Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 20, 2017 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | Imprimis Pharmaceuticals, Inc. | ||
Entity Central Index Key | 1,360,214 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 45,000,000 | ||
Entity Common Stock, Shares Outstanding | 18,627,915 | ||
Trading Symbol | IMMY | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 8,853 | $ 2,685 |
Restricted cash and short-term investments | 200 | 150 |
Accounts receivable, net | 2,921 | 840 |
Inventories | 1,841 | 1,412 |
Prepaid expenses and other current assets | 938 | 786 |
Total current assets | 14,753 | 5,873 |
Property, plant and equipment, net | 7,295 | 2,657 |
Intangible assets, net | 2,972 | 3,135 |
Goodwill | 2,227 | 2,466 |
TOTAL ASSETS | 27,247 | 14,131 |
Current liabilities | ||
Accounts payable and accrued expenses | 3,538 | 3,407 |
Accrued payroll and related liabilities | 1,638 | 1,200 |
Deferred revenue and customer deposits | 91 | 65 |
Current portion of deferred acquisition obligation and accrued interest | 207 | 198 |
Current portion of contingent acquisition obligation | 483 | |
Current portion of note payable, net of unamortized debt discount | 3,973 | |
Current portion of capital lease obligations, net of unamortized discount | 458 | 21 |
Total current liabilities | 9,905 | 5,374 |
Capital lease obligations, net of current portion and unamortized discount | 1,318 | 1 |
Deferred acquisition obligation, net of current portion | 52 | 258 |
Accrued expenses, net of current portion | 667 | 500 |
Deferred tax liability | 936 | 1,047 |
Note payable and paid-in-kind interest, net of unamortized debt discount and current portion | 7,937 | 8,336 |
TOTAL LIABILITIES | 20,815 | 15,516 |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Common stock, $0.001 par value, 90,000,000 shares authorized, 18,627,915 and 9,755,678 shares issued and outstanding at December 31, 2016 and 2015, respectively | 19 | 10 |
Additional paid-in capital | 83,264 | 56,369 |
Accumulated deficit | (76,851) | (57,764) |
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | 6,432 | (1,385) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ 27,247 | $ 14,131 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
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 | 18,627,915 | 9,755,678 |
Common stock, shares outstanding | 18,627,915 | 9,755,678 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | ||
Sales, net | $ 19,927 | $ 9,654 |
License revenues | 15 | 62 |
Total revenues | 19,942 | 9,716 |
Cost of sales | (9,831) | (5,206) |
Gross profit | 10,111 | 4,510 |
Operating expenses: | ||
Selling and marketing | 7,382 | 6,496 |
General and administrative | 17,569 | 12,504 |
Research and development | 739 | 332 |
Impairment of long-lived assets | 303 | |
Total operating expenses | 25,993 | 19,332 |
Loss from operations | (15,882) | (14,822) |
Other income (expense): | ||
Interest expense, net | (2,774) | (1,108) |
Early extinguishment of debt | (1,966) | |
Change in fair value of derivative liabilities | (113) | |
Other income, net | 1,537 | 31 |
Income tax benefit (provision) | 111 | |
Total other expenses, net | (3,205) | (1,077) |
Net loss | $ (19,087) | $ (15,899) |
Basic and diluted net loss per share of common stock | $ (1.50) | $ (1.66) |
Weighted average number of shares of common stock outstanding, basic and diluted | 12,743,184 | 9,576,142 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2014 | $ 9 | $ 50,006 | $ (41,865) | $ 8,150 |
Balance, share at Dec. 31, 2014 | 9,258,231 | |||
Exercise of stock options | ||||
Exercise of stock options, shares | 130,457 | 130,457 | ||
Issuance of common stock upon vesting of RSUs net of tax withholding | (10) | $ (10) | ||
Issuance of common stock upon vesting of RSUs net of tax withholding , shares | 10,132 | |||
Sale of stock, net of offering costs (ATM) | 404 | 404 | ||
Sale of stock, net of offering costs (ATM), shares | 72,421 | |||
Exercise of warrants | $ 1 | 1,247 | 1,248 | |
Exercise of warrants, shares | 220,912 | |||
The Park Acquisition | 425 | 425 | ||
The Park Acquisition, shares | 63,525 | |||
Relative fair value of warrants to purchase common stock issued in connection with note payable | 840 | 840 | ||
Relative fair value of warrants to purchase common stock issued in connection with note payable, shares | ||||
Stock-based compensation expense | 3,457 | 3,457 | ||
Net loss | (15,899) | (15,899) | ||
Balance at Dec. 31, 2015 | $ 10 | 56,369 | (57,764) | (1,385) |
Balance, share at Dec. 31, 2015 | 9,755,678 | |||
Exercise of stock options | 55 | 55 | ||
Exercise of stock options, shares | 15,000 | |||
Issuance of common stock upon vesting of RSUs net of tax withholding | $ 1 | (144) | (143) | |
Issuance of common stock upon vesting of RSUs net of tax withholding , shares | 132,367 | |||
Sale of stock, net of offering costs (ATM) | 212 | 212 | ||
Sale of stock, net of offering costs (ATM), shares | 57,042 | |||
Stock-based compensation expense | 3,811 | 3,811 | ||
Registered public offering sale of stock, net of offering costs, March 2016 | $ 3 | 11,085 | 11,088 | |
Registered public offering sale of stock, net of offering costs, March 2016, shares | 3,335,000 | |||
Private placement, issuance of stock and warrants at $1.915 per unit, net of costs, in December 2016 | $ 5 | 9,212 | 9,217 | |
Private placement, issuance of stock and warrants at $1.915 per unit, net of costs, in December 2016, shares | 5,257,828 | |||
Stock-based payment for deferred acquisition obligation | 302 | 302 | ||
Stock-based payment for deferred acquisition obligation, shares | 75,000 | |||
Derivative liabilities in connection with convertible note and modification of warrants to purchase common stock issued in connection with note payable | 2,362 | 2,362 | ||
Derivative liabilities in connection with convertible note and modification of warrants to purchase common stock issued in connection with note payable, shares | ||||
Net loss | (19,087) | (19,087) | ||
Balance at Dec. 31, 2016 | $ 19 | $ 83,264 | $ (76,851) | $ 6,432 |
Balance, share at Dec. 31, 2016 | 18,627,915 |
Consolidated Statements of Sto6
Consolidated Statements of Stockholders' Equity (Deficit) (Parenthetical) - $ / shares | Dec. 31, 2016 | Mar. 16, 2016 |
Statement of Stockholders' Equity [Abstract] | ||
Issuance of stock and warrants price per share | $ 1.915 | $ 3.60 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (19,087) | $ (15,899) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization of furniture and equipment | 1,055 | 255 |
Amortization of intangible assets | 351 | 355 |
Amortization of deferred tax liability | (111) | |
Amortization of debt issuance costs and discount | 970 | 281 |
Debt extinguishment | 1,966 | |
Paid-in-kind interest added to principal of note payable | 203 | 130 |
Non-cash gain on contingent acquisition obligations | (83) | (31) |
Change in fair value of derivative liabilities | 113 | |
Impairment of long-lived assets | 303 | |
Stock-based compensation | 3,673 | 3,441 |
Issuance of warrant related to litigation settlement | 115 | |
Changes in assets and liabilities, net of effects from acquisitions: | ||
Accounts receivable | (2,081) | (360) |
Inventories | (429) | (314) |
Prepaid expenses and other current assets | (152) | (545) |
Accounts payable and accrued expenses | 1,515 | 1,028 |
Accrued payroll and related liabilities | 438 | 453 |
Deferred revenue and customer deposits | 26 | 63 |
NET CASH USED IN OPERATING ACTIVITIES | (11,215) | (11,143) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of Park Compounding, net of cash | (3,005) | |
Purchase of Central Allen Pharmacy, net of cash | (421) | |
Purchase of assets for ImprimisRx PA, Inc. | (524) | |
Payments on Pharmacy Creations contingent acquisition obligation | (100) | |
Investment in restricted marketable securities | (50) | |
Investment in patent and trademark assets | (252) | (185) |
Purchases of property, plant and equipment | (6,887) | (995) |
NET CASH USED IN INVESTING ACTIVITIES | (7,289) | (5,130) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Payments on capital lease obligations | (267) | (25) |
Net proceeds from public equity offering | 11,088 | |
Net proceeds from private placement equity offering | 9,217 | |
Payments on Park deferred acquisition obligation | (195) | (135) |
Proceeds from note payable, net of issuance costs | 9,265 | |
Proceeds from convertible note payable, net of issuance costs | 2,772 | |
Proceeds from Essex leaseback, net of issuance costs | 1,933 | |
Net proceeds from ATM sales of common stock | 212 | 404 |
Net proceeds (repurchases) from exercise of warrants and stock options, net of taxes remitted for RSU's | (88) | 1,238 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 24,672 | 10,747 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 6,168 | (5,526) |
CASH AND CASH EQUIVALENTS, beginning of period | 2,685 | 8,211 |
CASH AND CASH EQUIVALENTS, end of period | 8,853 | 2,685 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for income taxes | 9 | 1 |
Cash paid for interest | 1,366 | 637 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Fair value of embedded conversion feature recorded as debt discount and derivative liability | 2,322 | |
Reclassification of the fair value of the embedded conversion feature derivative liability to additional paid-in capital upon closing of the public equity offering | 2,646 | |
Reclassification of the fair value of the LSAF warrant from additional paid-in capital to derivative liability | 675 | |
Reclassification of the fair value of the LSAF warrant derivative liability to additional paid-in capital upon closing of the public equity offering | 464 | |
Reduction in value of warrant in connection with debt extinguishment | 73 | |
Issuance of common stock and fair value of deferred acquisition obligations related to the purchase of Park Compounding | 1,016 | |
Issuance of common stock and to settle contingent acquisition obligation related to the purchase of PC | 302 | |
Issuance of stock options for consulting services included in accounts payable and accrued expenses | 23 | 39 |
Final fee on notes payable recorded as debt discount and included in accrued expenses | 500 | |
Estimated relative fair value of warrants issued in connection with note payable | 840 | |
Purchase of property, plant and equipment included in accounts payable and accrued expenses | $ 81 | $ 1,275 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | NOTE 1. ORGANIZATION Imprimis Pharmaceuticals, Inc. (together with its subsidiaries, unless the context indicates or otherwise requires, the “Company” or “Imprimis”) is a pharmaceutical company dedicated to producing and dispensing high quality innovative medications in all 50 states. The Company’s unique business model increases patient access and affordability to many critical medicines. Headquartered in San Diego, California, Imprimis owns and operates three production and dispensing facilities located in California, New Jersey and Pennsylvania. On April 1, 2014, the Company acquired Pharmacy Creations, LLC (“PC”), a New Jersey based compounding pharmacy and on January 1, 2015, the Company acquired South Coast Specialty Compounding, Inc. D/B/A Park Compounding (“Park”), a California 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. On August 4, 2015, the Company acquired JT Pharmacy, Inc. d/b/a Central Allen Pharmacy (“CAP”), a Texas based compounding pharmacy whose name has been changed to ImprimisRx TX, Inc. (See Note 18), and on October 15, 2015, the Company, through a wholly-owned subsidiary ImprimisRx PA, Inc. , |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Imprimis has prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. 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 notes payable and derivative liabilities, and valuation of stock-based transactions with employees and non-employees. Actual results could differ from those estimates. Liquidity The Company has incurred significant operating losses and negative cash flows from operations since its inception. The Company incurred net losses of $19,087 and $15,899 for the years ended December 31, 2016 and 2015, respectively, and had an accumulated deficit of $76,851 and $57,764 as of December 31, 2016 and 2015, respectively. In addition, the Company used cash in operating activities of $11,215 and $11,143 for the years ended December 31, 2016 and 2015, respectively. While there is no assurance, the Company believes its existing cash resources and restricted cash of approximately $9,053 at December 31, 2016, will be sufficient to sustain the Company’s planned level of operations for at least the next twelve months. However, estimates of operating expenses and working capital requirements could be incorrect, and the Company could use its cash resources faster than anticipated. Further, some or all of the ongoing or planned activities may not be successful and could result in further losses. The Company may seek to increase liquidity and capital resources by one or more measures, to the extent necessary. These measures may include, but are not limited to, the following: obtaining financing through the issuance of equity, debt, or convertible securities; and working to increase revenue growth through pharmacy sales. There is no guarantee that the Company will be able to obtain capital when needed on terms it deems as acceptable, or at all. 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. Product Revenues Determination of criteria (3) and (4) is based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Estimated returns and allowances and other adjustments are provided for in the same period 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 Company’s performance under the other elements of the arrangement. In addition, if the Company’s 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. Cost of Sales Cost of sales includes direct and indirect costs to manufacture formulations and other products sold, including active pharmaceutical ingredients, personnel costs, packaging, storage, royalties (see Note 16), shipping and handling costs and the write-off of obsolete inventory. Research and Development The Company expenses all costs related to research and development as they are incurred. Research and development expenses consist of expenses incurred in performing research and development activities, including salaries and benefits, other overhead expenses, and costs related to clinical trials, contract services and outsourced contracts. Debt Issuance Costs and Debt Discount Debt issuance costs and the debt discount are recorded net of notes payable and capital lease obligations in the consolidated balance sheets. Amortization expense of debt issuance costs and the debt discount is calculated using the effective interest method over the term of the debt and is recorded in interest expense in the accompanying consolidated statements of operations. Intellectual Property The costs of acquiring intellectual property rights to be used in the research and development process, including licensing fees and milestone payments, are charged to research and development expense as incurred in situations where the Company has not identified an alternative future use for the acquired rights, and are capitalized in situations where we have identified an alternative future use for the acquired rights. Patents and trademarks are recorded at cost and capitalized at a time when the future economic benefits of such patents and trademarks become more certain (see Goodwill and Intangible Assets). The Company began capitalizing certain costs associated with acquiring intellectual property rights during 2015, if costs are not capitalized they are expensed as incurred. Income Taxes As part of the process of preparing the Company’s consolidated financial statements, the Company must estimate the actual current tax liabilities and assess temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within the balance sheet. The Company must assess the likelihood that the deferred tax assets will be recovered from future taxable income and, to the extent the Company believes that recovery is not likely, a valuation allowance must be established. To the extent the Company establishes a valuation allowance or increase or decrease this allowance in a period, the impact will be included in income tax expense in the consolidated statement of operations. The Company accounts for income taxes under the provisions of Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 740, “Income Taxes”, or ASC 740. As of December 31, 2016 and 2015, there were no unrecognized tax benefits included in the consolidated balance sheets that would, if recognized, affect the effective tax rate. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties in its consolidated balance sheets at December 31, 2016 and 2015, and has not recognized interest and/or penalties in the consolidated statements of operations for the years ended December 31, 2016 and 2015. The Company is subject to taxation in the United States, California, New Jersey, Texas and Pennsylvania. The Company’s tax years since 2000 are subject to examination by the federal and state tax authorities due to the carryforward of unutilized net operating losses. Cash and Cash Equivalents Cash equivalents include short-term, highly liquid investments with maturities of three months or less at the time of acquisition. Concentrations of Credit Risk The Company places its cash with financial institutions deemed by management to be of high credit quality. The Federal Deposit Insurance Corporation (“FDIC”) provides basic deposit coverage with limits up to $250 per owner. At December 31, 2016, the Company had approximately $8,800 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 $422 and $180 as of December 31, 2016 and 2015, respectively. Inventories Inventories are stated at the lower of cost or market. Cost is determined on a first-in, first-out basis. The Company evaluates the carrying value of inventories on a regular basis, based on the price expected to be obtained for products in their respective markets compared with historical cost. Write-downs of inventories are considered to be permanent reductions in the cost basis of inventories. The Company also regularly evaluates its inventories for excess quantities and obsolescence (expiration), taking into account such factors as historical and anticipated future sales or use in production compared to quantities on hand and the remaining shelf life of products and active pharmaceutical ingredients on hand. The Company establishes reserves for excess and obsolete inventories as required based on its analyses. Property, Plant and Equipment Property, plant and equipment is stated at cost less accumulated depreciation and amortization. Depreciation and amortization is calculated using the straight-line method over the estimated useful life of the asset. Leasehold improvements and capital lease equipment are amortized over the estimated useful life or remaining lease term, whichever is shorter. Computer software and hardware and furniture and equipment are depreciated over three to five years. Business Combinations The Company accounts for business combinations by recognizing the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at their fair values on the acquisition date. The purchase price allocation process requires management to make significant estimates and assumptions, especially with respect to intangible assets, estimated contingent consideration payments and pre-acquisition contingencies. Examples of critical estimates in valuing certain of the intangible assets the Company has acquired or may acquire in the future include but are not limited to: ● future expected cash flows from product sales, support agreements, consulting contracts, other customer contracts, and acquired developed technologies and patents; and ● discount rates utilized in valuation estimates. Unanticipated events and circumstances may occur 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 estimates 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 financial position, statements of operations or cash flows in the period of the change in the estimate. Goodwill and Intangible Assets Patents and trademarks are recorded at cost and capitalized at a time when the future economic benefits of such patents and trademarks become more certain. At that time, the Company capitalizes third-party legal costs and filing fees associated with obtaining and prosecuting claims related to its patents and trademarks. Once the patents have been issued, the Company amortizes these costs over the shorter of the legal life of the patent or its estimated economic life, generally 20 years, using the straight-line method. Trademarks are an indefinite life intangible asset and are assessed for impairment based on future projected cash flows as further described below. 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 Company’s business relative to expected operating results; ● significant adverse economic and industry trends; ● significant decline in the Company’s market capitalization for an extended period of time relative to net book value; and ● expectations that a reporting unit will be sold or otherwise disposed. The 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 unit’s goodwill may be impaired and the Company then performs the second step of the impairment test. If the fair value of a reporting unit exceeds its carrying amount, no further analysis is required. Step 2. If further analysis is required, the Company compares the implied fair value of the reporting unit’s goodwill, determined by allocating the reporting unit’s fair value to all of its assets and its liabilities in a manner similar to a purchase price allocation, to its carrying amount. If the carrying amount of the reporting unit’s goodwill exceeds its fair value, an impairment loss will be recognized in an amount equal to the excess. Impairment of Long-Lived Assets Long-lived assets, such as property, plant and equipment, purchased intangibles subject to amortization and patents and trademarks, 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 consolidated balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposal group classified as held-for-sale would be presented separately in the appropriate asset and liability sections of the consolidated balance sheet, if material. In September 2016, the Company decided to cease operations at its Texas facility, and began winding down the operations. Based on current projections regarding future cash flows of the Texas facility and the related subsidiary, the evaluation resulted in an impairment of $64 related to intangible assets and $239 related to goodwill, recorded to impairment of long-lived assets on the consolidated statements of operations during the year ended December 31, 2016. During the year ended December 31, 2015, the Company did not recognize any impairment of its long-lived assets (See Note 18). 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 consolidated balance sheets. Total billing and collection management expense under this agreement for the years ended December 31, 2016 and 2015 was $55 and $142, respectively, and is included in selling and marketing expenses in the accompanying consolidated statements of operations. The amount due under the agreement as of December 31, 2016 and 2015 was $73 and $81, respectively. Deferred Rent The Company accounts for rent expense related to its operating leases by determining total minimum rent payments on the leases over their respective periods and recognizing the rent expense on a straight-line basis. The difference between the actual amount paid and the amount recorded as rent expense in each fiscal year and interim periods within each fiscal year is recorded as an adjustment to deferred rent (See Note 9). Fair Value Measurements Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability. GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The established fair value hierarchy prioritizes the use of inputs used in valuation methodologies into the following three levels: ● Level 1: Applies to assets or liabilities for which there are quoted prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and must be used to measure fair value whenever available. ● Level 2: Applies to assets or liabilities for which there are significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. ● Level 3: Applies to assets or liabilities for which there are significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. For example, Level 3 inputs would relate to forecasts of future earnings and cash flows used in a discounted future cash flows method. At December 31, 2016 and 2015, the Company did not have any financial assets or liabilities that are measured on a recurring basis. The Company’s financial instruments included cash and cash equivalents, restricted short-term investments, accounts receivable, accounts payable and accrued expenses, accrued payroll and related liabilities, deferred revenue and customer deposits, deferred acquisition obligations, notes payable and capital leases. The carrying amount of these financial instruments, except for deferred acquisition obligations, notes payable and capital leases, approximates fair value due to the short-term maturities of these instruments. The Company’s restricted short-term investments are carried at amortized cost, which approximates fair value. Based on borrowing rates currently available to the Company, the carrying values of the deferred acquisition obligations, notes payable and capital leases, approximate their respective fair values. Derivative Instruments The Company accounts for free-standing derivative instruments and hybrid instruments that contain embedded derivative features as either assets or liabilities in the consolidated balance sheets and are measured at fair value with gains or losses recognized in earnings. Embedded derivatives that are not clearly and closely related to the host contract are bifurcated and are recognized at fair value with changes in fair value recognized as either a gain or loss in earnings. The Company determines the fair value of derivative instruments and hybrid instruments based on available market data using appropriate valuation models, giving consideration to all of the rights and obligations of each instrument. The Company estimates the fair value of derivative instruments and hybrid instruments using various techniques (and combinations thereof) that are considered to be consistent with the objective of measuring fair value. In selecting the appropriate technique, the Company considers, among other factors, the nature of the instrument, the market risks that it embodies and the expected means of settlement. The Company generally uses the Black-Scholes-Merton option pricing model, adjusted for the effect of dilution, because it embodies all of the requisite assumptions (including trading volatility, estimated terms, dilution and risk-free rates) necessary to fair value these instruments. Estimating the fair value of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. Increases in the trading price of the Company’s common stock and increases in fair value during a given financial quarter result in the application of non-cash derivative expense. Conversely, decreases in the trading price of the Company’s common stock and decreases in fair value during a given financial quarter would result in the application of non-cash derivative income. 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 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 Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows FASB guidance. As such, the value of the applicable stock-based compensation is periodically remeasured and income or expense is recognized during 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 vendor’s 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 grantor’s 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 consolidated balance sheets. 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 and “if converted” method) from deferred acquisition obligations, stock options, unvested RSUs, warrants and convertible notes were 9,162,259 and 3,313,169 at December 31, 2016 and 2015, respectively, and are excluded from the calculation of diluted net loss per share for all periods presented because the effect is anti-dilutive. Included in the basic and diluted net loss per share calculation were RSUs awarded to directors that had vested, but the issuance and delivery of the shares are deferred until the director resigns. The number of shares underlying these vested RSUs at December 31, 2016 and 2015 was 80,245 and 55,824, respectively, The following table shows the computation of basic and diluted net loss per share of common stock for the years ended December 31, 2016 and 2015: For the For the Year Ended Year Ended December 31, 2016 December 30, 2015 Numerator – net loss $ (19,087 ) $ (15,899 ) Denominator – weighted average number of shares outstanding, basic and diluted 12,743,184 9,576,142 Net loss per share, basic and diluted $ (1.50 ) $ (1.66 ) Recently Adopted Accounting Pronouncements In August 2014, the FASB issued new accounting guidance which defines management’s responsibility to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. This guidance is effective for annual periods ended after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company has applied the guidance and disclosure provisions of the new standard upon adoption in its 2016 annual consolidated financial statements. The adoption of the guidance did not have a material impact on the Company’s consolidated financial statements and its related footnote disclosures. Recently Issued Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers. In February 2016, the FASB issued ASU 2016-02, Leases In January 2016, the FASB issued ASU 2016-01, Financial Instruments: Recognition and Measurement of Financial Assets and Financial Liabilities In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory, |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 3. ACQUISITIONS Acquisition of Park On January 1, 2015, the Company acquired all of the outstanding capital stock 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 make and distribute its patent-pending proprietary drug formulations and other novel pharmaceutical solutions through Park 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 Company’s 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 Company’s 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 the Company issued to the Sellers 63,525 shares of the Company’s restricted common stock, valued at $500 based on the average closing price of the Company’s 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 Company’s 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. The Company also recorded a deferred tax liability of $1,047 related to the Park acquisition. 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 $5,163. 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 consolidated balance sheet at December 31, 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 tax liability 1,047 Deferred consideration to Sellers 591 Total acquisition date fair value $ 5,163 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 1,895 Net assets acquired $ 5,163 During the year ended December 31, 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 was based on estimates and appraisals that was based on the Company’s final evaluation of Park’s assets and liabilities, including both tangible and intangible assets. Results of Operations The amount of revenues and net income of Park included in the Company’s consolidated statement of operations from the acquisition date through the period ended December 31, 2015 are as follows: Total revenues $ 6,134 Net income $ 1,088 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 Park’s 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 name represents the fair value of the brand and name recognition associated with the marketing of Park’s 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, $1,895 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 Park’s 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. Other 2015 Acquisitions During 2015, the Company acquired CAP and purchased the assets of TOHC, primarily to expand its compounding pharmacy infrastructure and offerings. These acquisitions were not individually significant. The Company has included the financial results of the CAP acquisition in its consolidated financial statements from its acquisition date and the results from this company were not individually material to the Company’s consolidated financial statements. The purchase price for these acquisitions totaled, collectively, approximately $945, which was paid entirely in cash. The Company recorded $641 of net tangible assets and $65 of identifiable intangible assets, based on their estimated fair values, and $239 of residual goodwill. The acquisition of CAP was not individually significant and the 2015 results from this company were not individually material to our consolidated financial statements. The Company incurred approximately $201 in acquisition expenses related to the Park Acquisition, $135 in expenses related to the acquisition of the assets of TOHC and did not incur material acquisition expenses related to the acquisition of CAP. |
Restricted Cash and Short-Term
Restricted Cash and Short-Term Investments | 12 Months Ended |
Dec. 31, 2016 | |
Cash and Cash Equivalents [Abstract] | |
Restricted Cash and Short-Term Investments | NOTE 4. RESTRICTED CASH AND SHORT-TERM INVESTMENTS The restricted cash and short-term investments at December 31, 2016 and 2015 consist of a money market account and certificates of deposit, which are classified as held-to-maturity. At December 31, 2016 and 2015, the restricted short-term investments were recorded at amortized cost which approximates fair value. At December 31, 2016 and 2015, the money market account and the certificates of deposit of $200 and $150, respectively, were classified as a current asset. The certificates of deposit that were required as collateral under the Company’s corporate credit card agreement and as additional security for the Company’s office space lease were redeemed during the year ended December 31, 2016. The money market account is required for additional security for the Company’s New Jersey based facility. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 5. INVENTORIES Inventories are comprised of over-the-counter and prescription retail pharmacy products, commercial pharmaceutical products, related laboratory supplies and active pharmaceutical ingredients. The composition of inventories, net of reserve, as of December 31, 2016 and 2015 was as follows: December 31, 2016 December 31, 2015 Raw materials $ 669 $ 775 Finished goods 1,172 637 Total inventories $ 1,841 $ 1,412 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2016 | |
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 at December 31, 2016 and 2015 consisted of the following: December 31, 2016 December 31, 2015 Prepaid insurance $ 315 $ 297 Other prepaid expenses 517 370 Deposits and other current assets 106 119 Total prepaid expenses and other current assets $ 938 $ 786 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | NOTE 7. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment at December 31, 2016 and 2015 consisted of the following: December 31, 2016 December 31, 2015 Property, plant and equipment, net: Computer software and hardware $ 831 $ 323 Furniture and equipment 424 350 Lab and pharmacy equipment 2,559 538 Leasehold improvements 4,836 1,746 8,650 2,957 Accumulated depreciation and amortization (1,355 ) (300 ) $ 7,295 $ 2,657 The Company recorded depreciation and amortization expense of $1,055 and $255 during the years ended December 31, 2016 and 2015, respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | NOTE 8. INTANGIBLE ASSETS AND GOODWILL The Company’s intangible assets at December 31, 2016 consisted of the following: Amortization periods Accumulated Net (in years) Cost amortization Impairment Carrying value Patents 17-19 years $ 214 $ (6 ) $ - $ 208 Trademarks Indefinite 224 - - 224 Customer relationships 3-15 years 2,998 (554 ) (15 ) 2,429 Trade name 5 years 16 (7 ) (1 ) 8 Non-competition clause 3-4 years 294 (184 ) (20 ) 90 State pharmacy licenses 25 years 45 (4 ) (28 ) 13 $ 3,791 $ (755 ) $ (64 ) $ 2,972 The Company’s intangible assets at December 31, 2015 consisted of the following: Amortization periods Accumulated Net (in years) Cost amortization Carrying value Patents 17-19 years $ 64 $ (1 ) $ 63 Trademarks Indefinite 121 - 121 Customer relationships 3-15 years 2,998 (297 ) 2,701 Trade name 5 years 16 (4 ) 12 Non-competition clause 3-4 years 294 (99 ) 195 State pharmacy licenses 25 years 45 (2 ) 43 $ 3,538 $ (403 ) $ 3,135 Amortization expense for intangible assets for the years ended December 31, 2016 and 2015 was as follows: For the For the Year Ended Year Ended December 31, 2016 December 31, 2015 Patents $ 5 $ 1 Customer relationships 255 260 Trade name 3 3 Non-competition clause 86 90 State pharmacy licenses 2 1 $ 351 $ 355 Estimated future amortization expense for the Company’s intangible assets at December 31, 2016 is as follows: Years ending December 31, 2017 $ 359 2018 218 2019 215 2020 212 2021 212 Thereafter 1,755 $ 2,972 The changes in the carrying value of the Company’s goodwill during the years ended December 31, 2016 and 2015 were as follows: Balance at January 1, 2015 $ 332 Acquisition of Park (see Note 3) 1,895 Acquisition of CAP (see Note 3) 239 Balance at December 31, 2015 2,466 Impairment of CAP (see Note 2) (239 ) Balance at December 31, 2016 $ 2,227 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | NOTE 9. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses at December 31, 2016 and 2015 consisted of the following: December 31, 2016 December 31, 2015 Accounts payable $ 2,999 $ 3,185 Deferred rent 412 63 Accrued interest (see Note 10) 116 90 Accrued exit fee for note payable (see Note 10) 667 500 Building lease liability(1) 11 46 Other accrued expenses (2) - 23 Total accounts payable and accrued expenses 4,205 3,907 Less: Current portion (3,538 ) (3,407 ) Non-current total accrued expenses $ 667 $ 500 (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. In September 2016, the Company decided to cease operations at its Texas location and started steps to wind down operations. The Company recognized a loss of $16 during the year ended December 31, 2016 related to the estimated remaining lease liability. The obligations were discounted based on current prevailing market rates. (2) The amount consists of a $23 stock-based compensation accrual at December 31, 2015, for stock options to be granted for services performed. The stock-based compensation expense related to the accruals was $23 during the year ended December 31, 2015. The $23 was recorded to additional paid-in-capital upon issuance of the stock options in 2016. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 10. DEBT Senior Note – 2015 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, as amended in January 2016 and December 2016 (see further description of December 2016 amendment below), the Lender made available to the Company a term loan in the aggregate principal amount of up to $10,000, all of which was drawn on May 11, 2015. The term loan bore interest at a fixed per-annum rate of 12.5% and allowed for 2% of the interest to be paid-in-kind until December 2016. The Company was permitted to pay interest only until June 1, 2017. The Company is required to pay interest, plus repayments of the principal amount of the term loan, in 20 equal monthly installments. All amounts owed under the Loan Agreement, including a final fee of 5% of the aggregate principal amount of the term loan and prepayment fees of up to 1% of the principal balance are due on January 1, 2019 . The Company incurred expenses of approximately $1,066 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 $667 and $500 for the final fee, as of December 31, 2016 and 2015, respectively, is included in accrued expenses (see Note 9) in the accompanying consolidated balance sheets. 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 Lender’s consent, including, among others, disposing of certain of the Company’s 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 Company’s capital stock, or incurring any lien or other encumbrance on the Company’s 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 Company’s 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 issued to the Lender a warrant to purchase up to 125,000 shares of the Company’s common stock, which is exercisable immediately, has an exercise price of $7.85 per share upon issuance 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 option pricing model with the following assumptions: fair value of the Company’s 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 consolidated balance sheet. The debt discount is being amortized to interest expense over the term of the debt using the interest method. As described further, this warrant was amended in January 2016 and December 2016. For the years ended December 31, 2016 and 2015, debt discount amortization related to the Loan Agreement was $470 and $281, respectively. Convertible Senior Note – 2016 On January 22, 2016, the Company entered into a note purchase agreement (the “NPA”) with, and issued an 8.00% Convertible Senior Secured Note (“Convertible Note”) in the principal amount of $3,000 to, the Lender. Pursuant to the terms of the NPA, on the date thereof, the Company issued the Convertible Note to the Lender and, as consideration therefor, the Lender paid the Company in cash the full principal amount of the Convertible Note. The Company incurred expenses of approximately $228 in connection with the Convertible Note and these expenses were recorded as a debt discount. The debt discount is being amortized as interest expense over the term of the debt using the effective interest method. Pursuant to the terms of the Convertible Note, the Company is obligated to pay interest on the principal amount of the Convertible Note monthly in cash at a fixed per-annum rate of 8.00%, and the Company is obligated to repay the full principal amount of the Convertible Note in cash on May 11, 2021. The Company is permitted to redeem the Convertible Note prior to its maturity at any time on or after March 1, 2018 for cash purchase prices equal to 109% - 105% of the outstanding principal amount of the Convertible Note, depending on the date of redemption. The Convertible Note was initially convertible by the holder at any time into shares of the Company’s common stock at an effective conversion price of approximately $5.90 and subject to anti-dilution adjustment upon the Company’s first equity financing while the Convertible Note is outstanding in which it receives gross proceeds of at least $3,000, if such equity financing is completed at a per share price that is less than the conversion rate of the Convertible Note, and also subject to adjustment upon stock combinations or splits, certain recapitalizations, stock or cash dividends or other distributions of property or equity rights. Additionally, in the event of certain change of control events affecting the Company, the Company may be required, at the option of the Lender, to repurchase the Convertible Note in cash for the greater of 105% of the outstanding principal amount of the Convertible Note or the value of the shares of common stock issuable upon conversion of the Convertible Note. The fair value of the conversion feature was $2,322 and was recorded as a debt discount, decreasing notes payable and increasing additional paid-in capital on the accompanying consolidated balance sheet (see also Note 12). The debt discount is being amortized to interest expense over the term of the debt using the effective interest method. For the year ended December 31, 2016, debt discount amortization related to the Convertible Note was $534. In connection and concurrently with the execution of the NPA and the issuance of the Convertible Note, the Company and the Lender also entered into an amendment (the “Loan Agreement Amendment”) to the Loan Agreement (see above). The Loan Agreement Amendment modifies the terms of the Loan Agreement in order to eliminate the potential borrowing of a second term loan thereunder and to permit the Company to issue the Convertible Note. Additionally, the Company and the Lender entered into an amendment (the “Warrant Amendment”) to the warrants that were issued to the Lender in connection with the Loan Agreement. The Warrant Amendment modifies the terms of the warrants in order to reduce the exercise price thereof to $5.90 per share, which is consistent with the initial conversion rate of the Convertible Note, and to add an anti-dilution adjustment provision that is consistent with the same such provision in the Convertible Note. On March 16, 2016, upon the closing of the Offering (see Note 12) and pursuant to the anti-dilution adjustment provisions of the Convertible Note and the Warrant Amendment, the effective conversion price of the Convertible Note was adjusted to approximately $3.60, and the exercise price of the warrants was adjusted to $3.60 per share (see also Note 12 for further accounting discussion of the warrant exercise price and conversion provisions and related derivative liabilities). The warrant was amended again in December 2016, to modify the exercise price to $1.79 per share, in connection with the Exchange Agreement (described below). On December 27, 2016, the Company entered into a third amendment (the “Amendment”) to the Loan Agreement with the Lender. Concurrently with entering into and related to the Amendment, the Company and the Lender also entered into an Exchange and Discharge Agreement (the “Exchange Agreement”). The Amendment and Exchange Agreement, among other things, primarily allowed for the Company and the Lender to exchange the Convertible Note for a $3,000 term loan (the “Term B Loan”). The Term B Loan was issued in exchange for, and not funded separately, cancellation and discharge of all indebtedness related to the Convertible Note. Terms, conditions and security interests of the Term B Loan are substantially equal to those of the Loan Agreement. The Amendment also amended certain terms and definitions associated with prepayment, payment schedule, amortization periods and defined the outstanding principal amounts due to the Lender under the Loan Agreement and Term B Loan, including any interest that has been paid in kind of the principal balance, in aggregate, as $13,332. In connection with the Exchange Agreement, during the year ended December 31, 2016, the Company recorded early extinguishment expense of $1,966 for remaining unamortized debt discounts related to the Convertible Note at the time of the Exchange Agreement. Notes payable at December 31, 2016 were as follows: December 31, 2016 December 2016 Amended Note $ 13,332 Less: Discount on notes (1,422 ) Less: Current portion (4,999 ) Long-term portion $ 6,911 Future minimum payments under notes payable outstanding at December 31, 2016 are as follows: Year Ending December 31, 2016 Amount 2017 $ 6,485 2018 8,905 Total minimum payments 15,390 Less: amount representing interest (2,058 ) Notes payable, gross 13,332 Less: unamortized discount (1,422 ) Note payable, net of unamortized debt discount $ 11,910 |
Capital Lease Obligation
Capital Lease Obligation | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Capital Lease Obligation | NOTE 11. CAPITAL LEASE OBLIGATION On August 9, 2016, the Company entered into a commercial lease agreement (the “Lease Agreement”) with Essex Capital Corporation (“Essex”). Pursuant to the terms of the Lease Agreement, the Company sold certain equipment (the “Equipment”) to Essex for a total purchase price of approximately $2,000, which was then leased back to the Company under a thirty-six month term net basis lease with monthly payments of approximately $64. The fair value of equipment sold and then leased under the Lease Agreement totaled approximately $2,000. The lease term may be extended for an additional twelve month period in the event the Company achieves certain financial milestones. The Company has the right to purchase the Equipment from Essex upon the expiration of the Lease Agreement for a purchase price equal to the Equipment’s then fair market value, with such fair market value not to exceed fifteen percent of the original Equipment value on August 9, 2016. If the Equipment is not purchased at the end of the term, the Company may automatically extend the lease on a month-to-month basis or return the Equipment and terminate the Lease Agreement. The Company expects to purchase the Equipment at the end of the term of the lease and has accrued the final payment amount of $300. The Company also incurred expenses of approximately $67 in connection with the Lease Agreement. The issuance costs were recorded as a discount. The discount is being amortized as interest expense over the term of the lease using the effective interest method. The Company used an interest rate of 16.8% for calculation of the present value of the future minimum payments under the Lease Agreement. For the year ended December 31, 2016, debt discount amortization related to the Lease Agreement was $90 and is included in interest expense in the accompanying consolidated statement of operations. At December 31, 2016, future payments under the Company’s capital lease were as follows: Amount 2017 $ 773 2018 773 2019 751 Total minimum lease payments 2,297 Less: amount representing interest payments (244 ) Present value of future minimum lease payments 2,053 Less: unamortized discount (277 ) 1,776 Less: current portion, net of unamortized discount (458 ) Capital lease obligation, net of current portion and unamortized discount $ 1,318 The value of the equipment under capital leases as of December 31, 2016 and 2015 was $2,070 and $60, respectively, with related accumulated depreciation of $293 and $9, respectively. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) and Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) and Stock-Based Compensation | NOTE 12. STOCKHOLDERS’ EQUITY (DEFICIT) AND STOCK-BASED COMPENSATION Common Stock At December 31, 2016 and 2015, the Company had 90,000,000 shares of common stock, $0.001 par value, authorized. Issuances During the Year Ended December 31, 2015 During the year ended December 31, 2015, the Company issued a total of 130,457 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 255,600 shares of common stock with exercise prices ranging from $3.20 to $4.51 per share. During the year ended December 31, 2015, the Company issued 1,611 shares of common stock to employees related to the vesting of RSUs, net of 1,241 shares of common stock withheld for payroll tax withholdings totaling $10. 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 year ended December 31, 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. In November 2015, the Company entered into a Controlled Equity Offering SM In January 2015, the Company issued 63,525 shares of restricted common stock, valued at $425, in connection with the Park Acquisition (see Note 3). During the year ended December 31, 2015, 28,606 shares of the Company’s common stock underlying RSUs issued to directors vested, but the issuance and delivery of these shares are deferred until the director resigns. Issuances During the Year Ended December 31, 2016 In March 2016, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with National Securities Corporation and several other underwriters, under which the Company sold in a firm-commitment public offering (the “Offering”), 3,335,000 shares of the Company’s common stock at $3.60 per share. The Offering closed on March 16, 2016. The Company received net proceeds of $11,088, after deducting the underwriting discount and the offering expenses payable by the Company. The Company sold 57,042 shares of common stock and received net proceeds of $212, after deducting $20 for sales commission and offering expenses, under the Sales Agreement during the year ended December 31, 2016, leaving an aggregate of $1,871 available for future sales of shares thereunder as of December 31, 2016. In May 2016, we issued 75,000 shares of the Company’s common stock, with a fair value of $302, as a contingent payment related to the acquisition of PC (see Note 16). In October 2016, the Company issued 16,076 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 in September 2016. In December 2016, the Company issued 116,291 shares of its common stock to its CEO, Mark L. Baum, in connection with 200,000 RSUs that had vested in May 2016. The issuance of common stock was net of 83,709 shares of common stock withheld for payroll tax withholdings totaling $144. In December 2016, the Company entered into a securities purchase agreement with certain purchasers, which provided for the sale of 5,257,828 Units, with each Unit consisting of one share of common stock of the Company, and one warrant to purchase one share of common stock (the “Investor Warrants”), at a price of $1.915 per Unit for aggregate net proceeds of approximately $9,217 after deducting $852 in placement agent fees and offering expenses (the “PIPE Offering”). The Investor Warrants have an exercise price of $1.79 per share, are non-exercisable for the first six months and will expire three years from the date of issuance. The Company paid National Securities Corporation (the “Placement Agent”), in consideration for its services as placement agent for the PIPE Offering, a cash amount equal to 7.5% of the gross proceeds from the sale of the Units. The Company also issued to the Placement Agent a warrant (the “Agent Warrant”) to purchase up to 210,313 shares of the Company’s common stock. The Agent Warrant was issued on the same terms and conditions of the Investor Warrants. During the year ended December 31, 2016, the Company issued a total of 15,000 shares of common stock as a result of option exercises. The Company received $55 in cash proceeds for the issuance of the shares of common stock upon the exercise pursuant to exercise provisions of stock options to purchase 15,000 shares of common stock with exercise price of $3.68 per share. During the year ended December 31, 2016, 24,421 shares of the Company’s common stock underlying RSUs issued to directors vested, but the issuance and delivery of these shares are deferred until the director resigns. Preferred Stock At December 31, 2016 and 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 Company’s Board of Directors and stockholders adopted the Company’s 2007 Incentive Stock and Awards Plan, which was subsequently amended on November 5, 2008, February 26, 2012, July 18, 2012, May 2, 2013 and September 27, 2013 (as amended, the “Plan”). As of December 31, 2016, the Plan provides for the issuance of a maximum of 5,000,000 shares of the Company’s common stock. The purpose of the Plan is to provide an incentive to attract and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons in the Company’s development and financial success. Under the Plan, the Company is authorized to issue incentive stock options intended to qualify under Section 422 of the Internal Revenue Code, non-qualified stock options, RSUs and restricted stock. The Plan is administered by the Compensation Committee of the Company’s Board of Directors. The Company had 815,159 shares available for future issuances under the Plan at December 31, 2016. Stock Options A summary of the stock option activity under the Plan for the year ended December 31, 2016 is as follows: Number of shares Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life Aggregate Intrinsic Value Options outstanding - January 1, 2016 1,544,026 $ 5.74 Options granted 549,350 $ 3.99 Options exercised (15,000 ) $ 3.68 Options cancelled/forfeit (65,063 ) $ 7.80 Options outstanding - December 31, 2016 2,013,313 6.20 6.28 $ 13 Options exercisable 808,067 6.18 5.75 $ 13 Options vested and expected to vest 1,892,790 6.20 6.10 $ 13 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 December 31, 2016, based on the closing price of the Company’s common stock of $2.50 on that date. The aggregate intrinsic value of stock options exercised during the year ended December 31, 2016 was approximately $29. During 2016 and 2015, the Company granted stock options to certain employees, directors and consultants. The stock options were granted with an exercise price equal to the current market price of the Company’s common stock, as reported by the securities exchange on which the common stock was then listed, at the grant date and have contractual terms ranging from five to 10 years. Vesting terms for options granted in 2016 and 2015 to employees, directors and consultants 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 Company’s 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. On July 31, 2015, the Company granted to its Chief Executive Officer, Mark Baum, an option (the “Baum Performance Option”) to purchase 600,000 shares of the Company’s common stock at an exercise price of $7.87 per share under the Plan subject to the satisfaction of certain market-based vesting criteria. The market-based vesting criteria are separated into five tranches and require that the Company achieve and maintain certain average stock price targets ranging from $9 per share to $15 per share during the five year period following the grant date. These market-based vesting conditions are as follows: Tranche Number of Shares Target Share Price Tranche 1 200,000 shares $9.00 or greater Tranche 2 100,000 shares $10.00 or greater Tranche 3 100,000 shares $12.00 or greater Tranche 4 100,000 shares $14.00 or greater Tranche 5 100,000 shares $15.00 or greater The Baum Performance Option terminates on the fifth anniversary of the grant date. The fair value of the Baum Performance Option was $2,784 using a Monte Carlo Simulation with a five-year life, 80% volatility and a risk free interest rate of 1.54 %. The table below illustrates the fair value per share determined using the Black-Scholes-Merton option pricing model with the following assumptions used for valuing options granted to employees and directors: 2016 2015 Weighted-average fair value of options granted $ 3.91 $ 6.22 Expected terms (in years) 5.81 - 6.11 5.81 - 6.11 Expected volatility 101 - 112 % 101 - 121 % Risk-free interest rate 1.07 - 1.70 % 1.39 - 1.68 % Dividend yield - - The table below illustrates the fair value per share determined using the Black-Scholes-Merton option pricing model with the following assumptions used for valuing options granted to consultants: 2016 2015 Weighted-average fair value of options granted $ 6.18 $ 6.49 Expected terms (in years) 10 10 Expected volatility 109 % 108 - 109 % Risk-free interest rate 1.06 % 1.06 - 1.63 % Dividend yield - - The following table summarizes information about stock opt0ions outstanding and exercisable at December 31, 2016: 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 - $2.60 147,000 5.80 $ 2.43 125,000 $ 2.40 $3.74 - $4.50 695,623 7.69 $ 4.05 225,256 $ 4.25 $5.49 - $7.99 952,103 5.01 $ 7.54 249,857 $ 6.83 $8.06 - $8.99 213,557 6.10 $ 8.92 202,924 $ 8.95 $42.80 5,030 3.87 $ 42.80 5,030 $ 42.80 2,013,313 6.28 $ 6.20 808,067 $ 6.18 As of December 31, 2016, there was approximately $5,116 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 3.1 years. The stock-based compensation for all stock options was $2,159 and $1,747 during the years ended December 31, 2016 and 2015, respectively. Restricted Stock Units RSU awards are granted subject to certain vesting requirements and other restrictions, including performance and market based vesting criteria. The grant-date fair value of the RSUs, which has been determined based upon the market value of the Company’s 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. Grants During the Year Ended December 31, 2015 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 employee’s 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 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 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%. During the year ended December 31, 2015, the Company granted an aggregate of 34,166 RSUs to its non-employee directors valued at $270. These RSUs vest in equal quarterly installments over a one year period subject to the director’s continued service at the vesting date, but the issuance and delivery of these shares are deferred until the director resigns. Grants During the Year Ended December 31, 2016 In April 2016, the Company granted performance-based RSU awards to its CEO, Mark L. Baum, of up to 1,050,000 performance stock units and to its CFO, Andrew R. Boll, of up to 157,500 performance stock units. The performance stock units will vest on the fifth anniversary of the grant date, subject to Mr. Baum’s and Mr. Boll’s continued employment with the Company, respectively, and may vest earlier if the Company achieves and maintains certain stock price targets during the five year period following the grant date or upon a change in control if the performance-based equity award is not assumed, continued or substituted for by the acquiring entity. The market-based accelerated vesting criteria are broken into five equal tranches and require that the Company achieve and maintain certain stock price targets ranging from $9 per share to $15 per share during the five-year period following the grant date. These market-based accelerated vesting conditions and share amounts (in aggregate) are set forth below: Tranche Number of shares Target share price Tranche 1 230,000 shares $9.00 or greater Tranche 2 230,000 shares $10.00 or greater Tranche 3 230,000 shares $12.00 or greater Tranche 4 230,000 shares $14.00 or greater Tranche 5 287,500 shares $15.00 or greater For each respective tranche to vest the following conditions must be met: (i) the Company’s 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 Company’s common stock during the Measurement Period must be at or above the target share price for such tranche; and (iii) with certain limited exceptions, the executive must be in service with the Company through the date of vesting. Concurrent with the issuance of the performance-based restricted stock unit awards, Mr. Baum agreed to forfeit 1,050,000 RSUs subject to performance-based vesting granted to him in May 2013 and Mr. Boll agreed to forfeit the Boll Performance Equity Award granted to him in February 2015. As a result, the issuance of the performance-based RSUs awarded in April 2016 have been treated as modifications of the RSUs granted to Mr. Baum in May 2013 and Mr. Boll in February 2015 for accounting purposes. The Company used a lattice binomial model to estimate a derived service period of 33 months related to the performance-based vesting grants and used the following assumptions: 2016 Market price $ 3.98 Contractual terms (in years) 5.00 Expected volatility 102 % Risk-free interest rate 1.04 % Dividend yield - During the year ended December 31, 2016, the Company granted an aggregate of 63,450 RSUs to its non-employee directors valued at $250. These RSUs vest in equal quarterly installments over a one year period subject to the director’s continued service at the vesting date, but the issuance and delivery of these shares are deferred until the director resigns. A summary of the Company’s RSU activity and related information for the year ended December 31, 2016 is as follows: Number of RSUs Weighted Average Grant Date Fair Value RSUs unvested - January 1, 2016 1,487,961 $ 3.18 RSUs granted 1,270,950 $ 2.25 RSUs vested (249,018 ) $ 8.32 RSUs cancelled/forfeit (1,217,017 ) $ 1.95 RSUs unvested at December 31, 2016 1,292,876 $ 2.43 As of December 31, 2016, the total unrecognized compensation expense related to unvested RSUs was approximately $3,873 which is expected to be recognized over a weighted-average period of 1.8 years, based on estimated vesting schedules. The stock-based compensation for RSUs was $1,539 and $1,671 during the years ended December 31, 2016 and 2015, respectively. The Company recorded stock-based compensation (including issuance of common stock for services and accrual for stock-based compensation) related to equity instruments granted to employees, directors and consultants as follows: For the For the Year Ended Year Ended December 31, 2016 December 30, 2015 Employees - selling and marketing $ 498 $ 370 Employees - general and administrative 2,954 2,720 Directors - general and administrative 221 268 Consultants - selling and marketing - 83 Other - general and administrative 115 - Total $ 3,788 $ 3,441 Warrants From time to time, the Company issues warrants to purchase shares of the Company’s common stock to investors, lenders (see Note 10), underwriters and other non-employees for services rendered or to be rendered in the future. A summary of warrant activity during the year ended December 31, 2016 is as follows: Number of Shares Subject to Warrants Outstanding Weighted Avg. Exercise Price Warrants outstanding - January 1, 2016 240,688 $ 7.41 Granted 5,508,141 $ 1.80 Exercised - Expired - Warrants outstanding and exercisable - December 31, 2016 5,748,829 $ 1.91 Weighted average remaining contractual life of the outstanding warrants in years - December 31, 2016 3.08 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 warrants granted related to settlement agreements: 2016 Weighted-average fair value of warrants granted 2.88 Expected terms (in years) 5 Expected volatility 106 % Risk-free interest rate 0.79 % Dividend yield - All warrants outstanding as of December 31, 2016 are 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 10) 5/11/2015 125,000 $ 1.79 125,000 5/11/2025 Underwriter warrants 2/7/2013 55,688 $ 5.25 55,688 2/7/2018 Settlement warrants 8/16/2016 40,000 $ 3.75 40,000 8/16/2021 Warrants issued to investor relations consultant 7/19/2013 60,000 $ 8.50 60,000 7/19/2018 Placement Agent Warrants 12/27/2016 210,313 $ 1.79 - 12/27/2019 PIPE Investor Warrants 12/27/2016 5,257,828 $ 1.79 - 12/27/2019 5,748,829 $ 1.91 280,688 |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | NOTE 13. DERIVATIVE INSTRUMENTS During the year ended December 31, 2016, the Company modified certain common stock purchase warrants issued in conjunction with debt which are detachable, or free standing, instruments. The warrants were considered a derivative liability upon modification and the estimated fair value of the warrants was reclassified from equity to liabilities. In addition, the Company recorded a derivative liability and debt discount associated with the estimated fair value of the embedded conversion feature in the Convertible Note (see Note 10). Both instruments contained a provision which allowed for one-time adjustments to their exercise or conversion prices. The one-time adjustment occurred upon the closing of the Company’s underwritten public offering of its common stock (see Note 12), on March 16, 2016, whereby the conversion and exercise prices were adjusted from $5.90 to $3.60 per share. At the time of the one-time adjustment, the Company reclassified the derivative liabilities to equity based on their then estimated fair value at that time. The Company estimated the fair value of the derivative liabilities utilizing Level 3 inputs. The Company used the Black-Scholes-Merton option pricing model as it embodies all of the requisite assumptions (including trading volatility, remaining term to maturity, market price, strike price, and risk-free rates) necessary to value these instruments. 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 derivative liabilities: 2016 Expected volatility 103 - 111 % Risk-free interest rate 1.22 - 1.70 % Dividend yield - The Company estimated the expected terms based on the remaining contractual life of the instruments on the date of the fair value measurement. The warrant expires on May 11, 2025 and the convertible note had an original maturity date of May 11, 2021. The following table provides a reconciliation of all liabilities measured at fair value using Level 3 significant unobservable inputs: September 30, 2016 Warrant derivative liability: Balance at January 1, 2016 $ - Modification of warrant and reclassification from equity to liabilities 675 Change in fair value (211 ) Reclassification from liabilities to equity upon closing of public equity offering (464 ) Balance at December 31, 2016 $ - Embedded conversion feature derivative liability: Balance at January 1, 2016 $ - Embedded conversion feature in Convertible Note issued 2,322 Change in fair value 324 Reclassification from liabilities to equity upon closing of public equity offering (2,646 ) Balance at December 31, 2016 $ - |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 14. INCOME TAXES The Company is subject to taxation in the United States, California, New Jersey, Texas and Pennsylvania. The provision for income taxes for the years ended December 31, 2016 and 2015 are summarized below: December 31, 2016 December 31, 2015 Current: Federal $ - $ - State 8 5 Total current $ 8 $ 5 Deferred: Federal $ 19,847 $ 14,037 State 5,802 4,036 Change in valuation allowance (25,760 ) (18,072 ) Total deferred (111 ) - Income tax provision (benefit) $ (103 ) $ 5 Income taxes for the years ended December 31, 2016 and 2015, are recorded in the general and administrative expenses line item in the accompanying consolidated statements of operations. A reconciliation of income taxes computed by applying the statutory U.S. income tax rate to the Company’s loss before income taxes to the income tax provision is as follows: December 31, 2016 December 31, 2015 U.S. federal statutory tax rate 35.00 % 35.00 % Benefit of lower tax brackets (1.00 )% (1.00 )% State tax benefit, net 0.08 % (0.03 )% Research and development credits 0.00 % 0.00 % Employee stock based compensation (1.47 )% (0.67 )% Loss on debt conversion 0.00 % 0.00 % Other (0.18 )% (0.71 )% Valuation allowance (31.89 )% (32.62 )% Effective income tax rate 0.54 % (0.03 )% Deferred tax assets and liabilities reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows (in thousands): December 31, 2016 December 31, 2015 Deferred tax assets (liabilities): NOL’s $ 21,555 $ 15,099 Depreciation and amortization 199 121 Other 398 346 Research & development credits 556 556 Deferred stock compensation 3,875 2,997 Park stock purchase identifiable intangibles (936 ) (1,047 ) Unrealized gain or loss on investments - - Total deferred tax assets, net 25,647 18,072 Valuation allowance (26,583 ) (19,119 ) Net deferred tax liabilities $ (936 ) $ (1,047 ) Realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Accordingly, the net deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by approximately $7.4 and $5.2 in 2016 and 2015, respectively. As of December 31, 2016, the Company had net operating loss carryforwards for federal income tax purposes of approximately $54,275 which expire beginning in the year 2027 and federal research and development tax credits of approximately $354 which expire beginning in the year 2026. As of December 31, 2015, the Company had net operating loss carryforwards for state income tax purposes of approximately $52,334 which expire beginning in the year 2017 and state research and development tax credits of approximately $305 which do not expire. The deferred tax asset at December 31, 2015 does not include any excess tax benefits from employee stock option exercises and RSU vests that are a component of the federal and California net operating loss carryover, respectively. The Company’s stockholders’ equity balance will be increased if and when such excess tax benefits are ultimately realized. Utilization of the net operating losses may be subject to substantial annual limitation due to federal and state ownership change limitations provided by the Internal Revenue Code and similar state provisions. Such annual limitations could result in the expiration of the net operating losses ad credits before their utilization. The Company did not have any unrecognized tax benefits as of December 31, 2016 and 2015, all of which is offset by a full valuation allowance. These unrecognized tax benefits, if recognized, would not affect the effective tax rate. |
Employee Savings Plan
Employee Savings Plan | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Savings Plan | NOTE 15. EMPLOYEE SAVINGS PLAN The Company has established an employee savings plan pursuant to Section 401(k) of the Internal Revenue Code, effective January 1, 2014. The plan allows participating employees to deposit into tax deferred investment accounts up to 100% of their salary, subject to annual limits. The Company makes certain matching contributions to the plan in amounts up to 4% of the participants’ annual cash compensation, subject to annual limits. The Company contributed approximately $248 and $146 to the plan during the years ended December 31, 2016 and 2015, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 16. COMMITMENTS AND CONTINGENCIES Contingent Acquisition Obligation On April 1, 2014, the Company acquired all of the outstanding membership interests of Pharmacy Creations, LLC (“PC”). The sellers of PC, are entitled to receive certain payments, including contingent consideration upon certain conditions, if PC earns revenue of between $3,500 and $7,500 during the 12 month period ending March 31, 2016, an aggregate of that number of shares of Imprimis common stock equal to the amount that such revenue exceeds $3,500 divided by 18.5882, rounded down to the lower whole number (not to exceed 215,190 shares). The estimated fair value of the contingent acquisition obligation was $483 and included in the contingent acquisition obligation in the accompanying balance sheet at December 31, 2015. During May 2016, the Company paid the sellers of PC $100 in cash and 75,000 shares of its common stock with a fair value of $302, as payment in full related to the contingent acquisition obligation. Related to the payment of the contingent acquisition obligation the Company recorded a gain of $81 during the year ended December 31, 2016, which is included in other income, net in the accompanying consolidated statement of operations. Operating Leases 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 $20,426, with a 3% increase in the base rent amount on an annual basis. The lease agreement allows for the monthly rent amount to be abated for two months at various times during the lease agreement. In January 2015, the Company entered into a commercial lease agreement, for the lease to Park of approximately 4,500 square feet of laboratory and office space. The monthly rent amount is $10 and includes annual increases of approximately 3%. The current lease term expires on December 31, 2020. In February 2015, the Company entered into a lease agreement for approximately 8,602 square feet of laboratory, 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. In August 2015, the Company entered into a lease agreement for approximately 1,100 square feet of laboratory, warehouse and office space in Allen, Texas. The lease term expires on October 31, 2019. The monthly rent amount is $3 and includes annual increases of approximately 2%. Subsequent to December 31, 2016, the Company transferred its obligations under the Allen, Texas lease as a part of the Company’s sale of ImprimisRx TX, Inc. (See also Note 18). Rent expense for the years ended December 31, 2016 and 2015 was $668 and $641, respectively. The following represents future annual minimum lease payments, net of expected sublease income, as of December 31, 2016: 2017 $ 495 2018 496 2019 257 2020 266 2021 134 Thereafter 79 Total $ 1,727 Legal Urigen, et. al, Litigation On October 2014, the Company entered into a license agreement (the “Urigen License”) with Urigen Pharmaceuticals, Inc. (“Urigen”) for a license of certain U.S. patents and patent applications to develop and sell in the U.S. Urigen’s URG101 product, a heparin and alkalinized lidocaine compounded formulation for the prevention or treatment of disorders of the lower urinary tract. The Company, as the plaintiff, filed a civil action in the San Diego Superior Court against Urigen in December 2015, wherein the Company outlined serious concerns regarding material failures and inaccuracies of the representation and warranties provided by Urigen in the Urigen License, which have affected the Company’s ability to realize the expected benefit of the Urigen License. Urigen filed a cross-complaint in April 2016 for breach of contract asserting unpaid royalties totaling $698 and requesting a decree to cancel the Urigen Agreement. The Company filed another complaint in May 2016 with the U.S. District Court for the Southern District of California for declaratory judgment of the invalidity of the core patent filing related to Urigen’s URG 101. In June 2016, the Company received notice from Urigen of their election to terminate the Urigen License. In November 2016, the Company and Urigen entered into a settlement and mutual release agreement whereby all parties agreed to settle all disputes related to the Urigen License and associated litigation matters, the Company agreed to make a one-time payment to Urigen related to past sales of Urigen’s URG101 product and to cease selling the URG101 product over a certain period of time. The Company recorded a gain related to the settlement with Urigen totaling $551 which is included in other income, net in the accompanying consolidated statement of operations. Corwin, Kammer, et. al. Litigation In February 2014, Robert Kammer (“Kammer”), the Company’s Chairman of the Board, filed a lawsuit in the San Diego Superior Court against Merlyn Corwin (“Corwin”) to enforce his contract rights related to a settlement agreement the parties had previously entered into involving shares of the Company’s common stock. Corwin filed an answer to the complaint in March 2014 and in June 2014 filed the first amended cross complaint adding the Company as a cross-defendant. In August 2014, Corwin filed a seconded amended cross complaint (the “SACC”) which added Mark Baum (“Baum”), the Company’s Chief Executive Officer, and an individual who previously provided consulting services to the Company as additional cross-defendants. The SACC alleged numerous causes of action including securities fraud, concealment, misrepresentations, inducement of misrepresentations, rescission – undue influence, intentional infliction of emotional distress and declaratory relief of invalidity of the settlement agreement. In September 2014, the Company and Baum filed an anti-strategic lawsuit against public participation motion (“Anti-SLAPP”), arguing all allegations in the SACC were based on protected activity under the litigation privilege. Kammer also filed an Anti-SLAPP motion in October 2014. In November 2014, the Company, Baum and Kammer were granted both Anti-SLAPP motions, with the ruling judge deciding that the parties successfully demonstrated that the allegations arose from activity protected by the litigation privilege. The judge further found that the evidence Corwin relied upon in her arguments failed to demonstrate a probability that she could prevail on any of the claims. The court then ordered Corwin to pay the Company’s and Baum’s attorney fees and the case was dismissed. In May 2015, Corwin filed an appeal and in November 2015, the appellate court reversed the Anti-SLAPP decision of the trial court. In April 2016, the Company and Baum filed a demurrer to the SACC. The court ordered a ruling on the demurrer in June 2016, dismissing most of the causes of action against Baum and the Company, but leaving the claim for fraud by concealment and intentional infliction of emotional distress. In August 2016, all parties related to this litigation entered into a settlement and mutual release agreement, whereby all parties agreed to settle all disputes and release one another of any legal claims. The Company issued 40,000 at-the-money warrants (see Note 12) as part of the settlement consideration. The estimated fair value of the warrant (see Note 12) and associated legal expenses were recorded in general and administrative expenses during the year ended December 31, 2016 in the accompanying consolidated statement of operations. General and Other In the ordinary course of business, the Company may face various claims brought by third parties and the Company may, from time to time, make claims or take legal actions to assert the Company’s rights, including intellectual property 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 Company’s consolidated financial position and results of operations. Indemnities In addition to the indemnification provisions contained in the Company’s charter documents, the Company generally enters into separate indemnification agreements with each of the Company’s directors and officers. These agreements require the Company, among other things, to indemnify the director or officer against specified expenses and liabilities, such as attorneys’ fees, judgments, fines and settlements, paid by the individual in connection with any action, suit or proceeding arising out of the individual’s status or service as the Company’s director or officer, other than liabilities arising from willful misconduct or conduct that is knowingly fraudulent or deliberately dishonest, and to advance expenses incurred by the individual in connection with any proceeding against the individual with respect to which the individual may be entitled to indemnification by the Company. The Company also indemnifies its lessors in connection with its facility leases for certain claims arising from the use of the facilities. These 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 consolidated balance sheets. Insurance Claims In June 2016, the Company’s Texas based facility was damaged related to a malfunction with the property’s sprinkler system. The Company commenced restoration efforts and filed claims for damages under its insurance policies, including claims related to business interruption. During the year ended December 31, 2016, the Company recorded the insurance claim of $861 in other income, net in the accompanying consolidated statement of operations which reflected amounts paid by its insurance carrier related to the claims filed for property damage and business interruption. PCCA Commission Agreement On December 21, 2015, the Company entered into a Commission Agreement (the “PCCA Commission Agreement) with Professional Compounding Centers of America, Inc. (“PCCA”). The PCCA Commission Agreement replaces a Strategic Alliance Agreement (the “PCCA Strategic Alliance Agreement”) entered into on February 18, 2013 and a License Agreement (the “PCCA License Agreement) entered into on August 30, 2012, in each case between the Company and PCCA. Upon the execution of the PCCA Commission Agreement, the Company and PCCA mutually agreed to terminate the PCCA Strategic Alliance Agreement and PCCA License Agreement. No amounts were due or paid under either the PCCA Strategic Alliance Agreement or PCCA License Agreement. PCCA has previously introduced to the Company certain PCCA members, which led to the Company’s acquisition of certain intellectual property (the “PCCA Member IP”) from such PCCA members. Under the terms of the PCCA Strategic Alliance Agreement, PCCA had the right to receive certain commissions based on the Company’s net sales, if any, of any products utilizing the PCCA Member IP. The primary purpose of the PCCA Commission Agreement is to specifically identify the PCCA Member IP subject to this arrangement and to revise the terms and the amount of the commission payments. As a result, pursuant to the terms of the PCCA Commission Agreement, PCCA continues to hold its right to receive commissions based on the Company’s net sales, if any, of any products utilizing the PCCA Member IP. No commission amounts were paid or accrued under this agreement for the years ended December 31, 2016 and 2015. Asset Purchase Agreements The Company has acquired intellectual property rights related to certain proprietary innovations from certain inventors (the “Inventors”) through multiple asset purchase agreements. The asset purchase agreements provide that the Inventors will cooperate with the Company in obtaining patent protection for the acquired intellectual property and that the Company will use commercially reasonable efforts to research, develop and commercialize a product based on the acquired intellectual property. In addition, the Company has acquired a right of first refusal on additional intellectual property and drug development opportunities presented by these Inventors. In consideration for the acquisition of the intellectual property rights, the Company is obligated to make payments to the Inventors based on the completion of certain milestones, generally consisting of: (1) a payment payable within 30 days after the issuance of the first patent in the United States arising from the acquired intellectual property (if any); (2) a payment payable within 30 days after the Company files the first investigational new drug application (“IND”) with the FDA for the first product arising from the acquired intellectual property (if any); (3) for certain of the Inventors, a payment payable within 30 days after the Company files the first new drug application with the FDA for the first product arising from the acquired intellectual property (if any); and (4) certain royalty payments based on the net receipts received by the Company in connection with the sale or licensing of any product based on the acquired intellectual property (if any), after deducting (among other things) the Company’s development costs associated with such product. If, following five years after the date of the applicable asset purchase agreement, the Company either (a) for certain of the Inventors, has not filed an IND or, for the remaining Inventors, has not initiated a study where data is derived, or (b) has failed to generate royalty payments to the Inventors for any product based on the acquired intellectual property, the Inventors may terminate the applicable asset purchase agreement and request that the Company re-assign the acquired technology to the Inventors. $3 and $0 were accrued under these agreements for royalty expenses during the years ended December 31, 2016 and 2015, respectively. |
Segment Information and Concent
Segment Information and Concentrations | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Information and Concentrations | NOTE 17. SEGMENT INFORMATION AND CONCENTRATIONS The Company operates the 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 Company’s chief operating decision-maker is the Chief Executive Officer, who evaluates the Company as a single operating segment. The Company categorizes revenues by geographic area based on selling location. All operations are currently located in the United States; therefore, total revenues for 2016 and 2015 are attributed to the United States. All long-lived assets at December 31, 2016 and 2015 are located in the United States. The Company sells its compounded formulations to a large number of customers. No single customer contributed 10% or more of the Company’s total pharmacy sales in the years ended December 31, 2016 and 2015. The Company receives its active pharmaceutical ingredients from two and three main supplier during the years ended December 31, 2016 and 2015, respectively. These suppliers collectively accounted for 63% and 43% of drug and chemical purchases during the years ended December 31, 2016 and 2015, respectively. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 18. SUBSEQUENT EVENTS The Company has performed an evaluation of events occurring subsequent to December 31, 2016 through the filing date of this Annual Report on Form 10-K (the “Annual Report”). Based on its evaluation, nothing other than the events described below needs to be disclosed. In February 2017, the Company entered into a Stock Purchase Agreement (the “TX SPA”) with Livernois & London, LLC (“Livernois”). Pursuant to the terms of the TX SPA, the Company sold to Livernois and Livernois purchased from the Company one hundred percent (100%) of the issued and outstanding shares of common stock of the Company’s Texas based subsidiary, ImprimisRx TX, Inc. dba ImprimisRx (“Imprimis TX”). The Company ceased operations of Imprimis TX in 2016 and the Agreement does not transfer to Livernois any Company rights to intellectual property, products, clients, nor any existing Company business operations. As consideration for the purchase of Imprimis TX, Livernois paid the Company $10 and the Company assigned, and Livernois assumed, the remaining lease obligation totaling approximately $113 for its Texas based facility. ImprimisRx TX did not have significant operation and as such, the closure and selling of the subsidiary is not presented as discontinued operations. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Imprimis has prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
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 notes payable and derivative liabilities, and valuation of stock-based transactions with employees and non-employees. Actual results could differ from those estimates. |
Liquidity | Liquidity The Company has incurred significant operating losses and negative cash flows from operations since its inception. The Company incurred net losses of $19,087 and $15,899 for the years ended December 31, 2016 and 2015, respectively, and had an accumulated deficit of $76,851 and $57,764 as of December 31, 2016 and 2015, respectively. In addition, the Company used cash in operating activities of $11,215 and $11,143 for the years ended December 31, 2016 and 2015, respectively. While there is no assurance, the Company believes its existing cash resources and restricted cash of approximately $9,053 at December 31, 2016, will be sufficient to sustain the Company’s planned level of operations for at least the next twelve months. However, estimates of operating expenses and working capital requirements could be incorrect, and the Company could use its cash resources faster than anticipated. Further, some or all of the ongoing or planned activities may not be successful and could result in further losses. The Company may seek to increase liquidity and capital resources by one or more measures, to the extent necessary. These measures may include, but are not limited to, the following: obtaining financing through the issuance of equity, debt, or convertible securities; and working to increase revenue growth through pharmacy sales. There is no guarantee that the Company will be able to obtain capital when needed on terms it deems as acceptable, or at all. |
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. Product Revenues Determination of criteria (3) and (4) is based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Estimated returns and allowances and other adjustments are provided for in the same period 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 Company’s performance under the other elements of the arrangement. In addition, if the Company’s 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. |
Cost of Sales | Cost of Sales Cost of sales includes direct and indirect costs to manufacture formulations and other products sold, including active pharmaceutical ingredients, personnel costs, packaging, storage, royalties (see Note 16), shipping and handling costs and the write-off of obsolete inventory. |
Research and Development | Research and Development The Company expenses all costs related to research and development as they are incurred. Research and development expenses consist of expenses incurred in performing research and development activities, including salaries and benefits, other overhead expenses, and costs related to clinical trials, contract services and outsourced contracts. |
Debt Issuance Costs and Debt Discount | Debt Issuance Costs and Debt Discount Debt issuance costs and the debt discount are recorded net of notes payable and capital lease obligations in the consolidated balance sheets. Amortization expense of debt issuance costs and the debt discount is calculated using the effective interest method over the term of the debt and is recorded in interest expense in the accompanying consolidated statements of operations. |
Intellectual Property | Intellectual Property The costs of acquiring intellectual property rights to be used in the research and development process, including licensing fees and milestone payments, are charged to research and development expense as incurred in situations where the Company has not identified an alternative future use for the acquired rights, and are capitalized in situations where we have identified an alternative future use for the acquired rights. Patents and trademarks are recorded at cost and capitalized at a time when the future economic benefits of such patents and trademarks become more certain (see Goodwill and Intangible Assets). The Company began capitalizing certain costs associated with acquiring intellectual property rights during 2015, if costs are not capitalized they are expensed as incurred. |
Income Taxes | Income Taxes As part of the process of preparing the Company’s consolidated financial statements, the Company must estimate the actual current tax liabilities and assess temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within the balance sheet. The Company must assess the likelihood that the deferred tax assets will be recovered from future taxable income and, to the extent the Company believes that recovery is not likely, a valuation allowance must be established. To the extent the Company establishes a valuation allowance or increase or decrease this allowance in a period, the impact will be included in income tax expense in the consolidated statement of operations. The Company accounts for income taxes under the provisions of Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 740, “Income Taxes”, or ASC 740. As of December 31, 2016 and 2015, there were no unrecognized tax benefits included in the consolidated balance sheets that would, if recognized, affect the effective tax rate. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties in its consolidated balance sheets at December 31, 2016 and 2015, and has not recognized interest and/or penalties in the consolidated statements of operations for the years ended December 31, 2016 and 2015. The Company is subject to taxation in the United States, California, New Jersey, Texas and Pennsylvania. The Company’s tax years since 2000 are subject to examination by the federal and state tax authorities due to the carryforward of unutilized net operating losses. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents include short-term, highly liquid investments with maturities of three months or less at the time of acquisition. |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company places its cash with financial institutions deemed by management to be of high credit quality. The Federal Deposit Insurance Corporation (“FDIC”) provides basic deposit coverage with limits up to $250 per owner. At December 31, 2016, the Company had approximately $8,800 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 $422 and $180 as of December 31, 2016 and 2015, respectively. |
Inventories | Inventories Inventories are stated at the lower of cost or market. Cost is determined on a first-in, first-out basis. The Company evaluates the carrying value of inventories on a regular basis, based on the price expected to be obtained for products in their respective markets compared with historical cost. Write-downs of inventories are considered to be permanent reductions in the cost basis of inventories. The Company also regularly evaluates its inventories for excess quantities and obsolescence (expiration), taking into account such factors as historical and anticipated future sales or use in production compared to quantities on hand and the remaining shelf life of products and active pharmaceutical ingredients on hand. The Company establishes reserves for excess and obsolete inventories as required based on its analyses. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is stated at cost less accumulated depreciation and amortization. Depreciation and amortization is calculated using the straight-line method over the estimated useful life of the asset. Leasehold improvements and capital lease equipment are amortized over the estimated useful life or remaining lease term, whichever is shorter. Computer software and hardware and furniture and equipment are depreciated over three to five years. |
Business Combinations | Business Combinations The Company accounts for business combinations by recognizing the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at their fair values on the acquisition date. The purchase price allocation process requires management to make significant estimates and assumptions, especially with respect to intangible assets, estimated contingent consideration payments and pre-acquisition contingencies. Examples of critical estimates in valuing certain of the intangible assets the Company has acquired or may acquire in the future include but are not limited to: ● future expected cash flows from product sales, support agreements, consulting contracts, other customer contracts, and acquired developed technologies and patents; and ● discount rates utilized in valuation estimates. Unanticipated events and circumstances may occur 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 estimates 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 financial position, statements of operations or cash flows in the period of the change in the estimate. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Patents and trademarks are recorded at cost and capitalized at a time when the future economic benefits of such patents and trademarks become more certain. At that time, the Company capitalizes third-party legal costs and filing fees associated with obtaining and prosecuting claims related to its patents and trademarks. Once the patents have been issued, the Company amortizes these costs over the shorter of the legal life of the patent or its estimated economic life, generally 20 years, using the straight-line method. Trademarks are an indefinite life intangible asset and are assessed for impairment based on future projected cash flows as further described below. 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 Company’s business relative to expected operating results; ● significant adverse economic and industry trends; ● significant decline in the Company’s market capitalization for an extended period of time relative to net book value; and ● expectations that a reporting unit will be sold or otherwise disposed. The 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 unit’s goodwill may be impaired and the Company then performs the second step of the impairment test. If the fair value of a reporting unit exceeds its carrying amount, no further analysis is required. Step 2. If further analysis is required, the Company compares the implied fair value of the reporting unit’s goodwill, determined by allocating the reporting unit’s fair value to all of its assets and its liabilities in a manner similar to a purchase price allocation, to its carrying amount. If the carrying amount of the reporting unit’s goodwill exceeds its fair value, an impairment loss will be recognized in an amount equal to the excess. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, such as property, plant and equipment, purchased intangibles subject to amortization and patents and trademarks, 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 consolidated balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposal group classified as held-for-sale would be presented separately in the appropriate asset and liability sections of the consolidated balance sheet, if material. In September 2016, the Company decided to cease operations at its Texas facility, and began winding down the operations. Based on current projections regarding future cash flows of the Texas facility and the related subsidiary, the evaluation resulted in an impairment of $64 related to intangible assets and $239 related to goodwill, recorded to impairment of long-lived assets on the consolidated statements of operations during the year ended December 31, 2016. During the year ended December 31, 2015, the Company did not recognize any impairment of its long-lived assets (See Note 18). |
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 consolidated balance sheets. Total billing and collection management expense under this agreement for the years ended December 31, 2016 and 2015 was $55 and $142, respectively, and is included in selling and marketing expenses in the accompanying consolidated statements of operations. The amount due under the agreement as of December 31, 2016 and 2015 was $73 and $81, respectively. |
Deferred Rent | Deferred Rent The Company accounts for rent expense related to its operating leases by determining total minimum rent payments on the leases over their respective periods and recognizing the rent expense on a straight-line basis. The difference between the actual amount paid and the amount recorded as rent expense in each fiscal year and interim periods within each fiscal year is recorded as an adjustment to deferred rent (See Note 9). |
Fair Value Measurements | Fair Value Measurements Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability. GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The established fair value hierarchy prioritizes the use of inputs used in valuation methodologies into the following three levels: ● Level 1: Applies to assets or liabilities for which there are quoted prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and must be used to measure fair value whenever available. ● Level 2: Applies to assets or liabilities for which there are significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. ● Level 3: Applies to assets or liabilities for which there are significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. For example, Level 3 inputs would relate to forecasts of future earnings and cash flows used in a discounted future cash flows method. At December 31, 2016 and 2015, the Company did not have any financial assets or liabilities that are measured on a recurring basis. The Company’s financial instruments included cash and cash equivalents, restricted short-term investments, accounts receivable, accounts payable and accrued expenses, accrued payroll and related liabilities, deferred revenue and customer deposits, deferred acquisition obligations, notes payable and capital leases. The carrying amount of these financial instruments, except for deferred acquisition obligations, notes payable and capital leases, approximates fair value due to the short-term maturities of these instruments. The Company’s restricted short-term investments are carried at amortized cost, which approximates fair value. Based on borrowing rates currently available to the Company, the carrying values of the deferred acquisition obligations, notes payable and capital leases, approximate their respective fair values. |
Derivative Instruments | Derivative Instruments The Company accounts for free-standing derivative instruments and hybrid instruments that contain embedded derivative features as either assets or liabilities in the consolidated balance sheets and are measured at fair value with gains or losses recognized in earnings. Embedded derivatives that are not clearly and closely related to the host contract are bifurcated and are recognized at fair value with changes in fair value recognized as either a gain or loss in earnings. The Company determines the fair value of derivative instruments and hybrid instruments based on available market data using appropriate valuation models, giving consideration to all of the rights and obligations of each instrument. The Company estimates the fair value of derivative instruments and hybrid instruments using various techniques (and combinations thereof) that are considered to be consistent with the objective of measuring fair value. In selecting the appropriate technique, the Company considers, among other factors, the nature of the instrument, the market risks that it embodies and the expected means of settlement. The Company generally uses the Black-Scholes-Merton option pricing model, adjusted for the effect of dilution, because it embodies all of the requisite assumptions (including trading volatility, estimated terms, dilution and risk-free rates) necessary to fair value these instruments. Estimating the fair value of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. Increases in the trading price of the Company’s common stock and increases in fair value during a given financial quarter result in the application of non-cash derivative expense. Conversely, decreases in the trading price of the Company’s common stock and decreases in fair value during a given financial quarter would result in the application of non-cash derivative income. |
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 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 Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows FASB guidance. As such, the value of the applicable stock-based compensation is periodically remeasured and income or expense is recognized during 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 vendor’s 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 grantor’s 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 consolidated balance sheets. |
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 and “if converted” method) from deferred acquisition obligations, stock options, unvested RSUs, warrants and convertible notes were 9,162,259 and 3,313,169 at December 31, 2016 and 2015, respectively, and are excluded from the calculation of diluted net loss per share for all periods presented because the effect is anti-dilutive. Included in the basic and diluted net loss per share calculation were RSUs awarded to directors that had vested, but the issuance and delivery of the shares are deferred until the director resigns. The number of shares underlying these vested RSUs at December 31, 2016 and 2015 was 80,245 and 55,824, respectively, The following table shows the computation of basic and diluted net loss per share of common stock for the years ended December 31, 2016 and 2015: For the For the Year Ended Year Ended December 31, 2016 December 30, 2015 Numerator – net loss $ (19,087 ) $ (15,899 ) Denominator – weighted average number of shares outstanding, basic and diluted 12,743,184 9,576,142 Net loss per share, basic and diluted $ (1.50 ) $ (1.66 ) |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In August 2014, the FASB issued new accounting guidance which defines management’s responsibility to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. This guidance is effective for annual periods ended after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company has applied the guidance and disclosure provisions of the new standard upon adoption in its 2016 annual consolidated financial statements. The adoption of the guidance did not have a material impact on the Company’s consolidated financial statements and its related footnote disclosures. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers. In February 2016, the FASB issued ASU 2016-02, Leases In January 2016, the FASB issued ASU 2016-01, Financial Instruments: Recognition and Measurement of Financial Assets and Financial Liabilities In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory, |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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 years ended December 31, 2016 and 2015: For the For the Year Ended Year Ended December 31, 2016 December 30, 2015 Numerator – net loss $ (19,087 ) $ (15,899 ) Denominator – weighted average number of shares outstanding, basic and diluted 12,743,184 9,576,142 Net loss per share, basic and diluted $ (1.50 ) $ (1.66 ) |
Acquisitions (Tables)
Acquisitions (Tables) - Acquisition of Park [Member] | 12 Months Ended |
Dec. 31, 2016 | |
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 tax liability 1,047 Deferred consideration to Sellers 591 Total acquisition date fair value $ 5,163 |
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 1,895 Net assets acquired $ 5,163 |
Schedule of Result of Operation from Acquisition | The amount of revenues and net income of Park included in the Company’s consolidated statement of operations from the acquisition date through the period ended December 31, 2015 are as follows: Total revenues $ 6,134 Net income $ 1,088 |
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 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | The composition of inventories, net of reserve, as of December 31, 2016 and 2015 was as follows: December 31, 2016 December 31, 2015 Raw materials $ 669 $ 775 Finished goods 1,172 637 Total inventories $ 1,841 $ 1,412 |
Prepaid Expenses and Other Cu30
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets at December 31, 2016 and 2015 consisted of the following: December 31, 2016 December 31, 2015 Prepaid insurance $ 315 $ 297 Other prepaid expenses 517 370 Deposits and other current assets 106 119 Total prepaid expenses and other current assets $ 938 $ 786 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment at December 31, 2016 and 2015 consisted of the following: December 31, 2016 December 31, 2015 Property, plant and equipment, net: Computer software and hardware $ 831 $ 323 Furniture and equipment 424 350 Lab and pharmacy equipment 2,559 538 Leasehold improvements 4,836 1,746 8,650 2,957 Accumulated depreciation and amortization (1,355 ) (300 ) $ 7,295 $ 2,657 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The Company’s intangible assets at December 31, 2016 consisted of the following: Amortization periods Accumulated Net (in years) Cost amortization Impairment Carrying value Patents 17-19 years $ 214 $ (6 ) $ - $ 208 Trademarks Indefinite 224 - - 224 Customer relationships 3-15 years 2,998 (554 ) (15 ) 2,429 Trade name 5 years 16 (7 ) (1 ) 8 Non-competition clause 3-4 years 294 (184 ) (20 ) 90 State pharmacy licenses 25 years 45 (4 ) (28 ) 13 $ 3,791 $ (755 ) $ (64 ) $ 2,972 The Company’s intangible assets at December 31, 2015 consisted of the following: Amortization periods Accumulated Net (in years) Cost amortization Carrying value Patents 17-19 years $ 64 $ (1 ) $ 63 Trademarks Indefinite 121 - 121 Customer relationships 3-15 years 2,998 (297 ) 2,701 Trade name 5 years 16 (4 ) 12 Non-competition clause 3-4 years 294 (99 ) 195 State pharmacy licenses 25 years 45 (2 ) 43 $ 3,538 $ (403 ) $ 3,135 |
Schedule of Amortization Expenses for Intangible Assets | Amortization expense for intangible assets for the years ended December 31, 2016 and 2015 was as follows: For the For the Year Ended Year Ended December 31, 2016 December 31, 2015 Patents $ 5 $ 1 Customer relationships 255 260 Trade name 3 3 Non-competition clause 86 90 State pharmacy licenses 2 1 $ 351 $ 355 |
Schedule of Estimated Future Amortization Expense | Estimated future amortization expense for the Company’s intangible assets at December 31, 2016 is as follows: Years ending December 31, 2017 $ 359 2018 218 2019 215 2020 212 2021 212 Thereafter 1,755 $ 2,972 |
Schedule of Goodwill | The changes in the carrying value of the Company’s goodwill during the years ended December 31, 2016 and 2015 were as follows: Balance at January 1, 2015 $ 332 Acquisition of Park (see Note 3) 1,895 Acquisition of CAP (see Note 3) 239 Balance at December 31, 2015 2,466 Impairment of CAP (see Note 2) (239 ) Balance at December 31, 2016 $ 2,227 |
Accounts Payable and Accrued 33
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses at December 31, 2016 and 2015 consisted of the following: December 31, 2016 December 31, 2015 Accounts payable $ 2,999 $ 3,185 Deferred rent 412 63 Accrued interest (see Note 10) 116 90 Accrued exit fee for note payable (see Note 10) 667 500 Building lease liability(1) 11 46 Other accrued expenses (2) - 23 Total accounts payable and accrued expenses 4,205 3,907 Less: Current portion (3,538 ) (3,407 ) Non-current total accrued expenses $ 667 $ 500 (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. In September 2016, the Company decided to cease operations at its Texas location and started steps to wind down operations. The Company recognized a loss of $16 during the year ended December 31, 2016 related to the estimated remaining lease liability. The obligations were discounted based on current prevailing market rates. (2) The amount consists of a $23 stock-based compensation accrual at December 31, 2015, for stock options to be granted for services performed. The stock-based compensation expense related to the accruals was $23 during the year ended December 31, 2015. The $23 was recorded to additional paid-in-capital upon issuance of the stock options in 2016. |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Summary of Notes Payable | Notes payable at December 31, 2016 were as follows: December 31, 2016 December 2016 Amended Note $ 13,332 Less: Discount on notes (1,422 ) Less: Current portion (4,999 ) Long-term portion $ 6,911 |
Summary of Future Minimum Payments | Future minimum payments under notes payable outstanding at December 31, 2016 are as follows: Year Ending December 31, 2016 Amount 2017 $ 6,485 2018 8,905 Total minimum payments 15,390 Less: amount representing interest (2,058 ) Notes payable, gross 13,332 Less: unamortized discount (1,422 ) Note payable, net of unamortized debt discount $ 11,910 |
Capital Lease Obligation (Table
Capital Lease Obligation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Schedule of Future Payment Under Capital Lease | At December 31, 2016, future payments under the Company’s capital lease were as follows: Amount 2017 $ 773 2018 773 2019 751 Total minimum lease payments 2,298 Less: amount representing interest payments (244 ) Present value of future minimum lease payments 2,053 Less: unamortized discount (277 ) 1,776 Less: current portion, net of unamortized discount (458 ) Capital lease obligation, net of current portion and unamortized discount $ 1,318 |
Stockholders' Equity (Deficit36
Stockholders' Equity (Deficit) and Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Schedule of Stock Option Plan Activity | A summary of the stock option activity under the Plan for the year ended December 31, 2016 is as follows: Number of shares Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life Aggregate Intrinsic Value Options outstanding - January 1, 2016 1,544,026 $ 5.74 Options granted 549,350 $ 3.99 Options exercised (15,000 ) $ 3.68 Options cancelled/forfeit (65,063 ) $ 7.80 Options outstanding - December 31, 2016 2,013,313 6.20 6.28 $ 13 Options exercisable 808,067 6.18 5.75 $ 13 Options vested and expected to vest 1,892,790 6.20 6.10 $ 13 |
Schedule of Market-based Vesting Conditions for Stock Option Units Granted | These market-based vesting conditions are as follows: Tranche Number of Shares Target Share Price Tranche 1 200,000 shares $9.00 or greater Tranche 2 100,000 shares $10.00 or greater Tranche 3 100,000 shares $12.00 or greater Tranche 4 100,000 shares $14.00 or greater Tranche 5 100,000 shares $15.00 or greater |
Schedule of Fair Value Assumption | The table below illustrates the fair value per share determined using the Black-Scholes-Merton option pricing model with the following assumptions used for valuing options granted to employees and directors: 2016 2015 Weighted-average fair value of options granted $ 3.91 $ 6.22 Expected terms (in years) 5.81 - 6.11 5.81 - 6.11 Expected volatility 101 - 112 % 101 - 121 % Risk-free interest rate 1.07 - 1.70 % 1.39 - 1.68 % Dividend yield - - The table below illustrates the fair value per share determined using the Black-Scholes-Merton option pricing model with the following assumptions used for valuing options granted to consultants: 2016 2015 Weighted-average fair value of options granted $ 6.18 $ 6.49 Expected terms (in years) 10 10 Expected volatility 109 % 108 - 109 % Risk-free interest rate 1.06 % 1.06 - 1.63 % Dividend yield - - |
Schedule of Shares Outstanding and Exercisable | The following table summarizes information about stock opt0ions outstanding and exercisable at December 31, 2016: 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 - $2.60 147,000 5.80 $ 2.43 125,000 $ 2.40 $3.74 - $4.50 695,623 7.69 $ 4.05 225,256 $ 4.25 $5.49 - $7.99 952,103 5.01 $ 7.54 249,857 $ 6.83 $8.06 - $8.99 213,557 6.10 $ 8.92 202,924 $ 8.95 $42.80 5,030 3.87 $ 42.80 5,030 $ 42.80 2,013,313 6.28 $ 6.20 808,067 $ 6.18 |
Schedule of 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 Assumptions Used | The Company used a lattice binomial model to estimate a derived service period of 33 months related to the performance-based vesting grants and used the following assumptions: 2016 Market price $ 3.98 Contractual terms (in years) 5.00 Expected volatility 102 % Risk-free interest rate 1.04 % Dividend yield - |
Schedule of Restricted Stock Units Activity | A summary of the Company’s RSU activity and related information for the year ended December 31, 2016 is as follows: Number of RSUs Weighted Average Grant Date Fair Value RSUs unvested - January 1, 2016 1,487,961 $ 3.18 RSUs granted 1,270,950 $ 2.25 RSUs vested (249,018 ) $ 8.32 RSUs cancelled/forfeit (1,217,017 ) $ 1.95 RSUs unvested at December 31, 2016 1,292,876 $ 2.43 |
Schedule of Stock Based Compensation Granted to Employees Directors Consultants | The Company recorded stock-based compensation (including issuance of common stock for services and accrual for stock-based compensation) related to equity instruments granted to employees, directors and consultants as follows: For the For the Year Ended Year Ended December 31, 2016 December 30, 2015 Employees - selling and marketing $ 498 $ 370 Employees - general and administrative 2,954 2,720 Directors - general and administrative 221 268 Consultants - selling and marketing - 83 Other - general and administrative 115 - Total $ 3,788 $ 3,441 |
Schedule of Warrants Activity | A summary of warrant activity during the year ended December 31, 2016 is as follows: Number of Shares Subject to Warrants Outstanding Weighted Avg. Exercise Price Warrants outstanding - January 1, 2016 240,688 $ 7.41 Granted 5,508,141 $ 1.80 Exercised - Expired - Warrants outstanding and exercisable - December 31, 2016 5,748,829 $ 1.91 Weighted average remaining contractual life of the outstanding warrants in years - December 31, 2016 3.08 |
Schedule of Warrants Outstanding and Warrants Exercisable | All warrants outstanding as of December 31, 2016 are 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 10) 5/11/2015 125,000 $ 1.79 125,000 5/11/2025 Underwriter warrants 2/7/2013 55,688 $ 5.25 55,688 2/7/2018 Settlement warrants 8/16/2016 40,000 $ 3.75 40,000 8/16/2021 Warrants issued to investor relations consultant 7/19/2013 60,000 $ 8.50 60,000 7/19/2018 Placement Agent Warrants 12/27/2016 210,313 $ 1.79 - 12/27/2019 PIPE Investor Warrants 12/27/2016 5,257,828 $ 1.79 - 12/27/2019 5,748,829 $ 1.91 280,688 |
Warrant [Member] | |
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 warrants granted related to settlement agreements: 2016 Weighted-average fair value of warrants granted 2.88 Expected terms (in years) 5 Expected volatility 106 % Risk-free interest rate 0.79 % Dividend yield - |
Accelerated [Member] | |
Schedule of Market-based Vesting Conditions for Restricted Stock Units Granted | These market-based accelerated vesting conditions and share amounts (in aggregate) are set forth below: Tranche Number of shares Target share price Tranche 1 230,000 shares $9.00 or greater Tranche 2 230,000 shares $10.00 or greater Tranche 3 230,000 shares $12.00 or greater Tranche 4 230,000 shares $14.00 or greater Tranche 5 287,500 shares $15.00 or greater |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Derivative Liabilities at Fair Value | 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 derivative liabilities: 2016 Expected volatility 103 - 111 % Risk-free interest rate 1.22 - 1.70 % Dividend yield - |
Fair Value at Reconciliation of Measured Liabilities | The following table provides a reconciliation of all liabilities measured at fair value using Level 3 significant unobservable inputs: September 30, 2016 Warrant derivative liability: Balance at January 1, 2016 $ - Modification of warrant and reclassification from equity to liabilities 675 Change in fair value (211 ) Reclassification from liabilities to equity upon closing of public equity offering (464 ) Balance at December 31, 2016 $ - Embedded conversion feature derivative liability: Balance at January 1, 2016 $ - Embedded conversion feature in Convertible Note issued 2,322 Change in fair value 324 Reclassification from liabilities to equity upon closing of public equity offering (2,646 ) Balance at December 31, 2016 $ - |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The Company is subject to taxation in the United States, California, New Jersey, Texas and Pennsylvania. The provision for income taxes for the years ended December 31, 2016 and 2015 are summarized below: December 31, 2016 December 31, 2015 Current: Federal $ - $ - State 8 5 Total current $ 8 $ 5 Deferred: Federal $ 19,847 $ 14,037 State 5,802 4,036 Change in valuation allowance (25,760 ) (18,072 ) Total deferred (111 ) - Income tax provision (benefit) $ (103 ) $ 5 |
Schedule of Income Tax Reconciliation | A reconciliation of income taxes computed by applying the statutory U.S. income tax rate to the Company’s loss before income taxes to the income tax provision is as follows: December 31, 2016 December 31, 2015 U.S. federal statutory tax rate 35.00 % 35.00 % Benefit of lower tax brackets (1.00 )% (1.00 )% State tax benefit, net 0.08 % (0.03 )% Research and development credits 0.00 % 0.00 % Employee stock based compensation (1.47 )% (0.67 )% Loss on debt conversion 0.00 % 0.00 % Other (0.18 )% (0.71 )% Valuation allowance (31.89 )% (32.62 )% Effective income tax rate 0.54 % (0.03 )% |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows (in thousands): December 31, 2016 December 31, 2015 Deferred tax assets (liabilities): NOL’s $ 21,555 $ 15,099 Depreciation and amortization 199 121 Other 398 346 Research & development credits 556 556 Deferred stock compensation 3,875 2,997 Park stock purchase identifiable intangibles (936 ) (1,047 ) Unrealized gain or loss on investments - - Total deferred tax assets, net 25,647 18,072 Valuation allowance (26,583 ) (19,119 ) Net deferred tax liabilities $ (936 ) $ (1,047 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Future Payments Under Leases | The following represents future annual minimum lease payments, net of expected sublease income, as of December 31, 2016: 2017 $ 495 2018 496 2019 257 2020 266 2021 134 Thereafter 79 Total $ 1,727 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Net loss | $ 19,087 | $ 15,899 |
Accumulated deficit | 76,851 | 57,764 |
Net cash used in operating activities | 11,215 | 11,143 |
Cash resources and restricted investments | 9,053 | |
Deposit coverage limits by FDIC, per owner | 250 | |
Cash deposits in excess of FDIC limits | 8,800 | |
Accounts receivable, net of allowance for doubtful accounts | $ 422 | $ 180 |
Property plant and equipment useful life | 3 years | 5 years |
Impairment of long-lived assets | $ 303 | |
Restricted Stock Units [Member] | ||
Number of shares vested during the period | 80,245 | 55,824 |
Deferred Acquisition Obligations, Stock Options, Unvested RSUs and Warrants [Member] | ||
Anti dilutive securities | 9,162,259 | 3,313,169 |
Billing and Collection Agreement [Member] | Third Party [Member] | ||
Percentage of billing and collection amount | 55.00% | |
Billing and collection management expense | $ 55 | $ 142 |
Due to related party | 73 | $ 81 |
Intangible Assets [Member] | ||
Impairment of long-lived assets | 64 | |
Goodwill [Member] | ||
Impairment of long-lived assets | $ 239 | |
Patents [Member] | ||
Patent estimated useful life | 20 years |
Summary of Significant Accoun41
Summary of Significant Accounting Policies - Schedule of Basic and Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Numerator - net loss | $ (19,087) | $ (15,899) |
Denominator - weighted average number of shares outstanding, basic and diluted | 12,743,184 | 9,576,142 |
Net loss per share, basic and diluted | $ (1.50) | $ (1.66) |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash payment | $ 421 | ||
Goodwill | 2,227 | $ 2,466 | $ 332 |
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 | 5,163 | ||
Acquisition adjusted description | Acquisition was adjusted from 25% to 15% | ||
Increase of goodwill | $ 46 | ||
Increase of intangible assets | 4 | ||
Goodwill | 1,895 | ||
Net tangible assets | 252 | ||
Identifiable intangible assets | 2,629 | ||
Acquisition expenses | 201 | ||
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 tax liability | $ 1,047 | ||
Deferred acquisition obligations | $ 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% | ||
Other 2015 Acquisitions [Member] | |||
Cash payment | 945 | ||
Goodwill | 239 | ||
Net tangible assets | 641 | ||
Identifiable intangible assets | 65 | ||
Acquisition expenses | $ 135 |
Acquisitions - Schedule of Acqu
Acquisitions - Schedule of Acquisition Date Fair Value of Consideration (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash payment to Sellers at closing | $ 3,005 | |
Park [Member] | ||
Cash payment to Sellers at closing | 3,100 | |
Restricted common stock issuance to Sellers at closing | 425 | |
Deferred tax liability | 1,047 | |
Deferred consideration to Sellers | 591 | |
Total acquisition date fair value | $ 5,163 |
Acquisitions - Schedule of Esti
Acquisitions - Schedule of Estimated Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Goodwill | $ 2,227 | $ 2,466 | $ 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 | 1,895 | ||
Net assets acquired | $ 5,163 |
Acquisitions - Schedule of Resu
Acquisitions - Schedule of Result of Operation from Acquisition (Details) - Park [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Total revenues | $ 6,134 |
Net income | $ 1,088 |
Acquisitions - Schedule of Inta
Acquisitions - Schedule of Intangible Assets Acquisition (Details) - Park [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
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 |
Restricted Cash and Short-Ter47
Restricted Cash and Short-Term Investments (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Cash and Cash Equivalents [Abstract] | ||
Certificate of deposit | $ 200 | $ 150 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 669 | $ 775 |
Finished goods | 1,172 | 637 |
Total inventories | $ 1,841 | $ 1,412 |
Prepaid Expenses and Other Cu49
Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid insurance | $ 315 | $ 297 |
Other prepaid expenses | 517 | 370 |
Deposits and other current assets | 106 | 119 |
Total prepaid expenses and other current assets | $ 938 | $ 786 |
Property, Plant and Equipment50
Property, Plant and Equipment (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization of property, plant and equipment | $ 1,055 | $ 255 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Abstract] | ||
Computer software and hardware | $ 831 | $ 323 |
Furniture and equipment | 424 | 350 |
Lab and pharmacy equipment | 2,559 | 538 |
Leasehold improvements | 4,836 | 1,746 |
Furniture and equipment, gross | 8,650 | 2,957 |
Accumulated depreciation and amortization | (1,355) | (300) |
Furniture and equipment, Net | $ 7,295 | $ 2,657 |
Intangible Assets and Goodwil52
Intangible Assets and Goodwill - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cost | $ 3,791 | $ 3,538 |
Accumulated amortization | (755) | (403) |
Impairment | (64) | |
Net Carrying value | $ 2,972 | 3,135 |
Patents [Member] | ||
Amortization periods (in years) | 20 years | |
Cost | $ 214 | 64 |
Accumulated amortization | (6) | (1) |
Impairment | ||
Net Carrying value | $ 208 | $ 63 |
Patents [Member] | Minimum [Member] | ||
Amortization periods (in years) | 17 years | 17 years |
Patents [Member] | Maximum [Member] | ||
Amortization periods (in years) | 19 years | 19 years |
Trademarks [Member] | ||
Amortization periods description | Indefinite | Indefinite |
Cost | $ 224 | $ 121 |
Accumulated amortization | ||
Impairment | ||
Net Carrying value | 224 | 121 |
Customer Relationships [Member] | ||
Cost | 2,998 | 2,998 |
Accumulated amortization | (554) | (297) |
Impairment | (15) | |
Net Carrying value | $ 2,429 | $ 2,701 |
Customer Relationships [Member] | Minimum [Member] | ||
Amortization periods (in years) | 3 years | 3 years |
Customer Relationships [Member] | Maximum [Member] | ||
Amortization periods (in years) | 15 years | 15 years |
Trade Name [Member] | ||
Amortization periods (in years) | 5 years | 5 years |
Cost | $ 16 | $ 16 |
Accumulated amortization | (7) | (4) |
Impairment | (1) | |
Net Carrying value | 8 | 12 |
Non-Competition Clause [Member] | ||
Cost | 294 | 294 |
Accumulated amortization | (184) | (99) |
Impairment | (20) | |
Net Carrying value | $ 90 | $ 195 |
Non-Competition Clause [Member] | Minimum [Member] | ||
Amortization periods (in years) | 3 years | 3 years |
Non-Competition Clause [Member] | Maximum [Member] | ||
Amortization periods (in years) | 4 years | 4 years |
State Pharmacy Licenses [Member] | ||
Amortization periods (in years) | 25 years | 25 years |
Cost | $ 45 | $ 45 |
Accumulated amortization | (4) | (2) |
Impairment | (28) | |
Net Carrying value | $ 13 | $ 43 |
Intangible Assets and Goodwil53
Intangible Assets and Goodwill - Schedule of Amortization Expenses for Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Amortization of intangible assets | $ 351 | $ 355 |
Patents [Member] | ||
Amortization of intangible assets | 5 | 1 |
Customer Relationships [Member] | ||
Amortization of intangible assets | 255 | 260 |
Trade Name [Member] | ||
Amortization of intangible assets | 3 | 3 |
Non-Competition Clause [Member] | ||
Amortization of intangible assets | 86 | 90 |
State Pharmacy Licenses [Member] | ||
Amortization of intangible assets | $ 2 | $ 1 |
Intangible Assets and Goodwil54
Intangible Assets and Goodwill - Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,017 | $ 359 | |
2,018 | 218 | |
2,019 | 215 | |
2,020 | 212 | |
2,021 | 212 | |
Thereafter | 1,755 | |
Intangible assets | $ 2,972 | $ 3,135 |
Intangible Assets and Goodwil55
Intangible Assets and Goodwill - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Intangible Assets And Goodwill - Schedule Of Goodwill Details | ||
Balance beginning | $ 2,466 | $ 332 |
Acquisition of Park (see Note 3) | 1,895 | |
Acquisition of CAP (see Note 3) | 239 | |
Impairment of CAP (see Note 2) | (239) | |
Balance ending | $ 2,227 | $ 2,466 |
Accounts Payable and Accrued 56
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |||
Accounts payable | $ 2,999 | $ 3,185 | |
Deferred rent | 412 | 63 | |
Accrued interest (see Note 10) | 116 | 90 | |
Accrued exit fee for note payable (see Note 10) | 667 | 500 | |
Building lease liability | [1] | 11 | 46 |
Other accrued expenses | [2] | 23 | |
Total accounts payable and accrued expenses | 4,205 | 3,907 | |
Less: Current portion | (3,538) | (3,407) | |
Non-current total accrued expenses | $ 667 | $ 500 | |
[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. In September 2016, the Company decided to cease operations at its Texas location and started steps to wind down operations. The Company recognized a loss of $16 during the year ended December 31, 2016 related to the estimated remaining lease liability. The obligations were discounted based on current prevailing market rates. | ||
[2] | The amount consists of a $23 stock-based compensation accrual at December 31, 2015, for stock options to be granted for services performed. The stock-based compensation expense related to the accruals was $23 during the year ended December 31, 2015. The $23 was recorded to additional paid-in-capital upon issuance of the stock options in 2016. |
Accounts Payable and Accrued 57
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) (Parenthetical) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Feb. 28, 2015USD ($)ft² | Dec. 31, 2016USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2015USD ($) | 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 | $ 16 | $ 117 | |||
Stock based compensation accrual | $ 23 | ||||
Additional paid-in-capital | $ 23 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Jan. 22, 2016 | May 11, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 27, 2016 | Mar. 16, 2016 |
Loan due date | May 11, 2021 | |||||
Liability of final fee included in accrued expenses | $ 667 | $ 500 | ||||
Fair value of warrants | 840 | |||||
Fair value of contractual term | 5 years | |||||
Common stock volatility rate | 102.00% | |||||
Fair value of dividend rate | ||||||
Fair value of risk-free interest rate | 1.04% | |||||
Debt discount | $ 970 | 281 | ||||
Debt conversion price per share | $ 5.90 | $ 5.90 | ||||
Proceeds from convertible note | $ 2,772 | |||||
Warrants exercise price per share | $ 1.915 | $ 3.60 | ||||
Loan Agreement [Member] | ||||||
Debt discount | $ 470 | 281 | ||||
Loan Agreement [Member] | Life Sciences Alternative Funding LLC [Member] | ||||||
Principal amount of loan | $ 10,000 | |||||
Loans bear interest | 12.50% | |||||
Loans bear interest rate description | The term loan bore interest at a fixed per-annum rate of 12.5% and allowed for 2% of the interest to be paid-in-kind until December 2016. The Company was permitted to pay interest only until June 1, 2017. | |||||
Loan installments | 20 months | |||||
Percentage of loan agreement final fee | 5.00% | |||||
Loan due date | Jan. 1, 2019 | |||||
Incurred expense debt | $ 1,066 | |||||
Liability of final fee included in accrued expenses | 667 | $ 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 | |||||
Fair value of contractual term | 10 years | |||||
Common stock volatility rate | 109.00% | |||||
Fair value of dividend rate | 0.00% | |||||
Fair value of risk-free interest rate | 1.25% | |||||
Note Purchase Agreement [Member] | Lender [Member] | 8.00% Convertible Senior Secured Note [Member] | ||||||
Loans bear interest | 8.00% | |||||
Loan due date | May 11, 2021 | |||||
Incurred expense debt | $ 228 | |||||
Debt discount | 534 | |||||
Convertible note principal amount | $ 3,000 | |||||
Convertible note fixed per annum rate | 8.00% | |||||
Convertible note description | The Company is permitted to redeem the Convertible Note prior to its maturity at any time on or after March 1, 2018 for cash purchase prices equal to 109% - 105% of the outstanding principal amount of the Convertible Note, depending on the date of redemption. | |||||
Debt conversion price per share | $ 5.90 | |||||
Proceeds from convertible note | $ 3,000 | |||||
Percentage of repurchase convertible note in cash is greater than outstanding principal amount | 105.00% | |||||
Fair value of embedded conversion feature | $ 2,322 | |||||
Exchange Agreement [Member] | Lender [Member] | ||||||
Principal amount of loan | $ 3,000 | |||||
Debt discount | $ 1,966 | |||||
Convertible note principal amount | $ 13,332 | |||||
Warrants exercise price per share | $ 1.79 |
Debt - Summary of Notes Payable
Debt - Summary of Notes Payable (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Less: Discounts on notes | $ (277) | |
Less: Current portion | 3,973 | |
Long-term portion | 7,937 | $ 8,336 |
Notes Payable [Member] | ||
December 2016 Amended Note | 13,332 | |
Less: Discounts on notes | (1,422) | |
Less: Current portion | (4,999) | |
Long-term portion | $ 6,911 |
Debt - Summary of Future Minimu
Debt - Summary of Future Minimum Payments (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Less: unamortized discount | $ (277) |
Notes Payable [Member] | |
2,017 | 6,485 |
2,018 | 8,905 |
Total minimum payments | 15,390 |
Less: amount representing interest | (2,058) |
Notes payable, gross | 13,332 |
Less: unamortized discount | (1,422) |
Note payable, net of unamortized debt discount | $ 11,910 |
Capital Lease Obligation (Detai
Capital Lease Obligation (Details Narrative) - USD ($) | Aug. 09, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Property and equipment purchase price | $ (6,887,000) | $ (995,000) | |
Amortization of debt discount | 970,000 | 281,000 | |
Capital leases of equipment | 2,070,000 | 60,000 | |
Capital leases of accumulated depreciation | 293,000 | $ 9,000 | |
Lease Agreement [Member] | |||
Property and equipment purchase price | $ 2,000,000 | 2,000,000 | |
Lease monthly payments | $ 64,000 | ||
Lease future payment | 300,000 | ||
Lease incurred expenses | $ 67,000 | ||
Capital lease future minimum payments percentage | 16.80% | ||
Amortization of debt discount | $ 90,000 |
Capital Lease Obligation - Sche
Capital Lease Obligation - Schedule of Future Payment Under Capital Lease (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Leases [Abstract] | ||
2,017 | $ 773 | |
2,018 | 773 | |
2,019 | 751 | |
Total minimum lease payments | 2,298 | |
Less: amount representing interest payments | (244) | |
Present value of future minimum lease payments | 2,053 | |
Less: unamortized discount | (277) | |
Present value of future net minimum lease payments | 1,776 | |
Less: current portion, net of unamortized discount | (458) | $ (21) |
Capital lease obligation, net of current portion and unamortized discount | $ 1,318 | $ 1 |
Stockholders' Equity (Deficit63
Stockholders' Equity (Deficit) and Stock-Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Mar. 16, 2016 | Dec. 31, 2016 | Oct. 31, 2016 | May 31, 2016 | Mar. 31, 2016 | Nov. 30, 2015 | Jul. 31, 2015 | Apr. 30, 2015 | Feb. 28, 2015 | Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 17, 2007 |
Common stock, shares authorized | 90,000,000 | 90,000,000 | 90,000,000 | 90,000,000 | ||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Shares issued upon exercise of stock options, shares | 130,457 | |||||||||||||
Warrants exercise price per share | $ 3.60 | $ 1.915 | $ 1.915 | |||||||||||
Proceeds from offering price | $ 11,088 | |||||||||||||
Number of shars issued for acquistion | 425 | |||||||||||||
Shares issued upon exercise of stock options | $ 55 | |||||||||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | ||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Preferred stock, shares issued | 0 | 0 | 0 | 0 | ||||||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | 0 | ||||||||||
Fair value of option | $ 23 | $ 39 | ||||||||||||
Stock-based compensation | $ 3,673 | $ 3,441 | ||||||||||||
2007 Incentive Stock and Awards Plan [Member] | ||||||||||||||
Number of shares available for sales | 815,159 | 815,159 | ||||||||||||
Maximum number of common stock issuance under the plan | 5,000,000 | |||||||||||||
Stock Option One [Member] | ||||||||||||||
Shares issued upon exercise of stock options, shares | 15,000 | |||||||||||||
Number of common stock issued for warrant exercises | 15,000 | |||||||||||||
Sale of stock price per share | $ 3.68 | $ 3.68 | ||||||||||||
Shares issued upon exercise of stock options | $ 55 | |||||||||||||
Investor Warrants [Member] | ||||||||||||||
Proceeds from issuance of warrants | $ 9,217 | |||||||||||||
Warrants exercise price per share | $ 1.79 | $ 1.79 | ||||||||||||
Percentage of cash commission | 7.50% | |||||||||||||
Sales commission and offering expenses | $ 852 | |||||||||||||
Sale of stock price per share | $ 1.915 | $ 1.915 | ||||||||||||
Agent Warrant [Member] | ||||||||||||||
Number of warrants issued for purchase of common stock | 210,313 | 210,313 | ||||||||||||
Directors [Member] | ||||||||||||||
Issuance of restricted common stock, shares | 28,606 | |||||||||||||
Non Employee Director [Member] | ||||||||||||||
Issuance of restricted common stock, shares | 63,450 | 34,166 | ||||||||||||
Issuance of restricted common stock | $ 250 | $ 270 | ||||||||||||
Mark L. Baum [Member] | ||||||||||||||
Issuance of restricted common stock, shares | 157,500 | |||||||||||||
Number of restricted stock forfeit during period | 1,050,000 | |||||||||||||
Mark Baum [Member] | Baum Performance Option [Member] | ||||||||||||||
Stock options to purchase shares of common stock | 600,000 | |||||||||||||
Stock option purchase of exercise price | $ 7.87 | |||||||||||||
Fair value of option | $ 2,784 | |||||||||||||
Option term | 5 years | |||||||||||||
Volatility percentage | 80.00% | |||||||||||||
Risk free interest rate | 154.00% | |||||||||||||
Andrew R. Boll [Member] | ||||||||||||||
Issuance of restricted common stock, shares | 30,000 | |||||||||||||
John P Saharek [Member] | ||||||||||||||
Issuance of restricted common stock, shares | 30,000 | |||||||||||||
Issuance of restricted common stock | $ 442 | |||||||||||||
Mr. Boll [Member] | ||||||||||||||
Issuance of restricted common stock, shares | 157,500 | |||||||||||||
Park [Member] | ||||||||||||||
Issuance of restricted common stock, shares | 63,525 | |||||||||||||
Issuance of restricted common stock | $ 425 | |||||||||||||
PC [Member] | ||||||||||||||
Number of shars issued for acquistion | $ 75,000 | |||||||||||||
Number of shars issued for acquistion, shares | 302 | |||||||||||||
Sales Agreement [Member] | ||||||||||||||
Percentage of cash commission | 3.00% | |||||||||||||
Sales commission and offering expenses | $ 50 | $ 16 | ||||||||||||
Number of shares sold under the agreement | 72,421 | |||||||||||||
Proceeds from sale of common stock approximately | $ 529 | |||||||||||||
Offerign expenses | $ 109 | |||||||||||||
Offering expenses description | After deducting $16 in commission fees and $109 in offering expenses payable by the Company, of approximately $404. | |||||||||||||
Underwriting Agreement [Member] | ||||||||||||||
Sales commission and offering expenses | $ 20 | |||||||||||||
Number of shares sold under the agreement | 3,335,000 | 57,042 | ||||||||||||
Proceeds from sale of common stock approximately | $ 212 | |||||||||||||
Sale of stock price per share | $ 3.60 | |||||||||||||
Proceeds from offering price | $ 11,088 | |||||||||||||
Number of shares available for sales | 1,871 | 1,871 | ||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||
Number of shares sold under the agreement | 5,257,828 | |||||||||||||
Warrant One [Member] | ||||||||||||||
Number of common stock issued for warrant exercises | 220,912 | |||||||||||||
Proceeds from issuance of warrants | $ 1,248 | |||||||||||||
Warrant Two [Member] | ||||||||||||||
Common stock issued upon warrants | 209,980 | |||||||||||||
Warrants exercise price per share | $ 5.925 | $ 5.925 | ||||||||||||
Warrant Three [Member] | ||||||||||||||
Warrants exercise price per share | $ 5.25 | $ 5.25 | ||||||||||||
Number of common stock isused upon cashless exercise provisions of warrants | 10,932 | |||||||||||||
Number of warrants issued for purchase of common stock | 30,457 | 30,457 | ||||||||||||
Restricted Stock Units [Member] | ||||||||||||||
Shares issued upon exercise of stock options, shares | 8,521 | |||||||||||||
Number of restricted stock issued | 1,611 | |||||||||||||
Number of shares vested during the period | 80,245 | 55,824 | ||||||||||||
Payroll tax withholdings | $ 10 | |||||||||||||
Restricted Stock Units [Member] | Employees [Member] | ||||||||||||||
Number of shares vested during the period | 1,241 | |||||||||||||
Restricted Stock Units [Member] | Directors [Member] | ||||||||||||||
Number of shares vested during the period | 24,421 | |||||||||||||
Restricted Stock Units [Member] | Non Employee Director [Member] | ||||||||||||||
Number of shares vested during the period | 16,076 | |||||||||||||
Restricted Stock Units [Member] | Mark L. Baum [Member] | ||||||||||||||
Number of restricted stock issued | 83,709 | |||||||||||||
Number of shares vested during the period | 200,000 | |||||||||||||
Payroll tax withholdings | $ 144 | |||||||||||||
Number of common stock shares issued for offering | 116,291 | |||||||||||||
Stock Option Plan [Member] | ||||||||||||||
Shares issued upon exercise of stock options, shares | (15,000) | |||||||||||||
Stock option purchase of exercise price | $ 3.99 | |||||||||||||
Intrinsic value of stock option exercised | $ 29 | |||||||||||||
Closing price of common stock price per share | $ 2.50 | $ 2.50 | ||||||||||||
Stock options granted with exercise price contractual terms | 5 years 9 months | |||||||||||||
Stock options granted vesting terms | Vesting terms for options granted in 2016 and 2015 to employees, directors and consultants 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. | |||||||||||||
Unrecognized compensation expense related to unvested stock options granted under the Plan | $ 5,116 | $ 5,116 | ||||||||||||
Stock-based compensation | $ 2,159 | $ 1,747 | ||||||||||||
Expense expected to recognize over the weighted-average remaining vesting period | 3 years 1 month 6 days | |||||||||||||
Boll Performance Equity Award [Member] | ||||||||||||||
Fair value of option | $ 228 | |||||||||||||
Option term | 3 years | |||||||||||||
Volatility percentage | 60.00% | |||||||||||||
Risk free interest rate | 0.77% | |||||||||||||
Unvested RSUs [Member] | ||||||||||||||
Unrecognized compensation expense related to unvested stock options granted under the Plan | $ 3,873 | $ 3,873 | ||||||||||||
Stock-based compensation | $ 1,539 | $ 1,671 | ||||||||||||
Expense expected to recognize over the weighted-average remaining vesting period | 1 year 9 months 18 days | |||||||||||||
Minimum [Member] | ||||||||||||||
Stock options to purchase shares of common stock | 255,600 | |||||||||||||
Stock option purchase of exercise price | $ 3.20 | |||||||||||||
Minimum [Member] | Mark L. Baum [Member] | ||||||||||||||
Average stock price targets ranging | $ 9 | |||||||||||||
Minimum [Member] | Mark Baum [Member] | Baum Performance Option [Member] | ||||||||||||||
Average stock price targets ranging | $ 9 | |||||||||||||
Minimum [Member] | Stock Option Plan [Member] | ||||||||||||||
Stock options granted with exercise price contractual terms | 5 years | |||||||||||||
Minimum [Member] | Boll Performance Equity Award [Member] | ||||||||||||||
Average stock price targets ranging | $ 10 | |||||||||||||
Maximum [Member] | ||||||||||||||
Stock option purchase of exercise price | $ 4.51 | |||||||||||||
Maximum [Member] | Mark L. Baum [Member] | ||||||||||||||
Average stock price targets ranging | $ 15 | |||||||||||||
Maximum [Member] | Mark Baum [Member] | Baum Performance Option [Member] | ||||||||||||||
Average stock price targets ranging | $ 15 | |||||||||||||
Maximum [Member] | Stock Option Plan [Member] | ||||||||||||||
Stock options granted with exercise price contractual terms | 10 years | |||||||||||||
Maximum [Member] | Boll Performance Equity Award [Member] | ||||||||||||||
Average stock price targets ranging | $ 30 |
Stockholders' Equity (Deficit64
Stockholders' Equity (Deficit) and Stock-Based Compensation - Schedule of Stock Option Plan Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Number of shares, Options exercised | 130,457 | |
Weighted Avg. Exercise Price, Exercisable Ending Balance | $ 6.20 | |
Stock Option Plan [Member] | ||
Number of shares, Outstanding, Beginning balance | 1,544,026 | |
Number of shares, Options granted | 549,350 | |
Number of shares, Options exercised | (15,000) | |
Number of shares, Options cancelled/forfeit | (65,063) | |
Number of shares, Outstanding, Ending balance | 2,013,313 | 1,544,026 |
Number of shares, Options exercisable | 808,067 | |
Number of shares, Options vested and expected to vest | 1,892,790 | |
Weighted Avg. Exercise Price, Outstanding, Beginning balance | $ 5.74 | |
Weighted Avg. Exercise Price, Options granted | 3.99 | |
Weighted Avg. Exercise Price, Options exercised | 3.68 | |
Weighted Avg. Exercise Price, Options cancelled/forfeit | 7.80 | |
Weighted Avg. Exercise Price, Outstanding, Ending balance | 6.20 | $ 5.74 |
Weighted Avg. Exercise Price, Exercisable Ending Balance | 6.18 | |
Weighted Avg. Exercise Price, Vested and expected to vest | $ 6.20 | |
Weighted Avg. Remaining Contractual Life, Options outstanding | 6 years 3 months 11 days | |
Weighted Avg. Remaining Contractual Life, Options exercisable | 5 years 9 months | |
Weighted Avg. Remaining Contractual Life, Options vested and expected to vest | 6 years 1 month 6 days | |
Aggregate Intrinsic Value, Options outstanding | $ 13 | |
Aggregate Intrinsic Value, Options exercisable | 13 | |
Aggregate Intrinsic Value, Options vested and expected to vest | $ 13 |
Stockholders' Equity (Deficit65
Stockholders' Equity (Deficit) and Stock-Based Compensation - Schedule of Market-based Vesting Conditions for Stock Option Units Granted (Details) | 12 Months Ended |
Dec. 31, 2016shares | |
Tranche 1 [Member] | |
Number of shares vesting | 200,000 |
Target share price description | 9.00 or greater |
Tranche 2 [Member] | |
Number of shares vesting | 100,000 |
Target share price description | 10.00 or greater |
Tranche 3 [Member] | |
Number of shares vesting | 100,000 |
Target share price description | 12.00 or greater |
Tranche 4 [Member] | |
Number of shares vesting | 100,000 |
Target share price description | 14.00 or greater |
Tranche 5 [Member] | |
Number of shares vesting | 100,000 |
Target share price description | 15.00 or greater |
Stockholders' Equity (Deficit66
Stockholders' Equity (Deficit) and Stock-Based Compensation - Schedule of Fair Value Assumption (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Options Granted to Employees [Member] | ||
Weighted-average fair value of granted | $ 3.91 | $ 6.22 |
Expected volatility, minimum | 101.00% | 101.00% |
Expected volatility, maximum | 112.00% | 121.00% |
Risk-free interest rate, minimum | 1.07% | 1.39% |
Risk-free interest rate, maximum | 1.70% | 1.68% |
Dividend yield | ||
Options Granted to Employees [Member] | Minimum [Member] | ||
Expected terms (in years) | 5 years 9 months 22 days | 5 years 9 months 22 days |
Options Granted to Employees [Member] | Maximum [Member] | ||
Expected terms (in years) | 6 years 1 month 10 days | 6 years 1 month 10 days |
Options Granted to Consultants [Member] | ||
Weighted-average fair value of granted | $ 6.18 | $ 6.49 |
Expected terms (in years) | 10 years | 10 years |
Expected volatility | 109.00% | |
Expected volatility, minimum | 108.00% | |
Expected volatility, maximum | 109.00% | |
Risk-free interest rate | 1.06% | |
Risk-free interest rate, minimum | 1.06% | |
Risk-free interest rate, maximum | 1.63% | |
Dividend yield | ||
Warrant Granted [Member] | ||
Weighted-average fair value of granted | $ 2.88 | |
Expected terms (in years) | 5 years | |
Expected volatility | 106.00% | |
Risk-free interest rate | 0.79% | |
Dividend yield |
Stockholders' Equity (Deficit67
Stockholders' Equity (Deficit) and Stock-Based Compensation - Schedule of Shares Outstanding and Exercisable (Details) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Number of Options Outstanding | shares | 2,013,313 |
Weighted Average Remaining Contractual Life in Years | 6 years 3 months 11 days |
Weighted Average Exercise Price | $ 6.20 |
Number Exercisable | shares | 808,067 |
Weighted Average Exercisable Exercise Price | $ 6.18 |
Range One [Member] | |
Range of Exercise Prices, minimum | 2.40 |
Range of Exercise Prices, maximum | $ 2.60 |
Number of Options Outstanding | shares | 147,000 |
Weighted Average Remaining Contractual Life in Years | 5 years 9 months 18 days |
Weighted Average Exercise Price | $ 2.43 |
Number Exercisable | shares | 125,000 |
Weighted Average Exercisable Exercise Price | $ 2.40 |
Range Two [Member] | |
Range of Exercise Prices, minimum | 3.74 |
Range of Exercise Prices, maximum | $ 4.50 |
Number of Options Outstanding | shares | 695,623 |
Weighted Average Remaining Contractual Life in Years | 7 years 8 months 9 days |
Weighted Average Exercise Price | $ 4.05 |
Number Exercisable | shares | 225,256 |
Weighted Average Exercisable Exercise Price | $ 4.25 |
Range Three [Member] | |
Range of Exercise Prices, minimum | 5.49 |
Range of Exercise Prices, maximum | $ 7.99 |
Number of Options Outstanding | shares | 952,103 |
Weighted Average Remaining Contractual Life in Years | 5 years 4 days |
Weighted Average Exercise Price | $ 7.54 |
Number Exercisable | shares | 249,857 |
Weighted Average Exercisable Exercise Price | $ 6.83 |
Range Four [Member] | |
Range of Exercise Prices, minimum | 8.06 |
Range of Exercise Prices, maximum | $ 8.99 |
Number of Options Outstanding | shares | 213,557 |
Weighted Average Remaining Contractual Life in Years | 6 years 1 month 6 days |
Weighted Average Exercise Price | $ 8.92 |
Number Exercisable | shares | 202,924 |
Weighted Average Exercisable Exercise Price | $ 8.95 |
Range Five [Member] | |
Range of Exercise Prices, minimum | $ 42.80 |
Number of Options Outstanding | shares | 5,030 |
Weighted Average Remaining Contractual Life in Years | 3 years 10 months 13 days |
Weighted Average Exercise Price | $ 42.80 |
Number Exercisable | shares | 5,030 |
Weighted Average Exercisable Exercise Price | $ 42.80 |
Stockholders' Equity (Deficit68
Stockholders' Equity (Deficit) and Stock-Based Compensation - Schedule of Market-based Vesting Conditions for Restricted Stock Units Granted (Details) | 12 Months Ended |
Dec. 31, 2016shares | |
Tranche 1 [Member] | |
Number of shares vesting | 200,000 |
Target share price description | 9.00 or greater |
Tranche 2 [Member] | |
Number of shares vesting | 100,000 |
Target share price description | 10.00 or greater |
Tranche 3 [Member] | |
Number of shares vesting | 100,000 |
Target share price description | 12.00 or greater |
Tranche 4 [Member] | |
Number of shares vesting | 100,000 |
Target share price description | 14.00 or greater |
Tranche 5 [Member] | |
Number of shares vesting | 100,000 |
Target share price description | 15.00 or greater |
Restricted Stock Units [Member] | Tranche 1 [Member] | |
Number of shares vesting | 30,000 |
Target share price description | 10.00 or greater |
Restricted Stock Units [Member] | Tranche 2 [Member] | |
Number of shares vesting | 30,000 |
Target share price description | 15.00 or greater |
Restricted Stock Units [Member] | Tranche 3 [Member] | |
Number of shares vesting | 30,000 |
Target share price description | 20.00 or greater |
Restricted Stock Units [Member] | Tranche 4 [Member] | |
Number of shares vesting | 30,000 |
Target share price description | 25.00 or greater |
Restricted Stock Units [Member] | Tranche 5 [Member] | |
Number of shares vesting | 37,500 |
Target share price description | 30.00 or greater |
Accelerated [Member] | Tranche 1 [Member] | |
Number of shares vesting | 230,000 |
Target share price description | 9.00 or greater |
Accelerated [Member] | Tranche 2 [Member] | |
Number of shares vesting | 230,000 |
Target share price description | 10.00 or greater |
Accelerated [Member] | Tranche 3 [Member] | |
Number of shares vesting | 230,000 |
Target share price description | 12.00 or greater |
Accelerated [Member] | Tranche 4 [Member] | |
Number of shares vesting | 230,000 |
Target share price description | 14.00 or greater |
Accelerated [Member] | Tranche 5 [Member] | |
Number of shares vesting | 287,500 |
Target share price description | 15.00 or greater |
Stockholders' Equity (Deficit69
Stockholders' Equity (Deficit) and Stock-Based Compensation - Schedule of Assumptions Used (Details) | 12 Months Ended |
Dec. 31, 2016$ / shares | |
Equity [Abstract] | |
Market price | $ 3.98 |
Contractual terms (in years) | 5 years |
Expected volatility | 102.00% |
Risk-free interest rate | 1.04% |
Dividend yield |
Stockholders' Equity (Deficit70
Stockholders' Equity (Deficit) and Stock-Based Compensation - Schedule of Restricted Stock Units Activity (Details) - Restricted Stock Units [Member] | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Number of RSUs unvested, Outstanding, Beginning balance | shares | 1,487,961 |
Number of RSUs granted | shares | 1,270,950 |
Number of RSUs vested | shares | (249,018) |
Number RSUs cancelled/forfeit | shares | (1,217,017) |
Number of RSUs unvested, Outstanding, Ending balance | shares | 1,292,876 |
Weighted Average Grant Date Fair Value, Beginning balance | $ / shares | $ 3.18 |
Weighted Average Grant Date Fair Value, RSUs granted | $ / shares | 2.25 |
Weighted Average Grant Date Fair Value, RSUs vested | $ / shares | 8.32 |
Weighted Average Grant Date Fair Value, RSUs cancelled/forfeit | $ / shares | 1.95 |
Weighted Average Grant Date Fair Value, Ending balance | $ / shares | $ 2.43 |
Stockholders' Equity (Deficit71
Stockholders' Equity (Deficit) and Stock-Based Compensation - Schedule of Stock Based Compensation Granted to Employees Directors Consultants (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Stock based compensation related to equity instruments granted to related parties | $ 3,788 | $ 3,441 |
Employees [Member] | Selling and Marketing [Member] | ||
Stock based compensation related to equity instruments granted to related parties | 498 | 370 |
Employees [Member] | General and Administrative [Member] | ||
Stock based compensation related to equity instruments granted to related parties | 2,954 | 2,720 |
Directors [Member] | General and Administrative [Member] | ||
Stock based compensation related to equity instruments granted to related parties | 221 | 268 |
Consultants [Member] | Selling and Marketing [Member] | ||
Stock based compensation related to equity instruments granted to related parties | 83 | |
Other [Member] | General and Administrative [Member] | ||
Stock based compensation related to equity instruments granted to related parties | $ 115 |
Stockholders' Equity (Deficit72
Stockholders' Equity (Deficit) and Stock-Based Compensation - Schedule of Warrants Activity (Details) - Warrant [Member] | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Number of shares, outstanding, beginning balance | shares | 240,688 |
Number of shares subject to warrants outstanding, granted | shares | 5,508,141 |
Number of shares subject to warrants outstanding, exercised | shares | |
Number of shares subject to warrants outstanding, expired | shares | |
Number of shares, outstanding, ending balance | shares | 5,748,829 |
Weighted average remaining contractual life of the outstanding warrants in years | 3 years 29 days |
Weighted avg. Exercise price, outstanding, beginning balance | $ / shares | $ 7.41 |
Weighted avg. Exercise price, granted | $ / shares | 1.80 |
Weighted avg. Exercise price, exercised | $ / shares | |
Weighted avg. Exercise price, expired/forfeited | $ / shares | |
Weighted avg. Exercise price, outstanding, ending balance | $ / shares | $ 1.91 |
Stockholders' Equity (Deficit73
Stockholders' Equity (Deficit) and Stock-Based Compensation - Schedule of Warrants Outstanding and Warrants Exercisable (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Mar. 16, 2016 | |
Exercise Price | $ 1.915 | $ 3.60 |
Expiration Date | May 11, 2025 | |
Warrant [Member] | ||
Warrants Outstanding | 5,748,829 | |
Exercise Price | $ 1.91 | |
Warrants Exercisable | 280,688 | |
Lender Warrants [Member] | ||
Issue Date | May 11, 2015 | |
Warrants Outstanding | 125,000 | |
Exercise Price | $ 1.79 | |
Warrants Exercisable | 125,000 | |
Expiration Date | May 11, 2025 | |
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 | |
Settlement Warrants [Member] | ||
Issue Date | Aug. 16, 2016 | |
Warrants Outstanding | 40,000 | |
Exercise Price | $ 3.75 | |
Warrants Exercisable | 40,000 | |
Expiration Date | Aug. 16, 2021 | |
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 | |
Placement Agent Warrants [Member] | ||
Issue Date | Dec. 27, 2016 | |
Warrants Outstanding | 210,313 | |
Exercise Price | $ 1.79 | |
Warrants Exercisable | ||
Expiration Date | Dec. 27, 2019 | |
PIPE Investor Warrants [Member] | ||
Issue Date | Dec. 27, 2016 | |
Warrants Outstanding | 5,257,828 | |
Exercise Price | $ 1.79 | |
Warrants Exercisable | ||
Expiration Date | Dec. 27, 2019 |
Derivative Instruments (Details
Derivative Instruments (Details Narrative) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Mar. 16, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Debt conversion price per share | $ 5.90 | $ 5.90 |
Warrants exercise price per share | $ 1.915 | $ 3.60 |
Warrants expiration date | May 11, 2025 | |
Convertible note original maturity date | May 11, 2021 |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Derivative Liabilities at Fair Value (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Expected volatility | 102.00% |
Risk-free interest rate | 1.04% |
Dividend yield | |
Minimum [Member] | |
Expected volatility | 103.00% |
Risk-free interest rate | 1.22% |
Maximum [Member] | |
Expected volatility | 111.00% |
Risk-free interest rate | 1.70% |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value at Reconciliation of Measured Liabilities (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Warrant Derivative Liability [Member] | |
Balance Beginning | |
Modification of warrant and reclassification from equity to liabilities | 675 |
Change in fair value | (211) |
Reclassification from liabilities to equity upon closing of public equity offering | (464) |
Balance Ending | |
Embedded Conversion Feature Derivative Liability [Member] | |
Balance Beginning | |
Embedded conversion feature in Convertible Note issued | 2,322 |
Change in fair value | 324 |
Reclassification from liabilities to equity upon closing of public equity offering | (2,646) |
Balance Ending |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes Details Narrative | ||
Deferred tax asset valuation allowance | $ 7,400 | $ 5,200 |
Federal net operating loss carryforwards | $ 54,275 | |
Federal net operating loss expiration date | 2,027 | |
Federal research and development tax credits | $ 354 | |
Federal research and development tax credits expiration date | 2,026 | |
State net operating loss carryforwards | 52,334 | |
State net operating loss expiration date | 2,017 | |
State research and development tax credits | $ 305 | |
Unrecognized tax benefits |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Current: Federal | ||
Current: State | 8 | 5 |
Total current | 8 | 5 |
Deferred: Federal | 19,847 | 14,037 |
Deferred: State | 5,802 | 4,036 |
Deferred: Change in valuation allowance | (25,760) | (18,072) |
Total deferred | (111) | |
Income tax provision (benefit) | $ 111 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal statutory tax rate | 35.00% | 35.00% |
Benefit of lower tax brackets | (1.00%) | (1.00%) |
State tax benefit, net | 0.08% | (0.03%) |
Research and development credits | 0.00% | 0.00% |
Employee stock based compensation | (1.47%) | (0.67%) |
Loss on debt conversion | 0.00% | 0.00% |
Other | (0.18%) | (0.71%) |
Valuation allowance | (31.89%) | (32.62%) |
Effective income tax rate | 0.54% | (0.03%) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
NOL's | $ 21,536 | $ 15,099 |
Depreciation and amortization | 199 | 121 |
Other | 398 | 346 |
Research & development credits | 556 | 556 |
Deferred stock compensation | 3,875 | 2,997 |
Park stock purchase identifiable intangibles | (936) | (1,047) |
Unrealized gain or loss on investments | ||
Total deferred tax assets, net | 25,647 | 18,072 |
Valuation allowance | (26,583) | (19,119) |
Net deferred tax liabilities | $ (936) | $ (1,047) |
Employee Savings Plan (Details
Employee Savings Plan (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | ||
Percentage of salary deposits in tax deferred investment account | 100.00% | |
Percentage of contributions made by the company | 4.00% | |
Contributions by the company | $ 248 | $ 146 |
Commitments and Contingencies82
Commitments and Contingencies (Details Narrative) $ in Thousands | May 31, 2016USD ($)shares | Sep. 02, 2014USD ($) | Apr. 02, 2014USD ($)shares | Aug. 31, 2016USD ($) | Aug. 31, 2015USD ($)ft² | Feb. 28, 2015USD ($)ft² | Jan. 31, 2015USD ($)ft² | Jun. 30, 2014ft² | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Apr. 30, 2016USD ($) | Sep. 30, 2014ft² |
Fair value of contingent acquisition obligation | $ 483 | |||||||||||
Issuance of common stock to settle contingent acquisition obligation | $ 302 | |||||||||||
Gain loss on contingent acquisition | 81 | |||||||||||
Lease agreement for office space (Square feet) | ft² | 7,565 | |||||||||||
Operating lease, monthly rental | 668 | 641 | ||||||||||
Gain on settlement | $ 40,000 | 551 | ||||||||||
Insurance claim in other income | 861 | |||||||||||
Accrued royalty expenses | 3 | $ 0 | ||||||||||
License Agreement [Member] | ||||||||||||
Lease agreement for office space (Square feet) | ft² | 8,602 | |||||||||||
Operating lease Expiry | Jul. 31, 2022 | |||||||||||
Operating lease, monthly rental | $ 10 | |||||||||||
Operating lease, rent increase percentage | 3.75% | |||||||||||
License Agreement [Member] | Urigen Pharmaceuticals, Inc [Member] | ||||||||||||
Unpaid royalties | $ 698 | |||||||||||
Lease Agreements [Member] | ||||||||||||
Lease agreement for office space (Square feet) | ft² | 1,100 | 4,500 | 7,565 | |||||||||
Operating lease Expiry | Oct. 31, 2019 | Dec. 31, 2020 | Oct. 31, 2018 | |||||||||
Operating lease, monthly rental | $ 20,426 | $ 3 | $ 10 | |||||||||
Operating lease, rent increase percentage | 3.00% | 2.00% | 3.00% | |||||||||
Pharmacy Creations, LLC [Member] | ||||||||||||
Fair value of divided ratio | 18.5882 | |||||||||||
Number of common stock shares issued for maximum exceeds from revenue | shares | 75,000 | 215,190 | ||||||||||
Payment of cash | $ 100 | |||||||||||
Pharmacy Creations, LLC [Member] | Minimum [Member] | ||||||||||||
Revenue | 3,500 | |||||||||||
Number of common stock shares issued for exceeds revenue value | $ 3,500 | |||||||||||
Pharmacy Creations, LLC [Member] | Maximum [Member] | ||||||||||||
Revenue | $ 7,500 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Payments Under Leases (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Compensation and Retirement Disclosure [Abstract] | |
2,017 | $ 495 |
2,018 | 496 |
2,019 | 257 |
2,020 | 266 |
2,021 | 134 |
Thereafter | 79 |
Total | $ 1,727 |
Segment Information and Conce84
Segment Information and Concentrations (Details Narrative) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
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 | 63.00% | 43.00% |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] $ in Thousands | 1 Months Ended |
Feb. 28, 2017USD ($) | |
Imprimis TX [Member] | |
Percentage of issued and outstanding shares of common stock | 100.00% |
Livernois [Member] | |
Purchase consideration value | $ 10 |
Remaining lease obligation amount | $ 113 |