Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 25, 2022 | Jun. 30, 2021 | |
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Entity File Number | 001-41063 | ||
Entity Registrant Name | JOURNEY MEDICAL CORPORATION | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 47-1879539 | ||
Entity Address, Address Line One | 9237 E Via de Ventura Blvd | ||
Entity Address, Address Line Two | SuiteĀ 105 | ||
Entity Address, City or Town | Scottsdale | ||
Entity Address, State or Province | AZ | ||
Entity Address, Postal Zip Code | 85258 | ||
City Area Code | 781 | ||
Local Phone Number | 652-4500 | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Trading Symbol | DERM | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 31,947,000 | ||
Entity Central Index Key | 0001867066 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | KPMG LLP | ||
Auditor Firm ID | 185 | ||
Auditor Location | Short Hills, New Jersey | ||
Common Stock A | |||
Entity Common Stock, Shares Outstanding | 6,000,000 | ||
Common excluding Class A | |||
Entity Common Stock, Shares Outstanding | 11,316,344 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 49,081 | $ 8,246 |
Accounts receivable, net of reserves | 23,112 | 23,928 |
Inventory | 9,862 | 1,404 |
Prepaid expenses and other current assets | 2,438 | 1,664 |
Total current assets | 84,493 | 35,242 |
Intangible asset, net | 12,552 | 15,029 |
Operating lease right-of-use asset, net | 89 | 175 |
Deferred tax assets | 1,454 | |
Other assets | 150 | 6 |
Total assets | 97,284 | 51,906 |
Current liabilities | ||
Accounts payable | 22,812 | 1,839 |
Accounts payable, related party | 589 | 117 |
Accrued expenses | 22,733 | 21,498 |
Accrued expenses, related party | 52 | |
Line of credit | 812 | |
Installment payments - licenses, short-term (net of debt discount of $490 and $778 as of December 31, 2021 and December 31, 2020, respectively) | 4,510 | 4,522 |
Operating lease liabilities, short-term | 98 | 85 |
Total current liabilities | 51,606 | 28,061 |
Income tax payable | 8 | 99 |
Note payable, related party | 5,220 | |
Installment payments - licenses, long-term (net of debt discount of $373 and $863 as of December 31, 2021 and December 31, 2020, respectively) | 3,627 | 8,137 |
Operating lease liabilities, long-term | 97 | |
Total liabilities | 55,241 | 41,614 |
Commitments and contingencies (Note 13) | ||
Stockholders' equity (deficit) | ||
Additional paid-in capital | 80,915 | 5,171 |
Retained earnings (Accumulated deficit) | (38,874) | 5,120 |
Total stockholders' equity | 42,043 | 10,292 |
Total liabilities and stockholders' equity | 97,284 | 51,906 |
Common excluding Class A | ||
Stockholders' equity (deficit) | ||
Common stock | 1 | |
Common Stock A | ||
Stockholders' equity (deficit) | ||
Common stock | $ 1 | $ 1 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Licenses debt discount, Current | $ 490 | $ 778 |
Licenses debt discount, Non current | $ 373 | $ 863 |
Par value | $ 0.0001 | $ 0.0001 |
Common stock authorized | 50,000,000 | 50,000,000 |
Common Stock A | ||
Common stock authorized | 6,000,000 | |
Common stock issued | 6,000,000 | 6,000,000 |
Common stock outstanding | 6,000,000 | 6,000,000 |
Common excluding Class A | ||
Par value | $ 0.0001 | $ 0.0001 |
Common stock authorized | 50,000,000 | 50,000,000 |
Common stock issued | 11,316,344 | 3,151,333 |
Common stock outstanding | 11,316,344 | 3,151,333 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Product revenue, net | $ 63,134 | $ 44,531 |
Operating expenses | ||
Cost of goods sold-product revenue | 32,084 | 14,594 |
Research and development | 2,739 | |
Research and development-licenses acquired, expense | 13,819 | 0 |
Selling, general and administrative | 39,833 | 22,086 |
Wire transfer fraud loss | 9,540 | |
Total operating expenses | 98,015 | 36,680 |
(Loss) income from operations | (34,881) | 7,851 |
Other expense | ||
Interest income | (2) | |
Interest Expense | 7,034 | 698 |
Change in fair value of derivative liability | 447 | 0 |
Total other expense | 7,479 | 698 |
Net (loss) income before income taxes | (42,360) | 7,153 |
Income tax expense | 1,634 | 1,870 |
Net (loss) income | $ (43,994) | $ 5,283 |
Net (loss) income per common share-basic | $ (4.32) | $ 0.58 |
Net (loss) income per common share-diluted | $ (4.32) | $ 0.49 |
Weighted average shares outstanding-basic | 10,189,844 | 9,135,985 |
Weighted average shares outstanding-diluted | 10,189,844 | 10,836,122 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common StockCommon Stock A | Common StockPlacement Agent Warrants | Common StockContingent Payment Warrant | Common Stock | Additional Paid-In CapitalPlacement Agent Warrants | Additional Paid-In CapitalContingent Payment Warrant | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit.) | Placement Agent Warrants | Contingent Payment Warrant | Total |
Balance at Beginning at Dec. 31, 2019 | $ 1 | $ 2,914 | $ (163) | $ 2,752 | |||||||
Balance at Beginning (in shares) at Dec. 31, 2019 | 6,000,000 | 3,133,333 | |||||||||
Unaudited Condensed Consolidated Statement of Changes in Stockholders' Equity. | |||||||||||
Stock-based compensation | $ 0 | $ 0 | 153 | 0 | 153 | ||||||
Exercise of stock options for cash | 0 | $ 0 | 13 | 0 | 13 | ||||||
Exercise of stock options for cash (In shares) | 18,000 | ||||||||||
Contribution of capital - extinguishment of related party payable | 0 | $ 0 | 2,091 | 0 | 2,091 | ||||||
Net income (loss) | 0 | 0 | 0 | 5,283 | 5,283 | ||||||
Balance at Ending at Dec. 31, 2020 | $ 1 | $ 0 | 5,171 | 5,120 | 10,292 | ||||||
Balance at Ending (in shares) at Dec. 31, 2020 | 6,000,000 | 3,151,333 | |||||||||
Unaudited Condensed Consolidated Statement of Changes in Stockholders' Equity. | |||||||||||
Stock-based compensation | $ 0 | $ 0 | 2,466 | 0 | 2,466 | ||||||
Exercise of stock options for cash | 0 | $ 0 | 7 | 0 | 7 | ||||||
Exercise of stock options for cash (In shares) | 10,000 | ||||||||||
Contribution of capital - extinguishment of related party payable | 0 | $ 0 | 112 | 0 | 112 | ||||||
Issuance of common stock related to equity plans (in shares) | 136,500 | ||||||||||
Issuance of common shares upon initial public offering, net of issuance costs of $1,921 million | $ 1 | 30,614 | 30,615 | ||||||||
Issuance of common shares upon initial public offering, net of issuance costs of $1,921 million (in shares) | 3,520,000 | ||||||||||
Conversion of class A preferred stock settled note to common stock | 21,812 | 21,812 | |||||||||
Conversion of class A preferred stock settled note to common stock (in shares) | 2,231,346 | ||||||||||
Conversion of related party payables to common stock | 16,105 | 16,105 | |||||||||
Conversion of related party payables to common stock (in shares) | 1,610,467 | ||||||||||
Conversion of warrants to common stock | $ 948 | $ 3,680 | $ 948 | $ 3,680 | |||||||
Conversion of warrants to common stock (in shares) | 111,567 | 545,131 | 111,567 | ||||||||
Net income (loss) | 0 | $ 0 | 0 | (43,994) | (43,994) | ||||||
Balance at Ending at Dec. 31, 2021 | $ 1 | $ 1 | $ 80,915 | $ (38,874) | $ 42,043 | ||||||
Balance at Ending (in shares) at Dec. 31, 2021 | 6,000,000 | 11,316,344 |
CONSOLIDATED STATEMENT OF CHA_2
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (parenthetical) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY | |
Stock issuance costs | $ 1,921 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | ||
Net (loss) income | $ (43,994) | $ 5,283 |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expenses | 0 | 5 |
Bad debt expense | 48 | 49 |
Non-cash interest expense | 781 | 698 |
Accretion of convertible preferred shares | 2,845 | 0 |
Amortization of debt discount | 2,572 | 0 |
Amortization of license fee | 2,474 | 1,420 |
Amortization of operating lease right-of-use assets | 86 | 91 |
Stock-based compensation | 2,466 | 153 |
Deferred taxes provision (benefit) | 1,566 | (335) |
Change in fair value of derivative liability | 447 | 0 |
Research and development-licenses acquired, expense | 13,819 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 768 | (5,022) |
Inventory | (8,458) | (547) |
Prepaid expenses and other current assets | (774) | (1,009) |
Other assets | (144) | 0 |
Accounts payable | 20,388 | (204) |
Accounts payable, related party | 1,325 | 52 |
Accrued expenses | 1,235 | 2,390 |
Accrued expenses, related party | 544 | 0 |
Income tax payable | (91) | 2,191 |
Lease liabilities | (84) | (83) |
Net cash (used in) provided by operating activities | (2,181) | 5,132 |
Cash flows from investing activities | ||
Purchase of research and development licenses | (10,000) | (1,200) |
Net cash used in investing activities | (10,000) | (1,200) |
Cash flows from financing activities | ||
Proceeds from the exercise of options | 7 | 13 |
Proceeds from Fortress note | 9,540 | |
Payment of license note payable | (5,300) | (500) |
Proceeds from convertible preferred shares | 18,967 | 0 |
Payment of debt issuance costs associated with convertible preferred shares | (1,996) | 0 |
Proceeds from line of credit | 7,000 | |
Repayment of line of credit | (6,188) | |
Proceeds from issuance of common stock - initial public offering | 32,536 | |
Offering costs for the issuance of common stock - initial public offering | (1,550) | |
Net cash provided by (used in) financing activities | 53,016 | (487) |
Net change in cash | 40,835 | 3,445 |
Cash at the beginning of the period | 8,246 | 4,801 |
Cash at the end of the period | 49,081 | 8,246 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 158 | 110 |
Supplemental disclosure of non-cash financing and investing activities: | ||
Unpaid debt offering cost | 214 | 0 |
Unpaid initial public offering cost | 371 | |
Derivative warrant liability associated with convertible preferred shares | 362 | |
Conversion of class A preferred stock settled note to common stock | 21,812 | |
Conversion of related party payables to common stock | 16,105 | |
Conversion of placement agent warrants to common stock | 948 | |
Conversion of contingent payment warrants to common stock | 3,680 | |
Extinguishment of related party payable relates to deferred tax assets | 43 | 2,091 |
Unpaid intangible assets | $ 0 | $ 7,872 |
ORGANIZATION AND PLAN OF BUSINE
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS | 12 Months Ended |
Dec. 31, 2021 | |
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS | |
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS | NOTE 1. ORGANIZATION AND PLAN OF BUSINESS OPERATIONS Journey Medical Corporation (collectively āJourneyā or the āCompanyā) was formed on July 18, 2014. The Company is a commercial-stage pharmaceutical company that focuses on the development and commercialization of pharmaceutical products for the treatment of dermatological conditions. The Companyās product portfolio at December31, 2021 includes five branded and three authorized generic prescription drugs for dermatological conditions that are marketed in the U.S. The Company acquires rights to future products by licensing or otherwise acquiring an ownership interest in, funding the research and development of, and eventually commercializing, the products through their exclusive field sales organization. As of December 31, 2021 and 2020, the Company is a majority-owned subsidiary of Fortress Biotech, Inc. (āFortressā or āParentā). Liquidity and Capital Resources At December 31, 2021, the Company had $49.1 million in cash and cash equivalents as compared to $8.2 million at December 31, 2020. On November 16, 2021, the Company completed an initial public offering (collectively the āJourney IPOā or āIPOā) of its common stock, which resulted in net proceeds of approximately $30.6 million, after deducting underwriting discounts and other offering costs. Prior the Companyās IPO, the Companyās operations were primarily financed through a working capital note from Fortress, referred to herein as the āFortress Note,ā cash generated by operations and cash raised in the Companyās private offering of 8% Cumulative Convertible Class A Preferred Stock (āClass A Preferred Stockā). In connection with the closing of the Companyās IPO on November 16, 2021, the Company issued 2,231,346 shares of common stock resulting from the conversion of all of the Class A Preferred Stock. In addition, the Fortress Note was converted into 1,610,467 shares of Journey common stock at the Journey IPO price of $10.00 per share. The Company also has access to a borrowing facility, which includes a working capital line of credit and a term loan. For the next twelve months from the issuance of these audited consolidated financial statements, the Company will be able to fund its operations through a combination of operating activities and the East West Bank borrowing facility. In January 2022 the Company borrowed $15 million against the term loan to facilitate the VYNE asset purchase. See Note 18, Subsequent Events, for further details. The Company regularly evaluates market conditions, its liquidity profile, and various financing alternatives for opportunities to enhance its capital structure. The Company may seek to raise capital through debt or equity financings to expand its product portfolio. If such funding is not available or not available on terms acceptable to the Company, the Companyās current plans for expansion of its product portfolio will be curtailed. In addition to the foregoing, the Company experienced minimal impact on revenue levels and its liquidity due to the worldwide spread of COVID-19. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The Companyās consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (āGAAPā). The Companyās consolidated financial statements include the accounts of the Company and the accounts of the Companyās wholly-owned subsidiary, JG Pharma, Inc. (āJGā or āJG Pharmaā). All intercompany balances and transactions have been eliminated. Emerging Growth Company From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (āFASBā), or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Companyās consolidated financial statements upon adoption. Under the Jumpstart Our Business Startups Act of 2012, as amended, the Company upon completion of its public offering meets the definition of an emerging growth company and elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates made by management include provisions for product returns, coupons, rebates, chargebacks, discounts, allowances and distribution fees paid to certain wholesalers, inventory realization, useful lives of amortizable intangible assets, fair value of stock options and warrants, stock-based compensation, accrued expenses, provisions for income taxes and contingencies. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Companyās future results of operations will be affected. Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one segment, which reflects products for the treatment of dermatological conditions. Cash and Cash Equivalents The Company considers highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents at December 31, 2021 and 2020 consisted entirely of cash and cash equivalents in institutions within the United States. Balances at certain institutions have exceeded Federal Deposit Insurance Corporation insured limits. Accounts Receivable, Net Accounts receivable consists of amounts due to the Company for product sales Accounts receivable are stated at amounts due from customers, net of an allowance for doubtful accounts. Accounts that are outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance for doubtful accounts by considering a number of factors, including the length of time trade accounts receivable are past due and the customerās current ability to pay its obligation to the Company. The Company writes off accounts receivable when they become uncollectible. The allowance for doubtful accounts was $0.1 million at both December 31, 2021 and 2020. Inventories Inventories comprise raw materials and finished goods, which are valued at the lower of cost and net realizable value, on a first-in, first-out basis. The Company evaluates the carrying value of inventories on a regular basis, taking into account anticipated future sales compared with quantities on hand, and the remaining shelf life of goods on hand. The acquired Qbrexza finished goods inventory initially incuded a fair value step-up of $6.5 million, which was fully expensed within cost of sales for the year ended December 31, 2021, as the inventory was sold to customers. Property and Equipment Computer equipment, furniture and fixtures and machinery and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful life of each asset. Leasehold improvements are amortized over the shorter of the estimated useful lives or the term of the respective leases. Intangible Assets Intangible assets are reported at cost, less accumulated amortization and impairments. Intangible assets with finite lives are amortized over their estimated useful lives, which represents the estimated life of the product. Amortization is calculated primarily using the straight-line method. During the ordinary course of business, the Company has entered into certain licenses and asset purchase agreements. Potential milestone payments for achieving sales targets or regulatory development milestones are recorded when it is probable of achievement. Upon a milestone payment being achieved, the milestone payment will be capitalized and amortized over the remaining useful life for approved products and expensed for milestones prior to FDA approval. Royalty payments are recorded as cost of goods sold as sales are recognized. Impairment of Long-Lived Assets The Company reviews long-lived assets, including property and equipment, for impairment at least annually or whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the long-lived asset in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based on discounted cash flows. As of December 31, 2021 and 2020, there were no indicators of impairment. Leases Arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the consolidated balance sheet as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Companyās incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. Variable lease expenses are recorded when incurred. In calculating the right-of-use asset and lease liability, the Company elects to combine lease and non-lease components. Fair Value Measurement The Company follows accounting guidance on fair value measurements for financial assets and liabilities measured at fair value on a recurring basis. Under the accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The accounting guidance requires fair value measurements be classified and disclosed in one of the following three categories: Level 1 Level 2 Level 3 The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Companyās assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. Certain of the Companyās financial instruments are not measured at fair value on a recurring basis but are recorded at amounts that approximate their fair value due to their liquid or short-term nature, such as accounts payable, accrued expenses and other current liabilities. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash. Periodically, the Company may maintain deposits in financial institutions in excess of government insured limits. Management believes that the Company is not exposed to significant credit risk as the Companyās deposits are held at financial institutions that management believes to be of high credit quality. The Company has not experienced any losses on these deposits. The Companyās accounts receivable primarily represent amounts due from drug wholesalers and specialty pharmacies in the United States. The Company performs periodic credit evaluations of customers and does not require collateral. An allowance for doubtful accounts is maintained for potential credit losses based on the aging of accounts receivable, historical bad debts experience, and the customerās current ability to pay its obligations to the Company. Accounts receivables balances are written off against the allowance when it is probable that the receivable will not be collected. See Note 15 for significant customers. Revenue Recognition The Company records revenue in accordance with the provisions of Accounting Standards Codification (āASCā) Topic 606, Revenue from Contracts with Customers Many of the Companyās products sold are subject to a variety of deductions. Revenues are recorded net of provisions for variable consideration, including chargebacks, coupons, discounts, other sales allowances, governmental rebate programs, price adjustments and returns. Accruals for these provisions are presented in the consolidated financial statements as reductions in determining net sales and as a contra asset in accounts receivable, net (if settled via credit) and other current liabilities (if paid in cash). Amounts recorded for revenue deductions can result from a complex series of judgements about future events and uncertainties and can rely heavily on estimates and assumptions. The following section briefly describes the nature of the Companyās provisions for variable consideration and how such provisions are estimated. Gross-to-Net Sales Accruals Discounts and Other Sales Allowances Wholesaler fees Product Returns The Company bases its product returns allowance on estimated on-hand inventories in the sales channels, measured end-customer demand, actual returns history and other factors, such as the trend experience for lots where product is still being returned, as applicable. If the historical data the Company uses to calculate these estimates does 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. Under this methodology, the Company tracks actual returns by individual production lots. Returns on closed lots, that is, lots no longer eligible for return credits, are analyzed to determine historical returns experience. Returns on open lots, that is, lots still eligible for return credits, are monitored and compared with historical return trend rates. Any changes from the historical trend rates are considered in determining the current sales return allowance. Government Chargebacks U.S. Government Rebates of sales attributed to Medicaid patients and record a liability for the rebates to be paid to the respective state Medicaid programs. The Companyās liability for these rebates consists of invoices received for: i) claims from prior quarters that have not been paid or for which an invoice has not yet been received ii) estimates of claims for the current quarter and iii) estimated future claims that will be made for product that has been recognized as revenue, but which remains in the distribution channel inventories at the end of each reporting period. Wholesaler Chargeback Accruals Coupons ā Managed Care Rebates Research and Development Costs Research and development costs are expensed as incurred. Advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made. Upfront and milestone payments due to third parties that perform research and development services on the Companyās behalf will be expensed as services are rendered or when the milestone is achieved. Research and development costs primarily consist of personnel related expenses and, payments made to third parties for license and milestone costs related to in-licensed products and technology, payments made to third party contract research organizations. In accordance with Accounting Standards Codification (āASCā) 730-10-25-1, Research and Development total purchase price for the licenses acquired during the period was reflected as research and development - licenses acquired on the Consolidated Statements of Operations for the years ended December 31, 2021. Stock-based Compensation The Company has a stock-based compensation plan in place and records the associated stock-based compensation expense over the requisite service period. The stock-based compensation plan and related compensation expense are discussed more fully in Note 14 to the Companyās consolidated financial statements. Compensation expense for service-based stock options is charged against operations on a straight-line basis between the grant date for the option and the vesting period, which is generally four years. The Company estimates the fair value of all service-based stock option awards as of the grant date by applying the Black-Scholes option pricing valuation model. The application of this valuation model involves assumptions that are highly subjective, judgmental, and sensitive in the determination of compensation cost. Compensation cost is adjusted for actual forfeitures. Options granted have a term of 10 years from the grant date. Restricted stock units (āRSUāsā) that are service based are recorded as deferred compensation and amortized into compensation expense on a straight-line basis over the vesting period, which ranges from three to four years in duration. Compensation cost for service based RSUās is based on the grant date fair value of the award, which is the closing market price of the Companyās common stock on the grant date multiplied by the number of shares awarded. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model, which requires the use of a number of assumptions, including the fair value of the common stock, expected volatility, risk-free interest rate, expected dividends and the expected term of the option. The assumptions used in calculating the fair value of stock-based awards represent managementās best estimates and involve inherent uncertainties and the application of managementās judgment. Forfeitures are recorded as they occur. All stock-based compensation costs are recorded in selling, general and administrative (āSG&Aā) expense in the Companyās consolidated statements of operations. Prior to the Companyās IPO, which closed on November 16, 2021, the fair value of the Companyās common stock underlying stock options was an input to the Black-Scholes option pricing model. The Company engaged an independent third-party valuation firm to provide an estimate of the fair value of its common stock annually, utilizing input from management. The fair value of the Companyās common stock was determined considering a number of objective and subjective factors, including valuations of guideline public companies, transactions of guideline public companies, discounts for lack of control transactions, lack of liquidity of the Companyās common stock and the general and industry-specific economic outlook. Contingencies The Company records accruals for contingencies and legal proceedings expected to be incurred in connection with a loss contingency when it is probable that a liability has been incurred and the amount can be reasonably estimated. If a loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Income Taxes As of December 31, 2021, after the IPO the Company was 58.39% owned by Fortress Biotech, Inc. (āFortressā) and prior to the IPO was filing consolidated federal tax return and consolidated or combined state tax returns in multiple jurisdictions with Fortress. As the Company completed its initial public offering on November 12, 2021, the Company deconsolidated from Fortress consolidated group for federal income tax purpose. The Companyās financial statements recognize the current and deferred income tax consequences that result from the Companyās activities during the current and preceding periods pursuant to the provisions of Accounting Standards Codification Topic 740, Income Taxes (ASC 740), as if the Company were a separate taxpayer rather than a member of the Fortress consolidated income tax return group. Fortress has agreed that JMC does not have to make payments to Fortress for JMCās use of net operation losses (āNOLsā) of Fortress (including other Fortress group members) accordingly, for any NOLs, the tax benefit the Company realized was recorded as a capital contribution. The Company records income taxes using the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax effects attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and operating loss and tax credit carryforwards. The Company establishes a valuation allowance if management believes it is more likely than not that the deferred tax assets will not be recovered based on an evaluation of objective verifiable evidence. Management has considered the Companyās history of cumulative tax and book income/loss incurred since inception, and the other positive and negative evidence, and has concluded that it is not more likely than not that the Company will realize the benefits of the net deferred tax assets as of December 31, 2021 and therefore a full valuation allowance on all of its deferred tax assets is required. The Company did not record any valuation allowance as of December 31, 2020. For tax positions that are more likely than not of being sustained upon audit, the Company recognizes the largest amount of the benefit that is greater than 50% likely of being realized. For tax positions that are not more likely than not of being sustained upon audit, the Company does not recognize any portion of the benefit. As of December 31, 2021, the Company had no unrecognized tax benefits and does not anticipate any significant change to the unrecognized tax benefit balance. The Company would classify interest and penalties related to uncertain tax positions as income tax expense, if applicable. There was no interest expense or penalties related to unrecognized tax benefits recorded through December 31, 2021. Net Loss (Income) Per Share Basic net (loss) income per share of common stock is calculated by dividing net (loss) income by the weighted-average number of shares of common stock outstanding during the reporting period. Diluted earnings per share is calculated by dividing net income by the weighted-average number of shares of common stock outstanding during the reporting period after giving effect to dilutive potential common shares for stock options and restricted stock units, determined using the treasury stock method. See Note 17 below. Comprehensive Income The Company has no components of other comprehensive income, and therefore, comprehensive income equals net income. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued Accounting Standards Update (āASUā) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Recently Issued Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06 ā Debt ā Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging ā Contracts in Entityās Own Equity (Subtopic 815 ā 40): Accounting for Convertible Instruments and Contracts in an Entityās Own Equity |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2021 | |
INVENTORY | |
INVENTORY | NOTE 3. INVENTORY The Companyās inventory consists of the following: ā ā ā ā ā ā ā ā ā December 31, ā December 31, ($in thousands) 2021 2020 ā ā ā ā ā ā ā Raw materials ā $ 5,572 ā $ ā Work-in-process ā ā ā ā Finished goods ā 4,290 ā 1,404 Total inventories ā $ 9,862 ā $ 1,404 ā The acquired Qbrexza inventory includes a fair value step-up of $6.5 million, which was fully expensed within cost of sales during the year ended December 31, 2021, as the inventory was sold to customers. For additional information on the Companyās asset acquisition of Qbrexza, please refer to Note 4. |
INTANGIBLES
INTANGIBLES | 12 Months Ended |
Dec. 31, 2021 | |
INTANGIBLES | |
INTANGIBLES | NOTE 4. INTANGIBLES On March 31, 2021, the Company executed an Asset Purchase Agreement (the āQbrexza APAā) with Dermira, Inc., a subsidiary of Eli Lilly and Company (āDermiraā). Pursuant to the terms of the agreement, the Company acquired the rights to QbrexzaĀ® (glycoprronium), a prescription cloth towelette to treat primary axillary hyperhidrosis in patients nine years of age or older. Upon HSR acceptance, which was received on May 13, 2021, the Company paid the upfront fee of $12.5 million to Dermira. In addition, Dermira is eligible to receive up to $144 million in the aggregate upon the achievement of certain sales milestones. The royalty structure for the agreement is tiered with royalties for the first two years ranging from approximately 40% to 30%. Thereafter for a period of eight years royalties are approximately 12.0% to 19.0%. Royalty amounts are subject to 50% diminution in the event of loss of exclusivity due to the introduction of an authorized generic. Upon closing of the QbrexzaĀ® purchase, the Company became substituted for Dermira as the plaintiff in U.S. patent litigation commenced by Dermira on October 21, 2020 in the U.S. District Court of Delaware (the āPatent Litigationā) against Perrigo Pharma International DAC (āPerrigoā) alleging infringement of certain patents covering QbrexzaĀ® (the āQbrexzaĀ® Patentsā), which are included among the proprietary rights to QbrexzaĀ®. The Patent Litigation was initiated following the submission by Perrigo, in accordance with the procedures set out in the Drug Price Competition and Patent Term Restoration Act of 1984 (the āHatch-Waxman Actā), of an Abbreviated New Drug Application (āANDAā). The ANDA seeks approval to market a generic version of QbrexzaĀ® prior to the expiration of the QbrexzaĀ® Patents and alleges that the QbrexzaĀ® Patents are invalid. Perrigo is subject to a 30-month stay preventing it from selling a generic version, but that stay is set to expire on March 9, 2023. Trial in the Patent Litigation is scheduled for September 19, 2022. The Company cannot make any predictions about the final outcome of this matter or the timing thereof. The purchase price of $12.5 million included the asset, Qbrexza, as well as finished goods and raw material inventory. The Company also has the obligation to accept any product returns related to sales made by Dermira. The Company allocated the upfront payment to inventory since the fair value of the inventory and Qbrexza rights exceeded the purchase price. The future contingent milestone payments, if achieved, will be recorded to intangible asset and amortized over the seven-year life of the asset commencing on the closing date. In December 18, 2020, the Company entered an Asset Purchase Agreement with a third party (the āAnti-itch Product Agreementā) for a topical product that is indicated to treat scabies and skin itch conditions (āAnti-itch Productā). Pursuant to the terms and conditions of the Anti-itch Product Agreement, the Company agreed to pay $4.0 million, comprised of a non-refundable deposit of $0.2 million upon the execution of the term sheet, a cash upfront payment of $1.8 million on January 1, 2021 and additional future payments of $0.5 million on April 1, 2021, $0.5 million on July 1, 2021, and $1.0 million on January 1, 2022. There are no subsequent milestone payments or royalties beyond the aforementioned payments. Commercial launch of this product is expected in the first half of 2022. On July 29, 2020, the Company entered into a license and supply agreement for AccutaneĀ® (āAccutane Agreementā) with DRL. Pursuant to the Accutane Agreement, the Company agreed to pay $5.0 million, comprised of an upfront payment of $1.0 million paid upon execution, with additional milestone payments totaling $4.0 million. Three additional milestone payments totaling $17.0 million are contingent upon the achievement of certain net sales milestones. Royalties in the low-double digits based on net sales, subject to specified reductions are also due. The term of the agreement is ten years and renewable upon mutual agreement. The Company is required to pay royalties during the term of the agreement. The agreement contains customary representations, warranties, and indemnities. Each party may also terminate the agreement for material breach by the other party or for certain bankruptcy or insolvency related events and the Company may terminate for upon 180 days written notice to the other party. The table below provides a summary of the Companyās intangible assets at December 31, 2021 and 2020, respectively: ā ā ā ā ā ā ā ā ā ā ā Estimated Useful December 31, ā December 31, ($in thousands) Lives (Years) 2021 2020 CeracadeĀ® ā 3 ā $ 300 ā $ 300 LuxamendĀ® ā 3 ā 50 ā 50 TargadoxĀ® ā 3 ā 1,250 ā 1,250 XiminoĀ® ā 7 ā 7,134 ā 7,134 ExeldermĀ® ā 3 ā 1,600 ā 1,600 Accutane ā 5 ā 4,727 ā 4,727 Anti-itch product (1) ā 3 ā 3,942 ā 3,945 Total intangible assets ā ā ā 19,003 ā 19,006 Accumulated amortization ā ā ā (6,451) ā (3,977) Net intangible assets ā ā ā $ 12,552 ā $ 15,029 (1) As of December 31, 2021, this asset has not yet been placed in service, therefore no amortization expense was recognized on this asset for the year ended December 31, 2021. Commercial launch of this product is expected in the first half of 2022. The Companyās amortization expense for the year ended December 31, 2021 and 2020 was approximately $2.5 million and $1.4 million, respectively. Amortization expense is recorded as a component of cost of goods sold in the Companyās consolidated statements of operations. The table below provides a summary for the year ended December 31, 2021 and 2020, of the Companyās recognized expense related to its product licenses, which was recorded in costs of goods sold on the consolidated statement of operations: ā ā ā ā ā ā Intangible ($ās in thousands) Assets, Net Balance at January 1, 2020 ā $ 7,377 Isotretinion agreement (1) ā 4,727 Anti-itch product license acquisition (2) ā 3,945 Exelderm milestone ā ā 400 Amortization expense ā ā (1,420) Balance at December 31, 2020 ā $ 15,029 Anti-itch product license acquisition ā ā (3) Amortization expense ā ā (2,474) Unvested balance at December 31, 2021 ā $ 12,552 (1) Includes an upfront payment of $1.0 million and one milestone payment of $0.5 million in 2020 as well as four payments totaling $3.5 million due at various points between 2021 through 2023. Such payments were discounted by $0.3 million due to the long-term nature of such payments. As of December 31, 2020, this asset has not yet been placed in service, therefore no amortization expense was recognized on this asset for the year ended December 31, 2020. The Company placed the assets in service in the first quarter of 2021. (2) Includes an upfront payment of $0.2 million, three payments totaling $2.8 million due in 2021 and $1.0 million due in 2022. Such payments were discounted by $0.1 million due to the long-term nature of such payments. As of December 31,2021 and 2020, this asset has not yet been placed in service, therefore no amortization expense was recognized on this asset for the year ended December 31, 2021 and 2020 respectively. Future amortization of the Companyās intangible assets is as follows: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total ($ās in thousands) XiminoĀ® AccutaneĀ® Amortization December 31, 2022 ā $ 1,019 ā $ 946 ā $ 1,965 December 31, 2023 ā 1,019 ā 945 ā 1,964 December 31, 2024 ā 1,019 ā 946 ā 1,965 December 31, 2025 ā 1,019 ā 945 ā 1,964 Thereafter ā 595 ā 157 ā 752 Subtotal ā $ 4,671 ā $ 3,939 ā $ 8,610 Asset not yet placed in service ā ā ā ā ā 3,942 Total ā $ 4,671 ā $ 3,939 ā $ 12,552 ā |
LICENSE ACQUIRED
LICENSE ACQUIRED | 12 Months Ended |
Dec. 31, 2021 | |
LICENSES ACQUIRED | |
LICENSES ACQUIRED | NOTE 5. LICENSES ACQUIRED On June 29, 2021, the Company entered a license, collaboration, and assignment agreement (the āDFD-29 Agreementā) to obtain the global rights for the development and commercialization of a late-stage development modified release oral minocycline for the treatment of rosacea (āDFD-29ā) with Dr. Reddyās Laboratories, Ltd (āDRLā). Pursuant to the terms and conditions of the DFD-29 Agreement, the Company agreed to pay $10.0 million, of which $2.0 million (the āFirst Installmentā) was paid upon execution and $8.0 million (the āSecond Installmentā) is payable 90 days following June 29, 2021. Additional contingent regulatory and commercial milestone payments totaling up to $163.0 million are also payable. Royalties ranging from approximately 10% to approximately 15% are payable on net sales of the DFD-29 product. In accordance with ASC 730-10-25-1, Research and Development Additionally, the Company is required to fund and oversee the Phase 3 clinical trials approximating $24.0 million, based upon the current development plan and budget. Either party may terminate the agreement prior to NDA approval in the event of bankruptcy or a material breach that remains uncured beyond the applicable cure period. Additionally, DRL may terminate the agreement if Company: i.) ceases development of the product for 6 consecutive months (except if such cessation is caused by DRL, applicable laws, or action/inaction of any third party beyond Company's control); ii.) files a patent challenge on any claim for a product patent or DRL background patent; or iii.) fails to initiate development of the product in the European Union (āEUā) (such termination solely relates to the rights granted in EU) within 24 months after product regulatory approval or cause first commercial sale in at least one country in the EU within 72 months after product regulatory approval. In connection with the closing of the Companyās IPO on November 16, 2021, the Company issued 545,131 unregistered shares of Journey Medical Inc. common stock to DRL calculated using a 15-day volume weighted average price (āVWAPā) of $9.1721 per share. The restrictions on the unregistered shares of common stock are governed by the terms set forth in the DFD-29 Agreement and applicable securities laws. See āContingent Payment Derivativeā |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2021 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 6: FAIR VALUE MEASUREMENTS Placement Agent Warrants Pursuant to the terms of the Companyās Class A Preferred Stock offering (see Note 14), the Company will issue upon a Qualified Financing (an external financing of $25.0 million or greater) to the placement agent (āthe Placement Agent Warrantsā) to purchase 5% of the shares of common stock into which the Class A Preferred Stock converts. This condition was met by the Companyās IPO. The Placement Agent Warrants have a term of five years and are exercisable at a 15% discount to the Qualified Financing price. The Company valued the Placement Agent Warrants using a Monte Carlo simulation valuation methodology. A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring Journeyās warrant liability that are categorized within Level 3 of the fair value hierarchy before the conversion was as follows: ā ā ā ā ā Risk-free interest rate 0.98 % Expected dividend yield ā ā Expected term in years 1.0 ā Expected volatility 50 % ā In connection with the Companyās IPO, the Company issued 111,567 shares of common stock in related to the conversion of all of the placement agent warrants. ā Contingent Payment Derivative In connection with the DFD-29 Agreement, the Company agreed to pay DRL additional consideration upon either an IPO of the Companyās common stock or an acquisition of the Company, the agreement further specifies that only one payment can be made. The contingent payment associated with an IPO of the Companyās common stock, is deemed to be achieved if upon the completion of an IPO the Companyās market capitalization on a fully diluted basis is $150 million or greater at the close of business on the date of such IPO. The payment due for the achievement of the IPO criteria is a follows: (a) issue to DRL a number of shares of the Companyās common stock equal to $5.0 million as calculated using a fifteen (15) day volume weighted average price (āVWAPā) of the Companyās closing price, measured fifteen (15) days following the IPO; or (b) make a cash payment to DRL equal to $5.0 million. As a result of the Companyās IPO on November 16, 2021, calculated using a 15-day VWAP of $9.1721 per share, the Company issued 545,131 unregistered shares of Journey common stock to DRL. The restrictions on the unregistered shares of common stock are governed by the terms set forth in the DFD-29 Agreement and applicable securities laws. The Company valued the contingent payment discussed above utilizing a Probability Weighted Expected Return Method (PWERM) model using a discount rate of 30% and expected term of 3 ā 5 months. ā Financial assets and liabilities measured at fair value on a recurring basis are summarized below: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2021 ($in thousands) Level 1 Level 2 Level 3 Total Assets: ā ā ā ā ā ā ā ā Cash and cash equivalents ā $ 49,081 ā $ ā ā $ ā ā $ 49,081 Total ā $ 49,081 ā $ ā ā $ ā ā $ 49,081 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2020 ($in thousands) Level 1 Level 2 Level 3 Total Assets: ā ā ā ā ā ā ā ā ā ā ā ā Cash and cash equivalents ā $ 8,246 ā $ ā ā $ ā ā $ 8,246 Total ā $ 8,246 ā $ ā ā $ ā ā $ 8,246 ā The table below provides a roll-forward of the changes in fair value of Level 3 financial instruments as of December 31, 2021: ā ā ā ā ā ā Warrant ($in thousands) liabilities Fair value at December 31, 2020 ā $ ā Additions: ā Contingent payment warrant ā 3,819 Placement agent warrant ā 362 Change in fair value of warrant liabilities: ā ā ā Contingent payment warrant ā ā (139) Placement agent warrant ā ā 586 Settlement of warrant liabilities in connection with IPO: ā ā Conversion of contingent payment warrants to common shares ā ā (3,680) Conversion of placement agent warrants to common shares ā ā (948) Fair value at December 31, 2021 ā $ ā ā During the year ended December 31, 2021 transfers Level Level |
RELATED PARTY AGREEMENTS
RELATED PARTY AGREEMENTS | 12 Months Ended |
Dec. 31, 2021 | |
RELATED PARTY AGREEMENTS | |
RELATED PARTY AGREEMENTS | NOTE 7. RELATED PARTY AGREEMENTS Shared Services Agreement with Fortress On November 12, 2021, the Company and Fortress entered into an arrangement to share the cost of certain legal, finance, regulatory, and research and development employees. Fortressās Executive Chairman and Chief Executive Officer is the Executive Chairman of the Company. Under the terms of the Agreement, the Company will reimburse Fortress for the salary and benefit costs associated with these employees based upon actual hours worked on Journey related projects following the completion of their IPO. To date, Fortress employees have provided services to the Company totaling approximately $0.5 million. Upon completion of the Companyās IPO, the amount converted into 52,438 shares of Journey common stock at the IPO price of $10.00 per share. In the normal course of business, the Company reimburses Fortress for various payroll related costs and selling, general and administrative costs. As of December 31, 2021 and 2020, the Company had a balance of approximately $0.6 million and $0.1 million, respectively, recorded as accounts payable and accrued expenses ā related party on the consolidated balance sheets. Fortress Note Since the Companyās inception in October 2014, Fortress has funded the Companyās operations through the Fortress Note. The Fortress Note matures on or before December 31, 2024. At December 31, 2021 and 2020, the Companyās outstanding balance under the Fortress Note was zero and $5.2 million, respectively. The Fortress Note is recorded on the consolidated balance sheets as Note payable, related party and is an interest-free note. On September 30, 2021, Fortress increased the Journey promissory note by $9.5 million in response to a cyber incident that occurred at Journey and resulted in $9.5 million of fraudulent payments. The $9.5 million contribution was approved by the boards of directors of both the Fortress and Journey and will ensure that Journeyās accounts payable function will continue to operate smoothly. This contribution, along with $5.2 million already outstanding under the Fortress Note converted into 1,476,044 shares of the Companyās common stock upon the closing of the Companyās IPO at the IPO price of $10.00 per share. Fortress Income Tax As of December 31, 2021, after the IPO the Company is 58.39% owned by Fortress prior to the IPO and has been filing consolidated federal tax returns and consolidated or combined state tax returns in multiple jurisdictions with Fortress. In connection with the filing of the consolidated tax return, the Companyās tax liabilities for the year ended December 31, 2020 of $1.9 million was satisfied utilizing NOLs generated by Fortress. Extinguishment of these liabilities to Fortress was recorded as a contribution of capital. Additionally, see Note 16 below for a discussion of income taxes. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2021 | |
ACCRUED EXPENSES | |
ACCRUED EXPENSES | NOTE 8. ACCRUED EXPENSES Accrued expenses consisted of the following: ā ā ā ā ā ā ā ā ā December 31, ($'s in thousands) 2021 2020 Accrued expenses: ā ā Accrued emplyee compensation $ 2,702 $ 2,041 Research and development - license fees ā 870 ā ā Accrued royalties payable ā 3,833 ā 2,682 Accured coupons and rebates ā 10,603 ā 12,869 Return reserve ā 3,240 ā 2,580 Other ā 1,485 ā 1,326 Total accrued expenses ā $ 22,733 ā $ 21,498 ā |
INSTALLMENT PAYMENTS - LICENSES
INSTALLMENT PAYMENTS - LICENSES | 12 Months Ended |
Dec. 31, 2021 | |
INSTALLMENT PAYMENTS - LICENSES | |
INSTALLMENT PAYMENTS - LICENSES | NOTE 9. INSTALLMENT PAYMENTS ā LICENSES The following tables show the details of the Companyās installment payments ā licenses for the periods presented: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2021 ā ā ā ā ā Anti-Itch ā ā ($in thousands) Ximino 1 Accutane 2 Product 3 Total Installment payments - licenses, short-term ā $ 2,000 ā $ 2,000 ā $ 1,000 ā $ 5,000 Less: imputed interest ā (425) ā (65) ā ā ā (490) Sub-total installment payments - licenses, short-term ā $ 1,575 ā $ 1,935 ā $ 1,000 ā $ 4,510 ā ā ā ā ā ā ā ā ā ā ā ā ā Installment payments - licenses, long-term ā $ 3,000 ā $ 1,000 ā $ ā ā $ 4,000 Less: imputed interest ā ā (350) ā ā (23) ā ā ā ā ā (373) Sub-total installment payments - licenses, long-term ā $ 2,650 ā $ 977 ā $ ā ā $ 3,627 ā ā ā ā ā ā ā ā ā ā ā ā ā Total installment payments - licenses ā $ 4,225 ā $ 2,912 ā $ 1,000 ā $ 8,137 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2020 ā ā ā ā ā Anti-Itch ā ā ($in thousands) ā Ximino 1 ā Accutane 2 ā Product 3 ā Total Installment payments - licenses, short-term ā $ 2,000 ā $ 500 ā $ 2,800 ā $ 5,300 Less: imputed interest ā (602) ā (122) ā (54) ā (778) Sub-total installment payments - licenses, short-term ā $ 1,398 ā $ 378 ā $ 2,746 ā $ 4,522 ā ā ā ā ā ā ā ā ā ā ā ā ā Installment payments - licenses, long-term ā $ 5,000 ā $ 3,000 ā $ 1,000 ā $ 9,000 Less: imputed interest ā (775) ā (88) ā ā ā (863) Sub-total installment payments - licenses, long-term ā $ 4,225 ā $ 2,912 ā $ 1,000 ā $ 8,137 ā ā ā ā ā ā ā ā ā ā ā ā ā Total installment payments - licenses ā $ 5,623 ā $ 3,290 ā $ 3,746 ā $ 12,659 Note 1: Imputed interest rate of 11.96% and maturity date of July 22, 2024. Note 2: Imputed interest rate of 4.03% and maturity date of July 29, 2023. Note 3: Imputed interest rate of 4.25% and maturity date of January 1, 2022. |
OPERATING LEASE OBLIGATIONS
OPERATING LEASE OBLIGATIONS | 12 Months Ended |
Dec. 31, 2021 | |
OPERATING LEASE OBLIGATIONS | |
OPERATING LEASE OBLIGATIONS | NOTE 10. OPERATING LEASE OBLIGATIONS The Company leases 3,681 square feet of office space in Scottsdale, Arizona. In August 2020, the Company amended its office lease and extended the lease term for an additional 25 months at an annual rate of approximately $0.1 million. The term of the amended lease commenced on December 1, 2020 and will expire on December 31, 2022. The Company recorded rent expense as follows (dollars in thousands): ā ā ā ā ā ā ā ā ā For the Years Ended December 31, ā 2021 ā 2020 Operating lease cost ā $ 89 ā $ 94 Variable lease cost ā ā 4 ā ā 6 Total lease cost ā $ 93 ā $ 100 ā The following table summarizes quantitative information about the Companyās operating leases (dollars in thousands): ā ā ā ā ā ā ā ā ā ā For the Years Ended December 31, ā 2021 2020 Operating cash flows from operating leases ā $ 91 ā $ 86 ā Right-of-use assets exchanged for new operating lease liabilities ā ā ā ā ā 182 ā Weighted-average remaining lease termāāāoperating leases ā 1.0 ā 1.5 ā Weighted-average discount rateāāāoperating leases ā 4.0 % 5.0 % ā As of December 31, 2021, future minimum lease payments under lease agreements associated with the Companyās operations were as follows: ā ā ā ā ā ā ā ā ā Future Lease ($in thousands) Liability Year Ended December 31, 2022 ā $ 100 Total ā 100 Less: present value discount ā (2) Operating lease liabilities ā $ 98 ā |
LINE OF CREDIT
LINE OF CREDIT | 12 Months Ended |
Dec. 31, 2021 | |
LINE OF CREDIT. | |
LINE OF CREDIT | NOTE 11. LINE OF CREDIT East West Bank Working Capital Line of Credit On March 31, 2021, the Company entered into an agreement with East West Bank (āthe EWB Agreementā) in which EWB agreed to provide a $7.5 million working capital line of credit. The line of credit is secured by the Companyās receivables and cash. Interest on the line is the greater of 4.25% or the prime rate plus 1%. The agreement matures in 36 months. The outstanding balance of the working capital line of credit was $812,000 at December 31, 2021. The EWB agreement was amended in January of 2022. See Note 18, Subsequent Events, for more detailed information on the amendment. |
INTEREST EXPENSE AND FINANCING
INTEREST EXPENSE AND FINANCING FEES | 12 Months Ended |
Dec. 31, 2021 | |
INTEREST EXPENSE AND FINANCING FEES | |
INTEREST EXPENSE AND FINANCING FEES | NOTE 12. INTEREST EXPENSE AND FINANCING FEES Interest expense and financing fees for the periods consisted of the following: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Year Ended December 31, ā ā 2021 ā 2020 ($in thousands) Interest Fees 1 Total Interest Fees 1 Total Convertible preferred shares ā $ 2,845 ā $ 2,572 ā $ 5,417 ā $ ā ā $ ā ā $ ā Dividend payable ā 820 ā ā ā 820 ā ā ā ā ā ā Installment payments - licenses 2 ā 724 ā ā ā 724 ā 696 ā ā ā 696 Anti-itch product installment payments ā 57 ā ā ā ā 57 ā 2 ā ā ā 2 LOC fees ā ā 16 ā ā ā ā ā 16 ā ā ā ā ā ā ā ā ā Total Interest Expense and Financing Fee ā $ 4,462 ā $ 2,572 ā $ 7,034 ā $ 698 ā $ ā ā $ 698 Note 1: Amortization of fees in connection with debt raises. Note 2: Imputed interest expense related to Ximino, Accutane and anti-itch cream acquisitions. The conversion premium relates to the 15% discount at which the Class A Preferred Stock converts, see Note 14. In accordance with the measurement and recognition guidance of ASC 835-30 Imputation of Interest, the Company will accrete the convertible preferred share settled notes to the estimated settlement amount of $14.8 million. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES. | |
COMMITMENTS AND CONTINGENCIES | NOTE 13. COMMITMENTS AND CONTINGENCIES License Agreements The Company has undertaken to make contingent milestone payments to the licensors of its portfolio of drug products and candidates. In addition, the Company shall pay royalties to such licensors based on a percentage of net sales of each drug candidate following regulatory marketing approval. For additional information on future milestone payments and royalties, see Note 4. |
STOCKHOLDERS' EQUITY AND CLASS
STOCKHOLDERS' EQUITY AND CLASS A PREFERRED STOCK | 12 Months Ended |
Dec. 31, 2021 | |
STOCKHOLDERS' EQUITY AND CLASS A PREFERRED STOCK | |
STOCKHOLDERS' EQUITY AND CLASS A PREFERRED STOCK | NOTE 14. STOCKHOLDERSā EQUITY AND CLASS A PREFERRED STOCK Common Stock The Companyās Certificate of Incorporation, as amended, authorizes the Company to issue 50,000,000 shares of $0.0001 par value Common Stock of which 6,000,000 shares are designated and authorized as Class A Common Stock. Voting Rights Each holder of Common Stock is entitled to one vote per share of Common Stock held on all matters submitted to a vote of the stockholders, including the election of directors. The Companyās Certificate of Incorporation and bylaws do not provide for cumulative voting rights. Each holder of Class A Common Stock is entitled to a number of votes that is equal to 1.1 times a fraction, the numerator of which is the sum of the shares of outstanding Common Stock, including the Class A Common Stock and the denominator of which is the number of outstanding shares of Class A Common Stock. Thus, the Class A Common Stock will at all times constitute a voting majority. Dividends The holders of the Companyās outstanding shares of Common Stock and Class A Common Stock are entitled to receive dividends, if any, as may be declared from time to time by the Companyās Board of Directors out of legally available funds. Liquidation In the event of the Companyās liquidation, dissolution or winding up, holders of Common Stock and Class A Common Stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of the Companyās debts and other liabilities, subject to the satisfaction of any liquidation preference granted to the holders of any outstanding shares of Preferred Stock. Rights and Preference Holders of the Companyās Common Stock and Class A Common Stock have no preemptive, conversion or subscription rights, and there is no redemption or sinking fund provisions applicable to either the Common Stock or the Class A Common Stock. The rights, preferences and privileges of the holders of Common Stock and Class A Common Stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of the Companyās Preferred Stock that are or may be issued. On November 16, 2021, the Company completed an IPO of its common stock and issued 3,520,000 shares of its common stock at $10.00 per share, which resulted in net proceeds of approximately $30.6 million, after deducting underwriting discounts and other offering costs. In addition, as a result of the IPO, the Company issued shares of its Common stock based on the following: 8% Cumulative Convertible Class A Preferred Offering In March 2021, the Company commenced an offering of 8% Cumulative Convertible Class A Preferred Stock (āClass A Preferred Offeringā) in an aggregate minimum amount of $12.5 million and an aggregate maximum amount of $30.0 million. The Class A Preferred Offering terminated on July 18, 2021. The Class A Preferred Stock automatically converts into the Companyās Common Stock upon a sale of the Company or a financing in an amount of at least $25.0 million within a year of the closing date of the Class A Preferred Offering (extendable by another six months at the Companyās option) at a discount of 15% to the per share qualified stock price. In the event that neither a sale of the Company nor a $25.0 million financing is completed, the Class A Preferred Stock will be exchanged for shares of Fortress common stock, at a 7.5% discount to the average Fortress common stock trading price over the 10-day period preceding such exchange. The Company has completed five closings in connection with the Class A Preferred Offering (āClosingsā). As a result of the Closings, the Company issued an aggregate of 758,680 Class A Preferred shares at a price of $25.00 per share, for gross proceeds of $19.0 million. Following the payment of placement agent fees of $1.9 million, and other expenses of $0.1 million, the Company received $17.0 million of net proceeds. In connection with the Companyās IPO, the company issued 2,231,346 shares of common stock resulting from the conversion of all of the Class A Preferred Stock. Stock Based Compensation In 2015, the Companyās Board of Directors adopted, and stockholders approved, the Journey Medical 2015 Stock Plan (the āPlanā) originally authorizing the Company to grant up to 3,000,000 shares of common stock, with subsequent authorizations totaling 1,642,857, to eligible employees, directors, and consultants in the form of restricted stock, stock options and other types of grants. The amount, terms, and exercisability provisions of grants are determined by the Board of Directors. As of December 31, 2021, 1,020,661 shares were available for issuance under the Plan. Total compensation cost that has been charged against operations related to the above plan was $2.5 million, and $0.2 million for the years ended December 31, 2021 and 2020, respectively. The Companyās stock compensation expense is recorded as a component of SG&A in the Companyās consolidated statements of operations. Stock Options The Company grants stock options to employees, non-employees and Directors with exercise prices equal to the closing price of the underlying shares of the Companyās common stock on the date that the options are granted. Options granted have a term of ten years from the grant date. Options granted generally vest over four-year period. Compensation cost for stock options is charged against operations on a straight-line basis between the grant date for the option and each vesting date. The Company estimates the fair value of stock options on the grant date by applying the Black-Scholes option pricing valuation model. The application of this valuation model involves assumptions that are highly subjective, judgmental, and sensitive in the determination of compensation cost. Prior to the Companyās IPO, which closed on November 16, 2021, the fair value of the Companyās common stock underlying stock options was an input to the Black-Scholes option pricing model. The fair value of the Companyās common stock was determined considering a number of objective and subjective factors, including valuations of guideline public companies, transactions of guideline public companies, discounts for lack of control transactions, lack of liquidity of the Companyās common stock and the general and industry-specific economic outlook. Historical information is the primary basis for the selection of the expected volatility of options granted. However, due to the Companyās limited time as a public filer, the Companyās volititily prior to the Companyās IPO, was derived from guidline public companies. The risk-free interest rate is selected based upon yields of United States Treasury issues with a term equal to the expected life of the option being valued. The expected term of options granted is based on the Simplified Method under SAB 107 and the expected term for non-employees is the remaining contractual life. The weighted-average key assumptions used in determining the fair value of options granted for the years ended December 31, 2021 and 2020, are as follows: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total ā Weighted ā ā Weighted weighted average ā ā Number ā average ā average ā remaining ā ā of ā exercise ā intrinsic ā contractual ā Shares price value life (years) Outstanding options at December 31, 2019 ā 2,294,000 ā $ 0.79 ā $ 5,916,970 ā 6.73 Exercised ā (18,000) ā ā 0.69 ā ā 29,428 ā ā Forfeited ā (134,000) ā ā 0.72 ā ā 325,539 ā ā Outstanding options at December 31, 2020 2,142,000 ā $ 0.80 ā $ 7,934,320 5.72 Exercised (10,000) ā 0.68 ā ā ā Forfeited (27,666) ā 1.37 ā ā ā Outstanding options at December 31, 2021 2,104,334 ā $ 0.79 ā $ 9,661,393 4.68 Options vested and exercisable at December 31, 2021 1,990,916 ā $ 0.76 ā $ 9,207,917 4.53 ā For the years ended December 31, 2021 and 2020, the Company issued 10,000 shares and 18,000 shares, respectively, of the Companyās common stock upon the exercise of outstanding stock options and received proceeds of $7,000 and $13,000, respectively. For the years ended December 31, 2021 and 2020, approximately $51,000 and $153,000, respectively, of stock option compensation cost has been charged against operations. As of December 31, 2021, there was $23,000 of unrecognized compensation cost related to unamortized stock option compensation, which is expected to be recognized over a remaining weighted-average period of approximately 0.9 years. The aggregate intrinsic value in the previous table reflects the total pretax intrinsic value (the difference between the Companyās closing stock price on the last trading day of the period and the exercise price of the options, multiplied by the number of in-the-money stock options) that would have been received by the option holders had all option holders exercised their options on December 31, 2021. The intrinsic value of the Companyās stock options changes based on the closing price of the Companyās common stock. Restricted Stock Units The Company grants RSUās to its employees and Directors. Restricted stock and RSUās are charged against income on a straight-line basis over the vesting period, which ranges from one to four years in duration. Compensation cost for restricted stock and RSUās is based on the awardās grant date fair value, which is the closing market price of the Companyās common stock on the grant date, multiplied by the number of shares awarded. The Companyās non-vested RSUās, at December 31, 2021 and 2020, and changes during the year ended December 31, 2021, are presented below: ā ā ā ā ā ā ā ā Weighted ā ā ā ā average ā ā Number of ā exercise ā units price Unvested balance at December 31, 2019 ā ā $ ā Granted 845,524 ā 3.37 Forfeited (30,000) ā ā 3.37 Unvested balance at December 31, 2020 ā 815,524 ā $ 3.37 Granted ā 143,006 ā ā 7.13 Vested ā (136,500) ā ā 3.37 Forfeited ā (107,000) ā ā 3.37 Unvested balance at December 31, 2021 ā 715,030 ā $ 4.12 ā As of December 31, 2021, the Company had unrecognized stock-based compensation expense related to all unvested restricted stock unit of $1.0 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.8 years. ā RSUās that contain performance conditions The Company recorded approximately $2.4 million of stock-based compensation expense in the fourth quarter of 2021, associated with performance-based RSUās granted to key employees that fully vested upon the closing of the Companyās IPO. |
REVENUES FROM CONTRACTS AND SIG
REVENUES FROM CONTRACTS AND SIGNIFICANT CUSTOMERS | 12 Months Ended |
Dec. 31, 2021 | |
REVENUES FROM CONTRACTS AND SIGNIFICANT CUSTOMERS | |
REVENUES FROM CONTRACTS AND SIGNIFICANT CUSTOMERS | NOTE 15. REVENUES FROM CONTRACTS AND SIGNIFICANT CUSTOMERS Disaggregation of Net Revenues The Company has the following actively marketed products, QbrexzaĀ®, AccutaneĀ®, TargadoxĀ®, XiminoĀ®, ExeldermĀ®, and LuxamendĀ®. All of the Companyās product revenues are recorded in the U.S. ā Revenues by product are summarized as follows: ā ā ā ā ā ā ā ā ā December 31, ($ās in thousands) 2021 2020 TargadoxĀ® ā $ 22,378 ā $ 30,708 XiminoĀ® ā 8,247 ā 9,518 ExeldermĀ® ā 5,363 ā 4,453 AccutaneĀ® ā 10,053 ā ā QbrexzaĀ® ā 17,056 ā ā Other branded revenue ā 37 ā (148) Total product revenue, net ā $ 63,134 ā $ 44,531 ā Significant Customers As of December 31, 2021, two of the Companyās customers accounted for more than 10% of its total accounts receivable balance at 16.3% and 12.9%. As of December 31, 2020, one of the Companyās customers accounted for 12% of its total accounts receivable balance. ā For the year ended December 31, 2021 and 2020, none of the Companyās customers accounted for more than 10% of its total gross product revenue. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES | |
INCOME TAXES | NOTE 16. INCOME TAXES The components of the income tax provision are as follows: ā ā ā ā ā ā ā ā ā ā Years Ended December 31, ($ās in thousands) 2021 2020 Current: ā ā ā ā Federal ā $ ā ā $ 1,669 State ā 67 ā 536 Total current ā 67 ā 2,205 ā ā ā ā ā ā ā Deferred: ā ā Federal ā (7,829) ā (234) State ā (1,474) ā (101) Total deferred ā (9,303) ā (335) Valuation allowance ā ā 10,870 ā ā ā Total income tax expense ā $ 1,634 ā $ 1,870 ā Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards. The significant components of the Companyās deferred tax assets consisted of the following: ā ā ā ā ā ā ā ā ā ā December 31, ($ās in thousands) 2021 2020 Deferred tax assets: ā ā ā ā Net operating loss carryforwards ā $ 3,113 ā $ 5 Amortization of license fees ā 4,760 ā 1,086 Stock compensation ā 667 ā 113 Lease liability ā 25 ā 48 Reserve on sales return, discount and bad debt ā 3,573 ā 765 Accruals and reserves ā 505 ā 248 Tax credits ā 193 ā ā Business interest expense deduction limit ā 41 ā ā State taxes ā 12 ā ā Total deferred tax assets ā 12,889 ā 2,265 Less: valuation allowance ā ā (10,870) ā ā ā Deferred tax assets, net ā $ 2,019 ā $ 2,265 ā ā ā ā ā ā ā Deferred tax liability: ā ā ā ā ā ā Section 481(a) adjustment on reserve on sales return, discount and bad debt ā ā (1,996) ā ā (765) Right-of-use asset ā ā (23) ā ā (46) Deferred tax assets, net ā $ ā ā $ 1,454 ā A reconciliation of the statutory tax rates and the effective tax rates is as follows: ā ā ā ā ā ā ā ā ā Years Ended December 31, ā 2021 2020 Percentage of pre-tax income: ā ā ā U.S. federal statutory income tax rate 21 % 21 % State taxes, net of federal benefit 4 % 6 % Non-deductible items (5) % 0 % Provision to return 0 % 0 % Change in state rate 0 % (1) % Change in valuation allowance ā (26) % 0 % Other 2 % 0 % Effective income tax rate (4) % 26 % ā The Company has incurred NOLs in previous years. As of December 31, 2021, the Company had remaining federal NOLs of approximately $13.8 million and had remaining state NOLs of approximately $4.3 million, which will begin to expire in 2034. The Company also had federal research and development credit carryforward of $193 thousand as of December 31, 2021, which will begin to expire in 2040 if unused. The utilization of the Companyās NOLs and tax credits may be subject to annual Internal Revenue Code Section 382 limitations (382 Limitations). The Company is subject to U.S. federal and various state taxes. As of December 31, 2021, the earliest federal tax year open for the assessment of income taxes under the applicable statutes of limitations is its 2018 tax year. The expiration of the statute of limitations related to the various state income and franchise tax returns varies by state. |
NET (LOSS) INCOME PER COMMON SH
NET (LOSS) INCOME PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2021 | |
NET (LOSS) INCOME PER COMMON SHARE | |
NET (LOSS) INCOME PER COMMON SHARE | NOTE 17. NET (LOSS) INCOME PER COMMON SHARE The Company accounts for and discloses net (loss) income per share using the treasury stock method. Net (loss) income per common share, or basic (loss) income per share, is computed by dividing net (loss) income by the weighted-average number of common shares outstanding. Net (loss) income per common share assuming dilutions, or diluted (loss) income per share, is computed by reflecting the potential dilution from the exercise of āin-the-moneyā stock options, and non-vested restricted stock units. The Companyās common stock equivalents, including unvested restricted stock and options have been excluded from the computation of diluted loss per share for the year ended December 31, 2021, as the effect of including such securities would be anti-dilutive. Therefore, the weighted average common stock outstanding used to calculate both basic and diluted income loss per share is the same for the year ended December 31, 2021. The following is a reconciliation of the numerator and denominator of the diluted net income per share computations for the year ended December 31, 2020 (in thousands except for share and per share amounts): ā ā ā ā ā ā For the Year Ended ā ā December 31, ā ā 2020 Net income ā $ 5,283 ā ā ā ā Weighted average shares outstanding - basic ā 9,135,985 Stock options ā 1,700,137 Weighted average shares outstanding - diluted ā 10,836,122 ā ā ā ā Per share data: ā Basic ā $ 0.58 Diluted ā $ 0.49 ā |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
SUBSEQUENT EVENTS. | |
SUBSEQUENT EVENTS | NOTE 18. SUBSEQUENT EVENTS VYNE Therapeutics Product Acquisition (āVYNE Product Acquisitionā) On January 13, 2022 the Company entered into a definitive agreement with VYNE Therapeutics, Inc. (āVYNEā) to acquire its Molecule Stabilizing Technology (āMSTā)ā¢ franchise for an upfront payment of $20.0 million and an additional $5.0 million on the one (1)-year anniversary of the closing. The agreement also provides for contingent net sales milestone payments. The Company acquired AMZEEQ (minocycline) topical foam, 4%, and ZILXI (minocycline) topical foam, 1.5%, two FDA-Approved Topical Minocycline Products and Molecule Stabilizing Technology (MST)ā¢. Amendment to the East West Bank Working Capital Line of Credit On January 12, 2022, the Company entered into a third amendment (the āAmendmentā) of its loan and security agreement with East West Bank, which increased the borrowing capacity of the Companyās revolving line of credit to $10.0 million, from $7.5 million, and added a term loan not to exceed $20.0 million. Both the revolving line of credit and the term loan mature on January 12, 2026. The term loan includes two tranches, the first of which is a$15.0 million term loan and the second of which is a $5.0 million term loan. On January 12, 2022, the Company borrowed $15.0 million against the first tranche of the term loan to facilitate the VYNE Product Acquisition. The term loan bears interest on its outstanding daily balance at a floating rate equal to 1.73% above the prime rate and is payable monthly, on the first calendar day each month. The term loans contain an interest only payment period through January 12, 2024, with an extension through July 12, 2024 if certain covenants are met, after which the outstanding balance of each term loan is payable in equal monthly installments of principal, plus all accrued interest, through the term loan maturity date. The Company may prepay all or any part of the term loan without penalty or premium, but may not re-borrow any amount, once repaid. Any outstanding borrowing against the revolving line of credit bears interest at a floating rate equal to 0.70% above the prime rate. The Amendment includes customary financial covenants such as collateral ratios and minimum liquidity provisions as well as audit provisions. Maruho Milestone Payment On February 11, 2022 the Company announced that its exclusive out-licensing partner in Japan p, received manufacturing and marketing approval in Japan for RapifortĀ® Wipes 2.5% (Japanese equivalent to U.S. FDA approved QBREXZAĀ®) for the treatment of primary axillary hyperhidrosis, triggering a net $2.5 million milestone payment to the Company. The net payment reflects a milestone payment of $10 million to the Company from the Companyās exclusive licensing partner in Japan, Maruho Co., Ltd. (āMaruhoā), offset by a $7.5 million payment to Dermira, Inc., pursuant to the terms of the Asset Purchase Agreement between the Company and Dermira Inc. In conjunction with the terms of the licensing agreement with Maruho, the milestone payment was paid to Maruho within 30 days of the approval. The Company acquired global rights to QBREXZAĀ® from Dermira Inc. in 2021. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The Companyās consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (āGAAPā). The Companyās consolidated financial statements include the accounts of the Company and the accounts of the Companyās wholly-owned subsidiary, JG Pharma, Inc. (āJGā or āJG Pharmaā). All intercompany balances and transactions have been eliminated. |
Emerging Growth Company | Emerging Growth Company From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (āFASBā), or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Companyās consolidated financial statements upon adoption. Under the Jumpstart Our Business Startups Act of 2012, as amended, the Company upon completion of its public offering meets the definition of an emerging growth company and elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates made by management include provisions for product returns, coupons, rebates, chargebacks, discounts, allowances and distribution fees paid to certain wholesalers, inventory realization, useful lives of amortizable intangible assets, fair value of stock options and warrants, stock-based compensation, accrued expenses, provisions for income taxes and contingencies. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Companyās future results of operations will be affected. |
Segment Information | Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one segment, which reflects products for the treatment of dermatological conditions. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents at December 31, 2021 and 2020 consisted entirely of cash and cash equivalents in institutions within the United States. Balances at certain institutions have exceeded Federal Deposit Insurance Corporation insured limits. |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable consists of amounts due to the Company for product sales Accounts receivable are stated at amounts due from customers, net of an allowance for doubtful accounts. Accounts that are outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance for doubtful accounts by considering a number of factors, including the length of time trade accounts receivable are past due and the customerās current ability to pay its obligation to the Company. The Company writes off accounts receivable when they become uncollectible. The allowance for doubtful accounts was $0.1 million at both December 31, 2021 and 2020. |
Inventories | Inventories Inventories comprise raw materials and finished goods, which are valued at the lower of cost and net realizable value, on a first-in, first-out basis. The Company evaluates the carrying value of inventories on a regular basis, taking into account anticipated future sales compared with quantities on hand, and the remaining shelf life of goods on hand. The acquired Qbrexza finished goods inventory initially incuded a fair value step-up of $6.5 million, which was fully expensed within cost of sales for the year ended December 31, 2021, as the inventory was sold to customers. |
Property and Equipment | Property and Equipment Computer equipment, furniture and fixtures and machinery and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful life of each asset. Leasehold improvements are amortized over the shorter of the estimated useful lives or the term of the respective leases. |
Intangible Assets | Intangible Assets Intangible assets are reported at cost, less accumulated amortization and impairments. Intangible assets with finite lives are amortized over their estimated useful lives, which represents the estimated life of the product. Amortization is calculated primarily using the straight-line method. During the ordinary course of business, the Company has entered into certain licenses and asset purchase agreements. Potential milestone payments for achieving sales targets or regulatory development milestones are recorded when it is probable of achievement. Upon a milestone payment being achieved, the milestone payment will be capitalized and amortized over the remaining useful life for approved products and expensed for milestones prior to FDA approval. Royalty payments are recorded as cost of goods sold as sales are recognized. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets, including property and equipment, for impairment at least annually or whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the long-lived asset in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based on discounted cash flows. As of December 31, 2021 and 2020, there were no indicators of impairment. |
Leases | Leases Arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the consolidated balance sheet as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Companyās incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. Variable lease expenses are recorded when incurred. In calculating the right-of-use asset and lease liability, the Company elects to combine lease and non-lease components. |
Fair Value Measurement | Fair Value Measurement The Company follows accounting guidance on fair value measurements for financial assets and liabilities measured at fair value on a recurring basis. Under the accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The accounting guidance requires fair value measurements be classified and disclosed in one of the following three categories: Level 1 Level 2 Level 3 The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Companyās assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. Certain of the Companyās financial instruments are not measured at fair value on a recurring basis but are recorded at amounts that approximate their fair value due to their liquid or short-term nature, such as accounts payable, accrued expenses and other current liabilities. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash. Periodically, the Company may maintain deposits in financial institutions in excess of government insured limits. Management believes that the Company is not exposed to significant credit risk as the Companyās deposits are held at financial institutions that management believes to be of high credit quality. The Company has not experienced any losses on these deposits. The Companyās accounts receivable primarily represent amounts due from drug wholesalers and specialty pharmacies in the United States. The Company performs periodic credit evaluations of customers and does not require collateral. An allowance for doubtful accounts is maintained for potential credit losses based on the aging of accounts receivable, historical bad debts experience, and the customerās current ability to pay its obligations to the Company. Accounts receivables balances are written off against the allowance when it is probable that the receivable will not be collected. See Note 15 for significant customers. |
Revenue Recognition | Revenue Recognition The Company records revenue in accordance with the provisions of Accounting Standards Codification (āASCā) Topic 606, Revenue from Contracts with Customers Many of the Companyās products sold are subject to a variety of deductions. Revenues are recorded net of provisions for variable consideration, including chargebacks, coupons, discounts, other sales allowances, governmental rebate programs, price adjustments and returns. Accruals for these provisions are presented in the consolidated financial statements as reductions in determining net sales and as a contra asset in accounts receivable, net (if settled via credit) and other current liabilities (if paid in cash). Amounts recorded for revenue deductions can result from a complex series of judgements about future events and uncertainties and can rely heavily on estimates and assumptions. The following section briefly describes the nature of the Companyās provisions for variable consideration and how such provisions are estimated. Gross-to-Net Sales Accruals Discounts and Other Sales Allowances Wholesaler fees Product Returns The Company bases its product returns allowance on estimated on-hand inventories in the sales channels, measured end-customer demand, actual returns history and other factors, such as the trend experience for lots where product is still being returned, as applicable. If the historical data the Company uses to calculate these estimates does 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. Under this methodology, the Company tracks actual returns by individual production lots. Returns on closed lots, that is, lots no longer eligible for return credits, are analyzed to determine historical returns experience. Returns on open lots, that is, lots still eligible for return credits, are monitored and compared with historical return trend rates. Any changes from the historical trend rates are considered in determining the current sales return allowance. Government Chargebacks U.S. Government Rebates of sales attributed to Medicaid patients and record a liability for the rebates to be paid to the respective state Medicaid programs. The Companyās liability for these rebates consists of invoices received for: i) claims from prior quarters that have not been paid or for which an invoice has not yet been received ii) estimates of claims for the current quarter and iii) estimated future claims that will be made for product that has been recognized as revenue, but which remains in the distribution channel inventories at the end of each reporting period. Wholesaler Chargeback Accruals Coupons ā Managed Care Rebates |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. Advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made. Upfront and milestone payments due to third parties that perform research and development services on the Companyās behalf will be expensed as services are rendered or when the milestone is achieved. Research and development costs primarily consist of personnel related expenses and, payments made to third parties for license and milestone costs related to in-licensed products and technology, payments made to third party contract research organizations. In accordance with Accounting Standards Codification (āASCā) 730-10-25-1, Research and Development total purchase price for the licenses acquired during the period was reflected as research and development - licenses acquired on the Consolidated Statements of Operations for the years ended December 31, 2021. |
Stock-based Compensation | Stock-based Compensation The Company has a stock-based compensation plan in place and records the associated stock-based compensation expense over the requisite service period. The stock-based compensation plan and related compensation expense are discussed more fully in Note 14 to the Companyās consolidated financial statements. Compensation expense for service-based stock options is charged against operations on a straight-line basis between the grant date for the option and the vesting period, which is generally four years. The Company estimates the fair value of all service-based stock option awards as of the grant date by applying the Black-Scholes option pricing valuation model. The application of this valuation model involves assumptions that are highly subjective, judgmental, and sensitive in the determination of compensation cost. Compensation cost is adjusted for actual forfeitures. Options granted have a term of 10 years from the grant date. Restricted stock units (āRSUāsā) that are service based are recorded as deferred compensation and amortized into compensation expense on a straight-line basis over the vesting period, which ranges from three to four years in duration. Compensation cost for service based RSUās is based on the grant date fair value of the award, which is the closing market price of the Companyās common stock on the grant date multiplied by the number of shares awarded. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model, which requires the use of a number of assumptions, including the fair value of the common stock, expected volatility, risk-free interest rate, expected dividends and the expected term of the option. The assumptions used in calculating the fair value of stock-based awards represent managementās best estimates and involve inherent uncertainties and the application of managementās judgment. Forfeitures are recorded as they occur. All stock-based compensation costs are recorded in selling, general and administrative (āSG&Aā) expense in the Companyās consolidated statements of operations. Prior to the Companyās IPO, which closed on November 16, 2021, the fair value of the Companyās common stock underlying stock options was an input to the Black-Scholes option pricing model. The Company engaged an independent third-party valuation firm to provide an estimate of the fair value of its common stock annually, utilizing input from management. The fair value of the Companyās common stock was determined considering a number of objective and subjective factors, including valuations of guideline public companies, transactions of guideline public companies, discounts for lack of control transactions, lack of liquidity of the Companyās common stock and the general and industry-specific economic outlook. |
Contingencies | Contingencies The Company records accruals for contingencies and legal proceedings expected to be incurred in connection with a loss contingency when it is probable that a liability has been incurred and the amount can be reasonably estimated. If a loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. |
Income Taxes | Income Taxes As of December 31, 2021, after the IPO the Company was 58.39% owned by Fortress Biotech, Inc. (āFortressā) and prior to the IPO was filing consolidated federal tax return and consolidated or combined state tax returns in multiple jurisdictions with Fortress. As the Company completed its initial public offering on November 12, 2021, the Company deconsolidated from Fortress consolidated group for federal income tax purpose. The Companyās financial statements recognize the current and deferred income tax consequences that result from the Companyās activities during the current and preceding periods pursuant to the provisions of Accounting Standards Codification Topic 740, Income Taxes (ASC 740), as if the Company were a separate taxpayer rather than a member of the Fortress consolidated income tax return group. Fortress has agreed that JMC does not have to make payments to Fortress for JMCās use of net operation losses (āNOLsā) of Fortress (including other Fortress group members) accordingly, for any NOLs, the tax benefit the Company realized was recorded as a capital contribution. The Company records income taxes using the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax effects attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and operating loss and tax credit carryforwards. The Company establishes a valuation allowance if management believes it is more likely than not that the deferred tax assets will not be recovered based on an evaluation of objective verifiable evidence. Management has considered the Companyās history of cumulative tax and book income/loss incurred since inception, and the other positive and negative evidence, and has concluded that it is not more likely than not that the Company will realize the benefits of the net deferred tax assets as of December 31, 2021 and therefore a full valuation allowance on all of its deferred tax assets is required. The Company did not record any valuation allowance as of December 31, 2020. For tax positions that are more likely than not of being sustained upon audit, the Company recognizes the largest amount of the benefit that is greater than 50% likely of being realized. For tax positions that are not more likely than not of being sustained upon audit, the Company does not recognize any portion of the benefit. As of December 31, 2021, the Company had no unrecognized tax benefits and does not anticipate any significant change to the unrecognized tax benefit balance. The Company would classify interest and penalties related to uncertain tax positions as income tax expense, if applicable. There was no interest expense or penalties related to unrecognized tax benefits recorded through December 31, 2021. |
Net Loss (Income) Per Share | Net Loss (Income) Per Share Basic net (loss) income per share of common stock is calculated by dividing net (loss) income by the weighted-average number of shares of common stock outstanding during the reporting period. Diluted earnings per share is calculated by dividing net income by the weighted-average number of shares of common stock outstanding during the reporting period after giving effect to dilutive potential common shares for stock options and restricted stock units, determined using the treasury stock method. See Note 17 below. |
Comprehensive Income | Comprehensive Income The Company has no components of other comprehensive income, and therefore, comprehensive income equals net income. |
Recently Adopted/Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In December 2019, the FASB issued Accounting Standards Update (āASUā) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Recently Issued Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06 ā Debt ā Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging ā Contracts in Entityās Own Equity (Subtopic 815 ā 40): Accounting for Convertible Instruments and Contracts in an Entityās Own Equity |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INVENTORY | |
Schedule of inventory | ā ā ā ā ā ā ā ā ā December 31, ā December 31, ($in thousands) 2021 2020 ā ā ā ā ā ā ā Raw materials ā $ 5,572 ā $ ā Work-in-process ā ā ā ā Finished goods ā 4,290 ā 1,404 Total inventories ā $ 9,862 ā $ 1,404 |
INTANGIBLES (Tables)
INTANGIBLES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INTANGIBLES | |
Schedule of intangible assets | ā ā ā ā ā ā ā ā ā ā ā Estimated Useful December 31, ā December 31, ($in thousands) Lives (Years) 2021 2020 CeracadeĀ® ā 3 ā $ 300 ā $ 300 LuxamendĀ® ā 3 ā 50 ā 50 TargadoxĀ® ā 3 ā 1,250 ā 1,250 XiminoĀ® ā 7 ā 7,134 ā 7,134 ExeldermĀ® ā 3 ā 1,600 ā 1,600 Accutane ā 5 ā 4,727 ā 4,727 Anti-itch product (1) ā 3 ā 3,942 ā 3,945 Total intangible assets ā ā ā 19,003 ā 19,006 Accumulated amortization ā ā ā (6,451) ā (3,977) Net intangible assets ā ā ā $ 12,552 ā $ 15,029 (1) As of December 31, 2021, this asset has not yet been placed in service, therefore no amortization expense was recognized on this asset for the year ended December 31, 2021. Commercial launch of this product is expected in the first half of 2022. |
Schedule of intangible assets roll forward | ā ā ā ā ā ā Intangible ($ās in thousands) Assets, Net Balance at January 1, 2020 ā $ 7,377 Isotretinion agreement (1) ā 4,727 Anti-itch product license acquisition (2) ā 3,945 Exelderm milestone ā ā 400 Amortization expense ā ā (1,420) Balance at December 31, 2020 ā $ 15,029 Anti-itch product license acquisition ā ā (3) Amortization expense ā ā (2,474) Unvested balance at December 31, 2021 ā $ 12,552 (1) Includes an upfront payment of $1.0 million and one milestone payment of $0.5 million in 2020 as well as four payments totaling $3.5 million due at various points between 2021 through 2023. Such payments were discounted by $0.3 million due to the long-term nature of such payments. As of December 31, 2020, this asset has not yet been placed in service, therefore no amortization expense was recognized on this asset for the year ended December 31, 2020. The Company placed the assets in service in the first quarter of 2021. (2) Includes an upfront payment of $0.2 million, three payments totaling $2.8 million due in 2021 and $1.0 million due in 2022. Such payments were discounted by $0.1 million due to the long-term nature of such payments. As of December 31,2021 and 2020, this asset has not yet been placed in service, therefore no amortization expense was recognized on this asset for the year ended December 31, 2021 and 2020 respectively. |
Schedule of future amortization of intangible assets | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total ($ās in thousands) XiminoĀ® AccutaneĀ® Amortization December 31, 2022 ā $ 1,019 ā $ 946 ā $ 1,965 December 31, 2023 ā 1,019 ā 945 ā 1,964 December 31, 2024 ā 1,019 ā 946 ā 1,965 December 31, 2025 ā 1,019 ā 945 ā 1,964 Thereafter ā 595 ā 157 ā 752 Subtotal ā $ 4,671 ā $ 3,939 ā $ 8,610 Asset not yet placed in service ā ā ā ā ā 3,942 Total ā $ 4,671 ā $ 3,939 ā $ 12,552 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
FAIR VALUE MEASUREMENTS | |
Schedule of financial assets and liabilities measured at fair value on a recurring basis | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2021 ($in thousands) Level 1 Level 2 Level 3 Total Assets: ā ā ā ā ā ā ā ā Cash and cash equivalents ā $ 49,081 ā $ ā ā $ ā ā $ 49,081 Total ā $ 49,081 ā $ ā ā $ ā ā $ 49,081 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2020 ($in thousands) Level 1 Level 2 Level 3 Total Assets: ā ā ā ā ā ā ā ā ā ā ā ā Cash and cash equivalents ā $ 8,246 ā $ ā ā $ ā ā $ 8,246 Total ā $ 8,246 ā $ ā ā $ ā ā $ 8,246 ā |
Schedule of roll-forward of changes in fair value of Level 3 financial instruments | ā ā ā ā ā ā Warrant ($in thousands) liabilities Fair value at December 31, 2020 ā $ ā Additions: ā Contingent payment warrant ā 3,819 Placement agent warrant ā 362 Change in fair value of warrant liabilities: ā ā ā Contingent payment warrant ā ā (139) Placement agent warrant ā ā 586 Settlement of warrant liabilities in connection with IPO: ā ā Conversion of contingent payment warrants to common shares ā ā (3,680) Conversion of placement agent warrants to common shares ā ā (948) Fair value at December 31, 2021 ā $ ā |
Placement Agent Warrants | |
FAIR VALUE MEASUREMENTS | |
Schedule of weighted average significant unobservable inputs used in measuring liabilities | ā ā ā ā ā Risk-free interest rate 0.98 % Expected dividend yield ā ā Expected term in years 1.0 ā Expected volatility 50 % |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
ACCRUED EXPENSES | |
Schedule of accrued expenses | ā ā ā ā ā ā ā ā ā December 31, ($'s in thousands) 2021 2020 Accrued expenses: ā ā Accrued emplyee compensation $ 2,702 $ 2,041 Research and development - license fees ā 870 ā ā Accrued royalties payable ā 3,833 ā 2,682 Accured coupons and rebates ā 10,603 ā 12,869 Return reserve ā 3,240 ā 2,580 Other ā 1,485 ā 1,326 Total accrued expenses ā $ 22,733 ā $ 21,498 |
INSTALLMENT PAYMENTS - LICENS_2
INSTALLMENT PAYMENTS - LICENSES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INSTALLMENT PAYMENTS - LICENSES | |
Schedule of installment payments - licenses | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2021 ā ā ā ā ā Anti-Itch ā ā ($in thousands) Ximino 1 Accutane 2 Product 3 Total Installment payments - licenses, short-term ā $ 2,000 ā $ 2,000 ā $ 1,000 ā $ 5,000 Less: imputed interest ā (425) ā (65) ā ā ā (490) Sub-total installment payments - licenses, short-term ā $ 1,575 ā $ 1,935 ā $ 1,000 ā $ 4,510 ā ā ā ā ā ā ā ā ā ā ā ā ā Installment payments - licenses, long-term ā $ 3,000 ā $ 1,000 ā $ ā ā $ 4,000 Less: imputed interest ā ā (350) ā ā (23) ā ā ā ā ā (373) Sub-total installment payments - licenses, long-term ā $ 2,650 ā $ 977 ā $ ā ā $ 3,627 ā ā ā ā ā ā ā ā ā ā ā ā ā Total installment payments - licenses ā $ 4,225 ā $ 2,912 ā $ 1,000 ā $ 8,137 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2020 ā ā ā ā ā Anti-Itch ā ā ($in thousands) ā Ximino 1 ā Accutane 2 ā Product 3 ā Total Installment payments - licenses, short-term ā $ 2,000 ā $ 500 ā $ 2,800 ā $ 5,300 Less: imputed interest ā (602) ā (122) ā (54) ā (778) Sub-total installment payments - licenses, short-term ā $ 1,398 ā $ 378 ā $ 2,746 ā $ 4,522 ā ā ā ā ā ā ā ā ā ā ā ā ā Installment payments - licenses, long-term ā $ 5,000 ā $ 3,000 ā $ 1,000 ā $ 9,000 Less: imputed interest ā (775) ā (88) ā ā ā (863) Sub-total installment payments - licenses, long-term ā $ 4,225 ā $ 2,912 ā $ 1,000 ā $ 8,137 ā ā ā ā ā ā ā ā ā ā ā ā ā Total installment payments - licenses ā $ 5,623 ā $ 3,290 ā $ 3,746 ā $ 12,659 Note 1: Imputed interest rate of 11.96% and maturity date of July 22, 2024. Note 2: Imputed interest rate of 4.03% and maturity date of July 29, 2023. Note 3: Imputed interest rate of 4.25% and maturity date of January 1, 2022. |
OPERATING LEASE OBLIGATIONS (Ta
OPERATING LEASE OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
OPERATING LEASE OBLIGATIONS | |
Schedule of rent expense and quantitative information | The Company recorded rent expense as follows (dollars in thousands): ā ā ā ā ā ā ā ā ā For the Years Ended December 31, ā 2021 ā 2020 Operating lease cost ā $ 89 ā $ 94 Variable lease cost ā ā 4 ā ā 6 Total lease cost ā $ 93 ā $ 100 ā The following table summarizes quantitative information about the Companyās operating leases (dollars in thousands): ā ā ā ā ā ā ā ā ā ā For the Years Ended December 31, ā 2021 2020 Operating cash flows from operating leases ā $ 91 ā $ 86 ā Right-of-use assets exchanged for new operating lease liabilities ā ā ā ā ā 182 ā Weighted-average remaining lease termāāāoperating leases ā 1.0 ā 1.5 ā Weighted-average discount rateāāāoperating leases ā 4.0 % 5.0 % |
Schedule of future minimum lease payments under lease agreements | ā ā ā ā ā ā ā ā ā Future Lease ($in thousands) Liability Year Ended December 31, 2022 ā $ 100 Total ā 100 Less: present value discount ā (2) Operating lease liabilities ā $ 98 |
INTEREST EXPENSE AND FINANCIN_2
INTEREST EXPENSE AND FINANCING FEES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INTEREST EXPENSE AND FINANCING FEES | |
Schedule of interest expense and financing fees | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Year Ended December 31, ā ā 2021 ā 2020 ($in thousands) Interest Fees 1 Total Interest Fees 1 Total Convertible preferred shares ā $ 2,845 ā $ 2,572 ā $ 5,417 ā $ ā ā $ ā ā $ ā Dividend payable ā 820 ā ā ā 820 ā ā ā ā ā ā Installment payments - licenses 2 ā 724 ā ā ā 724 ā 696 ā ā ā 696 Anti-itch product installment payments ā 57 ā ā ā ā 57 ā 2 ā ā ā 2 LOC fees ā ā 16 ā ā ā ā ā 16 ā ā ā ā ā ā ā ā ā Total Interest Expense and Financing Fee ā $ 4,462 ā $ 2,572 ā $ 7,034 ā $ 698 ā $ ā ā $ 698 Note 1: Amortization of fees in connection with debt raises. Note 2: Imputed interest expense related to Ximino, Accutane and anti-itch cream acquisitions. |
STOCKHOLDERS' EQUITY AND CLAS_2
STOCKHOLDERS' EQUITY AND CLASS A PREFERRED STOCK (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
STOCKHOLDERS' EQUITY AND CLASS A PREFERRED STOCK | |
Schedule of stock option activities | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total ā Weighted ā ā Weighted weighted average ā ā Number ā average ā average ā remaining ā ā of ā exercise ā intrinsic ā contractual ā Shares price value life (years) Outstanding options at December 31, 2019 ā 2,294,000 ā $ 0.79 ā $ 5,916,970 ā 6.73 Exercised ā (18,000) ā ā 0.69 ā ā 29,428 ā ā Forfeited ā (134,000) ā ā 0.72 ā ā 325,539 ā ā Outstanding options at December 31, 2020 2,142,000 ā $ 0.80 ā $ 7,934,320 5.72 Exercised (10,000) ā 0.68 ā ā ā Forfeited (27,666) ā 1.37 ā ā ā Outstanding options at December 31, 2021 2,104,334 ā $ 0.79 ā $ 9,661,393 4.68 Options vested and exercisable at December 31, 2021 1,990,916 ā $ 0.76 ā $ 9,207,917 4.53 |
Schedule of restricted stock units | ā ā ā ā ā ā ā ā Weighted ā ā ā ā average ā ā Number of ā exercise ā units price Unvested balance at December 31, 2019 ā ā $ ā Granted 845,524 ā 3.37 Forfeited (30,000) ā ā 3.37 Unvested balance at December 31, 2020 ā 815,524 ā $ 3.37 Granted ā 143,006 ā ā 7.13 Vested ā (136,500) ā ā 3.37 Forfeited ā (107,000) ā ā 3.37 Unvested balance at December 31, 2021 ā 715,030 ā $ 4.12 |
REVENUES FROM CONTRACTS AND S_2
REVENUES FROM CONTRACTS AND SIGNIFICANT CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
REVENUES FROM CONTRACTS AND SIGNIFICANT CUSTOMERS | |
Schedule of disaggregation of net revenues | The Company has the following actively marketed products, QbrexzaĀ®, AccutaneĀ®, TargadoxĀ®, XiminoĀ®, ExeldermĀ®, and LuxamendĀ®. All of the Companyās product revenues are recorded in the U.S. ā Revenues by product are summarized as follows: ā ā ā ā ā ā ā ā ā December 31, ($ās in thousands) 2021 2020 TargadoxĀ® ā $ 22,378 ā $ 30,708 XiminoĀ® ā 8,247 ā 9,518 ExeldermĀ® ā 5,363 ā 4,453 AccutaneĀ® ā 10,053 ā ā QbrexzaĀ® ā 17,056 ā ā Other branded revenue ā 37 ā (148) Total product revenue, net ā $ 63,134 ā $ 44,531 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES | |
Schedule of components of the income tax provision | ā ā ā ā ā ā ā ā ā ā Years Ended December 31, ($ās in thousands) 2021 2020 Current: ā ā ā ā Federal ā $ ā ā $ 1,669 State ā 67 ā 536 Total current ā 67 ā 2,205 ā ā ā ā ā ā ā Deferred: ā ā Federal ā (7,829) ā (234) State ā (1,474) ā (101) Total deferred ā (9,303) ā (335) Valuation allowance ā ā 10,870 ā ā ā Total income tax expense ā $ 1,634 ā $ 1,870 |
Schedule of components of the Company's deferred tax assets | ā ā ā ā ā ā ā ā ā ā December 31, ($ās in thousands) 2021 2020 Deferred tax assets: ā ā ā ā Net operating loss carryforwards ā $ 3,113 ā $ 5 Amortization of license fees ā 4,760 ā 1,086 Stock compensation ā 667 ā 113 Lease liability ā 25 ā 48 Reserve on sales return, discount and bad debt ā 3,573 ā 765 Accruals and reserves ā 505 ā 248 Tax credits ā 193 ā ā Business interest expense deduction limit ā 41 ā ā State taxes ā 12 ā ā Total deferred tax assets ā 12,889 ā 2,265 Less: valuation allowance ā ā (10,870) ā ā ā Deferred tax assets, net ā $ 2,019 ā $ 2,265 ā ā ā ā ā ā ā Deferred tax liability: ā ā ā ā ā ā Section 481(a) adjustment on reserve on sales return, discount and bad debt ā ā (1,996) ā ā (765) Right-of-use asset ā ā (23) ā ā (46) Deferred tax assets, net ā $ ā ā $ 1,454 |
Schedule of reconciliation of the statutory tax rates and the effective tax rates | ā ā ā ā ā ā ā ā ā Years Ended December 31, ā 2021 2020 Percentage of pre-tax income: ā ā ā U.S. federal statutory income tax rate 21 % 21 % State taxes, net of federal benefit 4 % 6 % Non-deductible items (5) % 0 % Provision to return 0 % 0 % Change in state rate 0 % (1) % Change in valuation allowance ā (26) % 0 % Other 2 % 0 % Effective income tax rate (4) % 26 % |
NET (LOSS) INCOME PER COMMON _2
NET (LOSS) INCOME PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
NET (LOSS) INCOME PER COMMON SHARE | |
Schedule of reconciliation of numerator and denominator of the diluted net income per share | The following is a reconciliation of the numerator and denominator of the diluted net income per share computations for the year ended December 31, 2020 (in thousands except for share and per share amounts): ā ā ā ā ā ā For the Year Ended ā ā December 31, ā ā 2020 Net income ā $ 5,283 ā ā ā ā Weighted average shares outstanding - basic ā 9,135,985 Stock options ā 1,700,137 Weighted average shares outstanding - diluted ā 10,836,122 ā ā ā ā Per share data: ā Basic ā $ 0.58 Diluted ā $ 0.49 |
ORGANIZATION AND PLAN OF BUSI_2
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS (Details) $ / shares in Units, $ in Thousands | Nov. 16, 2021USD ($)$ / sharesshares | Mar. 31, 2021 | Dec. 31, 2021USD ($)item$ / shares | Jan. 31, 2022USD ($) | Dec. 31, 2020USD ($) |
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS | |||||
Number of branded drugs in product portfolio | item | 5 | ||||
Number of authorized generic prescription drugs | item | 3 | ||||
Cash and cash equivalents | $ | $ 49,081 | $ 8,246 | |||
IPO | |||||
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS | |||||
Proceeds of initial public offering | $ | $ 30,600 | ||||
Price per share | $ / shares | $ 10 | ||||
Cumulative Convertible Class A Preferred Stock | |||||
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS | |||||
Preferred stock dividend rate | 8.00% | ||||
Number of shared issued for conversion of preferred stock | shares | 2,231,346 | ||||
Price per share | $ / shares | $ 25 | ||||
Cumulative Convertible Class A Preferred Stock | Fortress Note | |||||
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS | |||||
Number of shares issued for conversion of related part debt | shares | 1,610,467 | ||||
Cumulative Convertible Class A Preferred Stock | IPO | Fortress Note | |||||
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS | |||||
Price per share | $ / shares | $ 10 | ||||
Term Loan | Subsequent Event | |||||
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS | |||||
LineOfCredit | $ | $ 15,000 |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Segment Information (Details) | 12 Months Ended |
Dec. 31, 2021segment | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Number of operating segment | 1 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Allowance for doubtful accounts | $ 0.1 | $ 0.1 |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventories (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Finished goods inventory, fair value step up | $ 6.5 |
BASIS OF PRESENTATION AND SUM_6
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition (Details) | 12 Months Ended |
Dec. 31, 2021Y | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Prompt payment discount term | 1 |
Percentage of product revenues sold | 85.00% |
Minimum | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Prompt payment discount payment term days | 30 days |
Maximum | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Prompt payment discount payment term days | 98 days |
BASIS OF PRESENTATION AND SUM_7
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Stock-based Compensation (Details) | 12 Months Ended |
Dec. 31, 2021 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Options granted | 10 years |
BASIS OF PRESENTATION AND SUM_8
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | ||
Effective income tax rate | (4.00%) | 26.00% |
Income tax expense (benefit) | $ 1,634 | $ 1,870 |
Percentage of tax positions interest rate | 50.00% | |
Unrecognized Tax Benefits | $ 0 | |
Interest expense or penalties related to unrecognized tax benefits | $ 0 | |
Fortress | ||
Income Taxes | ||
Ownership interest (as a percent) | 58.39% |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
INVENTORY | ||
Raw materials | $ 5,572 | |
Finished goods | 4,290 | $ 1,404 |
Total inventories | 9,862 | $ 1,404 |
Finished goods inventory, fair value step up | $ 6,500 |
INTANGIBLES (Details)
INTANGIBLES (Details) - USD ($) $ in Millions | May 13, 2021 | Mar. 31, 2021 | Jan. 01, 2021 | Dec. 18, 2020 | Jul. 29, 2020 | Dec. 31, 2021 | Jan. 01, 2022 | Jul. 01, 2021 | Apr. 01, 2021 |
Anti-Itch product | |||||||||
Intangibles | |||||||||
Useful life | 3 years | ||||||||
Accutane | |||||||||
Intangibles | |||||||||
Useful life | 5 years | ||||||||
Asset purchase agreement | Qbrexza | |||||||||
Intangibles | |||||||||
Upfront fees | $ 12.5 | ||||||||
Milestone payments payable | $ 144 | ||||||||
Percentage of diminution in royalty | 50.00% | ||||||||
Age of patients | 9 years | ||||||||
Stay period | 30 months | ||||||||
Purchase price | $ 12.5 | ||||||||
Useful life | 7 years | ||||||||
Asset purchase agreement | Qbrexza | Royalty payment percentage for first two years | |||||||||
Intangibles | |||||||||
Period of royalty payments | 2 years | ||||||||
Asset purchase agreement | Qbrexza | Royalty payment percentage for eight years thereafter | |||||||||
Intangibles | |||||||||
Term of royalty | 8 years | ||||||||
Asset purchase agreement | Qbrexza | Minimum | Royalty payment percentage for first two years | |||||||||
Intangibles | |||||||||
Percent of royalty payments | 30.00% | ||||||||
Asset purchase agreement | Qbrexza | Minimum | Royalty payment percentage for eight years thereafter | |||||||||
Intangibles | |||||||||
Percent of royalty payments | 12.00% | ||||||||
Asset purchase agreement | Qbrexza | Maximum | Royalty payment percentage for first two years | |||||||||
Intangibles | |||||||||
Percent of royalty payments | 40.00% | ||||||||
Asset purchase agreement | Qbrexza | Maximum | Royalty payment percentage for eight years thereafter | |||||||||
Intangibles | |||||||||
Percent of royalty payments | 19.00% | ||||||||
Asset purchase agreement | Anti-Itch product | |||||||||
Intangibles | |||||||||
Upfront fees | $ 1.8 | ||||||||
Milestone payments payable | $ 1 | $ 0.5 | $ 0.5 | ||||||
Amount of expense agreed to pay under the agreement | $ 4 | ||||||||
Non refundable deposit | $ 0.2 | ||||||||
License And Supply agreement With DRL [Member] | Accutane | |||||||||
Intangibles | |||||||||
Upfront fees | $ 1 | ||||||||
Milestone payments payable | 4 | ||||||||
Contingent amount payable | 17 | ||||||||
Amount of expense agreed to pay under the agreement | $ 5 |
INTANGIBLES - Schedule of intan
INTANGIBLES - Schedule of intangible assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Intangibles | |||
Total intangible assets | $ 19,003 | $ 19,006 | |
Accumulated amortization | (6,451) | (3,977) | |
Net intangible assets | 12,552 | 15,029 | $ 7,377 |
Amortization expense | $ 2,474 | 1,420 | |
Ceracade | |||
Intangibles | |||
Estimated Useful Lives (Years) | 3 years | ||
Total intangible assets | $ 300 | 300 | |
Luxamend | |||
Intangibles | |||
Estimated Useful Lives (Years) | 3 years | ||
Total intangible assets | $ 50 | 50 | |
Targadox | |||
Intangibles | |||
Estimated Useful Lives (Years) | 3 years | ||
Total intangible assets | $ 1,250 | 1,250 | |
Ximino | |||
Intangibles | |||
Estimated Useful Lives (Years) | 7 years | ||
Total intangible assets | $ 7,134 | 7,134 | |
Net intangible assets | $ 4,671 | ||
Exelderm | |||
Intangibles | |||
Estimated Useful Lives (Years) | 3 years | ||
Total intangible assets | $ 1,600 | 1,600 | |
Accutane | |||
Intangibles | |||
Estimated Useful Lives (Years) | 5 years | ||
Total intangible assets | $ 4,727 | 4,727 | |
Net intangible assets | $ 3,939 | ||
Anti-itch product | |||
Intangibles | |||
Estimated Useful Lives (Years) | 3 years | ||
Total intangible assets | $ 3,942 | $ 3,945 | |
Amortization expense | $ 0 |
INTANGIBLES - Schedule of int_2
INTANGIBLES - Schedule of intangible assets roll forward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed consolidated statement of operations: | ||
Balance at beginning | $ 15,029 | $ 7,377 |
Isotretinion agreement | 4,727 | |
Anti-itch product license acquisition | (3) | 3,945 |
Exelderm milestone | 400 | |
Amortization expense | (2,474) | (1,420) |
Balance at end | 12,552 | 15,029 |
Amortization of Intangible Assets | 2,474 | 1,420 |
2022 | $ 1,965 | |
Renewable Mutual Agreement Term | 10 years | |
Termination Written Notice Period To Other Party | 180 days | |
Isotretinion agreement | ||
Condensed consolidated statement of operations: | ||
Amortization expense | 0 | |
Upfront fees | 1,000 | |
Milestone payments payable | 500 | |
Amortization of Intangible Assets | 0 | |
Long term discounted Payments | 300 | |
Finite Lived Intangible Assets Amortization Expense between 2021 through 2023 | 3,500 | |
Anti-itch product license acquisition | ||
Condensed consolidated statement of operations: | ||
Amortization expense | $ 0 | 0 |
Upfront fees | 200 | |
Amortization of Intangible Assets | 0 | 0 |
Long term discounted Payments | $ 100 | |
2021 | 2,800 | |
2022 | $ 1,000 |
INTANGIBLES - Future amortizati
INTANGIBLES - Future amortization expense (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Future amortization expense | |||
Year ended December 31, 2022 | $ 1,965 | ||
Year ended December 31, 2023 | 1,964 | ||
Year ended December 31, 2024 | 1,965 | ||
Year ended December 31, 2025 | 1,964 | ||
Thereafter | 752 | ||
Subtotal | 8,610 | ||
Assets not yet placed in service | 3,942 | ||
Net intangible assets | 12,552 | $ 15,029 | $ 7,377 |
Ximino | |||
Future amortization expense | |||
Year ended December 31, 2022 | 1,019 | ||
Year ended December 31, 2023 | 1,019 | ||
Year ended December 31, 2024 | 1,019 | ||
Year ended December 31, 2025 | 1,019 | ||
Thereafter | 595 | ||
Subtotal | 4,671 | ||
Net intangible assets | 4,671 | ||
Accutane | |||
Future amortization expense | |||
Year ended December 31, 2022 | 946 | ||
Year ended December 31, 2023 | 945 | ||
Year ended December 31, 2024 | 946 | ||
Year ended December 31, 2025 | 945 | ||
Thereafter | 157 | ||
Subtotal | 3,939 | ||
Net intangible assets | $ 3,939 |
LICENSES ACQUIRED (Details)
LICENSES ACQUIRED (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 16, 2021 | Jun. 29, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Licenses acquired | ||||
Second installment payable | $ 8,137 | $ 12,659 | ||
D F D Agreement | ||||
Licenses acquired | ||||
Amount payable | $ 10,000 | 10,000 | ||
First installment paid | 2,000 | |||
Second installment payable | $ 8,000 | |||
Period within which second installment is payable | 90 days | |||
Amount payable to fund clinical trials | $ 24,000 | |||
D F D Agreement | Contingent Payment Derivative | ||||
Licenses acquired | ||||
Unregistered shares issued | 545,131 | |||
Volume weighted average price per share related to shares issued | $ 9.1721 | |||
Number of days for calculating weighted average price | 15 days | 15 days | ||
D F D Agreement | Minimum | ||||
Licenses acquired | ||||
Percentage of royalties payable on net sales | 10.00% | |||
D F D Agreement | Maximum | ||||
Licenses acquired | ||||
Threshold additional contingent regulatory and commercial milestone payments payable | $ 163,000 | |||
Percentage of royalties payable on net sales | 15.00% |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Placement Agent Warrants $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($)Yshares | |
FAIR VALUE MEASUREMENTS | |
Percentage of shares to purchase from financing | 5.00% |
Warrants term | 5 years |
Percentage of discount on exercise price of warrants | 15.00% |
Conversion of stock, shares issued | shares | 111,567 |
Minimum | |
FAIR VALUE MEASUREMENTS | |
Qualified external financing | $ | $ 25 |
Risk-free interest rate | |
FAIR VALUE MEASUREMENTS | |
Measurement input | 0.98 |
Expected term in years | |
FAIR VALUE MEASUREMENTS | |
Measurement input | Y | 1 |
Expected volatility | |
FAIR VALUE MEASUREMENTS | |
Measurement input | 50 |
FAIR VALUE MEASUREMENTS - Conti
FAIR VALUE MEASUREMENTS - Contingent Payment Derivative (Details) - D F D Agreement - Contingent Payment Derivative $ / shares in Units, $ in Millions | Nov. 16, 2021$ / sharesshares | Dec. 31, 2021USD ($)item |
Derivative [Line Items] | ||
Number of payments | item | 1 | |
Value of shares to be issued | $ 5 | |
Number of days for calculating weighted average price | 15 days | 15 days |
Cash payment | $ 5 | |
Unregistered shares issued | shares | 545,131 | |
Volume weighted average price per share related to shares issued | $ / shares | $ 9.1721 | |
Minimum | ||
Derivative [Line Items] | ||
Market Capitalization | $ 150 |
FAIR VALUE MEASUREMENTS - Signi
FAIR VALUE MEASUREMENTS - Significant unobservable inputs (Details) - Contingent Payment Warrant | Dec. 31, 2021Y |
Discount rate | |
FAIR VALUE MEASUREMENTS | |
Measurement input | 30 |
Expected term in years | Minimum | |
FAIR VALUE MEASUREMENTS | |
Measurement input | 3 |
Expected term in years | Maximum | |
FAIR VALUE MEASUREMENTS | |
Measurement input | 5 |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial assets and liabilities measured at fair value on a recurring basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets: | ||
Cash and cash equivalents | $ 49,081 | $ 8,246 |
Total | 49,081 | 8,246 |
Level 1 | ||
Assets: | ||
Cash and cash equivalents | 49,081 | 8,246 |
Total | $ 49,081 | $ 8,246 |
FAIR VALUE MEASUREMENTS - Chang
FAIR VALUE MEASUREMENTS - Change In Level 3 Financial Instruments (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Changes in fair value of Level 3 financial instruments | |
Asset transfers, level 1 to 2 | $ 0 |
Asset transfers, level 2 to 1 | 0 |
Liability transfers, level 1 to 2 | 0 |
Liability transfers, level 2 to 1 | 0 |
Transfers in and out of level 3 | 0 |
Conversion of contingent payment warrants to common shares | |
Changes in fair value of Level 3 financial instruments | |
Settlement of warrant liabilities in connection with IPO | (3,680,000) |
Conversion of placement agent warrants to common shares | |
Changes in fair value of Level 3 financial instruments | |
Settlement of warrant liabilities in connection with IPO | (948,000) |
Placement Agent Warrants | |
Changes in fair value of Level 3 financial instruments | |
Additions | 362,000 |
Change in fair value of warrant liability | 586,000 |
Contingent Payment Warrant | |
Changes in fair value of Level 3 financial instruments | |
Additions | 3,819,000 |
Change in fair value of warrant liability | $ (139,000) |
RELATED PARTY AGREEMENTS (Detai
RELATED PARTY AGREEMENTS (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 16, 2021 | Nov. 12, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 |
RELATED PARTY AGREEMENTS | |||||
Note payable, related party | $ 5,220 | ||||
Fortress | |||||
RELATED PARTY AGREEMENTS | |||||
Ownership interest (as a percent) | 58.39% | ||||
Shared Services Agreement with Fortress | |||||
RELATED PARTY AGREEMENTS | |||||
Service provided by employees of related party | $ 500 | ||||
Stock Issued During Period, Shares, Issued for Services | 52,438 | ||||
Share Price | $ 10 | ||||
Shared Services Agreement with Fortress | Accounts Payable and Accrued Liabilities | |||||
RELATED PARTY AGREEMENTS | |||||
Due to related parties | 100 | $ 600 | |||
Fortress Note | |||||
RELATED PARTY AGREEMENTS | |||||
Note payable, related party | 5,200 | $ 0 | |||
Related party increase in promissory note | $ 9,500 | ||||
Related Party Transaction, Fraudulent Payments | 9,500 | ||||
Accounts payable, related party | 9,500 | ||||
Original amount of debt converted | $ 5,200 | ||||
Stock Issued During Period, Shares, Issued for Services | 1,476,044 | ||||
Share Price | $ 10 | ||||
Fortress Income Tax | |||||
RELATED PARTY AGREEMENTS | |||||
Related Party Transaction, Net Operating Loss Utilized to Settle Income Tax Liabilities | $ 1,900 | ||||
Fortress Income Tax | Fortress | |||||
RELATED PARTY AGREEMENTS | |||||
Ownership interest (as a percent) | 58.39% |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
ACCRUED EXPENSES | ||
Accrued employee compensation | $ 2,702 | $ 2,041 |
Research and development - license fees | 870 | |
Accrued royalties payable | 3,833 | 2,682 |
Accrued coupon and rebates | 10,603 | 12,869 |
Return reserve | 3,240 | 2,580 |
Other | 1,485 | 1,326 |
Total accrued expenses | $ 22,733 | $ 21,498 |
INSTALLMENT PAYMENTS - LICENS_3
INSTALLMENT PAYMENTS - LICENSES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
INSTALLMENT PAYMENTS - LICENSES | ||
Installment payments - licenses, short-term | $ 5,000 | $ 5,300 |
Less: imputed interest | (490) | (778) |
Sub-total installment payments - licenses, short-term | 4,510 | 4,522 |
Installment payments - licenses, long-term | 4,000 | 9,000 |
Less: imputed interest | (373) | (863) |
Sub-total installment payments - licenses, long-term | 3,627 | 8,137 |
Total installment payments - licenses | 8,137 | 12,659 |
Ximino | ||
INSTALLMENT PAYMENTS - LICENSES | ||
Installment payments - licenses, short-term | 2,000 | 2,000 |
Less: imputed interest | (425) | (602) |
Sub-total installment payments - licenses, short-term | 1,575 | 1,398 |
Installment payments - licenses, long-term | 3,000 | 5,000 |
Less: imputed interest | (350) | (775) |
Sub-total installment payments - licenses, long-term | 2,650 | 4,225 |
Total installment payments - licenses | $ 4,225 | $ 5,623 |
Imputed interest rate | 11.96% | 11.96% |
Accutane | ||
INSTALLMENT PAYMENTS - LICENSES | ||
Installment payments - licenses, short-term | $ 2,000 | $ 500 |
Less: imputed interest | (65) | (122) |
Sub-total installment payments - licenses, short-term | 1,935 | 378 |
Installment payments - licenses, long-term | 1,000 | 3,000 |
Less: imputed interest | (23) | (88) |
Sub-total installment payments - licenses, long-term | 977 | 2,912 |
Total installment payments - licenses | $ 2,912 | $ 3,290 |
Imputed interest rate | 4.03% | 4.03% |
Anti-Itch product | ||
INSTALLMENT PAYMENTS - LICENSES | ||
Installment payments - licenses, short-term | $ 1,000 | $ 2,800 |
Less: imputed interest | (54) | |
Sub-total installment payments - licenses, short-term | 1,000 | 2,746 |
Installment payments - licenses, long-term | 1,000 | |
Sub-total installment payments - licenses, long-term | 1,000 | |
Total installment payments - licenses | $ 1,000 | $ 3,746 |
Imputed interest rate | 4.25% | 4.25% |
OPERATING LEASE OBLIGATIONS (De
OPERATING LEASE OBLIGATIONS (Details) $ in Thousands | Dec. 31, 2021USD ($)ftĀ² | Aug. 31, 2020USD ($) |
OPERATING LEASE OBLIGATIONS | ||
Area of property under lease | ftĀ² | 3,681 | |
Renewal term | 25 months | |
Lease annual rate | $ | $ 100 | $ 100 |
OPERATING LEASE OBLIGATIONS - R
OPERATING LEASE OBLIGATIONS - Rent Expense and Quantitative Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Lease cost | ||
Operating lease cost | $ 89 | $ 94 |
Variable lease cost | 4 | 6 |
Total lease cost | 93 | 100 |
Operating cash flows from operating leases | $ 91 | 86 |
Right-of-use assets exchanged for new operating lease liabilities | $ 182 | |
Weighted-average remaining lease term - operating leases | 1 year | 1 year 6 months |
Weighted-average discount rate - operating leases | 4.00% | 5.00% |
OPERATING LEASE OBLIGATIONS - F
OPERATING LEASE OBLIGATIONS - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Aug. 31, 2020 |
Future Lease Liability | ||
Year Ended December 31, 2022 | $ 100 | $ 100 |
Total | 100 | |
Less: present value discount | (2) | |
Operating lease liabilities | $ 98 |
LINE OF CREDIT (Details)
LINE OF CREDIT (Details) - Line of Credit - East West Bank - USD ($) | Mar. 31, 2021 | Dec. 31, 2021 |
LINES OF CREDIT | ||
Working Capital line of credit | $ 7,500,000 | $ 812,000 |
Interest on line of credit | 4.25% | |
Line of credit term | 36 months | |
Prime Rate | ||
LINES OF CREDIT | ||
Spread on variable rate | 1.00% |
INTEREST EXPENSE AND FINANCIN_3
INTEREST EXPENSE AND FINANCING FEES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Interest Expense and Financing Fee [Line Items] | ||
Total interest and fees | $ 5,417 | |
Dividend payable | 820 | |
Installment payments - licenses | 724 | $ 696 |
LOC fees | 16 | |
Total interest | 7,034 | 698 |
Total interest and fees | $ 7,034 | 698 |
Convertible preferred shares, Conversion premium, Discount rate | 15.00% | |
Convertible preferred share settlement amount | $ 14,800 | |
Anti-Itch product | ||
Interest Expense and Financing Fee [Line Items] | ||
Anti-itch product installment payments | 57 | 2 |
Interest | ||
Interest Expense and Financing Fee [Line Items] | ||
Convertible preferred shares, Interest | 2,845 | |
Dividend payable | 820 | |
Installment payments - licenses | 724 | 696 |
LOC fees | 16 | |
Total interest | 4,462 | 698 |
Interest | Anti-Itch product | ||
Interest Expense and Financing Fee [Line Items] | ||
Anti-itch product installment payments | 57 | $ 2 |
Fees | ||
Interest Expense and Financing Fee [Line Items] | ||
Convertible preferred shares, Fees | 2,572 | |
Financing fees | $ 2,572 |
STOCKHOLDERS' EQUITY AND CLAS_3
STOCKHOLDERS' EQUITY AND CLASS A PREFERRED STOCK - Common Stock (Details) $ / shares in Units, $ in Millions | Nov. 16, 2021USD ($)$ / sharesshares | Dec. 31, 2021Vote$ / sharesshares | Dec. 31, 2020$ / sharesshares |
STOCKHOLDERS' EQUITY AND CLASS A PREFERRED STOCK | |||
Common stock authorized | 50,000,000 | 50,000,000 | |
Par value | $ / shares | $ 0.0001 | $ 0.0001 | |
Number of votes per share | Vote | 1 | ||
Voting rights ratio | 1.1 | ||
IPO | |||
STOCKHOLDERS' EQUITY AND CLASS A PREFERRED STOCK | |||
Number of common stock shares issued | 3,520,000 | ||
Issue price | $ / shares | $ 10 | ||
Proceeds from issuance of common stock in IPO | $ | $ 30.6 | ||
Common Stock A | |||
STOCKHOLDERS' EQUITY AND CLASS A PREFERRED STOCK | |||
Common stock authorized | 6,000,000 |
STOCKHOLDERS EQUITY AND CLASS A
STOCKHOLDERS EQUITY AND CLASS A PREFERRED STOCK - Cumulative Convertible Class A Preferred Offering (Details) $ / shares in Units, $ in Thousands | Nov. 16, 2021shares | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($)item$ / sharesshares |
Class of Stock [Line Items] | |||
Percent of discount on share price | 7.50% | ||
Number of trading days prior to exchange | 10 days | ||
Other expenses | $ 1,550 | ||
Cumulative Convertible Class A Preferred Stock | |||
Class of Stock [Line Items] | |||
Preferred stock dividend rate | 8.00% | ||
Preferred stock conversion extension term | 6 months | ||
Preferred stock conversion financing amount trigger | $ 25,000 | ||
Percent of discount on share price | 15.00% | ||
Number of closings | item | 5 | ||
Number of common stock shares issued | shares | 758,680 | ||
Issue price | $ / shares | $ 25 | ||
Gross proceeds | $ 19,000 | ||
Placement agent fees | 1,900 | ||
Other expenses | 100 | ||
Net proceeds | $ 17,000 | ||
Conversion of stock, shares issued | shares | 2,231,346 | ||
Cumulative Convertible Class A Preferred Stock | Minimum | |||
Class of Stock [Line Items] | |||
Convertible preferred stock, value authorized | $ 12,500 | ||
Cumulative Convertible Class A Preferred Stock | Maximum | |||
Class of Stock [Line Items] | |||
Convertible preferred stock, value authorized | $ 30,000 |
STOCKHOLDERS' EQUITY AND CLAS_4
STOCKHOLDERS' EQUITY AND CLASS A PREFERRED STOCK - 2015 Stock Plan (Details) - Stock Options - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares available for issuance | 1,020,661 | ||
Share-based Payment Arrangement, Expense | $ 51,000 | $ 153,000 | |
Stock Plan 2015 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized for grant | 3,000,000 | ||
Number of additional shares authorized for grant | 1,642,857 | ||
Share-based Payment Arrangement, Expense | $ 2,500,000 | $ 200,000 |
STOCKHOLDERS' EQUITY AND CLAS_5
STOCKHOLDERS' EQUITY AND CLASS A PREFERRED STOCK - Stock option activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Total weighted average intrinsic value | |||
Outstanding options at - beginning | $ 5,916,970 | ||
Exercised | 29,428 | ||
Forfeited | $ 325,539 | ||
Outstanding options - ending | $ 5,916,970 | ||
Outstanding options, Weighted average remaining contractual life (years) | 6 years 8 months 23 days | ||
Stock Options | |||
Number of shares | |||
Outstanding options - beginning | 2,142,000 | 2,294,000 | |
Exercised | (10,000) | (18,000) | |
Forfeited | (27,666) | (134,000) | |
Outstanding options - ending | 2,104,334 | 2,142,000 | 2,294,000 |
Options vested and exercisable at December 31, 2021 | 1,990,916 | ||
Weighted average exercise price | |||
Outstanding options - beginning | $ 0.80 | $ 0.79 | |
Exercised | 0.68 | 0.69 | |
Forfeited | 1.37 | 0.72 | |
Outstanding options - ending | 0.79 | $ 0.80 | $ 0.79 |
Options vested and exercisable at December 31, 2021 | $ 0.76 | ||
Total weighted average intrinsic value | |||
Outstanding options at - beginning | $ 7,934,320 | ||
Outstanding options - ending | 9,661,393 | $ 7,934,320 | |
Options vested and exercisable at December 31, 2021 | $ 9,207,917 | ||
Outstanding options, Weighted average remaining contractual life (years) | 4 years 8 months 4 days | 5 years 8 months 19 days | |
Options vested and exercisable at December 31, 2021 | 4 years 6 months 10 days |
STOCKHOLDERS' EQUITY AND CLAS_6
STOCKHOLDERS' EQUITY AND CLASS A PREFERRED STOCK - Stock options (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Proceeds from the exercise of options | $ 7,000 | $ 13,000 |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options granted term (in years) | 10 years | |
Vesting period | 4 years | |
Proceeds from the exercise of options | $ 7,000 | 13,000 |
Share based compensation expense | 51,000 | $ 153,000 |
Unrecognized stock-based compensation expense | $ 23,000 | |
Unrecognized stock-based compensation expense recognition period | 10 months 24 days |
STOCKHOLDERS' EQUITY AND CLAS_7
STOCKHOLDERS' EQUITY AND CLASS A PREFERRED STOCK - Restricted Stock Units (Details) - Restricted stock units - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of units | |||
Unvested balance - beginning | 815,524 | ||
Granted | 143,006 | 845,524 | |
Vested | 136,500 | ||
Forfeited | (107,000) | (30,000) | |
Unvested balance - ending | 715,030 | 715,030 | 815,524 |
Weighted average exercise price | |||
Unvested balance - beginning | $ 3.37 | ||
Granted | 7.13 | $ 3.37 | |
Vested | 3.37 | ||
Forfeited | 3.37 | 3.37 | |
Unvested balance - ending | $ 4.12 | $ 4.12 | $ 3.37 |
Vesting period | 1 year 9 months 18 days | ||
Unrecognized stock-based compensation expense | $ 1 | $ 1 | |
Share based compensation expense | $ 2.4 |
REVENUES FROM CONTRACTS AND S_3
REVENUES FROM CONTRACTS AND SIGNIFICANT CUSTOMERS - Disaggregation of net revenues (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Product revenue, net | $ 63,134 | $ 44,531 |
Targadox | ||
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Product revenue, net | 22,378 | 30,708 |
Ximino | ||
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Product revenue, net | 8,247 | 9,518 |
Exelderm | ||
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Product revenue, net | 5,363 | 4,453 |
Accutane | ||
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Product revenue, net | 10,053 | |
Qbrexa | ||
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Product revenue, net | 17,056 | |
Other branded products | ||
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Product revenue, net | $ 37 | $ (148) |
REVENUES FROM CONTRACTS AND S_4
REVENUES FROM CONTRACTS AND SIGNIFICANT CUSTOMERS - Significant Customers (Details) - customer | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Two Customers [Member] | ||
REVENUES FROM CONTRACTS AND SIGNIFICANT CUSTOMERS | ||
Number of Customers | 2 | |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Customer One | ||
REVENUES FROM CONTRACTS AND SIGNIFICANT CUSTOMERS | ||
Concentration risk, percentage | 16.30% | |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Customer Two | ||
REVENUES FROM CONTRACTS AND SIGNIFICANT CUSTOMERS | ||
Concentration risk, percentage | 12.90% | |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | One Customer [Member] | ||
REVENUES FROM CONTRACTS AND SIGNIFICANT CUSTOMERS | ||
Number of Customers | 1 | |
Concentration risk, percentage | 12.00% | |
Product Revenue | Customer Concentration Risk [Member] | ||
REVENUES FROM CONTRACTS AND SIGNIFICANT CUSTOMERS | ||
Number of Customers | 0 | 0 |
INCOME TAXES - Income tax provi
INCOME TAXES - Income tax provision (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | ||
Federal | $ 1,669 | |
State | $ 67 | 536 |
Total current | 67 | 2,205 |
Deferred: | ||
Federal | (7,829) | (234) |
State | (1,474) | (101) |
Total deferred | (9,303) | (335) |
Valuation allowance | 10,870 | |
Total income tax expense | $ 1,634 | $ 1,870 |
INCOME TAXES - Deferred tax ass
INCOME TAXES - Deferred tax assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 3,113 | $ 5 |
Amortization of license fees | 4,760 | 1,086 |
Stock compensation | 667 | 113 |
Lease liability | 25 | 48 |
Reserve on sales return, discount and bad debt | 3,573 | 765 |
Accruals and reserves | 505 | 248 |
Tax credits | 193 | |
Business interest expense deduction limit | 41 | |
State taxes | 12 | |
Total deferred tax assets | 12,889 | 2,265 |
Less: valuation allowance | (10,870) | |
Deferred tax assets, net | 2,019 | 2,265 |
Deferred tax liability: | ||
Section 481(a) adjustment on reserve on sales return, discount and bad debt | (1,996) | (765) |
Right-of-use asset | $ (23) | (46) |
Deferred tax assets, net | $ 1,454 |
INCOME TAXES - Effective tax ra
INCOME TAXES - Effective tax rates (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Percentage of pre-tax income: | ||
U.S. federal statutory income tax rate | 21.00% | 21.00% |
State taxes, net of federal benefit | 4.00% | 6.00% |
Non-deductible items | (5.00%) | 0.00% |
Provision to return | 0.00% | 0.00% |
Change in state rate | 0.00% | (1.00%) |
Change in valuation allowance | (26.00%) | 0.00% |
Other | 2.00% | 0.00% |
Effective income tax rate | (4.00%) | 26.00% |
INCOME TAXES (Details)
INCOME TAXES (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Federal | |
Net operating loss carryforwards | $ 13,800 |
State | |
Net operating loss carryforwards | 4,300 |
State | Research Tax Credit Carryforward | |
Research and Development Credit Carryforward | $ 193 |
NET (LOSS) INCOME PER COMMON _3
NET (LOSS) INCOME PER COMMON SHARE - Reconciliation of diluted net income per share computations (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Earnings Per Share | ||
Net income | $ (43,994) | $ 5,283 |
Weighted average shares outstanding-basic | 10,189,844 | 9,135,985 |
Stock options | 1,700,137 | |
Weighted average shares outstanding - diluted | 10,189,844 | 10,836,122 |
Net (loss) income per common share-basic | $ (4.32) | $ 0.58 |
Net (loss) income per common share-diluted | $ (4.32) | $ 0.49 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event - USD ($) $ in Millions | Feb. 11, 2022 | Jan. 13, 2022 | Jan. 12, 2022 |
East West Bank | Third Amendment [Member] | Revolving Credit Facility [Member] | |||
Subsequent Event [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 10 | ||
Current borrowing capacity | $ 7.5 | ||
East West Bank | Third Amendment [Member] | Revolving Credit Facility [Member] | Prime Rate | |||
Subsequent Event [Line Items] | |||
Spread on variable rate | 0.70% | ||
East West Bank | Third Amendment [Member] | Term Loan | |||
Subsequent Event [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 20 | ||
Current borrowing capacity | 15 | ||
Remaining borrowing capacity | $ 5 | ||
East West Bank | Third Amendment [Member] | Term Loan | Prime Rate | |||
Subsequent Event [Line Items] | |||
Spread on variable rate | 1.73% | ||
VYNE Therapeutics Product Acquisition Agreement [Member] | East West Bank | Third Amendment [Member] | Term Loan | |||
Subsequent Event [Line Items] | |||
Current borrowing capacity | $ 15 | ||
VYNE Therapeutics Product Acquisition Agreement [Member] | Molecule Stabilizing Technology [Member] | |||
Subsequent Event [Line Items] | |||
Upfront fees | $ 20 | ||
Milestone payments payable | $ 5 | ||
Asset Purchase Agreement With Dermira Inc [Member] | |||
Subsequent Event [Line Items] | |||
Milestone payment, offset amount | $ 7.5 | ||
Licensing Agreement With Maruho [Member] | |||
Subsequent Event [Line Items] | |||
Milestone payment due, period | 30 days | ||
Licensing Agreement With Maruho [Member] | Qbrexza [Member] | |||
Subsequent Event [Line Items] | |||
Milestone payment received, gross | $ 10 | ||
Milestone payment received, net | $ 2.5 |