Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 13, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | HARROW HEALTH, INC. | |
Entity Central Index Key | 0001360214 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 25,165,965 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents, including restricted cash of $200 | $ 4,193 | $ 6,838 |
Investment in Eton Pharmaceuticals | 27,650 | 21,420 |
Accounts receivable, net | 2,223 | 1,914 |
Inventories | 2,652 | 1,834 |
Prepaid expenses and other current assets | 1,401 | 837 |
Total current assets | 38,119 | 32,843 |
Property, plant and equipment, net | 5,946 | 6,375 |
Operating lease right-of-use assets | 6,069 | |
Intangible assets, net | 3,154 | 3,059 |
Goodwill | 2,227 | 2,227 |
TOTAL ASSETS | 65,157 | 49,451 |
Current liabilities | ||
Accounts payable and accrued expenses | 6,943 | 6,250 |
Accrued payroll and related liabilities | 1,576 | 2,283 |
Deferred revenue and customer deposits | 224 | 119 |
Current portion of note payable, net of unamortized debt discount | 247 | 2,529 |
Current portion of operating lease obligations | 496 | |
Current portion of finance lease obligations, net of unamortized discount | 370 | 720 |
Total current liabilities | 9,856 | 11,901 |
Operating lease obligations, net of current portion | 5,976 | |
Finance lease obligations, net of current portion and unamortized discount | 29 | |
Accrued expenses, net of current portion | 800 | 800 |
Note payable, net of current portion and unamortized debt discount | 13,498 | 11,999 |
TOTAL LIABILITIES | 30,159 | 24,700 |
Commitments and contingencies | ||
STOCKHOLDERS' EQUITY | ||
Common stock, $0.001 par value, 50,000,000 shares authorized, 25,138,958 and 24,339,610 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively | 25 | 24 |
Additional paid-in capital | 100,271 | 98,938 |
Accumulated deficit | (65,231) | (74,211) |
TOTAL HARROW HEALTH, INC. STOCKHOLDERS' EQUITY | 35,065 | 24,751 |
Noncontrolling interests | (67) | |
TOTAL STOCKHOLDERS' EQUITY | 34,998 | 24,751 |
TOTAL LIABILITIES AND EQUITY | 65,157 | 49,451 |
Surface Pharmaceuticals [Member] | ||
Current assets | ||
Investment | 4,443 | 4,947 |
Melt Pharmaceuticals [Member] | ||
Current assets | ||
Investment | $ 5,199 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Restricted cash | $ 200 | $ 200 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 25,138,958 | 24,339,610 |
Common stock, shares outstanding | 25,138,958 | 24,339,610 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues: | ||||
Total revenues | $ 13,516 | $ 10,384 | $ 25,806 | $ 19,249 |
Cost of sales | (5,225) | (4,157) | (9,123) | (8,228) |
Gross profit | 8,291 | 6,227 | 16,683 | 11,021 |
Operating expenses: | ||||
Selling, general and administrative | 8,248 | 6,779 | 16,791 | 13,267 |
Research and development | 810 | 72 | 1,215 | 159 |
Total operating expenses | 9,058 | 6,851 | 18,006 | 13,426 |
Loss from operations | (767) | (624) | (1,323) | (2,405) |
Other income (expense): | ||||
Interest expense, net | (716) | (671) | (1,319) | (1,334) |
Other income (expense), net | (255) | 630 | (255) | |
Total other income (expense), net | (1,653) | 3,146 | 10,236 | 1,414 |
Total net income (loss) including noncontrolling interests | (2,420) | 2,522 | 8,913 | (991) |
Net loss attributable to noncontrolling interests | 42 | 67 | ||
Net income (loss) attributable to Harrow Health, Inc. | $ (2,378) | $ 2,522 | $ 8,980 | $ (991) |
Basic net income (loss) per share of common stock | $ (0.09) | $ 0.12 | $ 0.36 | $ (0.05) |
Diluted net income (loss) per share of common stock | $ (0.09) | $ 0.11 | $ 0.34 | $ (0.05) |
Weighted average number of shares of common stock outstanding, basic | 25,216,565 | 21,190,794 | 25,030,012 | 21,070,644 |
Weighted average number of shares of common stock outstanding, diluted | 25,216,565 | 23,175,431 | 26,696,683 | 21,070,644 |
Melt Pharmaceuticals [Member] | ||||
Other income (expense): | ||||
Investment gain from and equity net Loss | $ (326) | $ 5,199 | ||
Surface Pharmaceuticals [Member] | ||||
Other income (expense): | ||||
Investment gain from and equity net Loss | (261) | 5,218 | (504) | 5,218 |
Eton Pharmaceuticals [Member] | ||||
Other income (expense): | ||||
Investment gain from and equity net Loss | (350) | (1,146) | 6,230 | (2,215) |
Product Sales, Net [Member] | ||||
Revenues: | ||||
Total revenues | 13,509 | 10,374 | 25,792 | 19,229 |
License Revenues [Member] | ||||
Revenues: | ||||
Total revenues | $ 7 | $ 10 | $ 14 | $ 20 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total Harrow Health, Inc Stockholders' Equity [Member] | Total Noncontrolling Interest Equity [Member] | Total |
Balance at Dec. 31, 2017 | $ 21 | $ 91,430 | $ (88,836) | $ 2,615 | $ 2,615 | |
Balance, shares at Dec. 31, 2017 | 20,623,129 | |||||
Issuance of common stock in connection with: Vesting of RSUs, net of tax withholding | ||||||
Issuance of common stock in connection with: Vesting of RSUs, net of tax withholding, shares | 60,000 | |||||
Issuance of common stock in connection with: Sale of stock, net of costs (ATM) | 641 | 641 | 641 | |||
Issuance of common stock in connection with: Sale of stock, net of costs (ATM), shares | 305,619 | |||||
Issuance of common stock in connection with: Stock-based payment for services provided | 108 | 108 | 108 | |||
Issuance of common stock in connection with: Stock-based payment for services provided, shares | 60,700 | |||||
Stock-based compensation expense | 1,359 | 1,359 | 1,359 | |||
Net income (loss) | (991) | (991) | (991) | |||
Balance at Jun. 30, 2018 | $ 21 | 93,538 | (89,827) | 3,732 | 3,732 | |
Balance, shares at Jun. 30, 2018 | 21,049,448 | |||||
Balance at Mar. 31, 2018 | $ 21 | 92,411 | (92,349) | 83 | 83 | |
Balance, shares at Mar. 31, 2018 | 20,813,205 | |||||
Issuance of common stock in connection with: Sale of stock, net of costs (ATM) | 519 | 519 | 519 | |||
Issuance of common stock in connection with: Sale of stock, net of costs (ATM), shares | 236,243 | |||||
Stock-based compensation expense | 608 | 608 | 608 | |||
Net income (loss) | 2,522 | 2,522 | 2,522 | |||
Balance at Jun. 30, 2018 | $ 21 | 93,538 | (89,827) | 3,732 | 3,732 | |
Balance, shares at Jun. 30, 2018 | 21,049,448 | |||||
Balance at Dec. 31, 2018 | $ 24 | 98,938 | (74,211) | 24,751 | 24,751 | |
Balance, shares at Dec. 31, 2018 | 24,339,610 | |||||
Issuance of common stock in connection with: Stock-based payment for services provided | 75 | 75 | 75 | |||
Issuance of common stock in connection with: Stock-based payment for services provided, shares | 15,000 | |||||
Stock-based compensation expense | 1,080 | 1,080 | 1,080 | |||
Net income (loss) | 8,980 | 8,980 | (67) | 8,913 | ||
Issuance of common stock in connection with: Exercise of warrants | $ 1 | 178 | 179 | 179 | ||
Issuance of common stock in connection with: Exercise of warrants, shares | 763,393 | |||||
Issuance of common stock in connection with: Exercise of employee stock options | ||||||
Issuance of common stock in connection with: Exercise of employee stock options , shares | 20,955 | |||||
Balance at Jun. 30, 2019 | $ 25 | 100,271 | (65,231) | 35,065 | (67) | 34,998 |
Balance, shares at Jun. 30, 2019 | 25,138,958 | |||||
Balance at Mar. 31, 2019 | $ 25 | 99,887 | (62,853) | 37,059 | (25) | 37,034 |
Balance, shares at Mar. 31, 2019 | 24,718,649 | |||||
Stock-based compensation expense | 367 | 367 | 367 | |||
Net income (loss) | (2,378) | (2,378) | (42) | (2,420) | ||
Issuance of common stock in connection with: Exercise of warrants | 17 | 17 | 17 | |||
Issuance of common stock in connection with: Exercise of warrants, shares | 399,354 | |||||
Issuance of common stock in connection with: Exercise of employee stock options | ||||||
Issuance of common stock in connection with: Exercise of employee stock options , shares | 20,955 | |||||
Balance at Jun. 30, 2019 | $ 25 | $ 100,271 | $ (65,231) | $ 35,065 | $ (67) | $ 34,998 |
Balance, shares at Jun. 30, 2019 | 25,138,958 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ 8,913 | $ (991) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization of property, plant and equipment | 968 | 800 |
Amortization of intangible assets | 125 | 117 |
Amortization of operating lease right-of-use assets | 256 | |
Amortization of debt issuance costs and discount | 263 | 314 |
Loss on sale and disposal of assets | 76 | 393 |
Stock-based payment of consulting services | 75 | |
Stock-based compensation | 1,080 | 1,359 |
Changes in assets and liabilities: | ||
Accounts receivable | (309) | 169 |
Inventories | (818) | 33 |
Prepaid expenses and other current assets | (564) | (268) |
Accounts payable, accrued expenses, and other liabilities | 830 | 885 |
Accrued payroll and related liabilities | (707) | 587 |
Deferred revenue and customer deposits | 105 | 5 |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (632) | 400 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Repayment of note receivable | 4 | |
Investment in patent and trademark assets | (220) | (154) |
Purchases of property, plant and equipment | (565) | (550) |
NET CASH USED IN INVESTING ACTIVITIES | (785) | (700) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Payments on capital lease obligations | (375) | (337) |
Payments on Park deferred acquisition obligation | (53) | |
Principal payments on note payable | (750) | |
Payments of costs related to amendment of note payable | (282) | |
Net proceeds from ATM sales of common stock | 641 | |
Net proceeds from exercise of warrants | 179 | |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | (1,228) | 251 |
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (2,645) | (49) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period | 6,838 | 4,219 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period | 4,193 | 4,170 |
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH | ||
Cash and cash equivalents | 3,993 | 3,970 |
Restricted cash | 200 | 200 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | 4,193 | 4,170 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for income taxes | 8 | 4 |
Cash paid for interest | 1,053 | 1,006 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Acquisition of equipment with finance lease obligation | 40 | |
Issuance of stock and stock options for consulting services included in accounts payable and accrued expenses | 108 | |
Purchases of property and equipment included in accrued expenses | 11 | |
Eton Pharmaceuticals [Member] | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Investment gain from and equity in net loss | (6,230) | 2,215 |
Melt Pharmaceuticals [Member] | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Investment gain from and equity in net loss | (5,199) | |
Surface Pharmaceuticals [Member] | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Investment gain from and equity in net loss | $ 504 | $ (5,218) |
Description of Business and Bas
Description of Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2019 | |
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 Harrow Health, Inc. (together with its subsidiaries, unless the context indicates or otherwise requires, the “Company” or “Harrow”) specializes in the development, production and sale of innovative medications that offer unique competitive advantages and serve unmet needs in the marketplace through its subsidiaries and deconsolidated companies. The Company owns one of the nation’s leading ophthalmology pharmaceutical businesses, ImprimisRx. In addition to wholly owning ImprimisRx, the Company also has equity positions in Eton Pharmaceuticals, Inc. (“Eton”), Surface Pharmaceuticals, Inc. (“Surface”), and Melt Pharmaceuticals, Inc. (“Melt”). More recently, the Company founded its subsidiaries Mayfield Pharmaceuticals, Inc. (“Mayfield”), Radley Pharmaceuticals, Inc. (“Radley”), and Stowe Pharmaceuticals, Inc. (“Stowe”). The Company owns royalty rights in certain 505(b)(2) drug candidates being developed by Surface, Melt, Radley and Mayfield. Harrow intends to continue to create new subsidiaries, and found, and hold equity and royalty rights in, new businesses that commercialize drug candidates that are internally developed or otherwise acquired or licensed from third parties In February 2019, the Company entered into an agreement with Elle Pharmaceutical, Inc. (“Elle”) in which Mayfield issued 1,000,000 shares of its common stock to Elle (see Note 14). In July 2019, the Company entered into an agreement with Noice Rx, LLC (“Noice”) to sell substantially all the assets associated with its non-ophthalmology pharmaceutical compounding business conducted by the Company’s subsidiary Park Compounding, Inc. (“Park”) for a purchase price of $8,000. The closing of the Park sale is contingent upon Noice being issued a temporary pharmacy and sterile license from the California State Board of Pharmacy and other customary conditions and terms (see Note 16). In connection with the sale of Park, the Company will issue Noice a seller’s note for $8,000. Basis of Presentation The Company 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, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 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, 2018. The consolidated financial statements include the accounts of Harrow and its wholly owned subsidiaries, as well as Mayfield, a 72% majority owned subsidiary of Harrow, as of June 30, 2019. The remaining 28% of Mayfield is owned by Elle. Mayfield was organized to develop women’s health focused drug candidates. All inter-company accounts and transactions have been eliminated in consolidation. Harrow consolidates entities in which we have a controlling financial interest. We consolidate subsidiaries in which we hold, directly or indirectly, more than 50% of the voting rights. The condensed consolidated balance sheets at June 30, 2019 and December 31, 2018 and the condensed consolidated statements of operations, stockholders’ equity and cash flows for the periods ended June 30, 2019 include our accounts and those of our wholly owned subsidiaries as well as Mayfield. The condensed consolidated statements of operations, stockholders’ equity and cash flows for the periods ended June 30, 2018 include our accounts and those of our wholly owned subsidiaries. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
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, 2019 to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Liquidity The Company has incurred significant operating losses and negative cash flows from operations since its inception. The Company incurred net income (loss) of $8,980 and $(991) for the six months ended June 30, 2019 and 2018, respectively, and had an accumulated deficit of $65,231 and $74,211 as of June 30, 2019 and December 31, 2018, respectively. In addition, the Company used cash in operating activities of $(632) for the six months ended June 30, 2019, while during the six months ended June 30, 2018, operating activities provided cash of $400. While there is no assurance, management of the Company believes existing cash resources and restricted cash of $4,193 at June 30, 2019, 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 through a variety of means which may include, but are not limited to: the sale of assets, investments 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 management deems acceptable, or at all. Segments The Company’s chief operating decision-maker is its Chief Executive Officer who makes resource allocation decisions and assesses performance based on financial information presented on as operating segments. The Company has identified two operating segments as reportable segments. See Note 15 for more information regarding the Company’s reportable segments. Noncontrolling Interests The Company recognizes any noncontrolling interest as a separate line item in equity in the condensed consolidated financial statements. A noncontrolling interest represents the portion of equity ownership in a less-than-wholly owned subsidiary not attributable to the Company. Generally, any interest that holds less than 50% of the outstanding voting shares is deemed to be a noncontrolling interest; however, there are other factors, such as decision-making rights, that are considered as well. The Company includes the amount of net income (loss) attributable to noncontrolling interests in consolidated net income (loss) on the face of the condensed consolidated statements of operations. The Company provides in the condensed consolidated statements of stockholders’ equity a reconciliation at the beginning and the end of the period of the carrying amount of total equity, equity attributable to the parent, and equity attributable to the noncontrolling interest that separately discloses: (1) net income or loss; (2) transactions with owners acting in their capacity as owners, showing separately contributions from and distributions to owners; and (3) each component of other income or loss. 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 5,331,883 and 10,245,280 at June 30, 2019 and 2018, respectively, and, except for the six months ended June 30, 2019 and the three months ended June 30, 2018, are excluded from the calculation of diluted net income (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, 2019 and 2018 was 304,873 and 168,513, 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, 2019 and 2018: For the Three Months Ended For the Six Months Ended June 30, 2019 2018 2019 2018 Numerator – net income (loss) attributable to Harrow Health, Inc. $ (2,378 ) $ 2,522 $ 8,980 $ (991 ) Denominator – weighted average number of shares outstanding, basic 25,216,565 21,190,794 25,030,012 21,070,644 Net income (loss) per share, basic $ (0.09 ) $ 0.12 $ 0.36 $ (0.05 ) For the six months ended June 30, 2019 and the three months ended June 30, 2018, 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 six months ended June 30, 2019 and the three months ended June 30, 2018, consisted of the following: For the For the Three Months Six Months Ended June 30, 2018 June 30, 2019 Diluted shares related to: Warrants 1,093,006 1,028,780 Stock options and RSUs 891,631 637,891 Dilutive common equivalent shares 1,984,637 1,666,671 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, 2019 and 2018: For the Three Months Ended For the Six Months Ended June 30, 2019 2018 2019 2018 Numerator – net income (loss) attributable to Harrow Health, Inc. $ (2,378 ) $ 2,522 $ 8,980 $ (991 ) Denominator – weighted average number of shares outstanding, basic 25,216,565 21,190,794 25,030,012 21,070,644 Dilutive common equivalents - 1,984,637 1,666,671 - Number of shares used for diluted earnings per share computation 25,216,565 23,175,431 26,696,683 21,070,644 Net income (loss) per share, diluted $ (0.09 ) $ 0.11 $ 0.34 $ (0.05 ) Investment in Eton Pharmaceuticals, Inc. – Related Party The Company owns 3,500,000 shares of Eton common stock, which represents approximately 19.7% of the equity and voting interests of Eton as of June 30, 2019. At June 30, 2019, the fair market value of Eton’s common stock was $7.90 per share, the closing share price of Eton common stock on June 28, 2019, the last trading day of the period ended June 30, 2019. In accordance with the Accounting Standards Update (“ASU”) 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In November 2018, the Company entered into a lock-up agreement that prohibits the sale of any of its Eton common stock until November 2019 without the approval of National Securities Corporation, the underwriter of Eton’s initial public offering of its common stock. Mark Baum, the Company’s Chief Executive Officer, is a member of the board of directors of Eton. Investment in Melt Pharmaceuticals, Inc. – Related Party In April 2018, the Company formed Melt as a wholly owned subsidiary. In January and March of 2019, Melt entered into definitive stock purchase agreements (collectively, the “Melt Series A Preferred Stock Agreement”) with certain investors and closed on the purchase and sale of Melt’s Series A Preferred Stock (the “Melt Series A Stock”), totaling approximately $11,400 of proceeds (collectively the “Melt Series A Round”) at a purchase price of $5.00 per share. As a result, the Company lost voting and ownership control of Melt and ceased consolidating Melt’s financial statements. In connection with the Melt Series A Preferred Stock Agreement, Melt also entered into a Registration Rights Agreement and agreed to use commercially reasonable efforts to file, or confidentially submit, a registration statement on Form S-1 with the United States Securities and Exchange Commission by September 30, 2020 relating to an initial public offering of its common stock. At the time of deconsolidation, the Company recorded a gain of $5,810 and adjusted the carrying value in Melt to reflect the increased valuation of Melt and the Company’s new ownership interest in accordance with Accounting Standard Codification (“ASC”) 810-10-40-4(c), Consolidation The Company owns 3,500,000 common shares (which is approximately 44% of the equity interest as of June 30, 2019) of Melt 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 Melt. Under this method, the Company recognizes earnings and losses of Melt in its consolidated financial statements and adjusts the carrying amount of its investment in Melt accordingly. The Company’s share of earnings and losses are based on the Company’s ownership interest of Melt. Any intra-entity profits and losses are eliminated. During the three and six months ended June 30, 2019, the Company recorded equity in net loss of Melt of $326 and $611, respectively. As of June 30, 2019, the carrying value of the Company’s investment in Melt was $5,199. See Note 4 for more information and related party disclosure regarding Melt. Investment in Surface Pharmaceuticals, Inc. – Related Party In April 2017, the Company formed Surface as a wholly owned subsidiary. In May and July 2018, Surface entered into a definitive stock purchase agreement with an institutional investor for the purchase of Surface’s Series A Preferred Stock (the “Surface Series A Stock”) and closed on the sale, resulting 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. 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 interest in accordance with 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 June 30, 2019) 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 Company’s ownership interest of Surface. Any intra-entity profits and losses are eliminated. The Company recorded equity in net loss of Surface of $261 and $504 during the three and six months ended June 30, 2019. The Company recorded equity in net loss of Surface of $102 during the three and six months ended June 30, 2018. As of June 30, 2019, the carrying value of the Company’s investment in Surface was $4,443. See Note 5 for more information and related party disclosure regarding Surface. Recently Adopted Accounting Pronouncements In February 2016, the FASB issued new lease accounting guidance in ASU No. 2016-02, Leases Recently Issued Accounting Pronouncements In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other |
Revenues
Revenues | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | NOTE 3. REVENUES The Company accounts for contracts with customers in accordance with ASC 606, Revenues from Contracts with Customers Product Revenues from Pharmacy Services The Company sells prescription drugs directly through our pharmacy and outsourcing facility network. Revenues 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 ASC 606, 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 the 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, the revenue of which 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, 2019 and 2018, consists of the following: For the Three Months Ended June 30, For the Six Months Ended June 30, 2019 2018 2019 2018 Product sales, net $ 13,509 $ 10,374 $ 25,792 $ 19,229 License revenues 7 10 14 20 Total revenues $ 13,516 $ 10,384 $ 25,806 $ 19,249 Deferred revenue and customer deposits at June 30, 2019 and December 31, 2018, was $224 and $119, retrospectively. All deferred revenue and customer deposit amounts at December 31, 2018 were recognized as revenue during the six months ended June 30, 2019. |
Investment in Melt Pharmaceutic
Investment in Melt Pharmaceuticals, Inc. and Agreements - Related Party Transactions | 6 Months Ended |
Jun. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment in Melt Pharmaceuticals, Inc. and Agreements - Related Party Transactions | NOTE 4. INVESTMENT IN MELT PHARMACEUTICALS, INC. AND AGREEMENTS - RELATED PARTY TRANSACTIONS In December 2018, the Company entered into an asset purchase agreement with Melt (the “Melt Asset Purchase Agreement”). Pursuant to the terms of the Melt Asset Purchase Agreement, Melt was assigned certain intellectual property and related rights from the Company to develop, formulate, make, sell, and sub-license certain Company conscious sedation and analgesia related formulations (collectively, the “Melt Products”). Under the terms of the Melt Asset Purchase Agreement, Melt is required to make royalty payments to the Company up to eight percent (8%) of net sales of the Melt Products while any patent rights remain outstanding, as well as other conditions. In January and March 2019, the Company entered into the Melt Series A Preferred Stock Agreement. In February 2019, the Company and Melt entered into a Management Services Agreement (the “Melt MSA”), whereby the Company provides to Melt certain administrative services and support, including bookkeeping, web services and human resources related activities, and Melt pays the Company a monthly amount of $10. As of June 30, 2019, the Company was due $714 from Melt for reimbursable expenses and amounts due under the Melt MSA and included in prepaid expenses and other current assets on the accompanying condensed consolidated balance sheets. The Company’s Chief Executive Officer, Mark L. Baum, and Chief Medical Officer, Larry Dillaha, are members of the Melt board of directors, and several employees of the Company (including Mr. Baum and the Company’s Chief Financial Officer, Andrew Boll) entered into consulting agreements and provide consulting services to Melt. The unaudited condensed results of operations information of Melt is summarized below: For the Six months ended June 30, 2019 Revenues, net $ - Loss from operations 1,382 Net loss $ (1,382 ) The unaudited condensed balance sheet information of Melt is summarized below: June 30, 2019 Current assets $ 9,521 Non current assets 3 Total assets $ 9,524 Total liabilities $ 940 Total preferred stock and stockholders’ equity 8,584 Total liabilities and stockholders’ equity $ 9,524 |
Investment in Surface Pharmaceu
Investment in Surface Pharmaceuticals, Inc. and Agreements - Related Party Transactions | 6 Months Ended |
Jun. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment in Surface Pharmaceuticals Inc. and Agreements - Related Party Transactions | NOTE 5. INVESTMENT IN SURFACE PHARMACEUTICALS, INC. AND AGREEMENTS - RELATED PARTY TRANSACTIONS The Company entered into an asset purchase and license agreement in 2017, and amended it in April 2018 (the “Surface License Agreements”) with 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. In January 2018, the Company and Surface entered into an amended Management Services Agreement (the “Surface 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 Surface MSA was terminated effective July 31, 2018. As of June 30, 2019, the Company was due $50 from Surface for reimbursable expenses and amounts due under the Surface MSA and included in prepaid expenses and other current assets on the accompanying condensed consolidated balance sheets. As of June 30, 2019, the Company owned 3,500,000 shares of Surface common stock (approximately 30% of the issued and outstanding equity interests). 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 who purchased the Surface Series A Stock. The unaudited condensed results of operations information of Surface is summarized below: For the Six Months Ended June 30, 2019 Revenues, net $ - Loss from operations 1,680 Net loss $ (1,680 ) The unaudited condensed balance sheet information of Surface is summarized below: June 30, 2019 Current assets $ 18,061 Non current assets 48 Total assets $ 18,109 Total liabilities $ 532 Total stockholders’ equity 17,577 Total liabilities and stockholders’ equity $ 18,109 |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 6. 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, 2019 and December 31, 2018 was as follows: June 30, December 31, 2019 2018 Raw materials $ 1,758 $ 1,119 Work in progress 264 6 Finished goods 630 709 Total inventories $ 2,652 $ 1,834 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 6 Months Ended |
Jun. 30, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | NOTE 7. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following: June 30, December 31, 2019 2018 Prepaid insurance $ 65 $ 328 Other prepaid expenses 434 334 Receivable due from Surface 50 50 Receivable due from Melt 714 - Deposits and other current assets 138 125 Total prepaid expenses and other current assets $ 1,401 $ 837 |
Property, Plant and Equipment
Property, Plant and Equipment | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | NOTE 8. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following: June 30, 2019 December 31, 2018 Property, plant and equipment, net: Computer software and hardware $ 1,743 $ 1,662 Furniture and equipment 420 397 Lab and pharmacy equipment 3,416 3,184 Leasehold improvements 5,612 5,496 11,191 10,739 Accumulated depreciation and amortization (5,245 ) (4,364 ) $ 5,946 $ 6,375 For the three and six months ended June 30, 2019, depreciation related to the property, plant and equipment was $491 and $968, respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | NOTE 9. INTANGIBLE ASSETS AND GOODWILL The Company’s intangible assets at June 30, 2019 consisted of the following: Amortization periods Accumulated Net (in years) Cost amortization Impairment Carrying value Patents 17-19 years $ 962 $ (64 ) $ - $ 898 Licenses 20 years 50 (5 ) - 45 Trademarks Indefinite 332 - - 332 Customer relationships 3-15 years 2,998 (1,115 ) (15 ) 1,868 Trade name 5 years 16 (15 ) (1 ) - Non-competition clause 3-4 years 294 (274 ) (20 ) - State pharmacy licenses 25 years 45 (6 ) (28 ) 11 $ 4,697 $ (1,479 ) $ (64 ) $ 3,154 Amortization expense for intangible assets for the three and six months ended June 30, 2019 was as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2019 2018 2019 2018 Patents $ 11 6 $ 15 $ 13 Licenses 1 - 5 - Customer relationships 51 $ 50 102 100 Trade name - 1 2 3 Non-competition clause - - - 1 State pharmacy licenses - - 1 - $ 63 $ 57 $ 125 $ 117 Estimated future amortization expense for the Company’s intangible assets at June 30, 2019 is as follows: Remainder of 2019 $ 128 2020 252 2021 252 2022 252 2023 252 Thereafter 2,018 $ 3,154 There have been no changes in the carrying value of the Company’s goodwill during the three and six months ended June 30, 2019. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 6 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | NOTE 10. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following: June 30, 2019 December 31, 2018 Accounts payable $ 5,957 $ 4,966 Accrued litigation settlement (see Note 14) 733 640 Deferred rent - 388 Accrued interest 253 256 Accrued exit fee for note payable 800 800 Total accounts payable and accrued expenses 7,743 7,050 Less: Current portion (6,943 ) (6,250 ) Non-current total accrued expenses $ 800 $ 800 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 11. DEBT SWK Refinance – May 2019 In May 2019, the Company entered into a joinder and amendment (the “Amendment”) to its term loan and security agreement dated as of July 19, 2017 (the “SWK Loan”), with SWK Funding LLC and its partners (the “Lender”), as lender and collateral agent. A summary of the material changes contained in the Amendment are as follows: ● The interest rate calculation that the loan bears is now equal to the three-month London Inter-Bank Offered Rate (subject to a minimum of 2.00%), plus an applicable margin of 10.00% (the “Margin Rate”); provided that, if, two days prior to a payment date, the Company provides the Lender evidence that the Company has achieved a leverage ratio as of such date of less than 4.00:1:00, the Margin Rate shall equal 9.00%; and if the Company has achieved a leverage ratio as of such date of less than 3.00:1:00, the Margin Rate shall equal 7.00%; ● Leverage ratio in the Amendment means, as of any date of determination, the ratio of: (a) indebtedness as of such date to (b) EBITDA (as defined in the SWK Loan), of the Company for the immediately preceding twelve (12) month period, adding-back (i) actual litigation expenses for the immediately preceding twelve (12) month period, minus (ii) actual litigation expenses for the immediately preceding three (3) month period multiplied by four (4); ● The definition of the first amortization date was changed to May 14, 2020, permitting the Company to pay interest only on the principal amount loaned for the next four payments (payments are due on a quarterly basis) following the Amendment; and ● Subject to the satisfaction of certain revenue and market capitalization requirements and conditions, the Lender agreed to make available to the Company an additional principal amount of up to $5,000. In addition to the terms described above, the Amendment joined the Company’s recently created subsidiaries to the SWK Loan and added definitions related to excluded subsidiaries that are not considered co-borrowers and are subsidiaries of the Company which the Company believes it will eventually deconsolidate from its financials and lose 50% or more of the equity interests of the subsidiary. Related to the Amendment, the Company incurred expenses related to legal and lender costs of $282 that are included in debt discount and will be amortized over the term of the SWK Loan. At June 30, 2019, future minimum payments under the Company’s note payable were as follows: Amount Remainder of 2019 $ 1,216 2020 3,696 2021 4,121 2022 3,828 2023 7,330 Total minimum payments 20,191 Less: amount representing interest (4,941 ) Notes payable, gross 15,250 Less: unamortized discount (1,505 ) 13,745 Less: current portion, net of unamortized discount (247 ) Note payable, net of current portion and unamortized debt discount $ 13,498 For the three and six months ended June 30, 2019, debt discount amortization related to note payable was $125 and $250, respectively. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | NOTE 12. LEASES The Company adopted Topic 842 on January 1, 2019. Topic 842 allows the Company to elect a package of practical expedients, which include: (i) an entity need not reassess whether any expired or existing contracts are or contain leases; (ii) an entity need not reassess the lease classification for any expired or existing leases; and (iii) an entity need not reassess any initial direct costs for any existing leases. Another practical expedient allows the Company to use hindsight in determining the lease term when considering lessee options to extend or terminate the lease and to purchase the underlying asset. The Company has elected to utilize the package of practical expedients and has not elected the hindsight methodology in its implementation of Topic 842. The Company elected to adopt this standard using the optional modified retrospective transition method and recognized a cumulative-effect adjustment to the condensed consolidated balance sheet on the date of adoption. Comparative periods have not been restated. With the adoption of Topic 842, the Company’s condensed consolidated balance sheet now contains the following line items: Right-of-use assets, Operating lease liabilities—short-term and Operating lease liabilities—long-term. The Company determined that it held the following significant operating leases of office and laboratory space as of January 1, 2019: ● An operating lease for 10,200 square feet of office space in San Diego, California that expires in December 2021, with an option to extend the term for a five-year period; ● An operating lease for 4,500 square feet of office and lab space in Irvine, California that expires in December 2020, with an option to extend the term for up to two five-year periods. The Company expects this lease will be assigned if the sale of Park closes (see Note 16); and ● An operating lease for 25,000 square feet of lab, warehouse and office space in Ledgewood, New Jersey that expires in July 2024, with an option to extend the term for two additional five-year periods. The extensions within the San Diego, California and Ledgewood, New Jersey operating lease agreements were included within the Company’s calculation of the new lease standard as the Company is reasonably certain it will exercise its option to extend these leases. The Company has elected to not recognize right-of-use assets and lease liabilities arising from short-term leases, which are leases that, at the commencement date, have a lease term of 12 months or less and do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. The previously classified capital leases are now classified as finance leases under the new standard. The Company has determined that the identified finance leases did not contain non-lease components and require no further allocation of the total lease cost. The Company has determined that the identified operating leases did contain non-lease components and elected an accounting policy to combine non-lease and lease components to determine the total lease cost. Additionally, the operating agreements in place did not contain information to determine the rate implicit in the leases. As such, the Company calculated the incremental borrowing rate based on the assumed remaining lease term for each lease in order to calculate the present value of the remaining lease payments. At June 30, 2019, the weighted average incremental borrowing rate and the weighted average remaining lease term for the operating leases held by the Company were 6.36% and 12.11 years, respectively. Upon adoption of Topic 842, the Company recorded a $6,325 increase in operating lease right-of-use assets, a $388 decrease in accounts payable and accrued expenses and a $6,712 increase in operating lease liability. The Company did not record any cumulative effect adjustments to opening stockholders’ equity. As of June 30, 2019, right-of-use assets and liabilities arising from operating leases were $6,069 and $6,472, respectively. During the three and six months ended June 30, 2019, cash paid for amounts included for the operating lease liabilities was $230 and $448 and the Company recorded operating lease expense of $232 and $464 included in selling, general and administrative expenses, respectively. Future lease payments under operating leases as of June 30, 2019 were as follows : Operating Leases Remainder of 2019 $ 457 2020 930 2021 809 2022 824 2023 843 Thereafter 5,304 Total minimum lease payments 9,167 Less: amount representing interest payments (2,695 ) Total operating lease liabilities 6,472 Less: current portion, operating lease liabilities (496 ) Operating lease liabilities, net of current portion $ 5,976 The Company also has two additional finance leases that are included in its lease accounting but are not considered significant. Future lease payments under non-cancelable finance leases as of June 30, 2019 were as follows : Finance Leases Remainder of 2019 $ 368 2020 9 2021 9 2022 9 2023 10 Total minimum lease payments 405 Less: amount representing interest payments (6 ) Present value of future minimum lease payments 399 Less: unamortized discount - 399 Less: current portion, net of unamortized discount (370 ) Finance lease obligation, net of current portion $ 29 At June 30, 2019, the weighted average incremental borrowing rate and the weighted average remaining lease term for the finance leases held by the Company were 9.71% and 0.70 years, respectively. For the three and six months ended June 30, 2019, debt discount amortization related to a finance lease obligation was $6 and $13, respectively, and included in interest expense, net. For the three and six months ended June 30, 2019, depreciation expense related to the equipment held under the finance lease obligations was $73 and $146, respectively. For the three and six months ended June 30, 2019, cash paid and expense recognized for interest expense related to the finance lease obligation was $4 and $15, respectively. Future minimum lease payments under operating leases and future minimum finance lease payments as of December 31, 2018 were as follows (in thousands): Finance Leases Operating Leases 2019 $ 751 $ 797 2020 - 857 2021 - 742 2022 - 320 2023 - 330 Thereafter - 196 $ 751 $ 3,242 Less: Amounts representing interest (15 ) Less: Amounts representing unamortized discount (16 ) Total obligation under capital leases 720 Less: Current portion of capital leases (720 ) Long term capital lease obligation $ - |
Stockholders' Equity and Stock-
Stockholders' Equity and Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity and Stock-Based Compensation | NOTE 13. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION Common Stock In March 2019, the Company issued 15,000 shares of its restricted common stock, with a fair value of $75, as consideration for commission expenses incurred during the six months ended June 30, 2019. During the six months ended June 30, 2019, the Company issued 20,955 shares of its common stock upon the cashless exercise of 57,933 options to purchase common stock, with exercise prices ranging from $1.70 to $4.09 per share. During the six months ended June 30, 2019, the Company issued 663,338 shares of its common stock upon the cashless exercise of 932,000 warrants to purchase common stock with an exercise price of $1.79 per share. During the six months ended June 30, 2019, the Company issued 100,055 shares of its common stock upon the exercise of 100,055 warrants to purchase common stock with an exercise price of $1.79 per share, and received net proceeds of $179. During the six months ended June 30, 2019, 68,180 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, 2019, 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. The Company had 997,280 shares available for future issuances under the 2017 Plan at June 30, 2019. Stock Options A summary of stock option activity under the Plans for the six months ended June 30, 2019 is as follows: Number of shares Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life Aggregate Intrinsic Value Options outstanding - January 1, 2019 2,482,009 $ 5.10 Options granted 352,000 $ 6.17 Options exercised (57,933 ) $ 3.72 Options cancelled/forfeited (50,471 ) $ 5.83 Options outstanding - June 30, 2019 2,725,605 $ 5.25 5.61 $ 9,621 Options exercisable 1,461,723 $ 4.69 5.98 $ 6,091 Options vested and expected to vest 2,607,104 $ 5.21 5.63 $ 9,323 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 28, 2019, based on the closing price of the Company’s common stock of $8.70 on that date. During the six months ended June 30, 2019, the Company granted stock options to certain employees and a consultant. 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, 2019 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; 100% of the shares subject to the option vest on a quarterly basis in equal installments over three years; and 90% of the shares subject to the option vest and become exercisable on the second month after the grant date and the remaining 10% of the shares subject to the option vest and become exercisable quarterly in equal installments thereafter over the next 11 months. 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: 2019 Weighted-average fair value of options granted $ 3.64 Expected terms (in years) 5.8 - 6.1 Expected volatility 64% - 67 % Risk-free interest rate 2.19% - 2.68 % Dividend yield - The following table summarizes information about stock options outstanding and exercisable at June 30, 2019: 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 - $2.60 816,936 7.22 $ 2.04 526,237 $ 2.12 $2.76 - $4.66 495,496 6.68 $ 3.97 441,452 $ 3.99 $5.61 - $6.30 440,350 8.41 $ 6.16 122,159 $ 6.04 $6.64 - $8.99 967,793 2.44 $ 8.01 366,845 $ 8.24 $42.80 5,030 1.12 $ 42.80 5,030 $ 42.80 $1.47 - $42.80 2,725,605 5.61 $ 5.25 1,461,723 $ 4.69 As of June 30, 2019, there was approximately $4,128 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 3.94 years. The stock-based compensation expense for all stock options was $262 and $540 during the three and six months ended June 30, 2019, 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 six months ended June 30, 2019, 185,000 RSUs with a fair market value of $1,139 were issued to certain employees; the RSUs vest in full on the third year anniversary of the grant date. During the three and six months ended June 30, 2019, the Company’s board of directors were granted 38,860 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, 2019 is as follows: Number of RSUs Weighted Average Grant Date Fair Value RSUs unvested - January 1, 2019 1,275,680 $ 2.16 RSUs granted 223,860 $ 6.43 RSUs vested (68,180 ) $ 2.20 RSUs cancelled/forfeited - RSUs unvested at June 30, 2019 1,431,360 $ 2.83 As of June 30, 2019, the total unrecognized compensation expense related to unvested RSUs was approximately $1,076, which is expected to be recognized over a weighted-average period of 0.37 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, 2019 was $110 and $540, respectively. Warrants From time to time, the Company issues warrants to purchase shares of the Company’s common stock to investors, lenders, underwriters and other non-employees for services rendered or to be rendered in the future, or pursuant to settlement agreements. A summary of warrant activity for the six months ended June 30, 2019 is as follows: Number of Shares Subject to Warrants Outstanding Weighted Avg. Exercise Price Warrants outstanding - January 1, 2019 2,206,973 $ 1.91 Granted - Exercised (1,032,055 ) $ 1.79 Expired - Warrants outstanding and exercisable - June 30, 2019 1,174,918 $ 2.01 Weighted average remaining contractual life of the outstanding warrants in years - June 30, 2019 3.51 A list of the warrants outstanding as of June 30, 2019 is included in the following table: Warrants Exercise Expiration Warrant Series Issue Date Outstanding Price Date Lender warrants 5/11/2015 125,000 $ 1.79 5/11/2025 Settlement warrants 8/16/2016 40,000 $ 3.75 8/16/2021 PIPE investor and placement agent warrants 12/27/2016 394,532 $ 1.79 12/27/2019 Lender warrants 7/19/2017 615,386 $ 2.08 7/19/2024 1,174,918 Subsidiary Stock-Based Transactions Mayfield Pharmaceuticals, Inc. The Company issued 1,000,000 shares of Mayfield’s common stock to Elle in connection with acquisition of certain drug candidate intellectual property and rights in February 2019. Following the issuance of Mayfield common stock to Elle, and as of June 30, 2019, the Company owned 72% of the equity interests in Mayfield. Mayfield is a consolidated subsidiary; the Company reports the operating results of Mayfield and allocates the noncontrolling interests to the non-majority partners. Stock-Based Compensation Summary The Company recorded stock-based compensation related to equity instruments granted to employees, directors and consultants as follows: For the Three Months Ended For the Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Employees - selling, general and administrative $ 268 $ 573 $ 906 $ 1,166 Directors - selling, general and administrative 75 35 150 85 Consultants - selling, general and administrative 24 - 99 108 Total $ 367 $ 608 $ 1,155 $ 1,359 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 14. COMMITMENTS AND CONTINGENCIES 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 the Company’s alleged transmittal of advertisements to its clients via facsimile. In February 2019, prior to a ruling on class certification, the Company entered into a proposed settlement agreement to award the class up to $1,400 in damages. The Court approved the proposed settlement agreement in the spring of 2019 and on or about August 14, 2019, the Court will make a final ruling on the total damage award. As a result of the low claim rate of approximately 1.4%, the Company does not expect total damages to exceed $640, which was accrued as an expense during the year ended December 31, 2018 (see Note 10). 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 California’s Sherman Act. The Court granted in part and denied in part each parties’ motions for summary judgement, resolving all issues except for whether Allergan was entitled to damages related to the Company’s purported Lanham Act violations. The parties went to trial in May 2019 to litigate damages related to the Lanham Act, and a jury found the Company liable for only $48 in lost profit damages, which was accrued as an expense during the period ended June 30, 2019 (see Note 10). In July 2019, the Court entered a permanent injunction, the scope of which is limited to compounded drugs prepared in, dispensed from within, or shipped to the state of California. The injunction requires the Company to: (1) only dispense drugs from a 503(a) facility with a “Valid Prescription Order”; (2) abide by the FDA’s anticipatory compounding guidelines; and (3) only use bulk drug substances identified on a list established by the Secretary of Health and Human Services or FDA’s interim “Category 1” list. The Company believes its was already in compliance with the order, prior to the injunction being ordered. 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 (the “NDS APA”). In July 2019, NDS filed a second amended complaint which added a claim related to its purported termination of the NDS APA. On August 12, 2019, the Company notified NDS of its acceptance of their purported termination of the NDS APA. The Company does not expect the termination of the NDS APA to affect its operations or revenues. The Company believes the claims are meritless and has previously and will continue to dispute all claims asserted against it and intends to vigorously defend against these allegations. Nonetheless, the Company cannot predict the eventual outcome of this litigation and, it could result in substantial costs, losses 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 Park related to a compounded formulation the Company believes was legally dispensed and was, without its knowledge, inappropriately administered to a patient unknown to Park, by the prescribing healthcare professional. Park filed a response to the accusation and requested a formal hearing. In April 2019, Park agreed to and the California State Board of Pharmacy approved terms of a settlement agreement (the “Settlement Agreement”) that became effective on May 29, 2019. Pursuant to the terms of the Settlement Agreement, Park is required to surrender its California pharmacy license by August 27, 2019; provided however, in the event of a sale of Park, the California State Board of Pharmacy agreed to expedite the issuance of a temporary license to the Park acquiror. The Company recently entered into an agreement to sell the Park business and is actively working on the transfer of the Park license to the acquiror (see Note 16). If a sale is not completed, the Company expects its New Jersey-based pharmacy to retain approximately half of the Park business and revenues. Product and Professional Liability Product and professional liability litigation represents an inherent risk to all firms in the pharmaceutical and pharmacy industry. We utilize traditional third-party insurance policies with regard to our 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 us as a co-defendant. In September 2018, co-defendant Dr. Kelly filed a cross-complaint against the Company and various Spectrum entities. The cross-complaint seeks indemnity and contribution from the Company and Spectrum. The Company answered the claims filed by Dr. Kelly in October 2018. The case is currently in the discovery phase. The Company believes the claims are meritless and has previously and will continue to dispute all claims asserted against it and intends to vigorously defend against these allegations. Nonetheless, the Company cannot predict the eventual outcome of this litigation, it could result in substantial costs, losses and a diversion of management’s resources and attention, which could harm the Company’s business and the value of its common stock. Anna Sue Gaukel et al. In June 2019, Anna Sue Gaukel and Lawrence Gaukel served the Company with a lawsuit filed in state court in Idaho against Imprimis Pharmaceuticals, Inc. asserting class action allegations and product liability claims related to Mrs. Gaukel’s doctor’s use of a compounded drug injection in each of her eyes. In June 2019, the Company removed the case to Federal Court and subsequently answered the complaint. The case is in the early phase. The Company believes the claims are meritless and has previously and will continue to dispute all claims asserted against it and intends to vigorously defend against these allegations. Nonetheless, the Company cannot predict the eventual outcome of this litigation, it could result in substantial costs, losses 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 it may, from time to time, make claims or take legal actions to assert its rights, including intellectual property disputes, contractual disputes and other commercial disputes. Any of these claims could subject the Company to litigation. Indemnities In addition to the indemnification provisions contained in the Company’s governing 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 The Company entered into a license agreement in April 2017 and as amended in April 2018, (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 $22 and $37 were made during the three and six months ended June 30, 2019, respectively. $26 and $48 was incurred as royalty expense during the three and six months ended and included in accounts payable to Dr. Lindstrom at June 30, 2019. 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 Harrow 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 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. $0 and $75 of stock-based payments were made and $640 and $1,182 were incurred under these agreements for commission expenses during the three and six months ended June 30, 2019, respectively. Asset Purchase, License and Related Agreements The Company has acquired and sourced intellectual property rights related to certain proprietary innovations from certain inventors and related parties (the “Inventors”) through multiple asset purchase agreements, license agreements, strategic agreements and commission agreements. In general, these agreements provide that the Inventors will cooperate with the Company in obtaining patent protection for the acquired intellectual property and that the Company will use commercially reasonable efforts to research, develop and commercialize a product based on the acquired intellectual property. In addition, the Company has acquired a right of first refusal on additional intellectual property and drug development opportunities presented by these Inventors. In consideration for the acquisition of the intellectual property rights, the Company is obligated to make payments to the Inventors based on the completion of certain milestones, generally consisting of: (1) a payment payable within 30 days after the issuance of the first patent in the United States arising from the acquired intellectual property (if any); (2) a payment payable within 30 days after the Company files the first investigational new drug application (“IND”) with the FDA for the first product arising from the acquired intellectual property (if any); (3) for certain of the Inventors, a payment payable within 30 days after the Company files the first new drug application with the FDA for the first product arising from the acquired intellectual property (if any); and (4) certain royalty payments based on the net receipts received by the Company in connection with the sale or licensing of any product based on the acquired intellectual property (if any), after deducting (among other things) the Company’s development costs associated with such product. If, following five years after the date of the applicable asset purchase agreement, the Company either (a) for certain of the Inventors, has not filed an IND or, for the remaining Inventors, has not initiated a study where data is derived, or (b) has failed to generate royalty payments to the Inventors for any product based on the acquired intellectual property, the Inventors may terminate the applicable asset purchase agreement and request that the Company re-assign the acquired technology to the Inventors. $274 and $465 and $114 and $197 were incurred under these agreements as royalty expenses for the three and six months ended June 30, 2019 and 2018, respectively, and $274 and $114 were included in accounts payable at June 30, 2019 and 2018, respectively. |
Segment Information and Concent
Segment Information and Concentrations | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information and Concentrations | NOTE 15. SEGMENT INFORMATION AND CONCENTRATIONS Beginning on January 1, 2019, the Company began evaluating performance of the Company based on operating segments. Segment performance for its two operating segments are based on segment contribution. The Company’s reportable segments consist of (i) its commercial stage pharmaceutical compounding business (Pharmaceutical Compounding), generally including the operations of ImprimisRx and Park businesses; and (ii) its start-up operations associated with pharmaceutical drug development business (Pharmaceutical Drug Development). Segment contribution for the segments represents net revenues less cost of sales, research and development, selling and marketing expenses, and select general and administrative expenses. The Company does not evaluate the following items at the segment level: ● Selling, general and administrative expenses that result from shared infrastructure, including certain expenses associated with legal matters, public company costs (e.g. investor relations), board of directors and principal executive officers and other like shared expenses. ● Operating expenses within selling, general and administrative expenses that result from the impact of corporate initiatives. Corporate initiatives primarily include integration, restructuring, acquisition and other shared costs. ● Other select revenues and operating expenses including R&D expenses, amortization, and asset sales and impairments, net as not all such information has been accounted for at the segment level, or such information has not been used by all segments. ● Total assets including capital expenditures. The Company defines segment net revenues as pharmaceutical compounded drug sales, licenses and other revenue derived from related agreements. Cost of sales within segment contribution includes direct and indirect costs to manufacture formulations and sell products, including active pharmaceutical ingredients, personnel costs, packaging, storage, royalties, shipping and handling costs, manufacturing equipment and tenant improvements depreciation, the write-off of obsolete inventory and other related expenses. Selling, general and administrative expenses consist mainly of personnel-related costs, marketing and promotion costs, distribution costs, professional service costs, insurance, depreciation, facilities costs, transaction costs, and professional services costs which are general in nature and attributable to the segment. Segment net revenues, segment operating expenses and segment contribution information consisted of the following for the three and six months ended June 30, 2019: For the Three Months Ended June 30, 2019 Pharmaceutical Pharmaceutical Compounding Drug Development Total Net revenues $ 13,516 $ - $ 13,516 Cost of sales (5,225 ) - (5,225 ) Gross profit 8,291 - 8,291 Operating expenses: Selling, general and administrative 5,804 43 5,847 Research and development 533 127 660 Segment contribution 1,954 (170 ) 1,784 Corporate 2,342 Research and development 150 Amortization 59 Operating loss $ (767 ) For the Six Months Ended June 30, 2019 Pharmaceutical Pharmaceutical Compounding Drug Development Total Net revenues $ 25,806 $ - $ 25,806 Cost of sales (9,123 ) - (9,123 ) Gross profit 16,683 - 16,683 Operating expenses: Selling, general and administrative 11,519 86 11,605 Research and development 658 263 921 Segment contribution 4,506 (349 ) 4,157 Corporate 5,061 Research and development 294 Amortization 125 Operating loss $ (1,323 ) The Company categorizes revenues by geographic area based on selling location. All operations are currently located in the U.S.; therefore, total revenues are attributed to the U.S. All long-lived assets at June 30, 2019 and December 31, 2018 are located in the U.S. The Company sells its compounded formulations to a large number of customers. There were no customers who comprised more than 10% of the Company’s total pharmacy sales for the three and six months ended June 30, 2019 and 2018. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 16. SUBSEQUENT EVENTS The Company has performed an evaluation of events occurring subsequent to June 30, 2019 through the filing date of this Quarterly Report. Based on its evaluation, no events other than those described below need to be disclosed. From July 1, 2019 through the date of the filing of this Quarterly Report, the Company issued 25,135 shares of its common stock related to the cashless exercise of 32,532 common stock warrants with an exercise price of $1.79. From July 1, 2019 through the date of the filing of this Quarterly Report, the Company issued 1,872 shares of its common stock upon the exercise of 1,872 options to purchase common stock, with exercise prices ranging from $1.70 to $3.20 per share, and received net proceeds of $5. Park Sale In July 2019, Park entered into an Asset Purchase Agreement (the “Park APA”) with Noice. U nder the terms of the , Park has agreed to sell substantially all of its assets associated with its non-ophthalmology pharmaceutical compounding business, including but not limited to, the Company’s lease obligation for its Irvine, California based pharmacy, for a total purchase price of $8,000 (the “Purchase Price”). Related to the Park APA, Noice entered into a loan agreement with Park equal to the Purchase Price (the “Sellers Note”). The Sellers Note will bear interest at 9.5% per annum and will be secured by all the assets of Noice. Noice will make ninety-six (96) monthly cash payments to the Company over the eight years following the closing. The first twenty-four months of the Sellers Note will require interest only payments of $63, with a principal payment of $2,000 due on September 15, 2021. Beginning on October 15, 2021, monthly payments will include interest and amortization of the principal balance and be equal to $119. The Sellers Note includes a warrant that becomes exercisable in five years and is equal to 19.9% of the ownership interests of Noice. The closing of the Park APA is dependent on the California State Board of Pharmacy issuing a temporary pharmacy and sterile license permit to Noice, which Noice has applied for. If the license is issued, the closing is expected to occur on or before August 27, 2019, subject to other customary terms and conditions. If the sale is closed, the Park business will be classified as discontinued operations in future periods. Mayfield License In July 2019, Mayfield entered into a License Agreement (the “TGV License”) with TGV-Health, LLC and TGV-Gyneconix, LLC (collectively, “TGV”), to acquire intellectual property rights for use in the women’s health field, related to Mayfield’s proprietary drug candidate MAY-66. The TGV License provides that TGV will cooperate with Mayfield in transferring all embodiments of the intellectual property (including know-how) related to the TGV License, assist in obtaining and protecting its patent rights for the acquired intellectual property and that Mayfield will use commercially reasonable efforts to research, develop and commercialize products based on the acquired intellectual property. In connection with the TGV License, Mayfield is obligated to make royalty payments to TGV equal to a low single digit percentage of net sales received by Mayfield in connection with the sale or licensing of any product based on the licensed intellectual property. In addition, Mayfield issued 300,000 shares of its common stock to TGV and is required to make certain milestone payments to TGV over the development of MAY-66 and any related products based on the licensed intellectual property. Stowe License In July 2019, Stowe entered into a License Agreement (the “Stowe License”) with TGV-Health, LLC and TGV- Ophthalnix, LLC (collectively, “TGV-O”), to acquire intellectual property rights for use in the ophthalmology and otic health field, related to Stowe’s proprietary drug candidate STE-006. The Stowe License provides that TGV-O will cooperate with Stowe in transferring all embodiments of the intellectual property (including know-how) related to the Stowe License, assist in obtaining and protecting its patent rights for the acquired intellectual property and that Stowe will use commercially reasonable efforts to research, develop and commercialize products based on the acquired intellectual property. In connection with the Stowe License, Stowe is obligated to make royalty payments to TGV-O equal to a low single digit percentage of net sales received by Stowe in connection with the sale or licensing of any product based on the licensed intellectual property. In addition, Stowe agreed to issue 1,750,000 shares of its common stock to TGV-O and is required to make certain milestone payments to TGV-O over the development of STE-006 and any related products based on the licensed intellectual property. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
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 income (loss) of $8,980 and $(991) for the six months ended June 30, 2019 and 2018, respectively, and had an accumulated deficit of $65,231 and $74,211 as of June 30, 2019 and December 31, 2018, respectively. In addition, the Company used cash in operating activities of $(632) for the six months ended June 30, 2019, while during the six months ended June 30, 2018, operating activities provided cash of $400. While there is no assurance, management of the Company believes existing cash resources and restricted cash of $4,193 at June 30, 2019, 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 through a variety of means which may include, but are not limited to: the sale of assets, investments 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 management deems acceptable, or at all. |
Segments | Segments The Company’s chief operating decision-maker is its Chief Executive Officer who makes resource allocation decisions and assesses performance based on financial information presented on as operating segments. The Company has identified two operating segments as reportable segments. See Note 15 for more information regarding the Company’s reportable segments. |
Noncontrolling Interests | Noncontrolling Interests The Company recognizes any noncontrolling interest as a separate line item in equity in the condensed consolidated financial statements. A noncontrolling interest represents the portion of equity ownership in a less-than-wholly owned subsidiary not attributable to the Company. Generally, any interest that holds less than 50% of the outstanding voting shares is deemed to be a noncontrolling interest; however, there are other factors, such as decision-making rights, that are considered as well. The Company includes the amount of net income (loss) attributable to noncontrolling interests in consolidated net income (loss) on the face of the condensed consolidated statements of operations. The Company provides in the condensed consolidated statements of stockholders’ equity a reconciliation at the beginning and the end of the period of the carrying amount of total equity, equity attributable to the parent, and equity attributable to the noncontrolling interest that separately discloses: (1) net income or loss; (2) transactions with owners acting in their capacity as owners, showing separately contributions from and distributions to owners; and (3) each component of other income or loss. |
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 5,331,883 and 10,245,280 at June 30, 2019 and 2018, respectively, and, except for the six months ended June 30, 2019 and the three months ended June 30, 2018, are excluded from the calculation of diluted net income (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, 2019 and 2018 was 304,873 and 168,513, 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, 2019 and 2018: For the Three Months Ended For the Six Months Ended June 30, 2019 2018 2019 2018 Numerator – net income (loss) attributable to Harrow Health, Inc. $ (2,378 ) $ 2,522 $ 8,980 $ (991 ) Denominator – weighted average number of shares outstanding, basic 25,216,565 21,190,794 25,030,012 21,070,644 Net income (loss) per share, basic $ (0.09 ) $ 0.12 $ 0.36 $ (0.05 ) For the six months ended June 30, 2019 and the three months ended June 30, 2018, 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 six months ended June 30, 2019 and the three months ended June 30, 2018, consisted of the following: For the For the Three Months Six Months Ended June 30, 2018 June 30, 2019 Diluted shares related to: Warrants 1,093,006 1,028,780 Stock options and RSUs 891,631 637,891 Dilutive common equivalent shares 1,984,637 1,666,671 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, 2019 and 2018: For the Three Months Ended For the Six Months Ended June 30, 2019 2018 2019 2018 Numerator – net income (loss) attributable to Harrow Health, Inc. $ (2,378 ) $ 2,522 $ 8,980 $ (991 ) Denominator – weighted average number of shares outstanding, basic 25,216,565 21,190,794 25,030,012 21,070,644 Dilutive common equivalents - 1,984,637 1,666,671 - Number of shares used for diluted earnings per share computation 25,216,565 23,175,431 26,696,683 21,070,644 Net income (loss) per share, diluted $ (0.09 ) $ 0.11 $ 0.34 $ (0.05 ) |
Investment in Eton Pharmaceuticals, Inc. - Related Party | Investment in Eton Pharmaceuticals, Inc. – Related Party The Company owns 3,500,000 shares of Eton common stock, which represents approximately 19.7% of the equity and voting interests of Eton as of June 30, 2019. At June 30, 2019, the fair market value of Eton’s common stock was $7.90 per share, the closing share price of Eton common stock on June 28, 2019, the last trading day of the period ended June 30, 2019. In accordance with the Accounting Standards Update (“ASU”) 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In November 2018, the Company entered into a lock-up agreement that prohibits the sale of any of its Eton common stock until November 2019 without the approval of National Securities Corporation, the underwriter of Eton’s initial public offering of its common stock. Mark Baum, the Company’s Chief Executive Officer, is a member of the board of directors of Eton. |
Investment in Melt Pharmaceuticals, Inc. - Related Party | Investment in Melt Pharmaceuticals, Inc. – Related Party In April 2018, the Company formed Melt as a wholly owned subsidiary. In January and March of 2019, Melt entered into definitive stock purchase agreements (collectively, the “Melt Series A Preferred Stock Agreement”) with certain investors and closed on the purchase and sale of Melt’s Series A Preferred Stock (the “Melt Series A Stock”), totaling approximately $11,400 of proceeds (collectively the “Melt Series A Round”) at a purchase price of $5.00 per share. As a result, the Company lost voting and ownership control of Melt and ceased consolidating Melt’s financial statements. In connection with the Melt Series A Preferred Stock Agreement, Melt also entered into a Registration Rights Agreement and agreed to use commercially reasonable efforts to file, or confidentially submit, a registration statement on Form S-1 with the United States Securities and Exchange Commission by September 30, 2020 relating to an initial public offering of its common stock. At the time of deconsolidation, the Company recorded a gain of $5,810 and adjusted the carrying value in Melt to reflect the increased valuation of Melt and the Company’s new ownership interest in accordance with Accounting Standard Codification (“ASC”) 810-10-40-4(c), Consolidation The Company owns 3,500,000 common shares (which is approximately 44% of the equity interest as of June 30, 2019) of Melt 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 Melt. Under this method, the Company recognizes earnings and losses of Melt in its consolidated financial statements and adjusts the carrying amount of its investment in Melt accordingly. The Company’s share of earnings and losses are based on the Company’s ownership interest of Melt. Any intra-entity profits and losses are eliminated. During the three and six months ended June 30, 2019, the Company recorded equity in net loss of Melt of $326 and $611, respectively. As of June 30, 2019, the carrying value of the Company’s investment in Melt was $5,199. See Note 4 for more information and related party disclosure regarding Melt. |
Investment in Surface Pharmaceuticals, Inc. - Related Party | Investment in Surface Pharmaceuticals, Inc. – Related Party In April 2017, the Company formed Surface as a wholly owned subsidiary. In May and July 2018, Surface entered into a definitive stock purchase agreement with an institutional investor for the purchase of Surface’s Series A Preferred Stock (the “Surface Series A Stock”) and closed on the sale, resulting 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. 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 interest in accordance with 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 June 30, 2019) 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 Company’s ownership interest of Surface. Any intra-entity profits and losses are eliminated. The Company recorded equity in net loss of Surface of $261 and $504 during the three and six months ended June 30, 2019. The Company recorded equity in net loss of Surface of $102 during the three and six months ended June 30, 2018. As of June 30, 2019, the carrying value of the Company’s investment in Surface was $4,443. See Note 5 for more information and related party disclosure regarding Surface. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the FASB issued new lease accounting guidance in ASU No. 2016-02, Leases |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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, 2019 and 2018: For the Three Months Ended For the Six Months Ended June 30, 2019 2018 2019 2018 Numerator – net income (loss) attributable to Harrow Health, Inc. $ (2,378 ) $ 2,522 $ 8,980 $ (991 ) Denominator – weighted average number of shares outstanding, basic 25,216,565 21,190,794 25,030,012 21,070,644 Net income (loss) per share, basic $ (0.09 ) $ 0.12 $ 0.36 $ (0.05 ) |
Schedule of Diluted Common Equivalent Shares | Diluted common equivalent shares for the six months ended June 30, 2019 and the three months ended June 30, 2018, consisted of the following: For the For the Three Months Six Months Ended June 30, 2018 June 30, 2019 Diluted shares related to: Warrants 1,093,006 1,028,780 Stock options and RSUs 891,631 637,891 Dilutive common equivalent shares 1,984,637 1,666,671 |
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, 2019 and 2018: For the Three Months Ended For the Six Months Ended June 30, 2019 2018 2019 2018 Numerator – net income (loss) attributable to Harrow Health, Inc. $ (2,378 ) $ 2,522 $ 8,980 $ (991 ) Denominator – weighted average number of shares outstanding, basic 25,216,565 21,190,794 25,030,012 21,070,644 Dilutive common equivalents - 1,984,637 1,666,671 - Number of shares used for diluted earnings per share computation 25,216,565 23,175,431 26,696,683 21,070,644 Net income (loss) per share, diluted $ (0.09 ) $ 0.11 $ 0.34 $ (0.05 ) |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenue | Revenue disaggregated by revenue source for the three and six months ended June 30, 2019 and 2018, consists of the following: For the Three Months Ended June 30, For the Six Months Ended June 30, 2019 2018 2019 2018 Product sales, net $ 13,509 $ 10,374 $ 25,792 $ 19,229 License revenues 7 10 14 20 Total revenues $ 13,516 $ 10,384 $ 25,806 $ 19,249 |
Investment in Melt Pharmaceut_2
Investment in Melt Pharmaceuticals, Inc. and Agreements - Related Party Transactions (Tables) - Melt Pharmaceuticals [Member] | 6 Months Ended |
Jun. 30, 2019 | |
Schedule of Condensed Income Statement | The unaudited condensed results of operations information of Melt is summarized below: For the Six months ended June 30, 2019 Revenues, net $ - Loss from operations 1,382 Net loss $ (1,382 ) |
Schedule of Condensed Balance Sheet | The unaudited condensed balance sheet information of Melt is summarized below: June 30, 2019 Current assets $ 9,521 Non current assets 3 Total assets $ 9,524 Total liabilities $ 940 Total preferred stock and stockholders’ equity 8,584 Total liabilities and stockholders’ equity $ 9,524 |
Investment in Surface Pharmac_2
Investment in Surface Pharmaceuticals, Inc. and Agreements - Related Party Transactions (Tables) - Surface Pharmaceuticals, Inc [Member] | 6 Months Ended |
Jun. 30, 2019 | |
Schedule of Condensed Income Statement | The unaudited condensed results of operations information of Surface is summarized below: For the Six Months Ended June 30, 2019 Revenues, net $ - Loss from operations 1,680 Net loss $ (1,680 ) |
Schedule of Condensed Balance Sheet | The unaudited condensed balance sheet information of Surface is summarized below: June 30, 2019 Current assets $ 18,061 Non current assets 48 Total assets $ 18,109 Total liabilities $ 532 Total stockholders’ equity 17,577 Total liabilities and stockholders’ equity $ 18,109 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | The composition of inventories as of June 30, 2019 and December 31, 2018 was as follows: June 30, December 31, 2019 2018 Raw materials $ 1,758 $ 1,119 Work in progress 264 6 Finished goods 630 709 Total inventories $ 2,652 $ 1,834 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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, December 31, 2019 2018 Prepaid insurance $ 65 $ 328 Other prepaid expenses 434 334 Receivable due from Surface 50 50 Receivable due from Melt 714 - Deposits and other current assets 138 125 Total prepaid expenses and other current assets $ 1,401 $ 837 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment consisted of the following: June 30, 2019 December 31, 2018 Property, plant and equipment, net: Computer software and hardware $ 1,743 $ 1,662 Furniture and equipment 420 397 Lab and pharmacy equipment 3,416 3,184 Leasehold improvements 5,612 5,496 11,191 10,739 Accumulated depreciation and amortization (5,245 ) (4,364 ) $ 5,946 $ 6,375 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The Company’s intangible assets at June 30, 2019 consisted of the following: Amortization periods Accumulated Net (in years) Cost amortization Impairment Carrying value Patents 17-19 years $ 962 $ (64 ) $ - $ 898 Licenses 20 years 50 (5 ) - 45 Trademarks Indefinite 332 - - 332 Customer relationships 3-15 years 2,998 (1,115 ) (15 ) 1,868 Trade name 5 years 16 (15 ) (1 ) - Non-competition clause 3-4 years 294 (274 ) (20 ) - State pharmacy licenses 25 years 45 (6 ) (28 ) 11 $ 4,697 $ (1,479 ) $ (64 ) $ 3,154 |
Schedule of Amortization Expenses for Intangible Assets | Amortization expense for intangible assets for the three and six months ended June 30, 2019 was as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2019 2018 2019 2018 Patents $ 11 6 $ 15 $ 13 Licenses 1 - 5 - Customer relationships 51 $ 50 102 100 Trade name - 1 2 3 Non-competition clause - - - 1 State pharmacy licenses - - 1 - $ 63 $ 57 $ 125 $ 117 |
Schedule of Estimated Future Amortization Expense | Estimated future amortization expense for the Company’s intangible assets at June 30, 2019 is as follows: Remainder of 2019 $ 128 2020 252 2021 252 2022 252 2023 252 Thereafter 2,018 $ 3,154 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consisted of the following: June 30, 2019 December 31, 2018 Accounts payable $ 5,957 $ 4,966 Accrued litigation settlement (see Note 14) 733 640 Deferred rent - 388 Accrued interest 253 256 Accrued exit fee for note payable 800 800 Total accounts payable and accrued expenses 7,743 7,050 Less: Current portion (6,943 ) (6,250 ) Non-current total accrued expenses $ 800 $ 800 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Future Minimum Payments | At June 30, 2019, future minimum payments under the Company’s note payable were as follows: Amount Remainder of 2019 $ 1,216 2020 3,696 2021 4,121 2022 3,828 2023 7,330 Total minimum payments 20,191 Less: amount representing interest (4,941 ) Notes payable, gross 15,250 Less: unamortized discount (1,505 ) 13,745 Less: current portion, net of unamortized discount (247 ) Note payable, net of current portion and unamortized debt discount $ 13,498 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of Future Lease Payment Under Operating Leases | Future lease payments under operating leases as of June 30, 2019 were as follows : Operating Leases Remainder of 2019 $ 457 2020 930 2021 809 2022 824 2023 843 Thereafter 5,304 Total minimum lease payments 9,167 Less: amount representing interest payments (2,695 ) Total operating lease liabilities 6,472 Less: current portion, operating lease liabilities (496 ) Operating lease liabilities, net of current portion $ 5,976 |
Schedule of Future Lease Payment Under Finance Lease | Future lease payments under non-cancelable finance leases as of June 30, 2019 were as follows : Finance Leases Remainder of 2019 $ 368 2020 9 2021 9 2022 9 2023 10 Total minimum lease payments 405 Less: amount representing interest payments (6 ) Present value of future minimum lease payments 399 Less: unamortized discount - 399 Less: current portion, net of unamortized discount (370 ) Finance lease obligation, net of current portion $ 29 |
Schedule of Future Minimum Lease Payments Under Operating Lease and Finance Lease | Future minimum lease payments under operating leases and future minimum finance lease payments as of December 31, 2018 were as follows (in thousands): Finance Leases Operating Leases 2019 $ 751 $ 797 2020 - 857 2021 - 742 2022 - 320 2023 - 330 Thereafter - 196 $ 751 $ 3,242 Less: Amounts representing interest (15 ) Less: Amounts representing unamortized discount (16 ) Total obligation under capital leases 720 Less: Current portion of capital leases (720 ) Long term capital lease obligation $ - |
Stockholders' Equity and Stoc_2
Stockholders' Equity and Stock-based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Schedule of Stock Option Plan Activity | A summary of stock option activity under the Plans for the six months ended June 30, 2019 is as follows: Number of shares Weighted Avg. Exercise Price Weighted Avg. Remaining Contractual Life Aggregate Intrinsic Value Options outstanding - January 1, 2019 2,482,009 $ 5.10 Options granted 352,000 $ 6.17 Options exercised (57,933 ) $ 3.72 Options cancelled/forfeited (50,471 ) $ 5.83 Options outstanding - June 30, 2019 2,725,605 $ 5.25 5.61 $ 9,621 Options exercisable 1,461,723 $ 4.69 5.98 $ 6,091 Options vested and expected to vest 2,607,104 $ 5.21 5.63 $ 9,323 |
Schedule of Fair Value Assumptions | 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: 2019 Weighted-average fair value of options granted $ 3.64 Expected terms (in years) 5.8 - 6.1 Expected volatility 64% - 67 % Risk-free interest rate 2.19% - 2.68 % Dividend yield - |
Schedule of Stock Option Outstanding and Exercisable | The following table summarizes information about stock options outstanding and exercisable at June 30, 2019: 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 - $2.60 816,936 7.22 $ 2.04 526,237 $ 2.12 $2.76 - $4.66 495,496 6.68 $ 3.97 441,452 $ 3.99 $5.61 - $6.30 440,350 8.41 $ 6.16 122,159 $ 6.04 $6.64 - $8.99 967,793 2.44 $ 8.01 366,845 $ 8.24 $42.80 5,030 1.12 $ 42.80 5,030 $ 42.80 $1.47 - $42.80 2,725,605 5.61 $ 5.25 1,461,723 $ 4.69 |
Schedule of Restricted Stock Units Activity | A summary of the Company’s RSU activity and related information for the six months ended June 30, 2019 is as follows: Number of RSUs Weighted Average Grant Date Fair Value RSUs unvested - January 1, 2019 1,275,680 $ 2.16 RSUs granted 223,860 $ 6.43 RSUs vested (68,180 ) $ 2.20 RSUs cancelled/forfeited - RSUs unvested at June 30, 2019 1,431,360 $ 2.83 |
Schedule of Warrants Activity | A summary of warrant activity for the six months ended June 30, 2019 is as follows: Number of Shares Subject to Warrants Outstanding Weighted Avg. Exercise Price Warrants outstanding - January 1, 2019 2,206,973 $ 1.91 Granted - Exercised (1,032,055 ) $ 1.79 Expired - Warrants outstanding and exercisable - June 30, 2019 1,174,918 $ 2.01 Weighted average remaining contractual life of the outstanding warrants in years - June 30, 2019 3.51 |
Schedule of Warrants Outstanding and Warrants Exercisable | A list of the warrants outstanding as of June 30, 2019 is included in the following table: Warrants Exercise Expiration Warrant Series Issue Date Outstanding Price Date Lender warrants 5/11/2015 125,000 $ 1.79 5/11/2025 Settlement warrants 8/16/2016 40,000 $ 3.75 8/16/2021 PIPE investor and placement agent warrants 12/27/2016 394,532 $ 1.79 12/27/2019 Lender warrants 7/19/2017 615,386 $ 2.08 7/19/2024 1,174,918 |
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 Three Months Ended For the Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Employees - selling, general and administrative $ 268 $ 573 $ 906 $ 1,166 Directors - selling, general and administrative 75 35 150 85 Consultants - selling, general and administrative 24 - 99 108 Total $ 367 $ 608 $ 1,155 $ 1,359 |
Segment Information and Conce_2
Segment Information and Concentrations (Table) (USD $) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Information And Concentrations Table | |
Schedule of Operating Segment | Segment net revenues, segment operating expenses and segment contribution information consisted of the following for the three and six months ended June 30, 2019: For the Three Months Ended June 30, 2019 Pharmaceutical Pharmaceutical Compounding Drug Development Total Net revenues $ 13,516 $ - $ 13,516 Cost of sales (5,225 ) - (5,225 ) Gross profit 8,291 - 8,291 Operating expenses: Selling, general and administrative 5,804 43 5,847 Research and development 533 127 660 Segment contribution 1,954 (170 ) 1,784 Corporate 2,342 Research and development 150 Amortization 59 Operating loss $ (767 ) For the Six Months Ended June 30, 2019 Pharmaceutical Pharmaceutical Compounding Drug Development Total Net revenues $ 25,806 $ - $ 25,806 Cost of sales (9,123 ) - (9,123 ) Gross profit 16,683 - 16,683 Operating expenses: Selling, general and administrative 11,519 86 11,605 Research and development 658 263 921 Segment contribution 4,506 (349 ) 4,157 Corporate 5,061 Research and development 294 Amortization 125 Operating loss $ (1,323 ) |
Description of Business and B_2
Description of Business and Basis of Presentation (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | ||
Aug. 14, 2019 | Jul. 31, 2019 | Feb. 28, 2019 | Jun. 30, 2019 | |
Voting rights, description | More than 50% of the voting rights | |||
Parent Company [Member] | ||||
Ownership percentage | 72.00% | |||
Subsequent Event [Member] | ||||
Number of shares issued | 25,135 | |||
Elle Pharmaceutical, LLC [Member] | ||||
Number of shares issued | 1,000,000 | |||
Ownership percentage | 28.00% | |||
Noice Rx, LLC [Member] | Subsequent Event [Member] | ||||
Purchase price | $ 8,000 | |||
Proceeds from issuance of notes | $ 8,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Jan. 31, 2019USD ($)$ / shares | Jul. 31, 2018USD ($)$ / shares | May 31, 2018USD ($)$ / shares | Jun. 30, 2019USD ($)$ / sharesshares | Mar. 31, 2019USD ($)$ / shares | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)Segment$ / sharesshares | Jun. 30, 2018USD ($)shares | Dec. 31, 2018USD ($) | |
Net income (loss) | $ (2,378) | $ 2,522 | $ 8,980 | $ (991) | |||||
Accumulated deficit | (65,231) | (65,231) | $ (74,211) | ||||||
Net cash used in operating activities | (632) | $ 400 | |||||||
Cash resources and restricted investments, marketable securities | 4,193 | $ 4,193 | |||||||
Number of segments | Segment | 2 | ||||||||
Non-controlling interest description | Generally, any interest that holds less than 50% of the outstanding voting shares is deemed to be a noncontrolling interest | ||||||||
Antidilutive securities | shares | 5,331,883 | 10,245,280 | |||||||
Right of use asset | 6,069 | $ 6,069 | |||||||
Lease liability | $ 6,472 | $ 6,472 | |||||||
Melt Series A Stock [Member] | |||||||||
Stock price per shares | $ / shares | $ 5 | $ 5 | |||||||
Proceeds from issuance of preferred stock | $ 11,400 | $ 11,400 | |||||||
Surface Series A Stock [Member] | |||||||||
Stock price per shares | $ / shares | $ 3.30 | $ 3.30 | |||||||
Proceeds from issuance of preferred stock | $ 21,000 | $ 21,000 | |||||||
Eton Pharmaceuticals, Inc. [Member] | |||||||||
Number of shares owned | shares | 3,500,000 | 3,500,000 | |||||||
Ownership percentage | 19.70% | 19.70% | |||||||
Stock price per shares | $ / shares | $ 7.90 | $ 7.90 | |||||||
Gain on investment | $ 350 | $ 6,230 | |||||||
Fair market value of investments | $ 27,650 | 27,650 | |||||||
Melt Pharmaceuticals, Inc. [Member] | |||||||||
Net income (loss) | $ (1,382) | ||||||||
Number of shares owned | shares | 3,500,000 | 3,500,000 | |||||||
Ownership percentage | 44.00% | 44.00% | |||||||
Gain on deconsolidation amount | $ 5,810 | ||||||||
Net income (loss) | $ 326 | 611 | |||||||
Carrying value of investments | $ 5,199 | 5,199 | |||||||
Surface Pharmaceuticals, Inc [Member] | |||||||||
Net income (loss) | $ (1,680) | ||||||||
Number of shares owned | shares | 3,500,000 | 3,500,000 | |||||||
Ownership percentage | 30.00% | 30.00% | |||||||
Gain on deconsolidation amount | $ 5,320 | ||||||||
Net income (loss) | $ 261 | $ 102 | 504 | $ 102 | |||||
Carrying value of investments | $ 4,443 | $ 4,443 | |||||||
Restricted Stock Units [Member] | |||||||||
Number of shares vested during the period | shares | 304,873 | 168,513 |
Summary of Significant Accoun_5
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, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Accounting Policies [Abstract] | ||||
Numerator - net income (loss) attributable to Harrow Health, Inc. | $ (2,378) | $ 2,522 | $ 8,980 | $ (991) |
Denominator - weighted average number of shares outstanding, basic | 25,216,565 | 21,190,794 | 25,030,012 | 21,070,644 |
Net income (loss) per share, basic | $ (0.09) | $ 0.12 | $ 0.36 | $ (0.05) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Diluted Common Equivalent Shares (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Dilutive common equivalent shares | 1,984,637 | 1,984,637 | 1,666,671 | |
Stock Option and RSUs[Member] | ||||
Dilutive common equivalent shares | 891,631 | 637,891 | ||
Warrant [Member] | ||||
Dilutive common equivalent shares | 1,093,006 | 1,028,780 |
Summary of Significant Accoun_7
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, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Accounting Policies [Abstract] | ||||
Numerator - net income (loss) attributable to Harrow Health, Inc. | $ (2,378) | $ 2,522 | $ 8,980 | $ (991) |
Denominator - weighted average number of shares outstanding, basic | 25,216,565 | 21,190,794 | 25,030,012 | 21,070,644 |
Dilutive common equivalent shares | 1,984,637 | 1,984,637 | 1,666,671 | |
Number of shares used for diluted earnings per share computation | 25,216,565 | 23,175,431 | 26,696,683 | 21,070,644 |
Net income (loss) per share, diluted | $ (0.09) | $ 0.11 | $ 0.34 | $ (0.05) |
Revenues (Details Narrative)
Revenues (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Revenue from Contract with Customer [Abstract] | ||
Deferred revenue and customer deposits | $ 224 | $ 119 |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Total Revenues | $ 13,516 | $ 10,384 | $ 25,806 | $ 19,249 |
Product Sales, Net [Member] | ||||
Total Revenues | 13,509 | 10,374 | 25,792 | 19,229 |
License Revenues [Member] | ||||
Total Revenues | $ 7 | $ 10 | $ 14 | $ 20 |
Investment in Melt Pharmaceut_3
Investment in Melt Pharmaceuticals, Inc. and Agreements - Related Party Transactions (Details Narrative) - Melt Pharmaceuticals, Inc. [Member] - USD ($) $ in Thousands | 1 Months Ended | ||
Feb. 28, 2019 | Dec. 31, 2018 | Jun. 30, 2019 | |
Asset Purchase Agreement [Member] | |||
Royalty payment percentage on net sales | 8.00% | ||
Management Services Agreement [Member] | |||
Administrative expenses | $ 10 | ||
Reimbursable expenses due | $ 714 |
Investment in Melt Pharmaceut_4
Investment in Melt Pharmaceuticals, Inc. and Agreements - Related Party Transactions - Schedule of Condensed Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues, net | $ 13,516 | $ 10,384 | $ 25,806 | $ 19,249 |
Loss from operations | (767) | (624) | (1,323) | (2,405) |
Net loss | $ (2,378) | $ 2,522 | 8,980 | $ (991) |
Melt Pharmaceuticals, Inc. [Member] | ||||
Revenues, net | ||||
Loss from operations | 1,382 | |||
Net loss | $ (1,382) |
Investment in Melt Pharmaceut_5
Investment in Melt Pharmaceuticals, Inc. and Agreements - Related Party Transactions - Schedule of Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets | $ 38,119 | $ 32,843 |
Total assets | 65,157 | 49,451 |
Total liabilities | 30,159 | 24,700 |
Total stockholders' equity | 35,065 | 24,751 |
Total liabilities and stockholders' equity | 65,157 | $ 49,451 |
Melt Pharmaceuticals, Inc. [Member] | ||
Current assets | 9,521 | |
Non current assets | 3 | |
Total assets | 9,524 | |
Total liabilities | 940 | |
Total stockholders' equity | 8,584 | |
Total liabilities and stockholders' equity | $ 9,524 |
Investment in Surface Pharmac_3
Investment in Surface Pharmaceuticals, Inc. and Agreements - Related Party Transactions (Details Narrative) - Surface Pharmaceuticals, Inc [Member] - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended |
Jan. 31, 2018 | Jun. 30, 2019 | |
Number of shares owned | 3,500,000 | |
Ownership percentage | 30.00% | |
Dr. Lindstrom [Member] | ||
Royalty payment percentage on net sales | 3.00% | |
Asset Purchase Agreement [Member] | Minimum [Member] | ||
Royalty payment percentage on net sales | 4.00% | |
Asset Purchase Agreement [Member] | Maximum [Member] | ||
Royalty payment percentage on net sales | 6.00% | |
Management Services Agreement [Member] | ||
Administrative expenses | $ 10 | |
Reimbursable expenses due | $ 50 |
Investment in Surface Pharmac_4
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, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues, net | $ 13,516 | $ 10,384 | $ 25,806 | $ 19,249 |
Loss from operations | (767) | (624) | (1,323) | (2,405) |
Net income (loss) | $ (2,378) | $ 2,522 | 8,980 | $ (991) |
Surface Pharmaceuticals, Inc [Member] | ||||
Revenues, net | ||||
Loss from operations | 1,680 | |||
Net income (loss) | $ (1,680) |
Investment in Surface Pharmac_5
Investment in Surface Pharmaceuticals, Inc. and Agreements - Related Party Transactions - Schedule of Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets | $ 38,119 | $ 32,843 |
Total assets | 65,157 | 49,451 |
Total liabilities | 30,159 | 24,700 |
Total stockholders' equity | 35,065 | 24,751 |
Total liabilities and stockholders' equity | 65,157 | $ 49,451 |
Surface Pharmaceuticals, Inc [Member] | ||
Current assets | 18,061 | |
Non current assets | 48 | |
Total assets | 18,109 | |
Total liabilities | 532 | |
Total stockholders' equity | 17,577 | |
Total liabilities and stockholders' equity | $ 18,109 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,758 | $ 1,119 |
Work in progress | 264 | 6 |
Finished goods | 630 | 709 |
Total inventories | $ 2,652 | $ 1,834 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Prepaid insurance | $ 65 | $ 328 |
Other prepaid expenses | 434 | 334 |
Deposits and other current assets | 138 | 125 |
Total prepaid expenses and other current assets | 1,401 | 837 |
Surface Pharmaceuticals, Inc [Member] | ||
Receivable due from related party | 50 | 50 |
Melt Pharmaceuticals, Inc. [Member] | ||
Receivable due from related party | $ 714 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization of property, plant and equipment | $ 491 | $ 968 | $ 800 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Abstract] | ||
Computer software and hardware | $ 1,743 | $ 1,662 |
Furniture and equipment | 420 | 397 |
Lab and pharmacy equipment | 3,416 | 3,184 |
Leasehold improvements | 5,612 | 5,496 |
Property, plant and equipment, gross | 11,191 | 10,739 |
Accumulated depreciation and amortization | (5,245) | (4,364) |
Property, plant and equipment, Net | $ 5,946 | $ 6,375 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Schedule of Intangible Assets (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Cost | $ 4,697 |
Accumulated amortization | (1,479) |
Impairment | (64) |
Net Carrying value | 3,154 |
Patents [Member] | |
Cost | 962 |
Accumulated amortization | (64) |
Impairment | |
Net Carrying value | $ 898 |
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 | (5) |
Impairment | |
Net Carrying value | $ 45 |
Trademarks [Member] | |
Amortization periods description | Indefinite |
Cost | $ 332 |
Accumulated amortization | |
Impairment | |
Net Carrying value | 332 |
Customer Relationships [Member] | |
Cost | 2,998 |
Accumulated amortization | (1,115) |
Impairment | (15) |
Net Carrying value | $ 1,868 |
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 | (15) |
Impairment | (1) |
Net Carrying value | |
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 |
Cost | $ 45 |
Accumulated amortization | (6) |
Impairment | (28) |
Net Carrying value | $ 11 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Schedule of Amortization Expenses for Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Amortization of intangible assets | $ 63 | $ 57 | $ 125 | $ 117 |
Patents [Member] | ||||
Amortization of intangible assets | 11 | 6 | 15 | 13 |
Licenses [Member] | ||||
Amortization of intangible assets | 1 | 5 | ||
Customer Relationships [Member] | ||||
Amortization of intangible assets | 51 | 50 | 102 | 100 |
Trade Name [Member] | ||||
Amortization of intangible assets | 1 | 2 | 3 | |
Non-Competition Clause [Member] | ||||
Amortization of intangible assets | 1 | |||
State Pharmacy Licenses [Member] | ||||
Amortization of intangible assets | $ 1 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2019 | $ 128 | |
2020 | 252 | |
2021 | 252 | |
2022 | 252 | |
2023 | 252 | |
Thereafter | 2,018 | |
Intangible assets | $ 3,154 | $ 3,059 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 5,957 | $ 4,966 |
Accrued litigation settlement (see Note 14) | 733 | 640 |
Deferred rent | 388 | |
Accrued interest | 253 | 256 |
Accrued exit fee for note payable | 800 | 800 |
Total accounts payable and accrued expenses | 7,743 | 7,050 |
Less: Current portion | (6,943) | (6,250) |
Non-current total accrued expenses | $ 800 | $ 800 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended |
May 31, 2019 | Jun. 30, 2019 | Jun. 30, 2019 | |
Amortization of debt discount | $ 6 | $ 13 | |
Notes Payable [Member] | |||
Amortization of debt discount | $ 125 | $ 250 | |
Term Loan and Security Agreement [Member] | SWK Funding LLC [Member] | |||
Debt interest rate, description | The interest rate calculation that the loan bears is now equal to the three-month London Inter-Bank Offered Rate (subject to a minimum of 2.00%), plus an applicable margin of 10.00% (the "Margin Rate"); provided that, if, two days prior to a payment date, the Company provides the Lender evidence that the Company has achieved a leverage ratio as of such date of less than 4.00:1:00, the Margin Rate shall equal 9.00%; and if the Company has achieved a leverage ratio as of such date of less than 3.00:1:00, the Margin Rate shall equal 7.00% | ||
Additional principal amount | $ 5,000 | ||
Deconsolidation percentage | 50.00% | ||
Legal and lender costs | $ 282 | ||
Term Loan and Security Agreement [Member] | SWK Funding LLC [Member] | London Inter-Bank Offered Rate [Member] | Minimum [Member] | |||
Debt instrument interest rate | 2.00% | ||
Term Loan and Security Agreement [Member] | SWK Funding LLC [Member] | Margin Rate [Member] | |||
Debt instrument interest rate | 10.00% |
Debt - Summary of Future Minimu
Debt - Summary of Future Minimum Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Less: unamortized discount | ||
Less: current portion, net of unamortized discount | (247) | $ (2,529) |
Note payable, net of current portion and unamortized debt discount | 13,498 | $ 11,999 |
Note Payable [Member] | ||
Remainder of 2019 | 1,216 | |
2020 | 3,696 | |
2021 | 4,121 | |
2022 | 3,828 | |
2023 | 7,330 | |
Total minimum payments | 20,191 | |
Less: amount representing interest | (4,941) | |
Notes payable, gross | 15,250 | |
Less: unamortized discount | (1,505) | |
Notes payable | 13,745 | |
Less: current portion, net of unamortized discount | (247) | |
Note payable, net of current portion and unamortized debt discount | $ 13,498 |
Leases (Details Narrative)
Leases (Details Narrative) $ in Thousands | Jan. 02, 2019USD ($)ft² | Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) |
Lease term description | The Company has elected to not recognize right-of-use assets and lease liabilities arising from short-term leases, which are leases that, at the commencement date, have a lease term of 12 months or less and do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. | ||||
Operating lease percentage | 6.36% | 6.36% | |||
Operating weighted average remaining term | 12 years 1 month 9 days | 12 years 1 month 9 days | |||
Operating lease right use of assets | $ 6,069 | $ 6,069 | |||
Decrease in accounts payable and accrued expenses | 830 | $ 885 | |||
Operating lease liability | 6,472 | 6,472 | |||
Cash paid in operating lease liability | 230 | 448 | |||
Operating lease expense | 232 | 464 | |||
Debt discount amortization | 6 | 13 | |||
Depreciation expenses | 73 | 146 | |||
Cash paid for interest expenses | $ 4 | $ 15 | |||
Finance Leases [Member] | |||||
Operating lease percentage | 9.71% | 9.71% | |||
Operating weighted average remaining term | 8 months 12 days | 8 months 12 days | |||
ASU- 2016-02 [Member] | |||||
Operating lease right use of assets | $ 6,325 | ||||
Decrease in accounts payable and accrued expenses | 388 | ||||
Operating lease liability | $ 6,712 | ||||
ASU- 2016-02 [Member] | San Diego [Member] | |||||
Operating lease space | ft² | 10,200 | ||||
Operating lease expires date | Dec. 31, 2021 | ||||
Lease term | 5 years | ||||
ASU- 2016-02 [Member] | Irvine [Member] | |||||
Operating lease space | ft² | 4,500 | ||||
Operating lease expires date | Dec. 31, 2020 | ||||
Lease term description | Term for up to two five-year periods | ||||
ASU- 2016-02 [Member] | Ledgewood [Member] | |||||
Operating lease space | ft² | 25,000 | ||||
Operating lease expires date | Jul. 31, 2024 | ||||
Lease term description | Term for two additional five-year periods. |
Leases - Schedule of Future Lea
Leases - Schedule of Future Lease Payment Under Operating Leases (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Remainder of 2019 | $ 457 | |
2020 | 930 | |
2021 | 809 | |
2022 | 824 | |
2023 | 843 | |
Thereafter | 5,304 | |
Total minimum lease payments | 9,167 | |
Less: amount representing interest payments | (2,695) | |
Total operating lease liabilities | 6,472 | |
Less: current portion, operating lease liabilities | 496 | |
Operating lease liabilities, net of current portion | $ 5,976 |
Leases - Schedule of Future L_2
Leases - Schedule of Future Lease Payment Under Finance Lease (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Remainder of 2019 | $ 368 | |
2020 | 9 | |
2021 | 9 | |
2022 | 9 | |
2023 | 10 | |
Total minimum lease payments | 405 | |
Less: amount representing interest payments | (6) | |
Present value of future minimum lease payment | 399 | |
Less: unamortized discount | ||
Present value of future net minimum lease payments | 399 | |
Less: current portion, net of unamortized discount | (370) | $ (720) |
Finance lease obligation, net of current portion | $ 29 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments Under Operating Lease and Finance Lease (Details) $ in Thousands | Jun. 30, 2019USD ($) |
2019 | $ 368 |
2020 | 9 |
2021 | 9 |
2022 | 9 |
2023 | 10 |
Financing lease payment | 405 |
2020 | 930 |
2021 | 809 |
2022 | 824 |
2023 | 843 |
Thereafter | 5,304 |
Operating lease payment | 9,167 |
Financing Lease [Member] | |
2019 | 751 |
2020 | |
2021 | |
2022 | |
2023 | |
Thereafter | |
Financing lease payment | 751 |
Less: Amounts representing interest | (15) |
Less: Amounts representing unamortized discount | (16) |
Total obligation under capital leases | 720 |
Less: Current portion of capital leases | (720) |
Long term capital lease obligation | |
Operating Lease [Member] | |
2019 | 797 |
2020 | 857 |
2021 | 742 |
2022 | 320 |
2023 | 330 |
Thereafter | 196 |
Operating lease payment | $ 3,242 |
Stockholders' Equity and Stoc_3
Stockholders' Equity and Stock-based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |
Feb. 28, 2019 | Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | |
Shares issued of common stock, shares | 15,000 | |||
Commission expense | $ 75 | |||
Stock-based compensation | $ 1,080 | $ 1,359 | ||
Mayfield Pharmaceuticals, Inc. [Member] | ||||
Number of shares issued for acquisition | 1,000,000 | |||
Ownership percentage | 72.00% | 72.00% | ||
2017 Incentive Stock and Awards Plan [Member] | ||||
Number of shares issued | 997,280 | |||
Maximum number of common stock issuance under the plan | 2,000,000 | 2,000,000 | ||
Restricted Stock [Member] | ||||
Shares issued of common stock, shares | 68,180 | |||
Stock Option Plan [Member] | ||||
Closing price of common stock price per share | $ 8.70 | $ 8.70 | ||
Forfeiture factor, percentage | 10.00% | |||
Unrecognized compensation expense related to unvested stock options granted under the plan | $ 4,128 | $ 4,128 | ||
Expense expected to recognize over the weighted-average remaining vesting period | 3 years 11 months 8 days | |||
Stock-based compensation | $ 262 | $ 540 | ||
Stock Option Plan [Member] | Employees and Consultant [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, 2019 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; 100% of the shares subject to the option vest on a quarterly basis in equal installments over three years; and 90% of the shares subject to the option vest and become exercisable on the second month after the grant date and the remaining 10% of the shares subject to the option vest and become exercisable quarterly in equal installments thereafter over the next 11 months. 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. | |||
Restricted Stock Units [Member] | ||||
Shares issued of common stock, shares | 185,000 | |||
Fair market value of restricted shares | $ 1,139 | |||
Restricted Stock Units [Member] | Board of Directors [Member] | ||||
Shares issued of common stock, shares | 38,860 | 38,860 | ||
Stock options granted vesting terms | Which vests on a quarterly basis, over one year in equal installments. | Which vests on a quarterly basis, over one year in equal installments. | ||
Fair market value of restricted shares | $ 300 | $ 300 | ||
Unvested RSUs [Member] | ||||
Unrecognized compensation expense related to unvested stock options granted under the plan | 1,076 | $ 1,076 | ||
Expense expected to recognize over the weighted-average remaining vesting period | 4 months 13 days | |||
Stock-based compensation | $ 110 | $ 540 | ||
Common Stock Warrants [Member] | ||||
Number of shares issued | 663,338 | |||
Exercise of warrants, shares | 932,000 | 932,000 | ||
Warrants exercise price | $ 1.79 | $ 1.79 | ||
Common Stock Warrants One [Member] | ||||
Number of shares issued | 100,055 | |||
Exercise of warrants, shares | 100,055 | 100,055 | ||
Warrants exercise price | $ 1.79 | $ 1.79 | ||
Number of shares issued, value | $ 179 | |||
Stock Option and RSUs[Member] | ||||
Number of shares issued | 20,955 | |||
Cashless exercise of options to purchase common stock | 57,933 | |||
Stock Option and RSUs[Member] | Minimum [Member] | ||||
Options exercise price | 1.70 | |||
Stock Option and RSUs[Member] | Maximum [Member] | ||||
Options exercise price | 4.09 |
Stockholders' Equity and Stoc_4
Stockholders' Equity and Stock-based Compensation - Schedule of Stock Option Plan Activity (Details) - Stock Option Plan [Member] $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | |
Number of shares, Outstanding, Beginning balance | shares | 2,482,009 |
Number of shares, Options granted | shares | 352,000 |
Number of shares, Options exercised | shares | (57,933) |
Number of shares, Options cancelled/forfeited | shares | (50,471) |
Number of shares, Outstanding, Ending balance | shares | 2,725,605 |
Number of shares, Options exercisable | shares | 1,461,723 |
Number of shares, Options vested and expected to vest | shares | 2,607,104 |
Weighted Avg. Exercise Price, Outstanding, Beginning balance | $ / shares | $ 5.10 |
Weighted Avg. Exercise Price, Options granted | $ / shares | 6.17 |
Weighted Avg. Exercise Price, Options exercised | $ / shares | 3.72 |
Weighted Avg. Exercise Price, Options cancelled/forfeited | $ / shares | 5.83 |
Weighted Avg. Exercise Price, Outstanding, Ending balance | $ / shares | 5.25 |
Weighted Avg. Exercise Price, Exercisable Ending Balance | $ / shares | 4.69 |
Weighted Avg. Exercise Price, Vested and expected to vest | $ / shares | $ 5.21 |
Weighted Avg. Remaining Contractual Life, Options outstanding | 5 years 7 months 10 days |
Weighted Avg. Remaining Contractual Life, Options exercisable | 5 years 11 months 23 days |
Weighted Avg. Remaining Contractual Life, Options vested and expected to vest | 5 years 7 months 17 days |
Aggregate Intrinsic Value, Options outstanding | $ | $ 9,621 |
Aggregate Intrinsic Value, Options exercisable | $ | 6,091 |
Aggregate Intrinsic Value, Options vested and expected to vest | $ | $ 9,323 |
Stockholders' Equity and Stoc_5
Stockholders' Equity and Stock-based Compensation - Schedule of Fair Value Assumptions (Details) - Options Granted to Employees [Member] | 6 Months Ended |
Jun. 30, 2019$ / shares | |
Weighted-average fair value of options granted | $ 3.64 |
Expected volatility, minimum | 64.00% |
Expected volatility, maximum | 67.00% |
Risk-free interest rate, minimum | 2.19% |
Risk-free interest rate, maximum | 2.68% |
Dividend yield | 0.00% |
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 Stoc_6
Stockholders' Equity and Stock-based Compensation - Schedule of Stock Option Outstanding and Exercisable (Details) | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Range of Exercise Prices, minimum | $ 1.47 |
Range of Exercise Prices, maximum | $ 42.80 |
Number of Options Outstanding | shares | 2,725,605 |
Weighted Average Remaining Contractual Life in Years | 5 years 7 months 10 days |
Weighted Average Exercise Price | $ 5.25 |
Number Exercisable | shares | 1,461,723 |
Weighted Average Exercisable Exercise Price | $ 4.69 |
Range One [Member] | |
Range of Exercise Prices, minimum | 1.47 |
Range of Exercise Prices, maximum | $ 2.60 |
Number of Options Outstanding | shares | 816,936 |
Weighted Average Remaining Contractual Life in Years | 7 years 2 months 19 days |
Weighted Average Exercise Price | $ 2.04 |
Number Exercisable | shares | 526,237 |
Weighted Average Exercisable Exercise Price | $ 2.12 |
Range Two [Member] | |
Range of Exercise Prices, minimum | 2.76 |
Range of Exercise Prices, maximum | $ 4.66 |
Number of Options Outstanding | shares | 495,496 |
Weighted Average Remaining Contractual Life in Years | 6 years 8 months 5 days |
Weighted Average Exercise Price | $ 3.97 |
Number Exercisable | shares | 441,452 |
Weighted Average Exercisable Exercise Price | $ 3.99 |
Range Three [Member] | |
Range of Exercise Prices, minimum | 5.61 |
Range of Exercise Prices, maximum | $ 6.30 |
Number of Options Outstanding | shares | 440,350 |
Weighted Average Remaining Contractual Life in Years | 8 years 4 months 28 days |
Weighted Average Exercise Price | $ 6.16 |
Number Exercisable | shares | 122,159 |
Weighted Average Exercisable Exercise Price | $ 6.04 |
Range Four [Member] | |
Range of Exercise Prices, minimum | 6.64 |
Range of Exercise Prices, maximum | $ 8.99 |
Number of Options Outstanding | shares | 967,793 |
Weighted Average Remaining Contractual Life in Years | 2 years 5 months 9 days |
Weighted Average Exercise Price | $ 8.01 |
Number Exercisable | shares | 366,845 |
Weighted Average Exercisable Exercise Price | $ 8.24 |
Range Five [Member] | |
Range of Exercise Prices, minimum | $ 42.80 |
Number of Options Outstanding | shares | 5,030 |
Weighted Average Remaining Contractual Life in Years | 1 year 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 Stoc_7
Stockholders' Equity and Stock-based Compensation - Schedule of Restricted Stock Units Activity (Details) - Restricted Stock Units [Member] | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Number of RSUs unvested, Outstanding, Beginning balance | 1,275,680 |
Number of RSUs granted | 223,860 |
Number of RSUs vested | (68,180) |
Number RSUs cancelled/forfeited | |
Number of RSUs unvested, Outstanding, Ending balance | 1,431,360 |
Weighted Average Grant Date Fair Value, Beginning balance | $ / shares | $ 2.16 |
Weighted Average Grant Date Fair Value, RSUs granted | $ / shares | 6.43 |
Weighted Average Grant Date Fair Value, RSUs vested | $ / shares | 2.20 |
Weighted Average Grant Date Fair Value, Ending balance | $ / shares | $ 2.83 |
Stockholders' Equity and Stoc_8
Stockholders' Equity and Stock-based Compensation - Schedule of Warrants Activity (Details) - Warrant [Member] | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Number of Shares Warrants Outstanding, beginning balance | 2,206,973 |
Number of Shares Warrants Outstanding, Granted | |
Number of Shares Warrants Outstanding, Exercised | (1,032,055) |
Number of Shares Warrants Outstanding, Expired | |
Number of Shares Warrants Outstanding, ending balance | 1,174,918 |
Weighted average remaining contractual life of the outstanding warrants in years | 3 years 6 months 3 days |
Weighted avg. Exercise Price, outstanding, beginning balance | $ / shares | $ 1.91 |
Weighted avg. Exercise Price, exercised | $ / shares | 1.79 |
Weighted avg. Exercise Price, outstanding and exercisable, ending balance | $ / shares | $ 2.01 |
Stockholders' Equity and Stoc_9
Stockholders' Equity and Stock-based Compensation - Schedule of Warrants Outstanding and Warrants Exercisable (Details) | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Warrant [Member] | |
Warrants Outstanding | shares | 1,174,918 |
Exercise Price | $ / shares | $ 2.01 |
Lender Warrants [Member] | |
Issue Date | May 11, 2015 |
Warrants Outstanding | shares | 125,000 |
Exercise Price | $ / shares | $ 1.79 |
Expiration Date | May 11, 2025 |
Settlement Warrants [Member] | |
Issue Date | Aug. 16, 2016 |
Warrants Outstanding | shares | 40,000 |
Exercise Price | $ / shares | $ 3.75 |
Expiration Date | Aug. 16, 2021 |
PIPE Investor and Placement Agent Warrants [Member] | |
Issue Date | Dec. 27, 2016 |
Warrants Outstanding | shares | 394,532 |
Exercise Price | $ / shares | $ 1.79 |
Expiration Date | Dec. 27, 2019 |
Lender Warrants One [Member] | |
Issue Date | Jul. 19, 2017 |
Warrants Outstanding | shares | 615,386 |
Exercise Price | $ / shares | $ 2.08 |
Expiration Date | Jul. 19, 2024 |
Stockholders' Equity and Sto_10
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, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Stock based compensation related to equity instruments granted to related parties | $ 367 | $ 608 | $ 1,155 | $ 1,359 |
Employees [Member] | Selling, General and Administrative [Member] | ||||
Stock based compensation related to equity instruments granted to related parties | 268 | 573 | 906 | 1,166 |
Directors [Member] | Selling, General and Administrative [Member] | ||||
Stock based compensation related to equity instruments granted to related parties | 75 | 35 | 150 | 85 |
Consultants [Member] | Selling, General and Administrative [Member] | ||||
Stock based compensation related to equity instruments granted to related parties | $ 24 | $ 99 | $ 108 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
May 31, 2019 | Feb. 28, 2019 | Apr. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accrued expenses | $ 800 | $ 800 | $ 800 | ||||||
Royalty payments | 274 | $ 114 | 465 | $ 197 | |||||
Stock based payments | $ 1,080 | 1,359 | |||||||
Business acquisition description | In consideration for the acquisition of the intellectual property rights, the Company is obligated to make payments to the Inventors based on the completion of certain milestones, generally consisting of: (1) a payment payable within 30 days after the issuance of the first patent in the United States arising from the acquired intellectual property (if any); (2) a payment payable within 30 days after the Company files the first investigational new drug application ("IND") with the FDA for the first product arising from the acquired intellectual property (if any); (3) for certain of the Inventors, a payment payable within 30 days after the Company files the first new drug application with the FDA for the first product arising from the acquired intellectual property (if any); and (4) certain royalty payments based on the net receipts received by the Company in connection with the sale or licensing of any product based on the acquired intellectual property (if any), after deducting (among other things) the Company's development costs associated with such product. If, following five years after the date of the applicable asset purchase agreement, the Company either (a) for certain of the Inventors, has not filed an IND or, for the remaining Inventors, has not initiated a study where data is derived, or (b) has failed to generate royalty payments to the Inventors for any product based on the acquired intellectual property, the Inventors may terminate the applicable asset purchase agreement and request that the Company re-assign the acquired technology to the Inventors. | ||||||||
Royalty expenses included in accounts payable | 274 | $ 114 | $ 274 | $ 114 | |||||
Allergan USA, Inc. [Member] | |||||||||
Lost profit damages | $ 48 | ||||||||
Settlement Agreement [Member] | |||||||||
Damages low claim rate, percentage | 1.40% | ||||||||
Accrued expenses | $ 640 | ||||||||
Klarity License Agreement [Member] | Richard L. Lindstrom, M.D [Member] | |||||||||
Royalty payment description | 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. | ||||||||
License Agreement [Member] | Richard L. Lindstrom, M.D [Member] | |||||||||
Royalty payments | 22 | 37 | |||||||
License Agreement [Member] | Richard L. Lindstrom, M.D [Member] | Initial Payment [Member] | |||||||||
Royalty payments | $ 50 | ||||||||
Net sales | 100 | ||||||||
License Agreement [Member] | Richard L. Lindstrom, M.D [Member] | Second Payment [Member] | |||||||||
Royalty payments | 50 | ||||||||
License Agreement [Member] | Richard L. Lindstrom, M.D [Member] | Final Payment [Member] | |||||||||
Royalty payments | 50 | ||||||||
Net sales | $ 50 | ||||||||
License Agreement [Member] | Dr. Lindstrom [Member] | |||||||||
Royalty payments | 26 | 48 | |||||||
Sales and Marketing Agreements [Member] | |||||||||
Stock based payments | 0 | 75 | |||||||
Commission expense incurred | $ 640 | $ 1,182 | |||||||
Maximum [Member] | |||||||||
Damages in lawsuit | $ 1,400 | ||||||||
Maximum [Member] | Sales and Marketing Agreements [Member] | |||||||||
Commission payments, percentage | 14.00% | ||||||||
Minimum [Member] | Sales and Marketing Agreements [Member] | |||||||||
Commission payments, percentage | 10.00% |
Segment Information and Conce_3
Segment Information and Concentrations (Details Narrative) - Segment | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Number of reportable segment | 2 | |||
Maximum percentage of sales derived from large number of customer | 10.00% | 10.00% | ||
Three Main Suppliers [Member] | ||||
Percentage of drug and chemical purchases from three main suppliers | 67.00% | 54.00% | 65.00% | 52.00% |
Segment Information and Conce_4
Segment Information and Concentrations - Schedule of Operating Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Total revenues | $ 13,516 | $ 10,384 | $ 25,806 | $ 19,249 |
Cost of sales | (5,225) | (4,157) | (9,123) | (8,228) |
Gross profit | 8,291 | 6,227 | 16,683 | 11,021 |
Selling, general and administrative | 8,248 | 6,779 | 16,791 | 13,267 |
Research and development | 810 | 72 | 1,215 | 159 |
Segment contribution | 1,784 | 4,157 | ||
Amortization | 59 | 125 | ||
Operating loss | (767) | $ (624) | (1,323) | $ (2,405) |
Corporate [Member] | ||||
Operating loss | 2,342 | 5,061 | ||
Research and Development Expense [Member] | ||||
Operating loss | 150 | 294 | ||
Pharmaceutical Compounding [Member] | ||||
Total revenues | 13,516 | 25,806 | ||
Cost of sales | (5,225) | (9,123) | ||
Gross profit | 8,291 | 16,683 | ||
Selling, general and administrative | 5,804 | 11,519 | ||
Research and development | 533 | 658 | ||
Segment contribution | 1,954 | 4,506 | ||
Pharmaceutical Drug Development [Member] | ||||
Total revenues | ||||
Cost of sales | ||||
Gross profit | ||||
Selling, general and administrative | 43 | 86 | ||
Research and development | 127 | 263 | ||
Segment contribution | $ (170) | $ (349) |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Oct. 15, 2021 | Aug. 14, 2019 | Jul. 31, 2019 | Jun. 30, 2019 |
Exercise price range, lower range limit | $ 1.47 | |||
Exercise price range, upper range limit | $ 42.80 | |||
Noice Rx, LLC [Member] | Loan Agreement [Member] | Forecast [Member] | ||||
Debt period payment | $ 119 | |||
Warrant exercisable term | 5 years | |||
Ownership percentage | 19.90% | |||
Mayfield Pharmaceuticals, Inc. [Member] | ||||
Ownership percentage | 72.00% | |||
Subsequent Event [Member] | ||||
Number of shares issued | 25,135 | |||
Number of common stock warrant shares, cashless exercise | 32,532 | |||
Warrant exercise price per share | $ 1.79 | |||
Number of common stock shares upon exercise | 1,872 | |||
Option to purchase of common stock | 1,872 | |||
Exercise price range, lower range limit | $ 1.70 | |||
Exercise price range, upper range limit | $ 3.20 | |||
Proceeds from stock option exercised | $ 5 | |||
Subsequent Event [Member] | Park Compounding, Inc. [Member] | Asset Purchase Agreement [Member] | ||||
Purchase price | $ 8,000 | |||
Subsequent Event [Member] | Noice Rx, LLC [Member] | ||||
Purchase price | $ 8,000 | |||
Subsequent Event [Member] | Noice Rx, LLC [Member] | Loan Agreement [Member] | ||||
Interest rate | 9.50% | |||
Debt instrument description | The Sellers Note will bear interest at 9.5% per annum and will be secured by all the assets of Noice. Noice will make ninety-six (96) monthly cash payments to the Company over the eight years following the closing. The first twenty-four months of the Sellers Note will require interest only payments of $63, with a principal payment of $2,000 due on September 15, 2021. | |||
Debt period payment interest | $ 63 | |||
Debt period payment principal | $ 2,000 | |||
Debt due date | Sep. 15, 2021 | |||
Subsequent Event [Member] | Mayfield Pharmaceuticals, Inc. [Member] | License Agreement [Member] | ||||
Number of shares issued | 300,000 | |||
Subsequent Event [Member] | Stowe Pharmaceuticals, Inc. [Member] | License Agreement [Member] | ||||
Number of shares issued | 1,750,000 |