred until the director resigns. 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, 2015 and 2014: Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 Numerator net loss $ (3,730 ) $ (2,596 ) $ (6,823 ) $ (4,921 ) Denominator weighted average number of shares outstanding, basic and diluted 9,501,730 9,109,842 9,419,956 9,060,496 Net loss per share, basic and diluted $ (0.39 ) $ (0.28 ) $ (0.72 ) $ (0.54 ) 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 and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management are, among others, allowance for doubtful accounts and contractual adjustments, realizability of inventories, valuation of deferred taxes, goodwill and intangible assets, recoverability of long-lived assets and goodwill, valuation of contingent acquisition obligations and deferred acquisition obligations, valuation of note payable, and valuation of stock-based compensation issued to employees and non-employees. Actual results could differ from those estimates. Recently Adopted Accounting Pronouncements In April 2015, the FASB issued Accounting Standard Update (ASU) 2015-03 Simplifying the Presentation of Debt Issuance Costs Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09 Revenue from Contracts with Customers. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 3. ACQUISITIONS Acquisition of Park On January 1, 2015, the Company acquired all of the outstanding membership interests of Park (the Park Acquisition) from its previous owners (the Sellers), such that Park became a wholly owned subsidiary of the Company. The acquisition of Park permits the Company to further make and distribute its patent-pending proprietary drug formulations and other novel pharmaceutical solutions and introduces the Company to new geographic and compounded formulation markets. The transaction has been accounted for as a business combination and the financial results of Park have been included in the Companys condensed consolidated financial statements for the period subsequent to the acquisition. The estimated acquisition date fair value of consideration transferred, assets acquired and liabilities assumed for Park are presented below and represent the Companys best estimates. Fair Value of Consideration Transferred At the closing of the Park Acquisition, the Company paid to the Sellers an aggregate cash purchase price of $3,000, net of fees and expenses, and a $100 payment for cash remaining in a Park bank account, and we issued to the Sellers 63,525 shares of the Companys restricted common stock, valued at $500 based on the average closing price of the Companys common stock for the 10 trading days preceding the closing. In addition, the Company is obligated to make 12 quarterly cash payments to the Sellers collectively of $53 each over the three years following the closing of the Park Acquisition, totaling $638; provided that the Sellers will have the option to receive the last six of such payments, totaling up to an aggregate of $319, in the form of 6,749 shares of the Companys common stock for each such payment. The convertible features of the deferred consideration provide for a rate of conversion that is at market value, and as a result no value was attributed to the conversion feature. Management applied a discount rate of 15% to the restricted common stock issued at the closing of the Park Acquisition due to a lack of marketability of such shares as a result of certain restrictions on their transfer. The total acquisition date fair value of the consideration transferred and to be transferred is estimated at approximately $4,116. A $591 liability was recognized for the estimated acquisition date fair value of the deferred consideration and is included in the deferred acquisition obligations in the accompanying condensed consolidated balance sheet at June 30, 2015. The total acquisition date fair value of consideration transferred and to be transferred is estimated as follows: Cash payment to Sellers at closing $ 3,100 Restricted common stock issuance to Sellers at closing 425 Deferred consideration to Sellers 591 Total acquisition date fair value $ 4,116 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 January 1, 2015, the acquisition date. The excess of the acquisition date fair value of consideration transferred over the 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 $ 95 Accounts receivable 399 Inventories 232 Furniture and equipment 252 Intangible assets 2,629 Total identifiable assets acquired 3,607 Accounts payable and accrued expenses 304 Other liabilities 35 Total liabilities assumed 339 Total identifiable assets less liabilities assumed 3,268 Goodwill 848 Net assets acquired $ 4,116 The fair value adjustments made herein and the allocation of purchase price is preliminary. During the three months ended June 30, 2015 the discount rate of the common stock issued at the time of the Park Acquisition was adjusted from 25% to 15% which resulted in an increase of $46 and $4 in goodwill and intangible assets, respectively, compared to the initial allocation of the purchase price. The final allocation will be based on estimates and appraisals that will be finalized within one year of the closing of the Park Acquisition and based on the Companys final evaluation of Parks 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 Companys final purchase price allocation differs from the allocation used in preparing these condensed consolidated financial statements, the Companys tangible and intangible assets and net loss could be higher or lower than the amounts presented in these condensed consolidated financial statements. Results of Operations The amount of revenues and net income of Park included in the Companys condensed consolidated statement of operations from the acquisition date through the period ended June 30, 2015 are as follows: Total revenues $ 2,201 Net income $ 88 Intangible Assets Management engaged a third-party valuation firm to assist in the determination of the fair value of the acquired intangible assets of Park. In determining the fair value of the intangible assets, the Company considered, among other factors, the best use of the acquired assets, analyses of historical financial performance of Park and estimates of future performance of Park. The fair values of the identified intangible assets related to Parks customer relationships, trade name, non-competition clause, and state pharmacy licenses. Customer relationships and the non-competition clause were calculated using the income approach. Trade name and state pharmacy licenses were calculated using the cost approach. The following table sets forth the components of identified intangible assets associated with the Park Acquisition and their estimated useful lives. Fair Value Useful Life Customer relationships 2,387 3 - 15 years Trade name 10 5 years Non-competition clause 224 3 years State pharmacy licenses 8 25 years $ 2,629 The Company determined the useful lives of intangible assets based on the expected future cash flows and contractual life associated with the respective assets. Trade names represent the fair value of the brand and name recognition associated with the marketing of Parks formulations and services. Customer relationships represent the expected future benefit from contracts and relationships which, at the date of acquisition, were reasonably anticipated to continue given the history and operating practices of Park. The non-competition clause represents the contractual period and expected degree of adverse economic impact that would exist in its absence. Licenses represent twelve state pharmacy licenses Park held at the date of acquisition. Goodwill Of the total estimated purchase price for the Park Acquisition, $848 was allocated to goodwill and is attributable to expected synergies between the combined companies, including access for the Company to fulfill prescriptions with its patent-pending proprietary drug formulations through Parks market channels and 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 business 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. 2014 Acquisition of PC On April 1, 2014, the Company completed the acquisition of PC. The Company has included the financial results of PC in its condensed consolidated financial statements from the date of acquisition. The total purchase price for PC was approximately $1,115, which consisted of approximately $600 in cash payments and $515 in contingent consideration. The Company has recorded $124 of net tangible assets less liabilities, $659 of identifiable intangible assets, and $332 of goodwill in connection with such acquisition. Pro Forma Financial Information The following table presents the Companys unaudited pro forma results (including Park and PC) for the three and six months ended June 30, 2014, 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 acquisitions 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, interest charges, acquisition costs, and eliminations of intercompany transactions. For the For the Three Months Ended Six Months Ended June 30, 2014 June 30, 2014 Total revenues $ 1,721 $ 3,248 Net loss $ (2,669 ) $ (4,846 ) The Company incurred approximately $201 in acquisition expenses related to the Park Acquisition, and did not incur material acquisition expenses related to the PC acquisition. |
Restricted Short-Term Investmen
Restricted Short-Term Investment | 6 Months Ended |
Jun. 30, 2015 | |
Restricted Short-term Investment | |
Restricted Short-Term Investment | NOTE 4. RESTRICTED SHORT-TERM INVESTMENTS The restricted short-term investments at June 30, 2015 and December 31, 2014 consist of certificates of deposit, which are classified as held-to-maturity. At June 30, 2015 and December 31, 2014, the restricted short-term investments were recorded at amortized cost, which approximates fair value. At June 30, 2015 and December 31, 2014, the certificates of deposit of $150 were classified as a current asset. These certificates of deposit are required as collateral under the Companys corporate credit card agreement and additional security for the Companys office space lease, and they automatically renew every twelve months. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 5. INVENTORIES Inventories are comprised of finished compounded formulations, over-the-counter and prescription retail pharmacy products, commercial pharmaceutical products, related laboratory supplies and active pharmaceutical ingredients. The composition of inventories as of June 30, 2015 and December 31, 2014 was as follows: June 30, 2015 December 31, 2014 Raw materials $ 386 $ 146 Work in progress - 98 Finished goods 407 129 Total inventories $ 793 $ 373 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 6 Months Ended |
Jun. 30, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | NOTE 6. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following: June 30, 2015 December 31, 2014 Prepaid insurance $ 35 $ 124 Other prepaid expenses 295 82 Deposits and other current assets 106 35 Total prepaid expenses and other current assets $ 436 $ 241 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | NOTE 7. INTANGIBLE ASSETS AND GOODWILL The Companys intangible assets at June 30, 2015 consisted of the following: Amortization periods Accumulated Net (in years) Cost amortization Carrying value Customer relationships 3-15 years $ 2,983 $ (166 ) $ 2,817 Trade name 5 years 15 (3 ) 12 Non-competition clause 3-4 years 274 (53 ) 221 State pharmacy licenses 25 years 16 (2 ) 14 $ 3,288 $ (224 ) $ 3,064 Amortization expense for intangible assets for the three and six months ended June 30, 2015 was as follows: For the Three Months Ended For the Six Months Ended June 30, 2015 June 30, 2015 Customer relationships $ 66 $ 129 Trade name 1 2 Non-competition clause 26 44 State pharmacy licenses 1 1 $ 94 $ 176 Estimated future amortization expense for the Companys intangible assets at June 30, 2015 is as follows: Years ending December 31, Remainder of 2015 $ 174 2016 349 2017 349 2018 208 2019 205 Thereafter 1,779 $ 3,064 The changes in the carrying value of the Companys goodwill during the six months ended June 30, 2015 were as follows: Balance at January 1, 2015 $ 332 Acquisition of Park (see Note 3) 848 Balance at June 30, 2015 $ 1,180 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 6 Months Ended |
Jun. 30, 2015 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | NOTE 8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following: June 30, 2015 December 31, 2014 Accounts payable $ 1,016 $ 699 Deferred rent 44 5 Accrued interest (see Note 9) 86 - Accrued exit fee for note payable (see Note 9) 500 - Building lease liability(1) 58 74 Other accrued expenses - 39 (2) Total accounts payable and accrued expenses 1,704 817 Less: Current portion (1,181 ) (787 ) Non-current total accrued expenses $ 523 $ 30 (1) In September 2014, the Company relocated its primary operations to a 7,565 square foot office facility in San Diego, California. In February 2015, the Company entered into a sublease agreement to sublet 3,874 square feet of its previously occupied offices through the remaining term of the lease at a monthly rent amount of $8. The Company recognized a loss of approximately $117 during the year ended December 31, 2014 related to the estimated remaining lease liability, net of expected sublease income, of the previously occupied offices. The obligations were discounted based on current prevailing market rates. (2) The amount consists of a $39 stock-based compensation accrual at December 31, 2014 related to stock options granted for consulting services provided. The stock options were granted during the six months ended June 30, 2015 and the $39 was recorded to additional paid-in-capital. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 9. DEBT On May 11, 2015, the Company entered into a loan and security agreement (the Loan Agreement) with IMMY Funding LLC, an affiliate of Life Sciences Alternative Funding LLC (the Lender), as lender and collateral agent. Pursuant to the terms of the Loan Agreement, the Lender made available to the Company term loans in the aggregate principal amount of up to $15,000, $10,000 of which was drawn on May 11, 2015 and the remaining $5,000 of which will be available to be drawn, at the Companys option, upon the Companys achievement of at least $15,000 in trailing 12-month revenue during any consecutive 12-month period through May 11, 2016. The term loans bear interest at a fixed per-annum rate of 12.5% and allows for 2% of the interest to be paid-in-kind until either February 2017 or May 2017, such date dependent upon the Companys ability to meet certain revenue or cash balance measures. The Company is permitted to pay interest only for the first three years and after the end of the interest-only period, we will be required to pay interest, plus repayments of the principal amount of the term loans, in 36 equal monthly installments. The interest-only period may be reduced to 20 months if the Company does not meet certain minimum revenue or cash balance requirements and the Company would be required to pay interest, plus repayments of the principal amount of the term loans, in 24 equal monthly installments. All amounts owed under the loan agreement, including a final fee of 5% of the aggregate principal amount of the term loans, will be due on the earlier of May 11, 2021, or 24 months after the end of the interest-only period. The Company incurred expenses of approximately $697 in connection with the Loan Agreement. The final fee and expenses are being amortized as interest expense over the term of the debt using the interest method and the related liability of $500 for the final fee is included in accrued expenses (see Note 8) in the accompanying condensed consolidated balance sheet. Pursuant to the terms of the Loan Agreement, the Company is bound by certain affirmative covenants setting forth actions that the Company must take during the term of the Loan Agreement, including, among others, certain information delivery requirements, obligations to maintain certain insurance and certain notice requirements. Additionally, the Company is bound by certain negative covenants setting forth actions that the Company may not take during the term of the Loan Agreement without the Lenders consent, including, among others, disposing of certain of the Companys or its subsidiaries business or property, incurring certain additional indebtedness, entering into certain merger, acquisition or change of control transactions, paying certain dividends or distributions on or repurchasing any of the Companys capital stock, or incurring any lien or other encumbrance on the Companys or its subsidiaries assets, subject to certain permitted exceptions. Upon the occurrence of an event of default under the Loan Agreement (subject to cure periods for certain events of default), all amounts owed by the Company thereunder may be declared immediately due and payable by the Lender. Events of default include, among others, the following: the occurrence of certain bankruptcy events; the failure to make payments under the Loan Agreement when due; the occurrence of a material adverse change in the business, operations or condition of the Company or any of its subsidiaries; the breach by the Company or its subsidiaries of certain of their material agreements with third parties; the initiation of certain regulatory enforcement actions against the Company or its subsidiaries; the rendering of certain types of fines or judgments against the Company or its subsidiaries; any breach by the Company or its subsidiaries of any covenant (subject to cure periods for certain covenants) made in the Loan Agreement; and the failure of any representation or warranty made by the Company or its subsidiaries in connection with the Loan Agreement to be correct in any material respect when made. The Companys obligations under the Loan Agreement are guaranteed on a secured basis by its wholly owned subsidiaries. Each of the Company and its subsidiaries has granted the Lender a security interest in substantially all of its personal property, rights and assets, including intellectual property rights and equity ownership, to secure the payment of all amounts owed under the Loan Agreement. In connection with the Loan Agreement, the Company has issued to the Lender a warrant to purchase up to 125,000 shares of the Companys common stock, which is exercisable immediately, has an exercise price of $7.85 per share and has a term of 10 years. The relative fair value of the warrants was approximately $840 and was estimated using the Black-Scholes-Merton model with the following assumptions: fair value of the Companys common stock at issuance of $7.97 per share; ten-year contractual term; 109% volatility; 0% dividend rate; and a risk-free interest rate of 1.25%. The relative fair value of the warrants was recorded as a debt discount, decreasing notes payable and increasing additional paid-in capital on the accompanying condensed consolidated balance sheet. The debt discount is being amortized to interest expense over the term of the debt using the interest method. For the three and six months ended June 30, 2015, debt discount and issuance costs amortization was approximately $70. Notes payable at June 30, 2015 was as follows: June 30, 2015 12.5% note payable $ 10,000 Add: Interest paid-in-kind 28 Less: Discount on note for issuance costs and relative fair value of warrants (1,967 ) Less: Current portion - Long-term portion $ 8,061 Future minimum payments as of June 30, 2015 are as follows: Year Ending December 31, Amount Remainder of 2015 $ 529 2016 1,075 2017 1,195 2018 2,741 2019 4,183 Thereafter 6,275 Total minimum payments 15,998 Less: amount representing interest and interest paid-in-kind (5,998 ) Note payable, gross 10,000 Add: interest paid-in-kind 28 Less: unamortized discount and issuance costs (1,967 ) Note payable and interest paid-in-kind, net of unamortized debt discount and issuance costs $ 8,061 |
Stockholders' Equity and Stock-
Stockholders' Equity and Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Stockholders' Equity and Stock-Based Compensation | NOTE 10. STOCKHOLDERS EQUITY AND STOCK-BASED COMPENSATION Common Stock During January 2015, the Company issued 63,525 shares of restricted common stock, valued at $425, in connection with the Park Acquisition (see Note 3). In January 2015, the Company issued 8,521 shares of its common stock in connection with RSUs that had been awarded to a non-employee director and had vested, but were not issued and settled until the resignation of the director on January 1, 2015. During the six months ended June 30, 2015, 9,936 shares of the Companys common stock underlying RSUs issued to directors vested, but the issuance and delivery of these shares are deferred until the director resigns. During the six months ended June 30, 2015, the Company issued a total of 220,912 shares of common stock as a result of warrant exercises. Of these, the Company received cash proceeds of $1,248 for the issuance of 209,980 shares of common stock upon the exercise on a cash basis of warrants to purchase the same number of shares of common stock with an exercise price of $5.925, and the Company received no cash proceeds for the issuance of 10,932 shares of common stock upon the exercise pursuant to cashless exercise provisions of warrants to purchase 30,457 shares of common stock with an exercise price of $5.25 per share. Preferred Stock At June 30, 2015, 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 Companys Board of Directors and stockholders adopted the Companys 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, 2015, the Plan provides for the issuance of a maximum of 5,000,000 shares of the Companys 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 Companys 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, restricted stock units and restricted stock. The Plan is administered by the Compensation Committee of the Companys Board of Directors. Stock Options A summary of stock option activity under the Plan for the six months ended June 30, 2015 is as follows: Number of shares Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life Aggregate Intrinsic Value Options outstanding - January 1, 2015 1,029,240 $ 5.74 Options granted 187,673 $ 7.68 Options exercised - $ - Options cancelled/forfeit (15,103 ) $ 9.06 Options outstanding - June 30, 2015 1,201,810 $ 5.99 6.19 $ 2,356 Options exercisable 822,593 $ 5.44 4.96 $ 2,564 Options vested and expected to vest 1,163,888 $ 5.96 6.11 $ 2,331 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, 2015, based on the closing price of the Companys common stock of $8.13 on that date. During the six months ended June 30, 2015, the Company granted stock options to certain employees and consultants. The stock options were granted with an exercise price equal to the current market price of the Companys common stock, as reported by the securities exchange on which the common stock was then listed, at the grant date and have contractual terms of 10 years. Vesting terms for options granted to employees and consultants during the six months ended June 30, 2015 typically included one of the following vesting schedules: 25% of the shares subject to the option vest and become exercisable on the first anniversary of the grant date and the remaining 75% of the shares subject to the option vest and become exercisable quarterly in equal installments thereafter over three years; quarterly vesting over three years; 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. The expected volatility is based on the historical volatilities of the common stock of the Company and comparable publicly traded companies based on the Companys belief that 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, which would affect 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: 2015 Weighted-average fair value of options granted $ 6.60 Expected terms (in years) 5.81 - 6.11 Expected volatility 106 - 121 % Risk-free interest rate 1.47 - 1.64 % 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: 2015 Weighted-average fair value of options granted $ 6.18 Expected terms (in years) 10.00 Expected volatility 109 % Risk-free interest rate 1.06 % Dividend yield - The following table summarizes information about stock options outstanding and exercisable at June 30, 2015: 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 4.07 $ 2.80 250,000 $ 2.80 $ 3.60 - $4.51 337,723 4.46 $ 4.36 283,350 $ 4.41 $ 5.49 - $7.99 353,730 8.87 $ 7.07 115,262 $ 6.60 $ 8.06 - $8.75 253,557 6.88 $ 8.89 167,181 $ 8.92 $ 28.00 - $80.00 6,800 4.60 $ 40.86 6,800 $ 40.86 1,201,810 6.19 $ 5.99 822,593 $ 5.44 As of June 30, 2015, there was approximately $1,975 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 2.5 years. The stock-based compensation for all stock options was $240 and $569 during the three and six months ended June 30, 2015, 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 Companys common stock on the grant date, is expensed over the vesting period of the RSUs. Unvested portions of RSUs issued to consultants are remeasured on an interim basis until vesting criteria is met. During February 2015, the Company granted 30,000 RSUs to its Chief Financial Officer, Andrew R. Boll and 30,000 RSUs to its Chief Commercial Officer, John P. Saharek, valued at $442 in the aggregate. The RSUs were granted pursuant to the Plan and will vest on the third anniversary of the RSU grant date, subject to the applicable employees continued employment with the Company on such date and accelerated vesting of all unvested shares thereunder upon the occurrence of a change in control (as defined in the Plan). During February 2015, the Company granted 157,500 RSUs to Mr. Boll, which are subject to the satisfaction of certain market-based and continued service conditions (the Boll Performance Equity Award). The market-based vesting criteria are separated into five tranches and require that the Company achieve and maintain certain stock price targets ranging from $10 per share to $30 per share during the three-year period following the grant date. With certain limited exceptions, Mr. Boll must be employed with the Company on the third anniversary of the grant date in order for the Boll Performance Equity Award to vest. The initial fair value of the Boll Performance Equity Award was $228 using a Monte Carlo Simulation with a three-year life, 60% volatility and a risk free interest rate of 0.77%. The market-based vesting conditions applicable to the Boll Performance Equity Award are as follows: Tranche Number of Shares Target Share Price Tranche 1 30,000 shares $10.00 or greater Tranche 2 30,000 shares $15.00 or greater Tranche 3 30,000 shares $20.00 or greater Tranche 4 30,000 shares $25.00 or greater Tranche 5 37,500 shares $30.00 or greater For each respective tranche to vest the following conditions must be met: (i) the Companys common stock must have an official closing price at or above the Target Share Price for the respective tranche (each such date, a Trigger Date); (ii) during the period that includes the Trigger Date and the immediately following 19 trading days (the Measurement Period), the arithmetic mean of the 20 closing prices of the Companys common stock during the Measurement Period must be at or above the Target Share Price for such tranche; and (iii) with certain limited exceptions, Mr. Boll must be in continuous service with the Company through the third anniversary of the grant date. Any unvested RSUs under the Boll Performance Equity Award will be forfeited on the third anniversary of the grant date. A summary of the Companys RSU activity and related information for the six months ended June 30, 2015 is as follows: Number of RSUs Weighted Average Grant Date Fair Value RSUs unvested - January 1, 2015 1,276,815 $ 3.20 RSUs granted 242,624 $ 3.59 RSUs vested (9,936 ) $ 7.55 RSUs cancelled/forfeited (6,209 ) $ 6.85 RSUs unvested at June 30, 2015 1,503,294 $ 3.22 As of June 30, 2015, the total unrecognized compensation expense related to unvested RSUs was approximately $2,002, which is expected to be recognized over a weighted-average period of 1.1 years, based on the vesting schedules of the applicable RSUs. The stock-based compensation for RSUs during the three and six months ended June 30, 2015 was $413 and $792, respectively. Warrants From time to time, the Company issues warrants to purchase shares of the Companys common stock to investors, lenders (see Note 9), underwriters and other non-employees for services rendered or to be rendered in the future. In April 2015, warrants to purchase 334,819 shares of the Companys common stock with an exercise price of $5.925 were cancelled following the expiration of their contractual term. A summary of warrant activity for the six months ended June 30, 2015 is as follows: Number of Shares Subject to Warrants Outstanding Weighted Avg. Exercise Price Warrants outstanding - January 1, 2014 690,944 $ 6.05 Granted 125,000 $ 7.85 Exercised (240,437 ) $ 5.84 Expired (334,819 ) $ 5.93 Warrants outstanding and exercisable - June 30, 2015 240,688 $ 7.41 Weighted average remaining contractual life of the outstanding warrants in years - June 30, 2015 6.49 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, 2015 was approximately $528. A list of the warrants outstanding as of June 30, 2015 is included in the following table: Warrants Outstanding Warrants Exercisable Warrants Exercise Warrants Expiration Warrant Series Issue Date Outstanding Price Exercisable Date Lender warrants (see Note 9) 5/11/2015 125,000 $ 7.85 125,000 5/11/2025 Underwriter Warrants 2/7/2013 55,688 $ 5.25 55,688 2/7/2018 Warrants issued to investor relations consultant 7/19/2013 60,000 $ 8.50 60,000 7/19/2018 240,688 $ 7.41 240,688 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 June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 Employees - selling and marketing $ 107 $ 17 $ 175 $ 31 Employees - general and administrative 516 562 1,037 1,105 Directors - general and administrative 63 42 108 84 Consultants - selling and marketing 17 15 41 31 Consultants - general and administrative - 18 - 87 Consultants - research and development - 5 - 9 Total $ 703 $ 659 $ 1,361 $ 1,347 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 11. COMMITMENTS AND CONTINGENCIES Capital Leases The Company leases equipment under capital leases with an interest rate of 4.25% per annum. At June 30, 2015, future payments under the Companys capital leases were as follows: Year ending December 31, Remainder of 2015 $ 15 2016 22 2017 1 Total minimum lease payments 38 Less amount representing interest (3 ) Present value of future minimum lease payments 35 Less current portion (27 ) Capital lease obligation, net of current portion $ 8 The value of the equipment under capital leases as of June 30, 2015 was $60, with related accumulated depreciation of $18. Operating Leases In February 2015, the Company entered into a lease agreement for approximately 8,602 square feet of lab, warehouse and office space in Roxbury, New Jersey. The current lease term expires on July 31, 2022. The monthly rent amount is $10 and includes annual increases of approximately 3.75%, and the lease allows for the first five months of rent amounts to be abated. This facility is currently undergoing construction to serve as an outsourcing facility and pharmacy. In January 2015, the Company entered into a commercial lease agreement, for the lease of certain premises to Park of approximately 4,500 square feet of lab and office space. The monthly rent amount is $10 and includes annual increases of approximately 3%. In June 2014, the Company entered into a lease agreement for 7,565 square feet of office space that commenced on September 1, 2014 and continues until October 31, 2018. Monthly rent began on September 1, 2014 in the amount of $20, 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. This space serves as our corporate headquarters. In April 2013, the Company entered into a lease agreement for 3,874 square feet of office space that commenced on May 1, 2013 and continues until September 30, 2016. Monthly rent began on May 1, 2013 in the amount of $10 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. In February 2015, the Company entered into a sublease agreement to sublet this space through the remaining term of the lease at a monthly rent amount of $8. In January 2010, PC entered into a lease agreement for 3,137 square feet of office and laboratory space that commenced on January 1, 2010 and continues until December 31, 2015. Monthly rent began on January 1, 2010 in the amount of $4. 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 Companys rights, including intellectual property disputes, 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 Companys consolidated financial position and results of operations. Indemnities In addition to the indemnification provisions contained in the Companys charter documents, the Company generally enters into separate indemnification agreements with each of the Companys 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 individuals status or service as the Companys 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 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 incurred any payments for these obligations and, therefore, no liabilities have been recorded for these indemnities in the accompanying condensed consolidated balance sheets. Urigen License On October 24, 2014 (the Urigen Effective Date), the Company entered into a license agreement (the Urigen License) with Urigen Pharmaceuticals, Inc. (Urigen), pursuant to which Urigen granted to the Company a license under certain U.S. patents and patent applications to develop and sell in the U.S. Urigens URG101 product (HLA), a heparin and alkalinized lidocaine compounded formulation, for the prevention or treatment of disorders of the lower urinary tract. As consideration for the license granted under the Urigen License, the Company agreed to pay Urigen annual tiered royalties based on sales of HLA, subject to certain minimum annual royalty payments. The annual tiered royalties consist of the greater of (i) $0.50 per dose (dollar amount not presented in thousands), and (ii) 15%-20% of the Companys net sales of HLA, with the royalty amount within such range depending on the Companys aggregate sales of HLA during the period to which the royalty payment applies. The minimum annual royalty payment consists of (a) for the 2015 calendar year, the greater of (i) 110% of the aggregate royalties paid to Urigen under the Existing Sublicenses during the preceding 12 months, on a prorated basis, and (ii) $800, less the aggregate royalties paid to Urigen under the Existing Sublicenses during the 2015 calendar year, and (b) for each calendar year thereafter, 110% of the aggregate amount owed by the Company to Urigen under the Urigen License during the prior calendar year. The Company is obligated to pay such royalties beginning with its first commercial sale of HLA and continuing until the expiration of the patents subject to the license granted under the Urigen License. The Company has also agreed to use commercially reasonable efforts to develop and commercialize HLA according to the terms of a diligence plan agreed to by the parties, which efforts will include, without limitation, the Companys investment of $2,000 in commercialization efforts of HLA, which investment and timeline can be adjusted dependent on market circumstances, and is expected to be incurred over 18-24 months following the Urigen Effective Date. The Urigen License was non-exclusive until April 24, 2015, when the Company exercised its option to convert the non-exclusive license to an exclusive license for the remaining term of the Urigen License. Legacy sublicensees, who previously had non-exclusive licensed rights to compound and sell HLA (the Existing Sub-licensees) were provided written notice of the Companys intent to terminate those non-exclusive license agreements, on or around April 24, 2015. Over the following 60 to 90 days (the Transition Period) the Company entered into agreements with the Existing Sub-licensees to transfer existing refill prescriptions to the Companys wholly owned pharmacies. These agreements required various one-time payments and limited future payments related to transferred prescriptions. Urigen agreed that any revenue received from the Existing Sub-licensees from HLA sales that are consistent with their respective agreements with Urigen, will be kept by the Company (without a related royalty payment to Urigen). Beginning on April 24, 2015, the Company was due royalty payments on any HLA prescriptions filled by Existing Sub-licensees during the Transition Period and any additional period the sublicenses filled prescriptions for HLA. During the three and six months ended June 30, 2015, the Company recognized $50 in royalty revenues related to HLA prescriptions filled by the Existing Sub-licensees. Subject to certain conditions and each partys right to terminate the Urigen License earlier under certain circumstances, the Urigen License will continue in effect until the expiration of the Companys royalty obligations under the Urigen License. The Urigen License terminates upon the first commercial sale of HLA by Urigen, its affiliates, or a third party after the U.S. Food and Drug Administration (the FDA) grants Urigen approval to market HLA in the U.S., if market approval is granted. The Company shall have the option, at its discretion, to become a non-exclusive distributor of HLA following the FDA granting Urigen such market approval. During the three and six months ended June 30, 2015 the Company recognized $3 and $5 in royalty amounts under the Urigen License, and such amounts are included in cost of sales in the accompanying condensed consolidated statement of operations. PCCA License Agreement On August 30, 2012, the Company entered into a license agreement with Professional Compounding Centers of America (PCCA), pursuant to which PCCA has granted to the Company and its affiliates certain exclusive rights under PCCAs 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 that the Company may produce, which royalties will range from 4.5% to 9% for each product, subject to certain minimum royalty payments. PCCA may terminate the license agreement if the Company fails to commence efforts to research and develop any such products within certain time periods, as set forth in the license agreement. No royalty amounts have been paid or accrued under this agreement during the six months ended June 30, 2015 and 2014. 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 PCCAs 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 further provide certain key technical assistance with respect to any potential development project the Company may pursue associated with the Member/Customers 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, 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, 2015. No royalty amounts have been paid or accrued under this agreement during the six months ended June 30, 2015 and 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 Companys 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. No royalty amounts have been paid or accrued under these agreements during the six months ended June 30, 2015 and 2014. |
Segment Information and Concent
Segment Information and Concentrations | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Information and Concentrations | NOTE 12. SEGMENT INFORMATION AND CONCENTRATIONS The Company operates its business on the basis of a single reportable segment, which is the business of developing proprietary drug therapies and providing such therapies through sterile and non-sterile pharmaceutical compounding services. The Companys 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 U.S.; therefore, total revenues for 2015 and 2014 are attributed to the U.S. All long-lived assets at June 30, 2015 are located in the U.S. The Company sells its compounded formulations to a large number of customers. Less than 10% of the Companys total pharmacy sales were derived from a single customer for the three and six months ended June 30, 2015. The Company receives its active pharmaceutical ingredients from three main suppliers. These suppliers collectively accounted for 51% and 57%, respectively, of active pharmaceutical ingredient purchases during the three and six months ended June 30, 2015. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 13. SUBSEQUENT EVENTS The Company has performed an evaluation of events occurring subsequent to June 30, 2015 through the filing date of this Quarterly Report. Based on its evaluation, nothing other than the events described below needs to be disclosed. From July 1, 2015 through the filing date of this Quarterly Report, the Company issued a total of 43,318 shares of common stock as a result of option exercises. The Company received no cash proceeds for the issuance of the shares of common stock upon the exercise pursuant to cashless exercise provisions of stock options to purchase 95,300 shares of common stock with exercise prices of $4.50 per share. Baum Agreement On July 31, 2015 the Company entered into a First Amendment to Amended and Restated Employment Agreement (the Amendment), with its Chief Executive Officer, Mark L. Baum (Mr. Baum), which amended that certain Amended and Restated Employment Agreement (the Employment Agreement), dated May 2, 2013, by and between Mr. Baum and the Company. Pursuant to the Amendment, Mr. Baums eligibility for certain discretionary performance related stock option grants set forth in Section 3(f) of the Employment Agreement was terminated. On July 31, 2015 (the Grant Date), pursuant to Section 3(f) of the Employment Agreement, the Company granted Mr. Baum an option (Option) to purchase 600,000 shares of common stock (Shares) of the Company at an exercise price of $7.87 per share under the Companys Amended and Restated 2007 Incentive Stock and Awards Plan, as amended, pursuant to the Companys form of Nonqualified Stock Option Agreement. 200,000 of the Shares subject to the Option shall vest if, at any time during the five (5) years following the Grant Date, the average of the official closing price per share of the Companys common stock during the preceding five (5) days is equal to or greater than $9.00 (the First Price Condition). 100,000 of the Shares subject to the Option shall vest if, at any time during the five (5) years following the Grant Date, the average of the official closing price per share of the Companys common stock during the preceding five (5) days is equal to or greater than $10.00 (the Second Price Condition). 100,000 of the Shares subject to the Option shall vest if, at any time during the five (5) years following the Grant Date, the average of the official closing price per share of the Companys common stock during the preceding five (5) days is equal to or greater than $12.00 (the Third Price Condition). 100,000 of the Shares subject to the Option shall vest if, at any time during the five (5) years following the Grant Date, the average of the official closing price per share of the Companys common stock during the preceding five (5) days is equal to or greater than $14.00 (the Fourth Price Condition). 100,000 of the Shares subject to the Option shall vest if, at any time during the five (5) years following the Grant Date, the average of the official closing price per share of the Companys common stock during the preceding five (5) days is equal to or greater than $15.00 (the Fifth Price Condition and each of the First Price Condition, the Second Price Condition, the Third Price Condition and the Fourth Price Condition, a Price Condition). Upon satisfaction of a Price Condition within one year of the date Mr. Baum is terminated by the Company without Cause (as defined in the Employment Agreement) or Mr. Baum resigns for Good Reason (as defined in the Employment Agreement), Mr. Baum shall be entitled to receive the applicable portion of the Option. If termination of Mr. Baums employment occurs by reason of death, Disability (as defined in the Employment Agreement) or any reason other than by the Company without Cause or by Mr. Baum for Good Reason prior to the vesting in full of the Option, any unexercised portion of the Option which has not vested on such date of termination of employment will be automatically terminated. Mr. Baum will have 90 days from the date of termination of employment or until the Grant Expiration Date (as defined below), whichever is shorter, to exercise any portion of the Option that is vested and exercisable on the date of termination; provide that if the termination was for Cause, the Option shall be immediately cancelled. The Option terminates on the fifth anniversary of the Grant Date (Grant Expiration Date). On July 31, 2015, the Company entered into a Retention Bonus Letter Agreement with Mr. Baum, pursuant to which the Company agrees to pay Mr. Baum 1.5% of the Fair Market Value (as defined in the Retention Bonus Letter Agreement) of the Change in Control Consideration (as defined in the Retention Bonus Letter Agreement) paid by a buyer to acquire the Company (Retention Bonus) in a transaction constituting a Change in Control (as defined in the Retention Bonus Letter Agreement), subject to Mr. Baums continued employment with the Company. The Companys obligation to pay such Retention Bonus is subject and subordinated to the Companys senior debt and terminates on May 2, 2016. CAP Acquisition On August 4, 2015, the Company acquired all of the outstanding capital stock of CAP pursuant to a stock purchase agreement entered into in July 2015. CAP is a compounding and retail pharmacy located in Allen, Texas. At closing, the Company paid the former owners of CAP a gross amount of four-hundred-twenty thousand dollars ($420). Canadian License Agreement On August 11, 2015, (the CAN Effective Date), the Company entered into a license agreement (the CAN Agreement) with Advanced Dosage Forms, Inc. and John DiGenova (collectively ADF), pursuant to which the Company granted to ADF a license under certain U.S. patent applications (the Licensed Patent Rights) to develop and sell in Canada certain of the Companys proprietary Dropless and LessDrops compounded formulations (the OPH Products) and use of certain of the Companys trademarks, designs, trade names and markings. Such license is non-exclusive; such that prior to December 31, 2015, the parties shall negotiate in good faith and attempt to reach mutual agreement on the terms and conditions upon which ADF would have the option to convert the licenses hereunder to exclusive. Such terms and conditions would include, without limitation, (a) diligence and market penetration conditions to convert, (b) annual diligence and market growth conditions to maintain exclusivity, and (c) an annual license fee of $50 payable to Imprimis ($25 of which would be creditable against the royalties owing during such year). As consideration for the license granted under the CAN Agreement, ADF has agreed to pay the Company royalties based on its sales of the OPH Products. The royalties consist of the greater of (i) $50 per unit of OPH Products sold (dollar amount not presented in thousands) and (ii) 20% of the ADFs sales of the OPH Products. ADF has also agreed to pay to Imprimis a noncreditable license fee of $10 at the CAN Effective Date. ADF is obligated to pay such royalties beginning with its first commercial sale of the OPH Products and continuing until claims under the Licensed Patent Rights are considered expired, abandoned, or unenforceable and are no longer subject to the license granted under the Agreement. ADF is obligated to maintain quality standards established by the Company, use commercially reasonable efforts to develop and commercialize the OPH Products and market shares according to the terms of the Agreement as agreed to by the parties. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
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 per owner. At June 30, 2015, the Company had approximately $9,801 in cash deposits in excess of FDIC limits |
Accounts Receivable | Accounts Receivable Accounts receivable are stated net of allowances for doubtful accounts and contractual adjustments. The accounts receivable balance primarily includes amounts due from customers the Company has invoiced or from third-party providers (e.g., insurance companies and governmental agencies), but for which payment has not been received. Charges to bad debt are based on both historical write-offs and specifically identified receivables. Contractual adjustments are determined by the amount expected to be collected from third-party providers. Accounts receivable are presented net of allowances for doubtful accounts and contractual adjustments in the amount of $183 and $4 as of June 30, 2015 and December 31, 2014, respectively. |
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 include sales of certain of the Companys proprietary compounded drug formulations and non-proprietary formulations and products. Product Revenues Determination of criteria (3) and (4) is based on managements 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 during which the related sales are recorded. The Company will defer any revenues received for a product that has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered and no refund will be required. License Revenues License arrangements may consist of non-refundable upfront license fees, data transfer fees, research reimbursement payments, exclusive license 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 the Company and require no consequential continuing involvement on the part of the Company are recognized as revenue when the license term commences and the licensed data, technology, compounded drug preparation and/or other deliverable 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 patent applications for such compounded drug preparations. The Company defers recognition of non-refundable fees if it has 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 and that are separate and independent of the Companys performance under the other elements of the arrangement. In addition, if the Companys continued involvement is required, through research and development services that are related to its proprietary know-how and expertise of the delivered technology or can only be performed by the Company, then such non-refundable 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. |
Business Combinations | Business Combinations We account 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 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 development technologies and patents; and ● discount rates utilized in valuation estimates. Unanticipated events and circumstances may occur that 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 relevant revenue or other 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 or the occurrence of events that cause results to differ from our estimates or assumptions could have a material effect on the consolidated statements of operations, financial position and cash flows in the period of the change in the estimate. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company reviews its goodwill and indefinite-lived intangible assets for impairment as of January 1 of each year and 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 Companys business relative to expected operating results; ● significant adverse economic and industry trends; ● significant decline in the Companys 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 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 amount 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 units 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 units goodwill, determined by allocating the reporting units 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 units goodwill exceeds its fair value, an impairment loss will be recognized in an amount equal to the 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 in 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 condensed 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 condensed consolidated balance sheet, if material. During the three and six months ended June 30, 2015 and 2014, the Company did not recognize any impairment of long-lived assets. |
Debt Issuance Costs and Debt Discount | Debt Issuance Costs and Debt Discount Debt issuance costs and the debt discount are recorded net of note payable in the condensed consolidated balance sheet. Amortization expense of debt issuance costs and the debt discount is calculated using the interest method over the term of the debt and is recorded in interest expense in the accompanying condensed consolidated statement of operations. |
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 entitys 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, 2015 and December 31, 2014, the Company did not have any financial assets or liabilities that are measured on a recurring basis. At June 30, 2015 and December 31, 2014, the Companys financial instruments included cash and cash equivalents, restricted short-term investments, accounts receivable, accounts payable and accrued expenses, accrued payroll and related liabilities, customer deposits, deferred acquisition obligations, note payable and capital leases. The carrying amount of these financial instruments, except for deferred acquisition obligations, note payable, and the capital leases, approximates fair value due to the short-term maturities of these instruments. The Companys restricted short-term investments are carried at amortized cost, which approximates fair value. Based on borrowing rates currently available to the Company, the carrying values of the deferred acquisition obligations, note payable, and capital leases approximate their respective fair values. |
Third Party Billing and Collection Agreements | Third Party Billing and Collection Agreements In connection with its acquisition of Park, the Company entered into a billing and collection agreement with a third party to assist in the billing and collection of workers compensation claims. Under the terms of the agreement, the Company is obligated to pay a fixed fee to the third party equal to 55% of the amounts billed and collected under the workers compensation claims. The Company accrues for such fees in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheet. Total billing and collection management expense under this agreement for the three and six months ended June 30, 2015 was $15 and $21, and is included in selling and marketing expenses in the accompanying condensed consolidated statement of operations. The amount due under the agreement as of June 30, 2015 was $54. |
Stock-Based Compensation | Stock-Based Compensation All stock-based payments to employees, directors 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 estimated 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 estimated 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 Companys accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows Financial Accounting Standards Board (FASB) guidance. As such, the value of the applicable stock-based compensation is periodically remeasured and income or expense is recognized during the vesting terms of the equity instruments. The measurement date for the estimated fair value of the equity instruments issued is 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 vendors performance is complete. In the case of equity instruments issued to consultants, the estimated fair value of the equity instrument is primarily recognized over the term of the consulting agreement. According to 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 grantors balance sheet once the equity instrument is granted for accounting purposes. Accordingly, the Company records the estimated fair value of nonforfeitable equity instruments issued for future consulting services as prepaid stock-based consulting expenses in its condensed consolidated balance sheets. |
Income Taxes | Income Taxes The Company accounts for income taxes under the provisions of FASB Accounting Standards Codification (ASC) 740, Income Taxes |
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 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 deferred acquisition obligations, stock options, RSUs and warrants were 3,014,919 and 3,419,149 at June 30, 2015 and 2014, respectively, and are excluded from the calculation of diluted net loss per share for all periods presented because the effect is anti-dilutive. Common stock equivalents at June 30, 2015 included 28,633 shares of common stock underlying RSUs awarded to directors that had vested, but the issuance and delivery of these shares are deferred until the director resigns. 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, 2015 and 2014: Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 Numerator net loss $ (3,730 ) $ (2,596 ) $ (6,823 ) $ (4,921 ) Denominator weighted average number of shares outstanding, basic and diluted 9,501,730 9,109,842 9,419,956 9,060,496 Net loss per share, basic and diluted $ (0.39 ) $ (0.28 ) $ (0.72 ) $ (0.54 ) |
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 and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management are, among others, allowance for doubtful accounts and contractual adjustments, realizability of inventories, valuation of deferred taxes, goodwill and intangible assets, recoverability of long-lived assets and goodwill, valuation of contingent acquisition obligations and deferred acquisition obligations, valuation of note payable, and valuation of stock-based compensation issued to employees and non-employees. Actual results could differ from those estimates. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In April 2015, the FASB issued Accounting Standard Update (ASU) 2015-03 Simplifying the Presentation of Debt Issuance Costs |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09 Revenue from Contracts with Customers. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
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, 2015 and 2014: Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 Numerator net loss $ (3,730 ) $ (2,596 ) $ (6,823 ) $ (4,921 ) Denominator weighted average number of shares outstanding, basic and diluted 9,501,730 9,109,842 9,419,956 9,060,496 Net loss per share, basic and diluted $ (0.39 ) $ (0.28 ) $ (0.72 ) $ (0.54 ) |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Schedule of Acquisition Date Fair Value of Consideration | The total acquisition date fair value of consideration transferred and to be transferred is estimated as follows: Cash payment to Sellers at closing $ 3,100 Restricted common stock issuance to Sellers at closing 425 Deferred consideration to Sellers 591 Total acquisition date fair value $ 4,116 |
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 $ 95 Accounts receivable 399 Inventories 232 Furniture and equipment 252 Intangible assets 2,629 Total identifiable assets acquired 3,607 Accounts payable and accrued expenses 304 Other liabilities 35 Total liabilities assumed 339 Total identifiable assets less liabilities assumed 3,268 Goodwill 848 Net assets acquired $ 4,116 |
Schedule of Result of Operation from Acquisition | The amount of revenues and net income of Park included in the Companys condensed consolidated statement of operations from the acquisition date through the period ended June 30, 2015 are as follows: Total revenues $ 2,201 Net income $ 88 |
Schedule of Intangible Assets Acquisition | The following table sets forth the components of identified intangible assets associated with the Park Acquisition and their estimated useful lives. Fair Value Useful Life Customer relationships 2,387 3 - 15 years Trade name 10 5 years Non-competition clause 224 3 years State pharmacy licenses 8 25 years $ 2,629 |
Schedule of Pro Forma Financial Information | The unaudited pro forma results presented include amortization charges for intangible assets, interest charges, acquisition costs, and eliminations of intercompany transactions. For the For the Three Months Ended Six Months Ended June 30, 2014 June 30, 2014 Total revenues $ 1,721 $ 3,248 Net loss $ (2,669 ) $ (4,846 ) |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | The composition of inventories as of June 30, 2015 and December 31, 2014 was as follows: June 30, 2015 December 31, 2014 Raw materials $ 386 $ 146 Work in progress - 98 Finished goods 407 129 Total inventories $ 793 $ 373 |
Prepaid Expenses and Other Cu23
Prepaid Expenses and Other Current Assets (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following: June 30, 2015 December 31, 2014 Prepaid insurance $ 35 $ 124 Other prepaid expenses 295 82 Deposits and other current assets 106 35 Total prepaid expenses and other current assets $ 436 $ 241 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The Companys intangible assets at June 30, 2015 consisted of the following: Amortization periods Accumulated Net (in years) Cost amortization Carrying value Customer relationships 3-15 years $ 2,983 $ (166 ) $ 2,817 Trade name 5 years 15 (3 ) 12 Non-competition clause 3-4 years 274 (53 ) 221 State pharmacy licenses 25 years 16 (2 ) 14 $ 3,288 $ (224 ) $ 3,064 |
Schedule of Amortization Expenses for Intangible Assets | Amortization expense for intangible assets for the three and six months ended June 30, 2015 was as follows: For the Three Months Ended For the Six Months Ended June 30, 2015 June 30, 2015 Customer relationships $ 66 $ 129 Trade name 1 2 Non-competition clause 26 44 State pharmacy licenses 1 1 $ 94 $ 176 |
Schedule of Estimated Future Amortization Expense | Estimated future amortization expense for the Companys intangible assets at June 30, 2015 is as follows: Years ending December 31, Remainder of 2015 $ 174 2016 349 2017 349 2018 208 2019 205 Thereafter 1,779 $ 3,064 |
Schedule of Changes in Carrying Value of Goodwill | The changes in the carrying value of the Companys goodwill during the six months ended June 30, 2015 were as follows: Balance at January 1, 2015 $ 332 Acquisition of Park (see Note 3) 848 Balance at June 30, 2015 $ 1,180 |
Accounts Payable and Accrued 25
Accounts Payable and Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consisted of the following: June 30, 2015 December 31, 2014 Accounts payable $ 1,016 $ 699 Deferred rent 44 5 Accrued interest (see Note 9) 86 - Accrued exit fee for note payable (see Note 9) 500 - Building lease liability(1) 58 74 Other accrued expenses - 39 (2) Total accounts payable and accrued expenses 1,704 817 Less: Current portion (1,181 ) (787 ) Non-current total accrued expenses $ 523 $ 30 (1) In September 2014, the Company relocated its primary operations to a 7,565 square foot office facility in San Diego, California. In February 2015, the Company entered into a sublease agreement to sublet 3,874 square feet of its previously occupied offices through the remaining term of the lease at a monthly rent amount of $8. The Company recognized a loss of approximately $117 during the year ended December 31, 2014 related to the estimated remaining lease liability, net of expected sublease income, of the previously occupied offices. The obligations were discounted based on current prevailing market rates. (2) The amount consists of a $39 stock-based compensation accrual at December 31, 2014 related to stock options granted for consulting services provided. The stock options were granted during the six months ended June 30, 2015 and the $39 was recorded to additional paid-in-capital. |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Summary of Notes Payable | Notes payable at June 30, 2015 was as follows: June 30, 2015 12.5% note payable $ 10,000 Add: Interest paid-in-kind 28 Less: Discount on note for issuance costs and relative fair value of warrants (1,967 ) Less: Current portion - Long-term portion $ 8,061 |
Summary of Future Minimum Payments | Future minimum payments as of June 30, 2015 are as follows: Year Ending December 31, Amount Remainder of 2015 $ 529 2016 1,075 2017 1,195 2018 2,741 2019 4,183 Thereafter 6,275 Total minimum payments 15,998 Less: amount representing interest and interest paid-in-kind (5,998 ) Note payable, gross 10,000 Add: interest paid-in-kind 28 Less: unamortized discount and issuance costs (1,967 ) Note payable and interest paid-in-kind, net of unamortized debt discount and issuance costs $ 8,061 |
Stockholders' Equity and Stoc27
Stockholders' Equity and Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Schedule of Stock Option Plan Activity | A summary of stock option activity under the Plan for the six months ended June 30, 2015 is as follows: Number of shares Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life Aggregate Intrinsic Value Options outstanding - January 1, 2015 1,029,240 $ 5.74 Options granted 187,673 $ 7.68 Options exercised - $ - Options cancelled/forfeit (15,103 ) $ 9.06 Options outstanding - June 30, 2015 1,201,810 $ 5.99 6.19 $ 2,356 Options exercisable 822,593 $ 5.44 4.96 $ 2,564 Options vested and expected to vest 1,163,888 $ 5.96 6.11 $ 2,331 |
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: 2015 Weighted-average fair value of options granted $ 6.60 Expected terms (in years) 5.81 - 6.11 Expected volatility 106 - 121 % Risk-free interest rate 1.47 - 1.64 % 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: 2015 Weighted-average fair value of options granted $ 6.18 Expected terms (in years) 10.00 Expected volatility 109 % Risk-free interest rate 1.06 % Dividend yield - |
Schedule of Shares Outstanding and Exercisable | The following table summarizes information about stock options outstanding and exercisable at June 30, 2015: 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 4.07 $ 2.80 250,000 $ 2.80 $ 3.60 - $4.51 337,723 4.46 $ 4.36 283,350 $ 4.41 $ 5.49 - $7.99 353,730 8.87 $ 7.07 115,262 $ 6.60 $ 8.06 - $8.75 253,557 6.88 $ 8.89 167,181 $ 8.92 $ 28.00 - $80.00 6,800 4.60 $ 40.86 6,800 $ 40.86 1,201,810 6.19 $ 5.99 822,593 $ 5.44 |
Market-based Vesting Conditions for Restricted Stock Units Granted | The market-based vesting conditions applicable to the Boll Performance Equity Award are as follows: Tranche Number of Shares Target Share Price Tranche 1 30,000 shares $10.00 or greater Tranche 2 30,000 shares $15.00 or greater Tranche 3 30,000 shares $20.00 or greater Tranche 4 30,000 shares $25.00 or greater Tranche 5 37,500 shares $30.00 or greater |
Schedule of Restricted Stock Units Activity | A summary of the Companys RSU activity and related information for the six months ended June 30, 2015 is as follows: Number of RSUs Weighted Average Grant Date Fair Value RSUs unvested - January 1, 2015 1,276,815 $ 3.20 RSUs granted 242,624 $ 3.59 RSUs vested (9,936 ) $ 7.55 RSUs cancelled/forfeited (6,209 ) $ 6.85 RSUs unvested at June 30, 2015 1,503,294 $ 3.22 |
Schedule of Warrants Activity | A summary of warrant activity for the six months ended June 30, 2015 is as follows: Number of Shares Subject to Warrants Outstanding Weighted Avg. Exercise Price Warrants outstanding - January 1, 2014 690,944 $ 6.05 Granted 125,000 $ 7.85 Exercised (240,437 ) $ 5.84 Expired (334,819 ) $ 5.93 Warrants outstanding and exercisable - June 30, 2015 240,688 $ 7.41 Weighted average remaining contractual life of the outstanding warrants in years - June 30, 2015 6.49 |
Schedule of Warrants Outstanding and Warrants Exercisable | A list of the warrants outstanding as of June 30, 2015 is included in the following table: Warrants Outstanding Warrants Exercisable Warrants Exercise Warrants Expiration Warrant Series Issue Date Outstanding Price Exercisable Date Lender warrants (see Note 9) 5/11/2015 125,000 $ 7.85 125,000 5/11/2025 Underwriter Warrants 2/7/2013 55,688 $ 5.25 55,688 2/7/2018 Warrants issued to investor relations consultant 7/19/2013 60,000 $ 8.50 60,000 7/19/2018 240,688 $ 7.41 240,688 |
Schedule of Stock Based Compensation Granted to Employees Directors Consultants | 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 June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 Employees - selling and marketing $ 107 $ 17 $ 175 $ 31 Employees - general and administrative 516 562 1,037 1,105 Directors - general and administrative 63 42 108 84 Consultants - selling and marketing 17 15 41 31 Consultants - general and administrative - 18 - 87 Consultants - research and development - 5 - 9 Total $ 703 $ 659 $ 1,361 $ 1,347 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Lease Equipment Under Capital Lease | The Company leases equipment under capital leases with an interest rate of 4.25% per annum. At June 30, 2015, future payments under the Companys capital leases were as follows: Year ending December 31, Remainder of 2015 $ 15 2016 22 2017 1 Total minimum lease payments 38 Less amount representing interest (3 ) Present value of future minimum lease payments 35 Less current portion (27 ) Capital lease obligation, net of current portion $ 8 |
Description of Business and B29
Description of Business and Basis of Presentation (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||||
Net losses | $ 3,730 | $ 2,596 | $ 6,823 | $ 4,921 | |
Accumulated deficit | 48,688 | 48,688 | $ 41,865 | ||
Net cash used in operating activities | 5,447 | $ 3,209 | |||
Cash and cash equivalents and restricted investments | $ 10,201 | $ 10,201 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Deposit coverage limits by FDIC, per owner | $ 250 | |||
Cash deposits in excess of FDIC limits | 9,801 | |||
Accounts receivable, net of allowance for doubtful accounts | $ 183 | 183 | $ 4 | |
Impairment of long-lived assets | $ 0 | $ 0 | ||
Unrecognized tax benefits | ||||
Recognize interest and/or penalties related to income tax matters in income tax expense | ||||
Anti-dilutive | 3,014,919 | 3,419,149 | ||
Number of restricted stock included in common stock equivalents | 28,633 | |||
Billing And Collection Agreement [Member] | Third Party [Member] | ||||
Percentage of billing and collection amount | 55.00% | |||
Billing and collection management expense | $ 15 | $ 21 | ||
Due to related party | $ 54 | $ 54 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Schedule of Basic and Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Accounting Policies [Abstract] | ||||
Numerator - net loss | $ (3,730) | $ (2,596) | $ (6,823) | $ (4,921) |
Denominator - weighted average number of shares outstanding, basic and diluted | 9,501,730 | 9,109,842 | 9,419,956 | 9,060,496 |
Net loss per share, basic and diluted | $ (0.39) | $ (0.28) | $ (0.72) | $ (0.54) |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
Good will | $ 1,180 | $ 1,180 | $ 332 |
Contingent consideration | $ 483 | ||
Park [Member] | |||
Cash paid for business acquisition, net of fees | $ 3,000 | ||
Payment of cash remaining in bank account | 100 | ||
Total acquisition date fair value | 4,116 | ||
Acquisition adjusted description | Acquisition was adjusted from 25% to 15% | ||
Increase of goodwill | $ 46 | ||
Increase of intangible assets | 4 | ||
Good will | 848 | 848 | |
Net tangible assets | 252 | 252 | |
Identifiable intangible assets | 2,629 | 2,629 | |
Park [Member] | Sellers [Member] | |||
Cash paid for business acquisition, net of fees | 638 | ||
Cash payment | 53 | ||
Issuance of common stock for payment | $ 319 | ||
Issuance of common stock shares for payment | 6,749 | ||
Deferred acquisition obligations | 591 | $ 591 | |
Park [Member] | Restricted Stock [Member] | |||
Number of common stock shares sold | 63,525 | ||
Number of common stock sold | $ 500 | ||
Percentage of discount rate | 15.00% | ||
Pharmacy Creations, LLC [Member] | |||
Cash paid for business acquisition, net of fees | $ 1,115 | ||
Cash payment | 600 | ||
Good will | 332 | 332 | |
Contingent consideration | 515 | 515 | |
Net tangible assets | 124 | 124 | |
Identifiable intangible assets | 659 | 659 | |
Acquisition expenses | $ 201 | $ 201 |
Acquisitions - Schedule of Acqu
Acquisitions - Schedule of Acquisition Date Fair Value of Consideration (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash payment to the PC Sellers at closing | $ 3,005 | |
Park [Member] | ||
Cash payment to the PC Sellers at closing | 3,100 | |
Restricted common stock issuance to Sellers at closing | 425 | |
Deferred consideration to Sellers | 591 | |
Total acquisition date fair value | $ 4,116 |
Acquisitions - Schedule of Esti
Acquisitions - Schedule of Estimated Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Goodwill | $ 1,180 | $ 332 |
Park [Member] | ||
Cash and cash equivalents | 95 | |
Accounts receivable | 399 | |
Inventories | 232 | |
Furniture and equipment | 252 | |
Intangible assets | 2,629 | |
Total identifiable assets acquired | 3,607 | |
Accounts payable and accrued expenses | 304 | |
Other liabilities | 35 | |
Total liabilities assumed | 339 | |
Total identifiable assets less liabilities assumed | 3,268 | |
Goodwill | 848 | |
Net assets acquired | $ 4,116 |
Acquisitions - Schedule of Resu
Acquisitions - Schedule of Result of Operation from Acquisition (Details) - Park Compounding [Member] $ in Thousands | 6 Months Ended |
Jun. 30, 2014USD ($) | |
Total revenues | $ 2,201 |
Net income | $ 88 |
Acquisitions - Schedule of Inta
Acquisitions - Schedule of Intangible Assets Acquisition (Details) - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands | Total |
Intangible Assets Fair Value | $ 2,629 |
Customer Relationships [Member] | |
Intangible Assets Fair Value | $ 2,387 |
Customer Relationships [Member] | Minimum [Member] | |
Useful Life | 3 years |
Customer Relationships [Member] | Maximum [Member] | |
Useful Life | 15 years |
Trade Name [Member] | |
Intangible Assets Fair Value | $ 10 |
Useful Life | 5 years |
Non-Competition Clause [Member] | |
Intangible Assets Fair Value | $ 224 |
Useful Life | 3 years |
State Pharmacy Licenses [Member] | |
Intangible Assets Fair Value | $ 8 |
Useful Life | 25 years |
Acquisitions - Schedule of Pro
Acquisitions - Schedule of Pro Forma Financial Information (Details) - Jun. 30, 2014 - USD ($) $ in Thousands | Total | Total |
Business Combinations [Abstract] | ||
Total revenues | $ 1,721 | $ 3,248 |
Net loss | $ (2,669) | $ (4,846) |
Restricted Short-Term Investm38
Restricted Short-Term Investment (Details Narrative) $ in Thousands | Jun. 30, 2015USD ($) |
Restricted Short-term Investment | |
Certificate of deposit | $ 150 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 386 | $ 146 |
Work in progress | 98 | |
Finished goods | $ 407 | 129 |
Total inventories | $ 793 | $ 373 |
Prepaid Expenses and Other Cu40
Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid insurance | $ 35 | $ 124 |
Other prepaid expenses | 295 | 82 |
Deposits and other current assets | 106 | 35 |
Total prepaid expenses and other current assets | $ 436 | $ 241 |
Intangible Assets and Goodwil41
Intangible Assets and Goodwill - Schedule of Intangible Assets (Details) - Jun. 30, 2015 - USD ($) $ in Thousands | Total |
Cost | $ 3,288 |
Accumulated amortization | (224) |
Net Carrying value | 3,064 |
Customer Relationships [Member] | |
Cost | 2,983 |
Accumulated amortization | (166) |
Net Carrying value | $ 2,817 |
Customer Relationships [Member] | Minimum [Member] | |
Amortization periods (in years) | 3 years |
Customer Relationships [Member] | Maximum [Member] | |
Amortization periods (in years) | 15 years |
Trade Name [Member] | |
Amortization periods (in years) | 5 years |
Cost | $ 15 |
Accumulated amortization | (3) |
Net Carrying value | 12 |
Non-Compete Clause [Member] | |
Cost | 274 |
Accumulated amortization | (53) |
Net Carrying value | $ 221 |
Non-Compete Clause [Member] | Minimum [Member] | |
Amortization periods (in years) | 3 years |
Non-Compete Clause [Member] | Maximum [Member] | |
Amortization periods (in years) | 4 years |
State Pharmacy Licenses [Member] | |
Amortization periods (in years) | 25 years |
Cost | $ 16 |
Accumulated amortization | (2) |
Net Carrying value | $ 14 |
Intangible Assets and Goodwil42
Intangible Assets and Goodwill - Schedule of Amortization Expenses for Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | |
Amortization of intangible assets | $ 94 | $ 176 | $ 18 |
Customer Relationships [Member] | |||
Amortization of intangible assets | 66 | 129 | |
Trade Name [Member] | |||
Amortization of intangible assets | 1 | 2 | |
Non-Competition Clause [Member] | |||
Amortization of intangible assets | 26 | 44 | |
State Pharmacy Licenses [Member] | |||
Amortization of intangible assets | $ 1 | $ 1 |
Intangible Assets and Goodwil43
Intangible Assets and Goodwill - Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2015 | $ 174 | |
2,016 | 349 | |
2,017 | 349 | |
2,018 | 208 | |
2,019 | 205 | |
Thereafter | 1,779 | |
Intangible assets | $ 3,064 | $ 611 |
Intangible Assets and Goodwil44
Intangible Assets and Goodwill - Schedule of Changes in Carrying Value of Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, Beginning | $ 332 |
Acquisition of Park (see Note 3) | 848 |
Goodwill, Ending | $ 1,180 |
Accounts Payable and Accrued 45
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | ||
Payables and Accruals [Abstract] | ||||
Accounts payable | $ 1,016 | $ 699 | ||
Deferred rent | 44 | $ 5 | ||
Accrued interest (see Note 9) | 86 | |||
Accrued exit fee for note payable (see Note 9) | 500 | |||
Building lease liability | [1] | $ 58 | $ 74 | |
Other accrued expenses | 39 | [2] | ||
Total accounts payable and accrued expenses | $ 1,704 | 817 | ||
Less: Current portion | (1,181) | (787) | ||
Non-current total accounts payable and accrued expenses | $ 523 | $ 30 | ||
[1] | In September 2014, the Company relocated its primary operations to a 7,565 square foot office facility in San Diego, California. In February 2015, the Company entered into a sublease agreement to sublet 3,874 square feet of its previously occupied offices through the remaining term of the lease at a monthly rent amount of $8. The Company recognized a loss of approximately $117 during the year ended December 31, 2014 related to the estimated remaining lease liability, net of expected sublease income, of the previously occupied offices. The obligations were discounted based on current prevailing market rates. | |||
[2] | The amount consists of a $39 stock-based compensation accrual at December 31, 2014 related to stock options granted for consulting services provided. The stock options were granted during the six months ended June 30, 2015 and the $39 was recorded to additional paid-in-capital. |
Accounts Payable and Accrued 46
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) (Parenthetical) $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | |
Feb. 28, 2015USD ($)ft² | Jun. 30, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014ft² | |
Payables and Accruals [Abstract] | ||||
Area of office space | ft² | 7,565 | |||
Area of previous office space | ft² | 3,874 | |||
Monthly rent amount | $ 8 | |||
Recognized lease losses related to estimated remaining lease liability | $ 117 | |||
Stock based compensation accrual | $ 39 | |||
Additional paid-in-capital | $ 39 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | May. 11, 2015 | Jun. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 |
Liability of final fee included in accrued expenses | $ 500 | $ 500 | |||
Debt discount | $ 70 | $ 70 | |||
Loan Agreement [Member] | Life Sciences Alternative Funding LLC [Member] | |||||
Principal amount of loan | $ 15,000 | ||||
Debt principal amount withdrawn | 10,000 | ||||
Debt principal remaining amount | $ 5,000 | ||||
Loans bear interest | 12.50% | ||||
loans bear interest rate description | The term loans bear interest at a fixed per-annum rate of 12.5% and allows for 2% of the interest to be paid-in-kind until either February 2017 or May 2017. | ||||
Loan installments | 36 months | ||||
Percentage of loan agreement final fee | 5.00% | ||||
Loan due date | May 11, 2021 | ||||
Incurred expenses loan | $ 697 | ||||
Liability of final fee included in accrued expenses | $ 500 | ||||
Issuance of warrants to purchase maximum number of shares | 125,000 | ||||
Common stock exercise price per share | $ 7.85 | ||||
Issuance of warrants to purchase of common stock expiration year | 10 years | ||||
Fair value of warrants | $ 840 | ||||
Fair value of common stock | $ 7.97 | ||||
Common stock volatility rate | 109.00% | ||||
Dividend rate percentage | 0.00% | ||||
Risk-free interest rate percentage | 1.25% | ||||
Loan Agreement [Member] | Life Sciences Alternative Funding LLC [Member] | Minimum Revenue or Cash Balance [Member] | |||||
Loan installments | 24 months | ||||
Loan Agreement [Member] | Life Sciences Alternative Funding LLC [Member] | May 11, 2016 [Member] | |||||
Achievement revenue | $ 15,000 |
Debt - Summary of Notes Payable
Debt - Summary of Notes Payable (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
12.5% note payable | $ 8,061 | |
12.5 Note Payable [Member] | ||
12.5% note payable | 10,000 | |
Add: Interest paid-in-kind | 28 | |
Less: Discount on note for issuance costs and relative fair value of warrants | $ (1,967) | |
Less: Current portion | ||
Long-term portion | $ 8,061 |
Debt - Summary of Future Minimu
Debt - Summary of Future Minimum Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Note payable, gross | $ 8,061 | |
12.5 Note Payable [Member] | ||
Remainder of 2015 | 529 | |
2,016 | 1,075 | |
2,017 | 1,195 | |
2,018 | 2,741 | |
2,019 | 4,183 | |
Thereafter | 6,275 | |
Total minimum payments | 15,998 | |
Less: amount representing interest and interest paid-in-kind | (5,998) | |
Note payable, gross | 10,000 | |
Add: interest paid-in-kind | 28 | |
Less: unamortized discount and issuance costs | (1,967) | |
Note payable and interest paid-in-kind, net of unamortized debt discount and issuance costs | $ 8,061 |
Stockholders' Equity and Stoc50
Stockholders' Equity and Stock-Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2015 | Feb. 28, 2015 | Jan. 31, 2015 | Jun. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | |
Issuance of common stock shares for vested awards | 9,936 | |||||
Issuance of common stock shares of warrant exercise | 220,912 | |||||
Proceeds from issuance of stock option exercise | $ 1,248 | |||||
Issuance of common stock exercise on cash basis of warrant to purchase shares | 209,980 | |||||
Issuance of common stock exercise on cash basis of warrant to purchase | $ 5.925 | |||||
Issuance of common stock shares for exercise | 10,932 | |||||
Issuance of warrant purchase of common stock exercise, shares | 334,819 | 30,457 | ||||
Common stock exercise price per share | $ 5.925 | $ 5.25 | ||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | ||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||
Preferred stock, shares issued | 0 | 0 | ||||
Preferred stock, shares outstanding | 0 | 0 | ||||
Maximum number of common stock issuance under the plan | 5,000,000 | 5,000,000 | ||||
Common stock market price per share | $ 8.13 | $ 8.13 | ||||
Stock options granted with exercise price contractual terms | 10 years | |||||
Stock options granted vesting terms | Vesting terms for options granted to employees and consultants during the six months ended June 30, 2015 typically included one of the following vesting schedules: 25% of the shares subject to the option vest and become exercisable on the first anniversary of the grant date and the remaining 75% of the shares subject to the option vest and become exercisable quarterly in equal installments thereafter over three years; quarterly vesting over three years; or 100% vesting associated with the provision or completion of services provided under contracts with consultants. | |||||
Stock-based compensation | $ 1,361 | $ 1,397 | ||||
Warrant [Member] | ||||||
Intrinsic value of warrant exercised | $ 528 | 528 | ||||
Stock Options [Member] | ||||||
Unrecognized compensation expense related to unvested stock options granted under the Plan | 1,975 | $ 1,975 | ||||
Expense expected to recognize over the weighted-average remaining vesting period | 2 years 6 months | |||||
Stock-based compensation | 240 | $ 569 | ||||
Employees And Directors [Member] | ||||||
Percentage of forfeiture factor | 10.00% | |||||
Restricted Stock Units (RSUs) [Member] | ||||||
Unrecognized compensation expense related to unvested stock options granted under the Plan | 2,002 | $ 2,002 | ||||
Expense expected to recognize over the weighted-average remaining vesting period | 1 year 1 month 6 days | |||||
Stock-based compensation | $ 413 | $ 792 | ||||
Restricted Stock Units (RSUs) [Member] | Andrew R. Boll [Member] | ||||||
Number of stock option granted, shares | 30,000 | |||||
Restricted Stock Units (RSUs) [Member] | Andrew R. Boll [Member] | Boll Performance Equity Award [Member] | ||||||
Number of stock option granted, shares | 157,500 | |||||
Stock option targeted price range lower limit | $ 10 | |||||
Stock option targeted price range upper limit | $ 30 | |||||
Stock option period | 3 years | |||||
Restricted Stock Units (RSUs) [Member] | John P. Saharek [Member] | ||||||
Number of stock option granted, shares | 30,000 | |||||
Number of stock option granted | $ 442 | |||||
Restricted Stock Units (RSUs) [Member] | Non-Employee Director [Member] | ||||||
Issuance of common stock shares for vested awards | 8,521 | |||||
Baum Performance Equity Award [Member] | Monte Carlo Simulation [Member] | ||||||
Initial fair value of stock option | $ 228 | |||||
Fair value assumptions, life term | 3 years | |||||
Fair value assumptions, volatility | 60.00% | |||||
Fair value assumptions, risk free interest rate | 0.77% | |||||
Park Compounding [Member] | ||||||
Issuance of restricted common stock, shares | 63,525 | |||||
Issuance of restricted common stock | $ 425 |
Stockholders' Equity and Stoc51
Stockholders' Equity and Stock-Based Compensation - Schedule of Stock Option Plan Activity (Details) - Jun. 30, 2015 - USD ($) $ / shares in Units, $ in Thousands | Total |
Number of shares, Options exercised | 10,932 |
Number of shares, Outstanding, Ending balance | 1,201,810 |
Number of shares, Options exercisable | 822,593 |
Weighted Avg. Remaining Contractual Life, Options outstanding | 6 years 2 months 9 days |
Weighted Avg. Remaining Contractual Life, Options exercisable | 10 years |
Stock Option Plan [Member] | |
Number of shares, Outstanding, Beginning balance | 1,029,240 |
Number of shares, Options granted | 187,673 |
Number of shares, Options exercised | |
Number of shares, Options cancelled/forfeit | (15,103) |
Number of shares, Outstanding, Ending balance | 1,201,810 |
Number of shares, Options exercisable | 822,593 |
Number of shares, Options vested and expected to vest | 1,163,888 |
Weighted Avg. Exercise Price, Outstanding, Beginning balance | $ 5.74 |
Weighted Avg. Exercise Price, Options granted | $ 7.68 |
Weighted Avg. Exercise Price, Options exercised | |
Weighted Avg. Exercise Price, Options cancelled/forfeit | $ 9.06 |
Weighted Avg. Exercise Price, Outstanding, Ending balance | 5.99 |
Weighted Avg. Exercise Price, Exercisable Ending Balance | 5.44 |
Weighted Avg. Exercise Price, Vested and expected to vest - end of period | $ 5.96 |
Weighted Avg. Remaining Contractual Life, Options outstanding | 6 years 2 months 9 days |
Weighted Avg. Remaining Contractual Life, Options exercisable | 4 years 11 months 16 days |
Weighted Avg. Remaining Contractual Life, Options vested and expected to vest | 6 years 1 month 10 days |
Aggregate Intrinsic Value, Options outstanding | $ 2,356 |
Aggregate Intrinsic Value, Options exercisable | 2,564 |
Aggregate Intrinsic Value, Options vested and expected to vest | $ 2,331 |
Stockholders' Equity and Stoc52
Stockholders' Equity and Stock-Based Compensation - Schedule of Fair Value Assumption (Details) - 6 months ended Jun. 30, 2015 - $ / shares | Total |
Options Granted To Employees [Member] | |
Weighted-average fair value of options granted | $ 6.60 |
Expected volatility, minimum | 106.00% |
Expected volatility, maximum | 121.00% |
Risk-free interest rate, minimum | 1.47% |
Risk-free interest rate, maximum | 1.64% |
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 1 month 10 days |
Options Granted To Consultants [Member] | |
Weighted-average fair value of options granted | $ 6.18 |
Expected terms (in years) | 10 years |
Expected volatility | 109.00% |
Risk-free interest rate | 1.06% |
Dividend yield | 0.00% |
Stockholders' Equity and Stoc53
Stockholders' Equity and Stock-Based Compensation - Schedule of Shares Outstanding and Exercisable (Details) - $ / shares | 6 Months Ended | 18 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2015 | |
Number of Options Outstanding | 1,201,810 | 1,201,810 | |
Weighted Average Remaining Contractual Life in Years | 6 years 2 months 9 days | ||
Weighted Average Exercise Price | $ 5.99 | ||
Number Exercisable | 822,593 | 822,593 | |
Weighted Average Exercisable Exercise Price | $ 5.44 | $ 5.44 | |
Range One [Member] | |||
Range of Exercise Prices, minimum | 2.40 | ||
Range of Exercise Prices, maximum | $ 3.20 | ||
Number of Options Outstanding | 250,000 | 250,000 | |
Weighted Average Remaining Contractual Life in Years | 4 years 26 days | ||
Weighted Average Exercise Price | $ 2.80 | ||
Number Exercisable | 250,000 | 250,000 | |
Weighted Average Exercisable Exercise Price | $ 2.80 | $ 2.80 | |
Range Two [Member] | |||
Range of Exercise Prices, minimum | 3.60 | ||
Range of Exercise Prices, maximum | $ 4.51 | ||
Number of Options Outstanding | 337,723 | 337,723 | |
Weighted Average Remaining Contractual Life in Years | 4 years 5 months 16 days | ||
Weighted Average Exercise Price | $ 4.36 | ||
Number Exercisable | 283,350 | 283,350 | |
Weighted Average Exercisable Exercise Price | $ 4.41 | $ 4.41 | |
Range Three [Member] | |||
Range of Exercise Prices, minimum | 5.49 | ||
Range of Exercise Prices, maximum | $ 7.99 | ||
Number of Options Outstanding | 353,730 | 353,730 | |
Weighted Average Remaining Contractual Life in Years | 8 years 10 months 13 days | ||
Weighted Average Exercise Price | $ 7.07 | ||
Number Exercisable | 115,262 | 115,262 | |
Weighted Average Exercisable Exercise Price | $ 6.60 | $ 6.60 | |
Range Four [Member] | |||
Range of Exercise Prices, minimum | 8.06 | ||
Range of Exercise Prices, maximum | $ 8.75 | ||
Number of Options Outstanding | 253,557 | ||
Weighted Average Remaining Contractual Life in Years | 6 years 10 months 17 days | ||
Weighted Average Exercise Price | $ 8.89 | ||
Number Exercisable | 167,181 | ||
Weighted Average Exercisable Exercise Price | $ 8.92 | ||
Range Five [Member] | |||
Range of Exercise Prices, minimum | 28 | ||
Range of Exercise Prices, maximum | $ 80 | ||
Number of Options Outstanding | 6,800 | 6,800 | |
Weighted Average Remaining Contractual Life in Years | 4 years 7 months 6 days | ||
Weighted Average Exercise Price | $ 40.86 | ||
Number Exercisable | 6,800 | 6,800 | |
Weighted Average Exercisable Exercise Price | $ 40.86 | $ 40.86 |
Stockholders' Equity and Stoc54
Stockholders' Equity and Stock-Based Compensation - Market-based Vesting Conditions for Restricted Stock Units Granted (Details) - 6 months ended Jun. 30, 2015 - shares | Total |
Tranche One [Member] | |
Number of Shares | 30,000 |
Target Share Price | $10.00 or greater |
Tranche Two [Member] | |
Number of Shares | 30,000 |
Target Share Price | $15.00 or greater |
Tranche Three [Member] | |
Number of Shares | 30,000 |
Target Share Price | $20.00 or greater |
Tranche Four [Member] | |
Number of Shares | 30,000 |
Target Share Price | $25.00 or greater |
Tranche Five [Member] | |
Number of Shares | 37,500 |
Target Share Price | $30.00 or greater |
Stockholders' Equity and Stoc55
Stockholders' Equity and Stock-Based Compensation - Schedule of Restricted Stock Units Activity (Details) - 6 months ended Jun. 30, 2015 - Restricted Stock Units (RSUs) [Member] - $ / shares | Total |
Number of RSUs, Outstanding, Beginning balance | 1,276,815 |
Number of RSUs granted | 242,624 |
Number of RSUs vested | (9,936) |
Number of RSUs cancelled/forfeited | (6,209) |
Number of RSUs, Outstanding, Ending balance | 1,503,294 |
Weighted Average Grant Date Fair Value, Beginning balance | $ 3.20 |
Weighted Average Grant Date Fair Value, RSUs granted | 3.59 |
Weighted Average Grant Date Fair Value, RSUs vested | 7.55 |
Weighted Average Grant Date Fair Value, RSUs cancelled/forfeited | 6.85 |
Weighted Average Grant Date Fair Value, Ending balance | $ 3.22 |
Stockholders' Equity and Stoc56
Stockholders' Equity and Stock-Based Compensation - Schedule of Warrants Activity (Details) - 6 months ended Jun. 30, 2015 - Warrant [Member] - $ / shares | Total |
Number of shares, Outstanding, Beginning balance | 690,944 |
Number of Shares Subject to Warrants Outstanding, Granted | 125,000 |
Number of Shares Subject to Warrants Outstanding, Exercised | (240,437) |
Number of Shares Subject to Warrants Outstanding, Expired | (334,819) |
Number of shares, Outstanding, Ending balance | 240,688 |
Weighted Average Remaining Contractual Life Of The Outstanding Warrants In Years | 6 years 5 months 27 days |
Weighted Avg. Exercise Price, Outstanding, Beginning balance | $ 6.05 |
Weighted Avg. Exercise Price, Granted | 7.85 |
Weighted Avg. Exercise Price, Exercised | 5.84 |
Weighted Avg. Exercise Price, Expired | 5.93 |
Weighted Avg. Exercise Price, Outstanding, Ending balance | $ 7.41 |
Stockholders' Equity and Stoc57
Stockholders' Equity and Stock-Based Compensation - Schedule of Warrants Outstanding and Warrants Exercisable (Details) - $ / shares | 6 Months Ended | ||
Jun. 30, 2015 | Mar. 01, 2015 | Jan. 31, 2015 | |
Warrant [Member] | |||
Warrants Outstanding | 240,688 | ||
Exercise Price | $ 7.41 | ||
Warrants Exercisable | 240,688 | ||
Lender Warrants [Member] | |||
Issue Date | May 11, 2012 | ||
Warrants Outstanding | 125,000 | ||
Exercise Price | $ 7.85 | ||
Warrants Exercisable | 125,000 | ||
Expiration Date | May 11, 2015 | ||
Underwriter Warrants [Member] | |||
Issue Date | Feb. 7, 2013 | ||
Warrants Outstanding | 55,688 | ||
Exercise Price | $ 5.25 | ||
Warrants Exercisable | 55,688 | ||
Expiration Date | Feb. 7, 2018 | ||
Warrants Issued To Investor Relations Consultant [Member] | |||
Issue Date | Jul. 19, 2013 | ||
Warrants Outstanding | 60,000 | ||
Exercise Price | $ 8.50 | ||
Warrants Exercisable | 60,000 | ||
Expiration Date | Jul. 19, 2018 |
Stockholders' Equity and Stoc58
Stockholders' Equity and Stock-Based Compensation - Schedule of Stock Based Compensation Granted to Employees Directors Consultants (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Stock based compensation related to equity instruments granted to related parties | $ 703 | $ 659 | $ 1,361 | $ 1,347 |
Employees [Member] | Selling And Marketing [Member] | ||||
Stock based compensation related to equity instruments granted to related parties | 107 | 17 | 175 | 31 |
Employees [Member] | General And Administrative [Member] | ||||
Stock based compensation related to equity instruments granted to related parties | 516 | 562 | 1,037 | 1,105 |
Directors [Member] | General And Administrative [Member] | ||||
Stock based compensation related to equity instruments granted to related parties | 63 | 42 | 108 | 84 |
Consultant [Member] | Selling And Marketing [Member] | ||||
Stock based compensation related to equity instruments granted to related parties | $ 17 | 15 | $ 41 | 31 |
Consultant [Member] | General And Administrative [Member] | ||||
Stock based compensation related to equity instruments granted to related parties | 18 | 87 | ||
Consultant [Member] | Research And Development [Member] | ||||
Stock based compensation related to equity instruments granted to related parties | $ 5 | $ 9 |
Commitments and Contingencies59
Commitments and Contingencies (Details Narrative) $ in Thousands | Apr. 24, 2015 | Oct. 24, 2014USD ($) | Sep. 02, 2014USD ($) | May. 01, 2013USD ($) | Feb. 18, 2013USD ($) | Feb. 28, 2015USD ($)ft² | Jan. 31, 2015USD ($)ft² | Jan. 31, 2010USD ($)ft² | Jun. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($)ft² | Sep. 30, 2014ft² | Apr. 30, 2013ft² | Aug. 31, 2012 |
Leases equipment under capital lease with interest rate | 4.25% | 4.25% | ||||||||||||
Equipment under capital leases net | $ 60 | $ 60 | ||||||||||||
Related accumulated depreciation | 18 | 18 | ||||||||||||
Lease agreement for office space (Square feet) | ft² | 7,565 | |||||||||||||
Rent expense | $ 8 | |||||||||||||
PCCA License Agreement [Member] | ||||||||||||||
Royalty amount | 0 | $ 0 | ||||||||||||
PCCA Strategic Alliance Agreement [Member] | ||||||||||||||
Lease term | 1 year | |||||||||||||
Lease renewal term | 1 year | |||||||||||||
Royalty amount | 0 | 0 | ||||||||||||
Maximum aggregate value of cash fees | $ 100 | |||||||||||||
Asset Purchase Agreements [Member] | ||||||||||||||
Royalty amount | 0 | $ 0 | ||||||||||||
Minimum [Member] | PCCA License Agreement [Member] | ||||||||||||||
Royalties range percentage | 4.50% | |||||||||||||
Maximum [Member] | PCCA License Agreement [Member] | ||||||||||||||
Royalties range percentage | 9.00% | |||||||||||||
Urigen Pharmaceuticals, Inc [Member] | ||||||||||||||
License agreement commitments description | The annual tiered royalties consist of the greater of (i) $0.50 per dose (dollar amount not presented in thousands), and (ii) 15%-20% of the Companys net sales of HLA, with the royalty amount within such range depending on the Companys aggregate sales of HLA during the period to which the royalty payment applies. The minimum annual royalty payment consists of (a) for the 2015 calendar year, the greater of (i) 110% of the aggregate royalties paid to Urigen under the Existing Sublicenses during the preceding 12 months, on a prorated basis, and (ii) $800, less the aggregate royalties paid to Urigen under the Existing Sublicenses during the 2015 calendar year, and (b) for each calendar year thereafter, 110% of the aggregate amount owed by the Company to Urigen under the Urigen License during the prior calendar year. The Company is obligated to pay such royalties beginning with its first commercial sale of HLA and continuing until the expiration of the patents subject to the license granted under the Urigen License. The Company has also agreed to use commercially reasonable efforts to develop and commercialize HLA according to the terms of a diligence plan agreed to by the parties, which efforts will include, without limitation, the Companys investment of $2,000 in commercialization efforts of HLA, which investment and timeline can be adjusted dependent on market circumstances, and is expected to be incurred over 18-24 months following the Urigen Effective Date. | |||||||||||||
Minimum royalties to be paid each calendar year | $ 800 | |||||||||||||
Value of product development investment | $ 2,000 | |||||||||||||
Royalty revenue | 50 | |||||||||||||
Urigen Pharmaceuticals, Inc [Member] | FDA [Member] | ||||||||||||||
Royalty revenue | $ 3 | $ 5 | ||||||||||||
Urigen Pharmaceuticals, Inc [Member] | Minimum [Member] | ||||||||||||||
Lease term | 18 months | |||||||||||||
Urigen Pharmaceuticals, Inc [Member] | Minimum [Member] | Transition Period [Member] | ||||||||||||||
Lease term | 60 days | |||||||||||||
Urigen Pharmaceuticals, Inc [Member] | Maximum [Member] | ||||||||||||||
Lease term | 24 months | |||||||||||||
Urigen Pharmaceuticals, Inc [Member] | Maximum [Member] | Transition Period [Member] | ||||||||||||||
Lease term | 90 days | |||||||||||||
Lease Agreement [Member] | ||||||||||||||
Lease agreement for office space (Square feet) | ft² | 8,602 | 4,500 | 7,565 | 3,874 | ||||||||||
Operating lease Expiry | Oct. 31, 2018 | Sep. 30, 2016 | Jul. 31, 2022 | |||||||||||
Operating lease, monthly rental | $ 20 | $ 10 | $ 10 | $ 10 | ||||||||||
Operating lease, rent increase percentage | 3.00% | 3.00% | 3.75% | 3.00% | ||||||||||
Lease Agreement [Member] | Pharmacy Creations, LLC [Member] | ||||||||||||||
Lease agreement for office space (Square feet) | ft² | 3,137 | |||||||||||||
Operating lease Expiry | Dec. 31, 2015 | |||||||||||||
Operating lease, monthly rental | $ 4 | |||||||||||||
Sublease Agreement [Member] | ||||||||||||||
Operating lease, monthly rental | $ 8 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Lease Equipment Under Capital Lease (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Compensation and Retirement Disclosure [Abstract] | ||
Remainder of 2015 | $ 15 | |
2,016 | 22 | |
2,017 | 1 | |
Total minimum lease payments | 38 | |
Less amount representing interest | (3) | |
Present value of future minimum lease payments | 35 | |
Less current portion | (27) | $ (24) |
Capital lease obligation, net of current portion | $ 8 | $ 19 |
Segment Information and Conce61
Segment Information and Concentrations (Details Narrative) - Jun. 30, 2015 | Total | Total |
Segment Reporting [Abstract] | ||
Maximum percentage of sales derived from single customer | 10.00% | 10.00% |
Percentage of drug and chemical purchases from three main suppliers | 51.00% | 57.00% |
Sebsequent Events (Details Narr
Sebsequent Events (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Aug. 04, 2015 | Jul. 31, 2015 | Jul. 02, 2015 | Apr. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2014 |
Issuance of common stock shares of warrant exercise | 220,912 | |||||
Proceeds from warrant exercises | $ 1,248 | $ 484 | ||||
Common stock exercise price per share | $ 5.925 | $ 5.25 | ||||
Number of stock option shares vested | 9,936 | |||||
Subsequent Event [Member] | ||||||
Issuance of common stock shares of warrant exercise | 43,318 | |||||
Proceeds from warrant exercises | $ 0 | |||||
Issuance of warrant purchase of common stock shares | 95,300 | |||||
Common stock exercise price per share | $ 4.50 | |||||
Subsequent Event [Member] | Central Allen Pharmacy [Member] | ||||||
Amount paid for acquired shares | $ 420 | |||||
Subsequent Event [Member] | Employment Agreement [Member] | Mark Baum [Member] | ||||||
Number of stock option issued for purchase of common stock | 600,000 | |||||
Common stock exercise price per share | $ 7.87 | |||||
Subsequent Event [Member] | Employment Agreement [Member] | Mark Baum [Member] | First Price Condition [Member] | ||||||
Number of stock option shares vested | 200,000 | |||||
Stock option vested period | 5 years | |||||
Common stock closing price per share | $ 9 | |||||
Subsequent Event [Member] | Employment Agreement [Member] | Mark Baum [Member] | Second Price Condition [Member] | ||||||
Number of stock option shares vested | 100,000 | |||||
Stock option vested period | 5 years | |||||
Common stock closing price per share | $ 10 | |||||
Subsequent Event [Member] | Employment Agreement [Member] | Mark Baum [Member] | Third Price Condition [Member] | ||||||
Number of stock option shares vested | 100,000 | |||||
Stock option vested period | 5 years | |||||
Common stock closing price per share | $ 12 | |||||
Subsequent Event [Member] | Employment Agreement [Member] | Mark Baum [Member] | Fourth Price Condition [Member] | ||||||
Number of stock option shares vested | 100,000 | |||||
Stock option vested period | 5 years | |||||
Common stock closing price per share | $ 14 | |||||
Subsequent Event [Member] | Employment Agreement [Member] | Mark Baum [Member] | Fifth Price Condition [Member] | ||||||
Number of stock option shares vested | 100,000 | |||||
Stock option vested period | 5 years | |||||
Common stock closing price per share | $ 15 | |||||
Subsequent Event [Member] | Retention Bonus Letter Agreement [Member] | Mark Baum [Member] | ||||||
Percentage of fair market value | 1.50% | |||||
Subsequent Event [Member] | CAN Agreement [Member] | Advanced Dosage Forms, Inc [Member] | ||||||
License fee | 50 | |||||
Creditable against the royalties owing | $ 25 | |||||
OPH product sold price per unit | $ 50 | |||||
Percentage of sales of OPH product | 20.00% | |||||
Noncreditable licence fee | $ 10 |