Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 03, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Imprimis Pharmaceuticals, Inc. | |
Entity Central Index Key | 1,360,214 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 21,049,448 | |
Trading Symbol | IMMY | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents, including restricted cash of $200 | $ 4,170 | $ 4,219 |
Accounts receivable, net | 1,360 | 1,529 |
Inventories | 2,216 | 2,249 |
Prepaid expenses and other current assets | 982 | 714 |
Note receivable, current portion | 95 | |
Total current assets | 8,728 | 8,806 |
Property, plant and equipment, net | 5,966 | 6,215 |
Intangible assets, net | 2,894 | 2,860 |
Note receivable, less current portion | 302 | |
Goodwill | 2,227 | 2,227 |
TOTAL ASSETS | 26,328 | 23,917 |
Current liabilities | ||
Accounts payable and accrued expenses | 4,663 | 3,885 |
Accrued payroll and related liabilities | 1,796 | 1,209 |
Deferred revenue and customer deposits | 34 | 29 |
Current portion of deferred acquisition obligation and accrued interest | 53 | |
Current portion of note payable, net of unamortized debt discount | 992 | |
Current portion of capital lease obligations, net of unamortized discount | 674 | 598 |
Total current liabilities | 8,159 | 5,774 |
Capital lease obligations, net of current portion and unamortized discount | 363 | 720 |
Accrued expenses, net of current portion | 800 | 800 |
Note payable, net of current portion and unamortized debt discount | 13,274 | 14,008 |
TOTAL LIABILITIES | 22,596 | 21,302 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.001 par value, 90,000,000 shares authorized, 21,049,448 and 20,623,129 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively | 21 | 21 |
Additional paid-in capital | 93,538 | 91,430 |
Accumulated deficit | (89,827) | (88,836) |
TOTAL STOCKHOLDERS' EQUITY | 3,722 | 2,615 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 26,328 | 23,917 |
Surface Pharmaceuticals [Member] | ||
Current assets | ||
Investment in Eton Pharmaceuticals | 5,218 | |
Eton Pharmaceuticals [Member] | ||
Current assets | ||
Investment in Eton Pharmaceuticals | $ 1,295 | $ 3,507 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Restricted cash | $ 200 | $ 200 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 21,049,448 | 20,623,129 |
Common stock, shares outstanding | 21,049,448 | 20,623,129 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues: | ||||
Product sales, net | $ 10,374 | $ 6,849 | $ 19,229 | $ 12,938 |
License revenues | 10 | 8 | 20 | 16 |
Total revenues | 10,384 | 6,857 | 19,249 | 12,954 |
Cost of sales | (4,157) | (3,288) | (8,228) | (6,645) |
Gross profit | 6,227 | 3,569 | 11,021 | 6,309 |
Operating expenses: | ||||
Selling, general and administrative | 6,779 | 6,485 | 13,267 | 13,296 |
Research and development | 72 | 101 | 159 | 261 |
Total operating expenses | 6,851 | 6,586 | 13,426 | 13,557 |
Loss from operations | (624) | (3,017) | (2,405) | (7,248) |
Other income (expense): | ||||
Interest expense, net | (671) | (767) | (1,334) | (1,555) |
Loss on sale of assets | (269) | (284) | ||
Other expense, net | (255) | (255) | ||
Total other income, net | 3,146 | 4,473 | 1,414 | 3,670 |
Income (loss) before income taxes | 2,522 | 1,456 | (991) | (3,578) |
Income tax benefit, net | 28 | 56 | ||
Net income (loss) | $ 2,522 | $ 1,484 | $ (991) | $ (3,522) |
Basic net income (loss) per share of common stock | $ 0.12 | $ 0.07 | $ (0.05) | $ (0.18) |
Diluted net income (loss) per share of common stock | $ 0.11 | $ 0.06 | $ (0.05) | $ (0.18) |
Weighted average number of shares of common stock outstanding, basic | 21,190,794 | 20,209,821 | 21,070,664 | 19,572,051 |
Weighted average number of shares of common stock outstanding, diluted | 23,175,431 | 23,177,881 | 21,070,664 | 19,572,051 |
Surface Pharmaceuticals [Member] | ||||
Other income (expense): | ||||
Investment losses | $ (102) | $ (102) | ||
Gain on deconsolidation of Surface Pharmaceuticals | 5,320 | 5,320 | ||
Eton Pharmaceuticals [Member] | ||||
Other income (expense): | ||||
Investment losses | (1,146) | (216) | (2,215) | (216) |
Gain on deconsolidation of Surface Pharmaceuticals | $ 5,725 | $ 5,725 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (991) | $ (3,522) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization of property, plant and equipment | 800 | 659 |
Amortization of intangible assets | 117 | 181 |
Deferred income taxes | (56) | |
Amortization of debt issuance costs and discount | 314 | 632 |
Loss on write down of assets and note receivable | 393 | 111 |
Loss on sale and disposal of assets | 173 | |
Stock-based compensation | 1,359 | 1,617 |
Changes in assets and liabilities: | ||
Accounts receivable | 169 | 65 |
Inventories | 33 | (404) |
Prepaid expenses and other current assets | (268) | 202 |
Accounts payable and accrued expenses | 885 | (194) |
Accrued payroll and related liabilities | 587 | (157) |
Deferred revenue and customer deposits | 5 | (83) |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 400 | (6,285) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Repayment of note receivable | 4 | |
Investment in patent and trademark assets | (154) | (143) |
Purchase of Klarity license | (50) | |
Purchases of property, plant and equipment | (550) | (322) |
NET CASH USED IN INVESTING ACTIVITIES | (700) | (515) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Payments on capital lease obligations | (337) | (305) |
Net proceeds from public equity offering | 2,940 | |
Payments on Park deferred acquisition obligation | (53) | (101) |
Principal payments on LSAF note payable | (601) | |
Net proceeds from ATM sales of common stock | 641 | |
Net proceeds from exercise of warrants and stock options, net of taxes remitted for RSU's | 179 | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 251 | 2,112 |
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (49) | (4,688) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period | 4,219 | 9,053 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period | 4,170 | 4,365 |
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD: | ||
Cash and cash equivalents | 3,970 | 4,165 |
Restricted cash | 200 | 200 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | 4,170 | 4,365 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for income taxes | 4 | |
Cash paid for interest | 1,006 | 901 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Issuance of stock options for consulting services included in accounts payable and accrued expenses | 108 | |
Eton Pharmaceuticals [Member] | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Gain on deconsolidation | (5,725) | |
Investment loss | 2,215 | 216 |
Surface Pharmaceuticals [Member] | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Gain on deconsolidation | (5,320) | |
Investment loss | $ 102 |
Description of Business and Bas
Description of Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Company and Background Imprimis Pharmaceuticals, Inc. (together with its subsidiaries, unless the context indicates or otherwise requires, the “Company” or “Imprimis”) is a pharmaceutical company specializing in the development, production and sale of innovative medications that offer unique competitive advantages and serve unmet needs in the marketplace. In addition to owning the nation’s leading ophthalmology pharmaceutical compounding business, ImprimisRx, the Company holds large equity positions in Eton Pharmaceuticals, Inc. (“Eton”), Surface Pharmaceuticals, Inc. (“Surface”) and Melt Pharmaceuticals, Inc. (“Melt”), companies originally founded as subsidiaries of Imprimis. The Company also owns royalty rights in certain 505(b)(2) drug candidates being developed by Eton, Surface and Melt. Basis of Presentation Imprimis has prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018 or for any other period. For further information, refer to the Company’s audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following represents an update for the three and six months ended June 30, 2018 to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Liquidity The Company has incurred significant operating losses and negative cash flows from operations since its inception. The Company incurred net losses of $991 and $3,522 for the six months ended June 30, 2018 and 2017, respectively, and had an accumulated deficit of $89,827 and $88,836 as of June 30, 2018 and December 31, 2017, respectively. In addition, while during the six months ended June 30, 2018 the Company generated cash of $400 from operating activities, there is no guarantee that trend will continue, historically, the Company has used cash in operating activities and during the six months ended June 30, 2017 the Company used $6,285 in operating activities. While there is no assurance, the Company believes its existing cash resources and restricted cash of $4,170 at June 30, 2018, along with proceeds from the Sales Agreement (see and defined in Note 15) 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 of the following which may include, but are not limited to: the sale of assets and/or businesses, obtaining financing through the issuance of equity, debt, or convertible securities; and working to increase revenue growth through 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. Basic and Diluted Net Income (Loss) per Common Share Basic net income (loss) per common share is computed by dividing income (loss) attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share is computed by dividing the income (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 income (loss) per share is computed using the weighted average number of shares of common stock outstanding during the period. Common stock equivalents (using the treasury stock or “if converted” method) from deferred acquisition obligations, convertible note payable, stock options, unvested restricted stock units (“RSUs”) and warrants were 10,245,280 and 9,404,755 at June 30, 2018 and 2017, respectively, and, except for the three months ended June 30, 2018 and 2017, are excluded from the calculation of diluted net (loss) per share for the periods presented, because the effect is anti-dilutive. Included in the basic and diluted net income (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 vested RSUs at June 30, 2018 and 2017 was 168,513 and 105,621, respectively. The following table shows the computation of basic net income (loss) per share of common stock for the three and six months ended June 30, 2018 and 2017: For the For the For the For the Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Numerator – net income (loss) $ 2,522 $ 1,484 $ (991 ) $ (3,522 ) Denominator – weighted average number of shares outstanding, basic 21,190,794 20,209,821 21,070,664 19,572,051 Net income (loss) per share, basic $ 0.12 $ 0.07 $ (0.05 ) $ (0.18 ) For the three months ended June 30, 2018 and 2017, the Company had net income. As a result, the Company computed diluted net income per share using the weighted-average number of common shares and dilutive common equivalent shares outstanding during those periods. Diluted common equivalent shares for the three months ended June 30, 2018 and 2017, consisted of the following: June 30, 2018 June 30, 2017 Shares Shares Diluted shares related to: Warrants 1,093,006 2,912,374 Restricted stock units 883,546 - Stock options 8,085 55,686 Dilutive common equivalent shares 1,984,637 2,968,060 The following table shows the computation of diluted net income (loss) per share of common stock for the three and six months ended June 30, 2018 and 2017: For the Three Months Ended For the Three Months Ended For the Six Months Ended For the Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Numerator – net income (loss) $ 2,522 $ 1,484 $ (991 ) $ (3,522 ) Denominator – weighted average number of shares outstanding, basic 21,190,794 20,209,821 21,070,664 19,572,051 Dilutive common equivalents 1,984,637 2,968,860 - - Number of shares used for diluted earnings per share computation 23,175,431 23,177,881 21,070,664 19,572,051 Net income (loss) per share, diluted $ 0.11 $ 0.06 $ (0.05 ) $ (0.18 ) Investment in Surface Pharmaceuticals, Inc. In April 2017, the Company formed Surface as a wholly owned subsidiary. In May and July 2018, Surface entered into and closed on definitive stock purchase agreements with an institutional investor for the purchase of Surface’s Series A Preferred Stock (the “Surface Series A Stock”) that resulted in total proceeds to Surface of approximately $21,000. At the time of the first closing in May 2018, the Company lost voting and ownership control of Surface and it ceased consolidating Surface’s financial statements, as of June 30, 2018, the Company owned approximately 35% of the issued and outstanding equity interests in Surface. The Surface Series A Stock (i) was issued at a purchase price of $3.30 per share; (ii) will vote together with the common stock and all other shares of stock of Surface having general voting power; (iii) will be entitled to the number of votes equal to the number of shares of preferred stock held; (iv) will hold liquidation preference over all other equity interests in Surface; and (v) will have mandatory conversion requirements into Surface common stock upon events including an underwritten initial public offering (“IPO”) of Surface common stock or similar transaction. At the time of deconsolidation, the Company recorded a gain of $5,320 and adjusted the carrying value in Surface to reflect the increased valuation of Surface and the Company’s new ownership percent in accordance with Accounting Standard Codification (“ASC”) 810-10-40-4(c), Consolidation The Company owns 3,500,000 common shares (which is approximately 30% of the equity interest as of the date of this Report, and calculated after the second closing of the sale Series A Preferred Stock in July 2018) of Surface and, uses the equity method of accounting for this investment, as management has determined that the Company has the ability to exercise significant influence over the operating and financial decisions of Surface. Under this method, the Company recognizes earnings and losses of Surface in its consolidated financial statements and adjusts the carrying amount of its investment in Surface accordingly. The Company’s share of earnings and losses are based on the shares of common stock and in-substance common stock of Surface held by the Company. Any intra-entity profits and losses are eliminated. During the three and six months ended June 30, 2018, the Company recorded equity in net loss of Surface of $102. As of June 30, 2018, the carrying value of the Company’s investment in Surface was $5,218. Reclassification Certain amounts in the 2017 condensed consolidated financial statements have been reclassified to conform to the classifications used to prepare the 2018 condensed consolidated financial statements. These reclassifications had no material impact on the Company’s financial position, results of operations, or cash flow as previously reported. Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers . The new standard became effective for the Company beginning January 1, 2018 and permits two methods of adoption: the full retrospective method, which requires the standard to be applied to each prior period presented, or the modified retrospective method, which requires the cumulative effect of adoption to be recognized as an adjustment to opening retained earnings in the period of adoption. The Company adopted the standard using the modified retrospective method. There was no effect for any adjustments to retained earnings upon adoption of the standard on January 1, 2018. Adoption of the new standard resulted in additional revenue-related disclosures in the footnotes to the Company’s condensed consolidated financial statements (see Note 3). In January 2017, the FASB issued ASU 2017-01, Business Combinations, Clarifying the Definition of a Business, In August 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Classification Restricted Cash In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation: Scope of Modification Accounting In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting Compensation-Stock Compensation Recently Issued Accounting Pronouncements In February 2016, the FASB issued new lease accounting guidance in ASU No. 2016-02, Leases In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | NOTE 3. REVENUE On January 1, 2018, the Company adopted ASU 2014-09, using the modified retrospective transition method. There was no effect for any adjustments to retained earnings upon adoption of the standard on January 1, 2018. The Company has two primary streams of revenue: (1) revenue recognized from our sale of products within our pharmacy services and (2) revenue recognized from intellectual property license and asset purchase agreements. Product Revenues from Pharmacy Services The Company sells prescription drugs directly through our pharmacy and outsourcing facility network. Revenue from our pharmacy services divisions includes: (i) the portion of the price the client pays directly to us, net of any volume-related or other discounts paid back to the client, (ii) the price paid to us by individuals, and (iii) customer copayments made directly to the pharmacy network. Sales taxes are not included in revenue. Following the core principle of ASU 2014-09, we have identified the following: 1. Identify the contract(s) with a customer: A contract exists with a customer at the time the prescription or order is received by the Company. 2. Identify the performance obligations in the contract: The order received contains the performance obligations to be met, in almost all cases the product the customer is wishing to receive. If we are unable to be meet the performance obligation the customer is notified. 3. Determine the transaction price: the transaction price is based on the product being sold to the customer, and any related customer discounts. These amounts are pre-determined and built into our order management software. 4. Allocate the transaction price to the performance obligations in the contract: The transaction price associated with the product(s) being ordered is allocated according to the pre-determined amounts. 5. Recognize revenue when (or as) the entity satisfies a performance obligation: At the time of shipment from the pharmacy or outsourcing facility the performance obligation has been met. The following revenue recognition policy has been established for the pharmacy services division: Revenues generated from prescription or office use drugs sold by our pharmacies and outsourcing facility are recognized when the prescription is shipped. At the time of shipment, the pharmacy services division has performed substantially all of its obligations under its client contracts and does not experience a significant level of returns or reshipments. 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. The Company records reductions to revenue for discounts at the time of the initial sale. Estimated returns and allowances and other adjustments are provided for in the same period during which the related sales are recorded and are based on actual returns history. The rate of returns is analyzed annually to determine historical returns experience. If the historical data we use to calculate these estimates do not properly reflect future returns, then a change in the allowance would be made in the period in which such a determination is made and revenues in that period could be materially affected. 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. Intellectual Property License Revenues The Company currently holds five intellectual property license and related agreements in which the Company has promised to grant a license or sale which provides a customer with right to access the Company’s intellectual property. 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, each of which revenue is recognized at the point of time the performance obligation is met. 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. Revenue disaggregated by revenue source for the three and six months ended June 30, 2018 and 2017, consists of the following: For the Three months ended For the Six months ended June 30, June 30, 2018 2017 2018 2017 Product sales, net $ 10,374 $ 6,849 $ 19,229 $ 12,938 License revenues 10 8 20 16 Total revenues $ 10,384 $ 6,857 $ 19,249 $ 12,954 Deferred revenue and customer deposits at June 30, 2018 and December 31, 2017, was $34 and $29, respectively. |
Investment in Eton Pharmaceutic
Investment in Eton Pharmaceuticals, Inc. and Agreements - Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Investment in Eton Pharmaceuticals, Inc. and Agreements - Related Party Transactions | NOTE 4. INVESTMENT IN ETON PHARMACEUTICALS, INC. AND AGREEMENTS - RELATED PARTY TRANSACTIONS In June 2017, the Company and its subsidiary, Eton, entered into and closed on definitive stock purchase agreements related to the sale of Eton’s Series A preferred stock (the “Series A Stock”) that resulted in the Company losing voting and ownership control of Eton and it at that time, ceased consolidating Eton’s financial statements. The Series A Stock has mandatory conversion requirements into common stock of Eton upon events, including an underwritten IPO of Eton common stock. Under the terms of its Series A Stock, Eton is required to complete an IPO by December 31, 2018, subject to exceptions and extension upon certain conditions. The Company owns 3,500,000 common shares (approximately 27% issued and outstanding equity interest as of the date of this Report) of Eton and, uses the equity method of accounting for this investment, as management has determined that the Company has the ability to exercise significant influence over the operating and financial decisions of Eton. Under this method, the Company recognizes earnings and losses of Eton in its consolidated financial statements and adjusts the carrying amount of its investment in Eton accordingly. The Company’s share of earnings and losses are based on the shares of common stock and in-substance common stock of Eton held by the Company. Any intra-entity profits and losses are eliminated. During the three and six months ended June 30, 2018, the Company recorded equity in net loss of Eton of $1,146 and $2,215, respectively. As of June 30, 2018, the carrying value of the Company’s investment in Eton was $1,295. The Company’s Chief Executive Officer, Mark L. Baum, is a director of Eton, and several employees of the Company (including Mr. Baum and the Company’s Chief Financial Officer, Andrew R. Boll) entered into consulting agreements and provided consulting services to Eton, these contracts concluded in April 2018. The unaudited condensed results of operations information of Eton is summarized below: For the Six months ended June 30, 2018 Revenues, net $ - Loss from operations 7,424 Net loss $ (7,424 ) The unaudited condensed balance sheet information of Eton is summarized below: At June 30, 2018 Current assets $ 9,162 Non current assets 484 Total assets 9,646 Total liabilities 2,046 Total preferred stock and stockholders’ equity 7,600 Total liabilities and stockholders’ equity $ 9,646 |
Investment in Surface Pharmaceu
Investment in Surface Pharmaceuticals Inc And Agreements - Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Investment in Surface Pharmaceuticals Inc And Agreements - Related Party Transactions | NOTE 5. INVESTMENT IN SURFACE PHARMACEUTICALS, INC. AND AGREEMENTS - RELATED PARTY TRANSACTIONS In 2017 and amended in April 2018, the Company entered into two asset purchase and license agreements (the “Surface License Agreements”) with its previously wholly owned subsidiary, Surface. Pursuant to the terms of the Surface License Agreements, the Company assigned and licensed to Surface certain intellectual property and related rights to develop, formulate, make, sell, and sub-license formulations of certain topical eye drop formulations that utilize a proprietary delivery vehicle and a proprietary doxycycline capsule (collectively, the “Surface Products”). Surface is required to make royalty payments to the Company of four to six percent (4%-6%) of net sales of the Surface Products while any patent rights remain outstanding. The certain of the Surface License Agreements were conditioned upon Surface receiving net proceeds of the sale of its equity securities of not less than $10,000, which occurred in May 2018. See also Note 2, under the subheading Investment in Surface Pharmaceuticals, Inc. In January 2018, the Company and Surface entered into an amended Management Services Agreement (the “MSA”), whereby the Company provided to Surface certain administrative services and support, including bookkeeping, web services and human resources related activities, and Surface paid the Company a monthly amount of $10. The MSA was terminated effective July 31, 2018. During the three and six months ended June 30, 2018, the Company incurred expenses that are reimbursable by Surface totaling $75, and no payments were made by Surface to the Company. As of June 30, 2018, the Company was due $223 from Surface for reimbursable expenses and amounts due under the MSA and included in prepaid expenses and other current assets on the accompanying condensed consolidated balance sheets. The Company owns 3,500,000 common shares (approximately 30% issued and outstanding equity interests as of the date of this Report) of Surface. The Company’s director, Richard L. Lindstrom and the Company’s Chief Executive Officer, Mark L. Baum, are directors of Surface. In addition, the Company’s Chief Financial Officer, Andrew R. Boll, was a director of Surface and resigned as a director of Surface concurrent with the sale of the Surface Series A Stock. Several employees and a director of the Company (including Mr. Baum, Dr. Lindstrom and Mr. Boll) entered into consulting agreements and provided consulting services to Surface. Surface is required to make royalty payments to Dr. Lindstrom of three percent (3%) of net sales of certain Surface products while certain patent rights remain outstanding. Dr. Lindstrom is also a principal of Flying L Partners, an affiliate of the funding investor. The unaudited condensed results of operations information of Surface is summarized below: For the Six months June 30, 2018 Revenues, net $ - Loss from operations 409 Net loss $ (409 ) The unaudited condensed balance sheet information of Surface is summarized below: At June 30, 2018 Current assets $ 14,691 Non current assets 37 Total assets 14,728 Total liabilities 312 Total stockholders’ equity 14,416 Total liabilities and stockholders’ equity $ 14,728 |
Restricted Cash
Restricted Cash | 6 Months Ended |
Jun. 30, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Restricted Cash | NOTE 6. RESTRICTED CASH The restricted cash at June 30, 2018 and December 31, 2017 consisted of funds held in a money market account. At June 30, 2018 and December 31, 2017, the restricted cash was recorded at amortized cost, which approximates fair value. At June 30, 2018 and December 31, 2017, the funds held in a money market account of $200 were classified as a current asset. The money market account funds are required as collateral as additional security for the Company’s New Jersey facility lease. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 7. INVENTORIES Inventories are comprised of finished compounded formulations, over-the-counter and prescription retail pharmacy products, commercial pharmaceutical products, related laboratory supplies and active pharmaceutical ingredients. The composition of inventories as of June 30, 2018 and December 31, 2017 was as follows: June 30, 2018 December 31, 2017 Raw materials $ 1,080 $ 956 Finished goods 1,136 1,293 Total inventories $ 2,216 $ 2,249 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 6 Months Ended |
Jun. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | NOTE 8. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following: June 30, 2018 December 31, 2017 Prepaid insurance $ 81 $ 164 Other prepaid expenses 553 426 Amounts due from Surface Pharmaceuticals 223 - Deposits and other current assets 125 124 Total prepaid expenses and other current assets $ 982 $ 714 |
Property, Plant and Equipment
Property, Plant and Equipment | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | NOTE 9. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following: June 30, 2018 December 31, 2017 Property, plant and equipment, net: Computer software and hardware $ 1,489 $ 1,239 Furniture and equipment 378 377 Lab and pharmacy equipment 2,641 2,545 Leasehold improvements 5,014 4,810 9,522 8,971 Accumulated depreciation and amortization (3,556 ) (2,756 ) $ 5,966 $ 6,215 For the three and six months ended June 30, 2018, depreciation related to the property, plant and equipment was $401 and $800, respectively. |
Note Receivable
Note Receivable | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Note Receivable | NOTE 10. NOTE RECEIVABLE The Company recorded a loss of $393, which was recorded net in other expense, during the three and six months ended June 30, 2018, related to the impairment and write-off of all amounts owed to it under its note receivable. The write-off is due to the Company’s estimate of collectability of the asset. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | NOTE 11. INTANGIBLE ASSETS AND GOODWILL The Company’s intangible assets at June 30, 2018 consisted of the following: Amortization periods (in years) Cost Accumulated amortization Impairment Net Carrying value Patents 17-19 years $ 498 $ (34 ) $ - $ 464 Licenses 20 years 50 - - 50 Trademarks Indefinite 293 - - 293 Customer relationships 3-15 years 2,998 (913 ) (15 ) 2,070 Trade name 5 years 16 (11 ) (1 ) 4 Non-competition clause 3-4 years 294 (274 ) (20 ) - State pharmacy licenses 25 years 45 (4 ) (28 ) 13 $ 4,194 $ (1,236 ) $ (64 ) $ 2,894 Amortization expense for intangible assets for the three and six months ended June 30, 2018 was as follows: For the For the For the For the Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Patents $ 6 $ 6 $ 13 $ 7 Licenses - - - - Customer relationships 50 63 100 127 Trade name 1 1 3 2 Non-competition clause - 22 1 44 State pharmacy licenses - - - 1 $ 57 $ 92 $ 117 $ 181 Estimated future amortization expense for the Company’s intangible assets at June 30, 2018 is as follows: Remainder of 2018 $ 113 2019 231 2020 229 2021 229 2022 229 Thereafter 1,863 $ 2,894 There have been no changes in the carrying value of the Company’s goodwill during the three and six months ended June 30, 2018. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 6 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | NOTE 12. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following: June 30, 2018 December 31,2017 Accounts payable $ 4,054 $ 3,241 Deferred rent 364 388 Accrued interest 245 256 Accrued exit fee for note payable 800 800 Total accounts payable and accrued expenses 5,463 4,685 Less: Current portion (4,663 ) (3,885 ) Non-current total accrued expenses $ 800 $ 800 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 13. DEBT At June 30, 2018, future minimum payments under the Company’s note payable were as follows: Amount Remainder of 2018 $ 1,227 2019 3,657 2020 3,440 2021 3,214 2022 11,200 Total minimum payments 22,738 Less: amount representing interest (6,738 ) Notes payable, gross 16,000 Less: unamortized discount (1,734 ) Less: current portion, net of unamortized discount (992 ) Note payable, net of current portion and unamortized debt discount $ 13,274 For the three and six months ended June 30, 2018, debt discount amortization related to note payable was $130 and $258, respectively. |
Capital Lease Obligation
Capital Lease Obligation | 6 Months Ended |
Jun. 30, 2018 | |
Leases [Abstract] | |
Capital Lease Obligation | NOTE 14. CAPITAL LEASE OBLIGATION At June 30, 2018, future payments under the Company’s capital leases were as follows: Amount Remainder of 2018 $ 387 2019 751 Total minimum lease payments 1,138 Less: amount representing interest payments (48 ) Present value of future minimum lease payment 1,090 Less: unamortized discount (53 ) 1,037 Less: current portion, net of unamortized discount (674 ) Capital lease obligation net of current portion and unamortized discount $ 363 For the three and six months ended June 30, 2018, debt discount amortization related to the capital lease obligation was $25 and $56, respectively. |
Stockholders' Equity and Stock-
Stockholders' Equity and Stock-based Compensation | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity and Stock-based Compensation | NOTE 15. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION Common Stock In January 2018, the Company issued 25,273 shares of its restricted common stock, with a fair value of $44, in lieu of a cash payment for accrued royalty expenses. RSUs granted in February 2015 to Andrew R. Boll, the Company’s Chief Financial Officer, vested, and in February 2018, 30,000 shares the Company’s common stock were issued to Mr. Boll. RSUs granted in February 2015 to John P. Saharek, the Company’s Chief Commercial Officer, vested, and in February 2018, 30,000 shares the Company’s common stock were issued to Mr. Saharek. In March 2018, the Company issued 35,427 shares of its restricted common stock, with a fair value of $64, in lieu of a cash payment for accrued royalty expenses. In November 2015, the Company entered into a Controlled Equity Offering SM During the six months ended June 30, 2018, 31,446 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. 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 “2007 Plan”). The 2007 Plan reached its term in September 2017, and we can no longer issue additional awards under this plan, however, options previously issued under the 2007 Plan will remain outstanding until they are exercised, reach their maturity or are otherwise cancelled/forfeited. On June 13, 2017, the Company’s Board of Directors and stockholders adopted the Company’s 2017 Incentive Stock and Awards Plan (the “2017 Plan” together with the 2007 Plan, the “Plans”). As of June 30, 2018, the 2017 Plan provides for the issuance of a maximum of 2,000,000 shares of the Company’s common stock. The purpose of the Plans are 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 Plans, the Company is authorized to issue incentive stock options intended to qualify under Section 422 of the Internal Revenue Code, non-qualified stock options, restricted stock units and restricted stock. The Plans are administered by the Compensation Committee of the Company’s Board of Directors. Stock Options A summary of stock option activity under the Plans for the six months ended June 30, 2018 is as follows: Number of shares Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life Aggregate Intrinsic Value Options outstanding - January 1, 2018 2,259,979 $ 5.51 Options granted 281,000 $ 1.75 Options exercised - $ - Options cancelled/forfeit (16,599 ) $ 4.16 Options outstanding - June 30, 2018 2,524,380 $ 5.10 6.04 $ 188 Options exercisable 1,162,736 $ 5.56 6.25 $ - Options vested and expected to vest 2,387,300 $ 5.11 6.04 $ 170 The aggregate intrinsic value in the table above represents the total pre-tax amount of the proceeds, net of exercise price, which would have been received by option holders if all option holders had exercised and immediately sold all options with an exercise price lower than the market price on June 30, 2018, based on the closing price of the Company’s common stock of $2.20 on that date. During the six months ended June 30, 2018, the Company granted stock options to certain employees and consultants. The stock options were granted with an exercise price equal to the current market price of the 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 of 10 years. Vesting terms for options granted to employees and consultants during the six months ended June 30, 2018 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; and 100% of the shares subject to the option vest on a quarterly basis in equal installments over three years. 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. Beginning on April 1, 2018, the Company began calculating expected volatility based solely on the historical volatilities of the common stock of the Company. In the past, the expected volatility was based on the historical volatilities of the common stock of the Company and comparable publicly traded companies, the Company previously utilized this methodology based on its estimate that it had 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 to employees and directors was determined in accordance with the “simplified approach,” as the Company has limited, relevant, historical data on employee exercises and post-vesting employment termination behavior. The expected risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The financial statement effect of forfeitures is estimated at the time of grant and revised, if necessary, if the actual effect differs from those estimates. For option grants to employees and directors, the Company assigns a forfeiture factor of 10%. These factors could change in the future, which would affect the determination of stock-based compensation expense in future periods. Utilizing these assumptions, the fair value is determined at the date of grant. The table below illustrates the fair value per share determined by the Black-Scholes-Merton option pricing model with the following assumptions used for valuing options granted to employees: 2018 Weighted-average fair value of options granted $ 1.39 Expected terms (in years) 5.8 - 6.1 Expected volatility 88% - 126 % Risk-free interest rate 2.05 - 3.00 % Dividend yield - The following table summarizes information about stock options outstanding and exercisable at June 30, 2018: 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 $1.47 - $2.60 857,125 8.26 $ 2.04 290,966 $ 2.30 $3.20 - $4.50 539,906 7.44 $ 3.97 357,398 $ 3.98 $5.49 - $6.36 101,536 5.07 $ 5.98 99,346 $ 5.99 $6.64 - $8.99 1,020,783 3.54 $ 7.98 409,996 $ 8.16 $42.80 5,030 2.12 $ 42.80 5,030 $ 42.80 $1.47 - $42.80 2,524,380 6.04 $ 5.10 1,162,736 $ 5.56 As of June 30, 2018, there was approximately $2,397 of total unrecognized compensation expense related to unvested stock options granted under the Plans. That expense is expected to be recognized over the weighted-average remaining vesting period of 2.4 years. The stock-based compensation expense for all stock options was $354 and $771 during the three and six months ended June 30, 2018, 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. During the three and six months ended June 30, 2018, the Company’s board of directors were granted 136,360 RSUs with a fair market value $300 which vests on a quarterly basis, over one year in equal installments A summary of the Company’s RSU activity and related information for the six months ended June 30, 2018 is as follows: Number of RSUs Weighted Average Grant Date Fair Value RSUs unvested - January 1, 2018 1,298,946 $ 2.42 RSUs granted 136,360 2.20 RSUs vested (91,446 ) 3.94 RSUs cancelled/forfeit - RSUs unvested at June 30, 2018 1,343,860 $ 2.16 As of June 30, 2018, the total unrecognized compensation expense related to unvested RSUs was approximately $1,050, which is expected to be recognized over a weighted-average period of 0.5 years, based on estimated and actual vesting schedules of the applicable RSUs. The stock-based compensation for RSUs during the three and six months ended June 30, 2018 was $254 and $577. Warrants From time to time, the Company issues warrants to purchase shares of the Company’s common stock to investors, lenders, underwriters, settlement agreements and other non-employees for services rendered or to be rendered in the future. 19 A summary of warrant activity for the six months ended June 30, 2018 is as follows: Number of Shares Subject to Warrants Outstanding Weighted Avg. Exercise Price Warrants outstanding - January 1, 2018 6,264,215 $ 1.91 Granted - Exercised - Expired (55,688 ) $ 5.25 Warrants outstanding and exercisable - June 30, 2018 6,208,527 $ 1.90 Weighted average remaining contractual life of the outstanding warrants in years - June 30, 2018 2.05 A list of the warrants outstanding as of June 30, 2018 is included in the following table: Warrants Outstanding Warrants Exercisable Warrants Exercise Warrants Expiration Warrant Series Issue Date Outstanding Price Exercisable Date Lender warrants 5/11/2015 125,000 $ 1.79 125,000 5/11/2025 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 $ 1.79 210,313 12/27/2019 PIPE Investor Warrants 12/27/2016 5,157,828 $ 1.79 5,157,828 12/27/2019 Lender warrants 7/19/2017 615,386 $ 2.08 615,386 7/19/2024 6,208,527 $ 1.90 6,208,527 Subsidiary Stock-Based Transactions During the six months ended June 30, 2018 the Company recognized $11 in stock-based compensation related to equity instruments granted by Surface to consultants, Imprimis employees and directors, including Mark Baum, CEO of the Company, Andrew Boll, CFO of the Company, and Richard Lindstrom, a director of the Company. The Company recorded stock-based compensation related to equity instruments granted to employees, directors and consultants as follows: For the For the For the For the Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Employees - selling, general and administrative $ 573 $ 617 $ 1,166 $ 1,452 Directors - selling, general and administrative 35 50 85 105 Consultants - selling, general and administrative - - 108 60 Total $ 608 $ 667 $ 1,359 $ 1,617 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 16. COMMITMENTS AND CONTINGENCIES Legal Dr. Sobol In December 2016, Louis L. Sobol, M.D. (“Sobol”) filed a lawsuit in the U.S. District Court for the Eastern District of Michigan, Southern Division against the Company, asserting claims on behalf of himself and an as-yet-uncertified class of consumers. The claims allege violations under the Telephone Consumer Protection Act, 47 U.S.C. § 227 via our alleged transmittal of advertisements to our clients via facsimile. In June 2018, Sobol filed a motion for class certification and in July 2018 the Company filed a response in opposition to the motion for class certification. The Company expects a ruling on the motion to certify the class to be determined in the fourth quarter of 2018. The Company believes the claims are frivolous and has previously and will continue to dispute all claims asserted against it and intends to vigorously defend these allegations. Nonetheless, the Company cannot predict the eventual outcome of this this litigation, it could result in substantial costs and a diversion of management’s resources and attention, which could harm the Company’s business and the value of its common stock. Allergan USA In September 2017, Allergan USA, Inc. (“Allergan”) filed a lawsuit in the U.S. District Court for the Central District of California against the Company, primarily claiming violations under the federal Lanham Act and other state laws. The case is currently in discovery, with a trial date set for April 2019. The Company believes the claims are frivolous and has previously and will continue to dispute all asserted claims against it and intends to vigorously defend these allegations. Nonetheless, the Company cannot predict the eventual outcome of this this litigation, it could result in substantial costs and a diversion of management’s resources and attention, which could harm the Company’s business and the value of its common stock. Spectrum In February 2018, the Company filed a complaint against Spectrum Laboratory Products, Inc., Spectrum Chemical Manufacturing Corp. and Spectrum Pharmacy Products, Inc. (collectively “Spectrum”) in the Los Angeles County Superior Court asserting claims for breach of contract, breach of implied covenant of good faith and fair dealing, violation of California Commercial Code Section 2101 and fraud. The claims stem from prior business dealings between the Company and Spectrum and allege false representation by Spectrum regarding their products, fraudulent labeling and misrepresentations of approved product usages. The complaint has been filed with the Court and in May 2018, Spectrum filed an answer with the Court. The matter is currently in the beginning stages of discovery. The Company intends to fully purse any and all legal remedies available to it against Spectrum. Novel Drug Solutions et al. In April 2018, Novel Drug Solutions, LLC and Eyecare Northwest, PA, (collectively “NDS”) filed a lawsuit against the Company in the U.S. District Court of Delaware asserting claims for breach of contract. The claims stem from an asset purchase agreement between the Company and NDS entered into in 2013. In July 2018, NDS filed a first amended complaint which added a claim for fraudulent inducement. In July 2018, the Company filed a motion to dismiss certain causes of action found in the complaint. A decision on the Company’s motion to dismiss has not yet been determined. The Company believes the claims are frivolous and has previously and will continue to dispute all claims asserted against it and intend to vigorously defend these allegations. Nonetheless, the Company cannot predict the eventual outcome of this this litigation, it could result in substantial costs and a diversion of management’s resources and attention, which could harm the Company’s business and the value of its common stock. California Board of Pharmacy In March 2018, the California Board of Pharmacy filed an accusation against our wholly owned subsidiary, Park Compounding, Inc. (“Park”) related to a compounded formulation the Company believes was legally dispensed and was, without the Company’s knowledge, inappropriately administered to a patient unknown to the Company, by the prescribing healthcare professional. The Company has filed its response to the accusation and has requested a formal hearing. The Company disputes all claims against it and intends to vigorously defend against the allegations. Nonetheless, the Company cannot predict the outcome of this matter, it could result in substantial costs, suspension or revocation of Park’s pharmacy license and a diversion of management’s resources and attention, which could harm the Company’s business and the value of its common stock. Product and Professional Liability Product and professional liability litigation represents an inherent risk to all firms in the pharmaceutical and pharmacy industry. The Company utilizes traditional third-party insurance policies with regard to its product and professional liability claims. Such insurance coverage at any given time reflects current market conditions, including cost and availability, when the policy is written. John Erick et al. In January 2018, John Erick and Deborah Ferrell, successors-in-interest and heirs of Jade Erick, (collectively “Erick”) filed a lawsuit in the San Diego County Superior against Kim Kelly, ND, MPH asserting claims related to death of Jade Erick. In April 2018, Erick filed an amendment to the lawsuit, naming the Company as a co-defendant. In May 2018, the Company filed demurrer challenging certain allegations and a motion to strike punitive damages, these motions will be heard by the Court on August 10, 2018. The Company believes the claims are frivolous and has previously and will continue to dispute all asserted claims against it and intends to vigorously defend these allegations. Nonetheless, the Company cannot predict the eventual outcome of this this litigation, it could result in substantial costs and a diversion of management’s resources and attention, which could harm the Company’s business and the value of its common stock. 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 condensed consolidated balance sheets. Klarity License Agreement – Related Party In April 2017 and as amended in April 2018, the Company entered into a license agreement (the “Klarity License Agreement”) with Richard L. Lindstrom, M.D., a member of its Board of Directors. Pursuant to the terms of the Klarity License Agreement, the Company licensed certain intellectual property and related rights from Dr. Lindstrom to develop, formulate, make, sell, and sub-license the topical ophthalmic solution Klarity used to protect and rehabilitate the ocular surface (the “Klarity Product”). Under the terms of the Klarity License Agreement, the Company is required to make royalty payments to Dr. Lindstrom ranging from 3% - 6% of net sales, dependent upon the final formulation of the Klarity Product sold. In addition, the Company is required to make certain milestone payments to Dr. Lindstrom including: (i) an initial payment of $50 upon execution of the Klarity License Agreement, (ii) a second payment of $50 following the first $50 in net sales of the Klarity Product; and (iii) a final payment of $50 following the first $100 in net sales of the Klarity Product. All of the above referenced milestone payments are payable at the Company’s election in cash or shares of the Company’s restricted common stock. Payments totaling $103 were made during the three and six months ended June 30, 2018, and $7 was due to Dr. Lindstrom at June 30, 2018. Sales and Marketing Agreements During 2017, the Company entered various sales and marketing agreements with certain organizations, to provide exclusive sales and marketing representation services to Imprimis in select geographies in the U.S., in connection with our ophthalmic compounded formulations. Under the terms of the sales and marketing agreements, the Company is required to make commission payments to equal to 10% - 14% of net sales for products above and beyond the initial existing sales amounts. In addition, the Company is required to make periodic milestone payments to certain organizations in shares of the Company’s restricted common stock if net sales in the assigned territory reach certain future levels by the end of their terms, as applicable. No stock-based payments were made and $343 and $558 were incurred under these agreements for commission expenses during the three and six months ended June 30, 2018, respectively. |
Segment Information and Concent
Segment Information and Concentrations | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information and Concentrations | NOTE 17. SEGMENT INFORMATION AND CONCENTRATIONS The Company operates its business on the basis of a single reportable segment, which is the business of developing proprietary drug therapies and providing such therapies through sterile and non-sterile pharmaceutical compounding services. The 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 U.S.; therefore, total revenues for 2018 and 2017 are attributed to the U.S. All long-lived assets at June 30, 2018 and December 31, 2017 are located in the U.S. The Company sells its compounded formulations to a large number of customers. Less than 10% of the Company’s total pharmacy sales were derived from a single customer for the three and six months ended June 30, 2018 and 2017. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 18. SUBSEQUENT EVENTS The Company has performed an evaluation of events occurring subsequent to June 30, 2018 through the filing date of this Quarterly Report. Based on its evaluation, no other events need to be disclosed. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Liquidity | Liquidity The Company has incurred significant operating losses and negative cash flows from operations since its inception. The Company incurred net losses of $991 and $3,522 for the six months ended June 30, 2018 and 2017, respectively, and had an accumulated deficit of $89,827 and $88,836 as of June 30, 2018 and December 31, 2017, respectively. In addition, while during the six months ended June 30, 2018 the Company generated cash of $400 from operating activities, there is no guarantee that trend will continue, historically, the Company has used cash in operating activities and during the six months ended June 30, 2017 the Company used $6,285 in operating activities. While there is no assurance, the Company believes its existing cash resources and restricted cash of $4,170 at June 30, 2018, along with proceeds from the Sales Agreement (see and defined in Note 15) 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 of the following which may include, but are not limited to: the sale of assets and/or businesses, obtaining financing through the issuance of equity, debt, or convertible securities; and working to increase revenue growth through 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. |
Basic and Diluted Net Income (Loss) Per Common Share | Basic and Diluted Net Income (Loss) per Common Share Basic net income (loss) per common share is computed by dividing income (loss) attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share is computed by dividing the income (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 income (loss) per share is computed using the weighted average number of shares of common stock outstanding during the period. Common stock equivalents (using the treasury stock or “if converted” method) from deferred acquisition obligations, convertible note payable, stock options, unvested restricted stock units (“RSUs”) and warrants were 10,245,280 and 9,404,755 at June 30, 2018 and 2017, respectively, and, except for the three months ended June 30, 2018 and 2017, are excluded from the calculation of diluted net (loss) per share for the periods presented, because the effect is anti-dilutive. Included in the basic and diluted net income (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 vested RSUs at June 30, 2018 and 2017 was 168,513 and 105,621, respectively. The following table shows the computation of basic net income (loss) per share of common stock for the three and six months ended June 30, 2018 and 2017: For the For the For the For the Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Numerator – net income (loss) $ 2,522 $ 1,484 $ (991 ) $ (3,522 ) Denominator – weighted average number of shares outstanding, basic 21,190,794 20,209,821 21,070,664 19,572,051 Net income (loss) per share, basic $ 0.12 $ 0.07 $ (0.05 ) $ (0.18 ) For the three months ended June 30, 2018 and 2017, the Company had net income. As a result, the Company computed diluted net income per share using the weighted-average number of common shares and dilutive common equivalent shares outstanding during those periods. Diluted common equivalent shares for the three months ended June 30, 2018 and 2017, consisted of the following: June 30, 2018 June 30, 2017 Shares Shares Diluted shares related to: Warrants 1,093,006 2,912,374 Restricted stock units 883,546 - Stock options 8,085 55,686 Dilutive common equivalent shares 1,984,637 2,968,060 The following table shows the computation of diluted net income (loss) per share of common stock for the three and six months ended June 30, 2018 and 2017: For the Three Months Ended For the Three Months Ended For the Six Months Ended For the Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Numerator – net income (loss) $ 2,522 $ 1,484 $ (991 ) $ (3,522 ) Denominator – weighted average number of shares outstanding, basic 21,190,794 20,209,821 21,070,664 19,572,051 Dilutive common equivalents 1,984,637 2,968,860 - - Number of shares used for diluted earnings per share computation 23,175,431 23,177,881 21,070,664 19,572,051 Net income (loss) per share, diluted $ 0.11 $ 0.06 $ (0.05 ) $ (0.18 ) |
Investment in Surface Pharmaceuticals, Inc. | Investment in Surface Pharmaceuticals, Inc. In April 2017, the Company formed Surface as a wholly owned subsidiary. In May and July 2018, Surface entered into and closed on definitive stock purchase agreements with an institutional investor for the purchase of Surface’s Series A Preferred Stock (the “Surface Series A Stock”) that resulted in total proceeds to Surface of approximately $21,000. At the time of the first closing in May 2018, the Company lost voting and ownership control of Surface and it ceased consolidating Surface’s financial statements, as of June 30, 2018, the Company owned approximately 35% of the issued and outstanding equity interests in Surface. The Surface Series A Stock (i) was issued at a purchase price of $3.30 per share; (ii) will vote together with the common stock and all other shares of stock of Surface having general voting power; (iii) will be entitled to the number of votes equal to the number of shares of preferred stock held; (iv) will hold liquidation preference over all other equity interests in Surface; and (v) will have mandatory conversion requirements into Surface common stock upon events including an underwritten initial public offering (“IPO”) of Surface common stock or similar transaction. At the time of deconsolidation, the Company recorded a gain of $5,320 and adjusted the carrying value in Surface to reflect the increased valuation of Surface and the Company’s new ownership percent in accordance with Accounting Standard Codification (“ASC”) 810-10-40-4(c), Consolidation The Company owns 3,500,000 common shares (which is approximately 30% of the equity interest as of the date of this Report, and calculated after the second closing of the sale Series A Preferred Stock in July 2018) of Surface and, uses the equity method of accounting for this investment, as management has determined that the Company has the ability to exercise significant influence over the operating and financial decisions of Surface. Under this method, the Company recognizes earnings and losses of Surface in its consolidated financial statements and adjusts the carrying amount of its investment in Surface accordingly. The Company’s share of earnings and losses are based on the shares of common stock and in-substance common stock of Surface held by the Company. Any intra-entity profits and losses are eliminated. During the three and six months ended June 30, 2018, the Company recorded equity in net loss of Surface of $102. As of June 30, 2018, the carrying value of the Company’s investment in Surface was $5,218. |
Reclassification | Reclassification Certain amounts in the 2017 condensed consolidated financial statements have been reclassified to conform to the classifications used to prepare the 2018 condensed consolidated financial statements. These reclassifications had no material impact on the Company’s financial position, results of operations, or cash flow as previously reported. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers . The new standard became effective for the Company beginning January 1, 2018 and permits two methods of adoption: the full retrospective method, which requires the standard to be applied to each prior period presented, or the modified retrospective method, which requires the cumulative effect of adoption to be recognized as an adjustment to opening retained earnings in the period of adoption. The Company adopted the standard using the modified retrospective method. There was no effect for any adjustments to retained earnings upon adoption of the standard on January 1, 2018. Adoption of the new standard resulted in additional revenue-related disclosures in the footnotes to the Company’s condensed consolidated financial statements (see Note 3). In January 2017, the FASB issued ASU 2017-01, Business Combinations, Clarifying the Definition of a Business, In August 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Classification Restricted Cash In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation: Scope of Modification Accounting In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting Compensation-Stock Compensation |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued new lease accounting guidance in ASU No. 2016-02, Leases In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Basic Earnings Per Common Share | The following table shows the computation of basic net income (loss) per share of common stock for the three and six months ended June 30, 2018 and 2017: For the For the For the For the Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Numerator – net income (loss) $ 2,522 $ 1,484 $ (991 ) $ (3,522 ) Denominator – weighted average number of shares outstanding, basic 21,190,794 20,209,821 21,070,664 19,572,051 Net income (loss) per share, basic $ 0.12 $ 0.07 $ (0.05 ) $ (0.18 ) |
Schedule of Diluted Common Equivalent Shares | Diluted common equivalent shares for the three months ended June 30, 2018 and 2017, consisted of the following: June 30, 2018 June 30, 2017 Shares Shares Diluted shares related to: Warrants 1,093,006 2,912,374 Restricted stock units 883,546 - Stock options 8,085 55,686 Dilutive common equivalent shares 1,984,637 2,968,060 |
Schedule of Diluted Earnings Per Common Share | The following table shows the computation of diluted net income (loss) per share of common stock for the three and six months ended June 30, 2018 and 2017: For the Three Months Ended For the Three Months Ended For the Six Months Ended For the Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Numerator – net income (loss) $ 2,522 $ 1,484 $ (991 ) $ (3,522 ) Denominator – weighted average number of shares outstanding, basic 21,190,794 20,209,821 21,070,664 19,572,051 Dilutive common equivalents 1,984,637 2,968,860 - - Number of shares used for diluted earnings per share computation 23,175,431 23,177,881 21,070,664 19,572,051 Net income (loss) per share, diluted $ 0.11 $ 0.06 $ (0.05 ) $ (0.18 ) |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenue | Revenue disaggregated by revenue source for the three and six months ended June 30, 2018 and 2017, consists of the following: For the Three months ended For the Six months ended June 30, June 30, 2018 2017 2018 2017 Product sales, net $ 10,374 $ 6,849 $ 19,229 $ 12,938 License revenues 10 8 20 16 Total revenues $ 10,384 $ 6,857 $ 19,249 $ 12,954 |
Investment in Eton Pharmaceut27
Investment in Eton Pharmaceuticals, Inc. and Agreements - Related Party Transactions (Tables) - Eton Pharmaceuticals [Member] | 6 Months Ended |
Jun. 30, 2018 | |
Schedule of Condensed Income Statement | The unaudited condensed results of operations information of Eton is summarized below: For the Six months ended June 30, 2018 Revenues, net $ - Loss from operations 7,424 Net loss $ (7,424 ) |
Schedule of Condensed Balance Sheet | The unaudited condensed balance sheet information of Eton is summarized below: At June 30, 2018 Current assets $ 9,162 Non current assets 484 Total assets 9,646 Total liabilities 2,046 Total preferred stock and stockholders’ equity 7,600 Total liabilities and stockholders’ equity $ 9,646 |
Investment in Surface Pharmac28
Investment in Surface Pharmaceuticals Inc And Agreements - Related Party Transactions (Tables) - Surface Pharmaceuticals [Member] | 6 Months Ended |
Jun. 30, 2018 | |
Schedule of Condensed Income Statement | The unaudited condensed results of operations information of Surface is summarized below: For the Six months June 30, 2018 Revenues, net $ - Loss from operations 409 Net loss $ (409 ) |
Schedule of Condensed Balance Sheet | The unaudited condensed balance sheet information of Surface is summarized below: At June 30, 2018 Current assets $ 14,691 Non current assets 37 Total assets 14,728 Total liabilities 312 Total stockholders’ equity 14,416 Total liabilities and stockholders’ equity $ 14,728 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | The composition of inventories as of June 30, 2018 and December 31, 2017 was as follows: June 30, 2018 December 31, 2017 Raw materials $ 1,080 $ 956 Finished goods 1,136 1,293 Total inventories $ 2,216 $ 2,249 |
Prepaid Expenses and Other Cu30
Prepaid Expenses and Other Current Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following: June 30, 2018 December 31, 2017 Prepaid insurance $ 81 $ 164 Other prepaid expenses 553 426 Amounts due from Surface Pharmaceuticals 223 - Deposits and other current assets 125 124 Total prepaid expenses and other current assets $ 982 $ 714 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment consisted of the following: June 30, 2018 December 31, 2017 Property, plant and equipment, net: Computer software and hardware $ 1,489 $ 1,239 Furniture and equipment 378 377 Lab and pharmacy equipment 2,641 2,545 Leasehold improvements 5,014 4,810 9,522 8,971 Accumulated depreciation and amortization (3,556 ) (2,756 ) $ 5,966 $ 6,215 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The Company’s intangible assets at June 30, 2018 consisted of the following: Amortization periods (in years) Cost Accumulated amortization Impairment Net Carrying value Patents 17-19 years $ 498 $ (34 ) $ - $ 464 Licenses 20 years 50 - - 50 Trademarks Indefinite 293 - - 293 Customer relationships 3-15 years 2,998 (913 ) (15 ) 2,070 Trade name 5 years 16 (11 ) (1 ) 4 Non-competition clause 3-4 years 294 (274 ) (20 ) - State pharmacy licenses 25 years 45 (4 ) (28 ) 13 $ 4,194 $ (1,236 ) $ (64 ) $ 2,894 |
Schedule of Amortization Expenses for Intangible Assets | Amortization expense for intangible assets for the three and six months ended June 30, 2018 was as follows: For the For the For the For the Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Patents $ 6 $ 6 $ 13 $ 7 Licenses - - - - Customer relationships 50 63 100 127 Trade name 1 1 3 2 Non-competition clause - 22 1 44 State pharmacy licenses - - - 1 $ 57 $ 92 $ 117 $ 181 |
Schedule of Estimated Future Amortization Expense | Estimated future amortization expense for the Company’s intangible assets at June 30, 2018 is as follows: Remainder of 2018 $ 113 2019 231 2020 229 2021 229 2022 229 Thereafter 1,863 $ 2,894 |
Accounts Payable and Accrued 33
Accounts Payable and Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consisted of the following: June 30, 2018 December 31,2017 Accounts payable $ 4,054 $ 3,241 Deferred rent 364 388 Accrued interest 245 256 Accrued exit fee for note payable 800 800 Total accounts payable and accrued expenses 5,463 4,685 Less: Current portion (4,663 ) (3,885 ) Non-current total accrued expenses $ 800 $ 800 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Summary of Future Minimum Payments | At June 30, 2018, future minimum payments under the Company’s note payable were as follows: Amount Remainder of 2018 $ 1,227 2019 3,657 2020 3,440 2021 3,214 2022 11,200 Total minimum payments 22,738 Less: amount representing interest (6,738 ) Notes payable, gross 16,000 Less: unamortized discount (1,734 ) Less: current portion, net of unamortized discount (992 ) Note payable, net of current portion and unamortized debt discount $ 13,274 |
Capital Lease Obligation (Table
Capital Lease Obligation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Leases [Abstract] | |
Schedule of Future Payment Under Capital Lease | At June 30, 2018, future payments under the Company’s capital leases were as follows: Amount Remainder of 2018 $ 387 2019 751 Total minimum lease payments 1,138 Less: amount representing interest payments (48 ) Present value of future minimum lease payment 1,090 Less: unamortized discount (53 ) 1,037 Less: current portion, net of unamortized discount (674 ) Capital lease obligation net of current portion and unamortized discount $ 363 |
Stockholders' Equity and Stoc36
Stockholders' Equity and Stock-based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Schedule of Stock Option Plan Activity | A summary of stock option activity under the Plans for the six months ended June 30, 2018 is as follows: Number of shares Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life Aggregate Intrinsic Value Options outstanding - January 1, 2018 2,259,979 $ 5.51 Options granted 281,000 $ 1.75 Options exercised - $ - Options cancelled/forfeit (16,599 ) $ 4.16 Options outstanding - June 30, 2018 2,524,380 $ 5.10 6.04 $ 188 Options exercisable 1,162,736 $ 5.56 6.25 $ - Options vested and expected to vest 2,387,300 $ 5.11 6.04 $ 170 |
Schedule of Fair Value Assumption | The table below illustrates the fair value per share determined by the Black-Scholes-Merton option pricing model with the following assumptions used for valuing options granted to employees: 2018 Weighted-average fair value of options granted $ 1.39 Expected terms (in years) 5.8 - 6.1 Expected volatility 88% - 126 % Risk-free interest rate 2.05 - 3.00 % Dividend yield - |
Schedule of Shares Outstanding and Exercisable | The following table summarizes information about stock options outstanding and exercisable at June 30, 2018: 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 $1.47 - $2.60 857,125 8.26 $ 2.04 290,966 $ 2.30 $3.20 - $4.50 539,906 7.44 $ 3.97 357,398 $ 3.98 $5.49 - $6.36 101,536 5.07 $ 5.98 99,346 $ 5.99 $6.64 - $8.99 1,020,783 3.54 $ 7.98 409,996 $ 8.16 $42.80 5,030 2.12 $ 42.80 5,030 $ 42.80 $1.47 - $42.80 2,524,380 6.04 $ 5.10 1,162,736 $ 5.56 |
Schedule of Restricted Stock Units Activity | A summary of the Company’s RSU activity and related information for the six months ended June 30, 2018 is as follows: Number of RSUs Weighted Average Grant Date Fair Value RSUs unvested - January 1, 2018 1,298,946 $ 2.42 RSUs granted 136,360 2.20 RSUs vested (91,446 ) 3.94 RSUs cancelled/forfeit - RSUs unvested at June 30, 2018 1,343,860 $ 2.16 |
Schedule of Warrants Activity | A summary of warrant activity for the six months ended June 30, 2018 is as follows: Number of Shares Subject to Warrants Outstanding Weighted Avg. Exercise Price Warrants outstanding - January 1, 2018 6,264,215 $ 1.91 Granted - Exercised - Expired (55,688 ) $ 5.25 Warrants outstanding and exercisable - June 30, 2018 6,208,527 $ 1.90 Weighted average remaining contractual life of the outstanding warrants in years - June 30, 2018 2.05 |
Schedule of Warrants Outstanding and Warrants Exercisable | A list of the warrants outstanding as of June 30, 2018 is included in the following table: Warrants Outstanding Warrants Exercisable Warrants Exercise Warrants Expiration Warrant Series Issue Date Outstanding Price Exercisable Date Lender warrants 5/11/2015 125,000 $ 1.79 125,000 5/11/2025 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 $ 1.79 210,313 12/27/2019 PIPE Investor Warrants 12/27/2016 5,157,828 $ 1.79 5,157,828 12/27/2019 Lender warrants 7/19/2017 615,386 $ 2.08 615,386 7/19/2024 6,208,527 $ 1.90 6,208,527 |
Schedule of Stock Based Compensation Granted to Employees Directors Consultants | The Company recorded stock-based compensation related to equity instruments granted to employees, directors and consultants as follows: For the For the For the For the Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Employees - selling, general and administrative $ 573 $ 617 $ 1,166 $ 1,452 Directors - selling, general and administrative 35 50 85 105 Consultants - selling, general and administrative - - 108 60 Total $ 608 $ 667 $ 1,359 $ 1,617 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Net loss | $ 2,522 | $ 1,484 | $ (991) | $ (3,522) | |
Accumulated deficit | 89,827 | 89,827 | $ 88,836 | ||
Net cash used in operating activities | 400 | $ (6,285) | |||
Cash resources and restricted investments | $ 4,170 | $ 4,170 | |||
Antidilutive securities | 23,175,431 | 23,177,881 | 21,070,664 | 19,572,051 | |
Right of use asset | $ 2,300 | $ 2,300 | |||
Lease liability | $ 2,800 | 2,800 | |||
Reclassification of restricted cash | 200 | $ 200 | |||
Surface Pharmaceuticals Inc [Member] | |||||
Net loss | $ (409) | ||||
Ownership percentage | 30.00% | 30.00% | |||
Gain on deconsolidation of Surface Pharmaceuticals | $ 5,320 | ||||
Number of shares owned | 3,500,000 | 3,500,000 | |||
Investment losses | $ 102 | $ 102 | |||
Investment in surface | $ 5,218 | $ 5,218 | |||
Surface Series A Stock [Member] | Surface Pharmaceuticals Inc [Member] | |||||
Ownership percentage | 35.00% | 35.00% | |||
Share purchase price | $ 3.30 | $ 3.30 | |||
Surface Series A Stock [Member] | May and July 2018 [Member] | |||||
Proceeds from issuance of preferred stock | $ 21,000 | ||||
Restricted Stock Units [Member] | |||||
Number of shares vested during the period | 168,513 | 105,621 | |||
Deferred Acquisition Obligations, Convertible Note Payable, Stock Options, Unvested RSUs and Warrants [Member] | |||||
Antidilutive securities | 10,245,280 | 9,404,755 |
Summary of Significant Accoun38
Summary of Significant Accounting Policies - Schedule of Basic Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Accounting Policies [Abstract] | ||||
Numerator - net income (loss) | $ 2,522 | $ 1,484 | $ (991) | $ (3,522) |
Denominator - weighted average number of shares outstanding, basic | 21,190,794 | 20,209,821 | 21,070,664 | 19,572,051 |
Net income (loss) per share, basic | $ 0.12 | $ 0.07 | $ (0.05) | $ (0.18) |
Summary of Significant Accoun39
Summary of Significant Accounting Policies - Schedule of Diluted Common Equivalent Shares (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Dilutive common equivalent shares | 1,984,637 | 2,968,860 | ||
Warrant [Member] | ||||
Dilutive common equivalent shares | 1,093,006 | 2,912,374 | ||
Restricted Stock Units [Member] | ||||
Dilutive common equivalent shares | 883,546 | |||
Stock Options [Member] | ||||
Dilutive common equivalent shares | 8,085 | 55,686 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies - Schedule of Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Accounting Policies [Abstract] | ||||
Numerator - net income (loss) | $ 2,522 | $ 1,484 | $ (991) | $ (3,522) |
Denominator - weighted average number of shares outstanding, basic | 21,190,794 | 20,209,821 | 21,070,664 | 19,572,051 |
Dilutive common equivalents | 1,984,637 | 2,968,860 | ||
Number of shares used for diluted earnings per share computation | 23,175,431 | 23,177,881 | 21,070,664 | 19,572,051 |
Net income (loss) per share, diluted | $ 0.11 | $ 0.06 | $ (0.05) | $ (0.18) |
Revenue (Details Narrative)
Revenue (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Revenue from Contract with Customer [Abstract] | ||
Deferred revenue and customer deposits | $ 34 | $ 29 |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Total Revenues | $ 10,384 | $ 6,857 | $ 19,249 | $ 12,954 |
Product Sales, Net [Member] | ||||
Total Revenues | 10,374 | 6,849 | 19,229 | 12,938 |
License Revenues [Member] | ||||
Total Revenues | $ 10 | $ 8 | $ 20 | $ 16 |
Investment in Eton Pharmaceut43
Investment in Eton Pharmaceuticals, Inc. and Agreements - Related Party Transactions (Details Narrative) - Eton Pharmaceuticals, Inc. [Member] $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018USD ($)shares | Jun. 30, 2018USD ($)shares | |
Number of shares owned | shares | 3,500,000 | 3,500,000 |
Ownership percentage | 27.00% | 27.00% |
Investment net loss | $ 1,146 | $ 2,215 |
Carrying value of investment | $ 1,295 | $ 1,295 |
Investment in Eton Pharmaceut44
Investment in Eton Pharmaceuticals, Inc. and Agreements - Related Party Transactions - Schedule of Condensed Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues, net | $ 10,384 | $ 6,857 | $ 19,249 | $ 12,954 |
Loss from operations | (624) | (3,017) | (2,405) | (7,248) |
Net loss | $ 2,522 | $ 1,484 | (991) | $ (3,522) |
Eton Pharmaceuticals, Inc. [Member] | ||||
Revenues, net | ||||
Loss from operations | 7,424 | |||
Net loss | $ (7,424) |
Investment in Eton Pharmaceut45
Investment in Eton Pharmaceuticals, Inc. and Agreements - Related Party Transactions - Schedule of Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets | $ 8,728 | $ 8,806 |
Total assets | 26,328 | 23,917 |
Total liabilities | 22,596 | 21,302 |
Total liabilities and stockholders' equity | 26,328 | $ 23,917 |
Eton Pharmaceuticals, Inc. [Member] | ||
Current assets | 9,162 | |
Non current assets | 484 | |
Total assets | 9,646 | |
Total liabilities | 2,046 | |
Total preferred stock and stockholders' equity | 7,600 | |
Total liabilities and stockholders' equity | $ 9,646 |
Investment in Surface Pharmac46
Investment in Surface Pharmaceuticals, Inc. and Agreements - Related Party Transactions (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | |
Jan. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |
Reimbursable expenses | $ 223 | ||
Surface Pharmaceuticals Inc [Member] | |||
Expenses incurred | $ 75 | ||
Number of shares owned | 3,500,000 | ||
Ownership percentage | 30.00% | ||
Surface Pharmaceuticals Inc [Member] | Dr. Lindstrom [Member] | |||
Royalty payments, percentage | 3.00% | ||
Surface License Agreements [Member] | |||
Royalty payment description | Surface is required to make royalty payments to the Company of four to six percent (4%-6%) of net sales of the Surface Products while any patent rights remain outstanding. | ||
Proceeds from the sale of equity securities | $ 10,000 | ||
Management Services Agreement [Member] | Surface Pharmaceuticals Inc [Member] | |||
Administrative expenses | $ 10 | ||
Reimbursable expenses | $ 223 |
Investment in Surface Pharmac47
Investment in Surface Pharmaceuticals, Inc. and Agreements - Related Party Transactions - Schedule of Condensed Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues, net | $ 10,384 | $ 6,857 | $ 19,249 | $ 12,954 |
Loss from operations | (624) | (3,017) | (2,405) | (7,248) |
Net loss | $ 2,522 | $ 1,484 | (991) | $ (3,522) |
Surface Pharmaceuticals Inc [Member] | ||||
Revenues, net | ||||
Loss from operations | 409 | |||
Net loss | $ (409) |
Investment in Surface Pharmac48
Investment in Surface Pharmaceuticals, Inc. and Agreements - Related Party Transactions - Schedule of Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets | $ 8,728 | $ 8,806 |
Total assets | 26,328 | 23,917 |
Total liabilities | 22,596 | 21,302 |
Total stockholders' equity | 3,722 | 2,615 |
Total liabilities and stockholders' equity | 26,328 | $ 23,917 |
Surface Pharmaceuticals Inc [Member] | ||
Current assets | 14,691 | |
Non current assets | 37 | |
Total assets | 14,728 | |
Total liabilities | 312 | |
Total stockholders' equity | 14,416 | |
Total liabilities and stockholders' equity | $ 14,728 |
Restricted Cash (Details Narrat
Restricted Cash (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Cash and Cash Equivalents [Abstract] | ||
Money market account | $ 200 | $ 200 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,080 | $ 956 |
Finished goods | 1,136 | 1,293 |
Total inventories | $ 2,216 | $ 2,249 |
Prepaid Expenses and Other Cu51
Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid insurance | $ 81 | $ 164 |
Other prepaid expenses | 553 | 426 |
Amounts due from Surface Pharmaceuticals | 223 | |
Deposits and other current assets | 125 | 124 |
Total prepaid expenses and other current assets | $ 982 | $ 714 |
Property, Plant and Equipment52
Property, Plant and Equipment (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation of property, plant and equipment | $ 401 | $ 800 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Abstract] | ||
Computer software and hardware | $ 1,489 | $ 1,239 |
Furniture and equipment | 378 | 377 |
Lab and pharmacy equipment | 2,641 | 2,545 |
Leasehold improvements | 5,014 | 4,810 |
Property, plant and equipment, gross | 9,522 | 8,971 |
Accumulated depreciation and amortization | (3,556) | (2,756) |
Property, plant and equipment, Net | $ 5,966 | $ 6,215 |
Note Receivable (Details Narrat
Note Receivable (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |||
Loss on write down of assets and note receivable | $ (393) | $ (393) | $ (111) |
Intangible Assets and Goodwil55
Intangible Assets and Goodwill - Schedule of Intangible Assets (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Cost | $ 4,194 |
Accumulated amortization | (1,236) |
Impairment | (64) |
Net Carrying value | 2,894 |
Patents [Member] | |
Cost | 498 |
Accumulated amortization | (34) |
Impairment | |
Net Carrying value | $ 464 |
Patents [Member] | Minimum [Member] | |
Amortization periods (in years) | 17 years |
Patents [Member] | Maximum [Member] | |
Amortization periods (in years) | 19 years |
Licenses [Member] | |
Amortization periods (in years) | 20 years |
Cost | $ 50 |
Accumulated amortization | |
Impairment | |
Net Carrying value | $ 50 |
Trademarks [Member] | |
Amortization periods description | Indefinite |
Cost | $ 293 |
Accumulated amortization | |
Impairment | |
Net Carrying value | 293 |
Customer Relationships [Member] | |
Cost | 2,998 |
Accumulated amortization | (913) |
Impairment | (15) |
Net Carrying value | $ 2,070 |
Customer Relationships [Member] | Minimum [Member] | |
Amortization periods (in years) | 3 years |
Customer Relationships [Member] | Maximum [Member] | |
Amortization periods (in years) | 15 years |
Trade Name [Member] | |
Amortization periods (in years) | 5 years |
Cost | $ 16 |
Accumulated amortization | (11) |
Impairment | (1) |
Net Carrying value | 4 |
Non-Competition Clause [Member] | |
Cost | 294 |
Accumulated amortization | (274) |
Impairment | (20) |
Net Carrying value | |
Non-Competition Clause [Member] | Minimum [Member] | |
Amortization periods (in years) | 3 years |
Non-Competition Clause [Member] | Maximum [Member] | |
Amortization periods (in years) | 4 years |
State Pharmacy Licenses [Member] | |
Amortization periods (in years) | 25 years |
State Pharmacy Licenses [Member] | |
Cost | $ 45 |
Accumulated amortization | (4) |
Impairment | (28) |
Net Carrying value | $ 13 |
Intangible Assets and Goodwil56
Intangible Assets and Goodwill - Schedule of Amortization Expenses for Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Amortization of intangible assets | $ 57 | $ 92 | $ 117 | $ 181 |
Patents [Member] | ||||
Amortization of intangible assets | 6 | 6 | 13 | 7 |
Licenses [Member] | ||||
Amortization of intangible assets | ||||
Customer Relationships [Member] | ||||
Amortization of intangible assets | 50 | 63 | 100 | 127 |
Trade Name [Member] | ||||
Amortization of intangible assets | 1 | 1 | 3 | 2 |
Non-Competition Clause [Member] | ||||
Amortization of intangible assets | 22 | 1 | 44 | |
State Pharmacy Licenses [Member] | ||||
Amortization of intangible assets | $ 1 |
Intangible Assets and Goodwil57
Intangible Assets and Goodwill - Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2018 | $ 113 | |
2,019 | 231 | |
2,020 | 229 | |
2,021 | 229 | |
2,022 | 229 | |
Thereafter | 1,863 | |
Intangible assets | $ 2,894 | $ 2,860 |
Accounts Payable and Accrued 58
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 4,054 | $ 3,241 |
Deferred rent | 364 | 388 |
Accrued interest | 245 | 256 |
Accrued exit fee for note payable | 800 | 800 |
Total accounts payable and accrued expenses | 5,463 | 4,685 |
Less: Current portion | (4,663) | (3,885) |
Non-current total accrued expenses | $ 800 | $ 800 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Debt Disclosure [Abstract] | ||
Amortization of debt discount | $ 130 | $ 258 |
Debt - Summary of Future Minimu
Debt - Summary of Future Minimum Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Less: unamortized discount | $ (53) | |
Less: current portion, net of unamortized discount | (992) | |
Note payable, net of current portion and unamortized debt discount | 13,274 | $ 14,008 |
Note Payable [Member] | ||
Remainder of 2018 | 1,227 | |
2,019 | 3,657 | |
2,020 | 3,440 | |
2,021 | 3,214 | |
2,022 | 11,200 | |
Total minimum payments | 22,738 | |
Less: amount representing interest | (6,738) | |
Notes payable, gross | 16,000 | |
Less: unamortized discount | (1,734) | |
Less: current portion, net of unamortized discount | (992) | |
Note payable, net of current portion and unamortized debt discount | $ 13,274 |
Capital Lease Obligation (Detai
Capital Lease Obligation (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Debt discount amortization | $ 130 | $ 258 |
Capital Lease Obligations [Member] | ||
Debt discount amortization | $ 25 | $ 56 |
Capital Lease Obligation - Sche
Capital Lease Obligation - Schedule of Future Payment Under Capital Lease (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Leases [Abstract] | ||
Remainder of 2018 | $ 387 | |
2,019 | 751 | |
Total minimum lease payments | 1,138 | |
Less: amount representing interest payments | (48) | |
Present value of future minimum lease payment | 1,090 | |
Less: unamortized discount | (53) | |
Present value of future net minimum lease payments | 1,037 | |
Less: current portion, net of unamortized discount | (674) | $ (598) |
Capital lease obligation, net of current portion and unamortized discount | $ 363 | $ 720 |
Stockholders' Equity and Stoc63
Stockholders' Equity and Stock-based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Feb. 28, 2018 | Jan. 31, 2018 | Nov. 30, 2015 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2017 |
Shares issued of restricted common stock, shares | 25,273 | 35,427 | |||||
Accrued royalty expense | $ 44 | $ 64 | |||||
Stock-based compensation | $ 1,359 | $ 1,617 | |||||
2007 Incentive Stock and Awards Plan [Member] | |||||||
Maximum number of common stock issuance under the plan | 2,000,000 | 2,000,000 | 2,000,000 | ||||
Consultants Employees and Directors [Member] | |||||||
Stock-based compensation | $ 11 | ||||||
Restricted Stock Units [Member] | |||||||
Shares issued of restricted common stock, shares | 31,446 | ||||||
Restricted Stock Units [Member] | Andrew R. Boll [Member] | |||||||
Shares issued of restricted common stock, shares | 30,000 | ||||||
Restricted Stock Units [Member] | John P. Saharek [Member] | |||||||
Shares issued of restricted common stock, shares | 30,000 | ||||||
Restricted Stock Units [Member] | Board of Directors [Member] | |||||||
Shares issued of restricted common stock, shares | 136,360 | 136,360 | |||||
Fair market value of restricted shares | $ 300 | $ 300 | |||||
Stock Option Plan [Member] | |||||||
Closing price of common stock price per share | $ 2.20 | $ 2.20 | |||||
Stock options granted with exercise price contractual terms | 6 years 2 months 30 days | ||||||
Forfeiture factor, percentage | 10.00% | ||||||
Unrecognized compensation expense related to unvested stock options granted under the plan | $ 2,397 | $ 2,397 | |||||
Expense expected to recognize over the weighted-average remaining vesting period | 2 years 4 months 24 days | ||||||
Stock-based compensation | 354 | $ 771 | |||||
Stock Option Plan [Member] | Employees and Consultants [Member] | |||||||
Stock options granted with exercise price contractual terms | 10 years | ||||||
Stock options granted vesting terms | Vesting terms for options granted to employees and consultants during the six months ended June 30, 2018 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; and 100% of the shares subject to the option vest on a quarterly basis in equal installments over three years. 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. | ||||||
Unvested RSUs [Member] | |||||||
Unrecognized compensation expense related to unvested stock options granted under the plan | 1,050 | $ 1,050 | |||||
Expense expected to recognize over the weighted-average remaining vesting period | 6 months | ||||||
Stock-based compensation | $ 254 | $ 577 | |||||
Sales Agreement [Member] | |||||||
Number of shares sold under the agreement | 305,619 | ||||||
Proceeds from sale of common stock approximately | $ 641 | ||||||
Sales commission and offering expenses | 20 | ||||||
Available future sales | $ 7,378 | ||||||
Cantor Fitzgerald & Co [Member] | Sales Agreement [Member] | |||||||
Cash commission, percentage | 3.00% |
Stockholders' Equity and Stoc64
Stockholders' Equity and Stock-based Compensation - Schedule of Stock Option Plan Activity (Details) $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($)$ / sharesshares | |
Weighted Avg. Exercise Price, Exercisable Ending Balance | $ 5.10 |
Stock Option Plan [Member] | |
Number of shares, Outstanding, Beginning balance | shares | 2,259,979 |
Number of shares, Options granted | shares | 281,000 |
Number of shares, Options exercised | shares | |
Number of shares, Options cancelled/forfeit | shares | (16,599) |
Number of shares, Outstanding, Ending balance | shares | 2,524,380 |
Number of shares, Options exercisable | shares | 1,162,736 |
Number of shares, Options vested and expected to vest | shares | 2,387,300 |
Weighted Avg. Exercise Price, Outstanding, Beginning balance | $ 5.51 |
Weighted Avg. Exercise Price, Options granted | 1.75 |
Weighted Avg. Exercise Price, Options exercised | |
Weighted Avg. Exercise Price, Options cancelled/forfeit | 4.16 |
Weighted Avg. Exercise Price, Outstanding, Ending balance | 5.10 |
Weighted Avg. Exercise Price, Exercisable Ending Balance | 5.56 |
Weighted Avg. Exercise Price, Vested and expected to vest | $ 5.11 |
Weighted Avg. Remaining Contractual Life, Options outstanding | 6 years 15 days |
Weighted Avg. Remaining Contractual Life, Options exercisable | 6 years 2 months 30 days |
Weighted Avg. Remaining Contractual Life, Options vested and expected to vest | 6 years 15 days |
Aggregate Intrinsic Value, Options outstanding | $ | $ 188 |
Aggregate Intrinsic Value, Options exercisable | $ | |
Aggregate Intrinsic Value, Options vested and expected to vest | $ | $ 170 |
Stockholders' Equity and Stoc65
Stockholders' Equity and Stock-based Compensation - Schedule of Fair Value Assumption (Details) - Options Granted to Employees [Member] | 6 Months Ended |
Jun. 30, 2018$ / shares | |
Weighted-average fair value of options granted | $ 1.39 |
Expected volatility, minimum | 88.00% |
Expected volatility, maximum | 126.00% |
Risk-free interest rate, minimum | 2.05% |
Risk-free interest rate, maximum | 3.00% |
Dividend yield | |
Minimum [Member] | |
Expected terms (in years) | 5 years 9 months 18 days |
Maximum [Member] | |
Expected terms (in years) | 6 years 1 month 6 days |
Stockholders' Equity and Stoc66
Stockholders' Equity and Stock-based Compensation - Schedule of Shares Outstanding and Exercisable (Details) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Range of Exercise Prices, minimum | $ 1.47 |
Range of Exercise Prices, maximum | $ 42.80 |
Number of Options Outstanding | shares | 2,524,380 |
Weighted Average Remaining Contractual Life in Years | 6 years 15 days |
Weighted Average Exercise Price | $ 5.10 |
Number Exercisable | shares | 1,162,736 |
Weighted Average Exercisable Exercise Price | $ 5.56 |
Range One [Member] | |
Range of Exercise Prices, minimum | 1.47 |
Range of Exercise Prices, maximum | $ 2.60 |
Number of Options Outstanding | shares | 857,125 |
Weighted Average Remaining Contractual Life in Years | 8 years 3 months 4 days |
Weighted Average Exercise Price | $ 2.04 |
Number Exercisable | shares | 290,966 |
Weighted Average Exercisable Exercise Price | $ 2.30 |
Range Two [Member] | |
Range of Exercise Prices, minimum | 3.20 |
Range of Exercise Prices, maximum | $ 4.50 |
Number of Options Outstanding | shares | 539,906 |
Weighted Average Remaining Contractual Life in Years | 7 years 5 months 9 days |
Weighted Average Exercise Price | $ 3.97 |
Number Exercisable | shares | 357,398 |
Weighted Average Exercisable Exercise Price | $ 3.98 |
Range Three [Member] | |
Range of Exercise Prices, minimum | 5.49 |
Range of Exercise Prices, maximum | $ 6.36 |
Number of Options Outstanding | shares | 101,536 |
Weighted Average Remaining Contractual Life in Years | 5 years 26 days |
Weighted Average Exercise Price | $ 5.98 |
Number Exercisable | shares | 99,346 |
Weighted Average Exercisable Exercise Price | $ 5.99 |
Range Four [Member] | |
Range of Exercise Prices, minimum | 6.64 |
Range of Exercise Prices, maximum | $ 8.99 |
Number of Options Outstanding | shares | 1,020,783 |
Weighted Average Remaining Contractual Life in Years | 3 years 6 months 14 days |
Weighted Average Exercise Price | $ 7.98 |
Number Exercisable | shares | 409,996 |
Weighted Average Exercisable Exercise Price | $ 8.16 |
Range Five [Member] | |
Range of Exercise Prices, minimum | $ 42.80 |
Number of Options Outstanding | shares | 5,030 |
Weighted Average Remaining Contractual Life in Years | 2 years 1 month 13 days |
Weighted Average Exercise Price | $ 42.80 |
Number Exercisable | shares | 5,030 |
Weighted Average Exercisable Exercise Price | $ 42.80 |
Stockholders' Equity and Stoc67
Stockholders' Equity and Stock-based Compensation - Schedule of Restricted Stock Units Activity (Details) - Restricted Stock Units [Member] | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Number of RSUs unvested, Outstanding, Beginning balance | 1,298,946 |
Number of RSUs granted | 136,360 |
Number of RSUs vested | (91,446) |
Number RSUs cancelled/forfeit | |
Number of RSUs unvested, Outstanding, Ending balance | 1,343,860 |
Weighted Average Grant Date Fair Value, Beginning balance | $ / shares | $ 2.42 |
Weighted Average Grant Date Fair Value, RSUs granted | $ / shares | 2.20 |
Weighted Average Grant Date Fair Value, RSUs vested | $ / shares | 3.94 |
Weighted Average Grant Date Fair Value, Ending balance | $ / shares | $ 2.16 |
Stockholders' Equity and Stoc68
Stockholders' Equity and Stock-based Compensation - Schedule of Warrants Activity (Details) - Warrant [Member] | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Number of shares, outstanding, beginning balance | 6,264,215 |
Number of shares subject to warrants outstanding, granted | |
Number of shares subject to warrants outstanding, exercised | |
Number of shares subject to warrants outstanding, expired | (55,688) |
Number of shares, outstanding and exercisable , ending balance | 6,208,527 |
Weighted average remaining contractual life of the outstanding warrants in years | 2 years 18 days |
Weighted avg. Exercise price, outstanding, beginning balance | $ / shares | $ 1.91 |
Weighted avg. Exercise price, expired | $ / shares | 5.25 |
Weighted avg. Exercise price, outstanding and exercisable, ending balance | $ / shares | $ 1.90 |
Stockholders' Equity and Stoc69
Stockholders' Equity and Stock-based Compensation - Schedule of Warrants Outstanding and Warrants Exercisable (Details) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Warrant [Member] | |
Warrants Outstanding | 6,208,527 |
Exercise Price | $ / shares | $ 1.90 |
Warrants Exercisable | 6,208,527 |
Lender Warrants [Member] | |
Issue Date | May 11, 2015 |
Warrants Outstanding | 125,000 |
Exercise Price | $ / shares | $ 1.79 |
Warrants Exercisable | 125,000 |
Expiration Date | May 11, 2025 |
Settlement Warrants [Member] | |
Issue Date | Aug. 16, 2016 |
Warrants Outstanding | 40,000 |
Exercise Price | $ / shares | $ 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 | $ / shares | $ 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 | $ / shares | $ 1.79 |
Warrants Exercisable | 210,313 |
Expiration Date | Dec. 27, 2019 |
PIPE Investor Warrants [Member] | |
Issue Date | Dec. 27, 2016 |
Warrants Outstanding | 5,157,828 |
Exercise Price | $ / shares | $ 1.79 |
Warrants Exercisable | 5,157,828 |
Expiration Date | Dec. 27, 2019 |
Lender Warrants One [Member] | |
Issue Date | Jul. 19, 2017 |
Warrants Outstanding | 615,386 |
Exercise Price | $ / shares | $ 2.08 |
Warrants Exercisable | 615,386 |
Expiration Date | Jul. 19, 2024 |
Stockholders' Equity and Stoc70
Stockholders' Equity and Stock-based Compensation - Schedule of Stock Based Compensation Granted to Employees Directors Consultants (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Stock based compensation related to equity instruments granted to related parties | $ 608 | $ 667 | $ 1,359 | $ 1,617 |
Employees [Member] | Selling, General and Administrative [Member] | ||||
Stock based compensation related to equity instruments granted to related parties | 573 | 617 | 1,166 | 1,452 |
Directors [Member] | Selling, General and Administrative [Member] | ||||
Stock based compensation related to equity instruments granted to related parties | 35 | 50 | 85 | 105 |
Consultants [Member] | Selling, General and Administrative [Member] | ||||
Stock based compensation related to equity instruments granted to related parties | $ 108 | $ 60 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2018 | Apr. 30, 2017 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2018 | |
Royalty payments | $ 44 | $ 64 | |||
Klarity License Agreement [Member] | |||||
Royalty payments | $ 103 | $ 103 | |||
Klarity License Agreement [Member] | Richard L. Lindstrom, M.D [Member] | |||||
Royalty payment description | Under the terms of the Klarity License Agreement, the Company is required to make royalty payments to Dr. Lindstrom ranging from 3% - 6% of net sales, dependent upon the final formulation of the Klarity Product sold. | ||||
Royalty payments | 7 | ||||
Klarity License Agreement [Member] | Richard L. Lindstrom, M.D [Member] | Initial Payment [Member] | |||||
Royalty payments | $ 50 | ||||
Klarity License Agreement [Member] | Richard L. Lindstrom, M.D [Member] | Second Payment [Member] | |||||
Royalty payments | 50 | ||||
Net sales | 50 | ||||
Klarity License Agreement [Member] | Richard L. Lindstrom, M.D [Member] | Final Payment [Member] | |||||
Royalty payments | 50 | ||||
Net sales | $ 100 | ||||
Sales and Marketing Agreements [Member] | |||||
Commission expense incurred | $ 343 | $ 558 | |||
Sales and Marketing Agreements [Member] | Minimum [Member] | |||||
Commission payments, percentage | 10.00% | ||||
Sales and Marketing Agreements [Member] | Maximum [Member] | |||||
Commission payments, percentage | 14.00% |
Segment Information and Conce72
Segment Information and Concentrations (Details Narrative) - Segment | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting [Abstract] | ||||
Number of reportable segment | 1 | |||
Maximum percentage of sales derived from large number of customer | 10.00% | 10.00% | 10.00% | 10.00% |
Percentage of drug and chemical purchases from three main suppliers | 54.00% | 72.00% | 52.00% | 77.00% |