Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 27, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | TherapeuticsMD, Inc. | |
Entity Central Index Key | 25,743 | |
Document Type | 10-Q | |
Trading Symbol | TXMD | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 203,927,142 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash | $ 113,525,419 | $ 131,534,101 |
Accounts receivable, net of allowance for doubtful accounts of $374,771 and $376,374, respectively | 3,921,359 | 4,500,699 |
Inventory | 1,338,618 | 1,076,321 |
Other current assets | 2,488,121 | 2,299,052 |
Total current assets | 121,273,517 | 139,410,173 |
Fixed assets, net | 511,073 | 516,839 |
Other Assets: | ||
Intangible assets, net | 2,497,360 | 2,405,972 |
Security deposit | 139,036 | 139,036 |
Total other assets | 2,636,396 | 2,545,008 |
Total assets | 124,420,986 | 142,472,020 |
Current Liabilities: | ||
Accounts payable | 6,146,278 | 7,358,514 |
Other current liabilities | 7,940,723 | 7,624,085 |
Total current liabilities | 14,087,001 | 14,982,599 |
Commitments and Contingencies - See Note 14 | ||
Stockholders' Equity: | ||
Preferred stock - par value $0.001; 10,000,000 shares authorized; no shares issued and outstanding | ||
Common stock - par value $0.001; 350,000,000 shares authorized: 198,593,268 and 196,688,222 issued and outstanding, respectively | 198,593 | 196,688 |
Additional paid-in capital | 441,025,624 | 436,995,052 |
Accumulated deficit | (330,890,232) | (309,702,319) |
Total stockholders' equity | 110,333,985 | 127,489,421 |
Total liabilities and stockholders' equity | $ 124,420,986 | $ 142,472,020 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 374,771 | $ 376,374 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 350,000,000 | 350,000,000 |
Common stock, shares issued | 198,593,268 | 196,688,222 |
Common stock, shares outstanding | 198,593,268 | 196,688,222 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Revenues, net | $ 3,985,464 | $ 4,930,091 |
Cost of goods sold | 659,635 | 1,108,443 |
Gross profit | 3,325,829 | 3,821,648 |
Operating expenses: | ||
Sales, general, and administrative | 16,837,617 | 9,678,552 |
Research and development | 7,724,840 | 15,097,017 |
Depreciation and amortization | 49,699 | 19,597 |
Total operating expenses | 24,612,156 | 24,795,166 |
Operating loss | (21,286,327) | (20,973,518) |
Other income | ||
Miscellaneous income | 125,968 | 41,617 |
Accreted interest | 3,867 | 2,536 |
Total other income | 129,835 | 44,153 |
Loss before income taxes | (21,156,492) | (20,929,365) |
Provision for income taxes | ||
Net loss | $ (21,156,492) | $ (20,929,365) |
Loss per share, basic and diluted: | ||
Net loss per share, basic and diluted | $ (0.11) | $ (0.11) |
Weighted average number of common shares outstanding, basic and diluted | 197,790,040 | 194,901,560 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (21,156,492) | $ (20,929,365) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 33,600 | 8,363 |
Amortization of intangible assets | 16,099 | 11,234 |
(Recovery of) provision for doubtful accounts | (1,603) | 236,151 |
Share-based compensation | 1,413,195 | 4,381,690 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 580,943 | (2,250,209) |
Inventory | (262,297) | (267,281) |
Other current assets | (253,518) | 477,312 |
Other assets | (2,536) | |
Accounts payable | (1,212,236) | 304,475 |
Other current liabilities | 316,638 | (1,373,762) |
Net cash used in operating activities | (20,525,671) | (19,403,928) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Patent costs | (107,487) | (90,529) |
Purchase of fixed assets | (27,834) | (74,478) |
Net cash used in investing activities | (135,321) | (165,007) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from sale of common stock, net of costs | 134,863,475 | |
Proceeds from exercise of options | 192,310 | 786,450 |
Proceeds from exercise of warrants | 2,460,000 | 1,310,000 |
Net cash provided by financing activities | 2,652,310 | 136,959,925 |
(Decrease) increase in cash | (18,008,682) | 117,390,990 |
Cash, beginning of period | 131,534,101 | 64,706,355 |
Cash, end of period | $ 113,525,419 | $ 182,097,345 |
THE COMPANY
THE COMPANY | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
THE COMPANY | NOTE 1 – THE COMPANY TherapeuticsMD, Inc., a Nevada corporation, or TherapeuticsMD or the Company, has three wholly owned subsidiaries, vitaMedMD, LLC, a Delaware limited liability company, or VitaMed; BocaGreenMD, Inc., a Nevada corporation, or BocaGreen; and VitaCare Prescription Services, Inc., a Florida corporation, or VitaCare. Unless the context otherwise requires, TherapeuticsMD, VitaMed, BocaGreen, and VitaCare collectively are sometimes referred to as “our company,” “we,” “our,” or “us.” Nature of Business We are a women’s health care company focused on creating and commercializing products targeted exclusively for women. Currently, we are focused on pursuing the regulatory approvals and pre-commercialization activities necessary for commercialization of our advanced hormone therapy pharmaceutical products. Our drug candidates that have completed clinical trials are designed to alleviate the symptoms of and reduce the health risks resulting from menopause-related hormone deficiencies, including hot flashes, osteoporosis and vaginal discomfort. We are developing these hormone therapy drug candidates, which contain estradiol and progesterone alone or in combination, with the aim of demonstrating clinical efficacy at lower doses, thereby enabling an enhanced side effect profile compared with competing products. With our SYMBODA™ technology, we are developing advanced hormone therapy pharmaceutical products to enable delivery of bio-identical hormones through a variety of dosage forms and administration routes. In addition, we manufacture and distribute branded and generic prescription prenatal vitamins, as well as over-the-counter, or OTC, iron supplements. |
BASIS OF PRESENTATION AND RECEN
BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2017 | |
Basis Of Presentation And Recently Issued Accounting Pronouncements | |
BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | NOTE 2 – BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Interim Financial Statements The accompanying unaudited interim consolidated financial statements of TherapeuticsMD, Inc., which include our wholly owned subsidiaries, should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the Securities and Exchange Commission, or the SEC, from which we derived the accompanying consolidated balance sheet as of December 31, 2016. The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP , for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, since they are interim statements, the accompanying unaudited interim consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements. The accompanying unaudited interim consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of our management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year or any other interim period in the future. Recently Issued Accounting Pronouncements In August 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2016-15, Statement of Cash Flows (Topic 230). ASU 2016-15 is intended to reduce the diversity in practice regarding how certain transactions are classified within the statement of cash flows. ASU 2016-15 is effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted with retrospective application. We are currently evaluating the impact of this guidance on our consolidated financial statements and disclosures. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting. This guidance simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The guidance is effective for public business entities for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. We adopted ASU 2016-09 effective January 1, 2017, electing to account for forfeitures when they occur. The impact from adoption of the provisions related to forfeiture rates was reflected in our consolidated financial statements on a modified retrospective basis, resulting in an adjustment of approximately $31,000 to retained earnings. The impact from adoption of the provisions related to excess tax benefits or deficiencies in the provision for income taxes rather than paid-in capital was adopted on a modified retrospective basis. Since we have a full valuation allowance on our net deferred tax assets, an amount equal to the cumulative adjustment made to retained earnings to recognize the previously unrecognized net operating losses from prior periods, was made to the valuation allowance through retained earnings for first quarter financial statements. Adoption of all other changes did not have an impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases. This guidance requires lessees to record most leases on their balance sheets but recognize expenses on their income statements in a manner similar to current accounting. The guidance also eliminates current real estate-specific provisions for all entities. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. The standard is effective for public business entities for annual periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted for all entities. We are in the process of analyzing the quantitative impact of this guidance on our results of operations and financial position. While we are continuing to assess all potential impacts of the standard, we currently believe, the impact of this standard will be primarily related to the accounting for our operating lease. In May 2014, the FASB and the International Accounting Standards Board (IASB) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under previous guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligations. In July 2015, the FASB approved the proposal to defer the effective date of ASU 2014-09 standard by one year. Early adoption is permitted after December 15, 2016, and the standard is effective for public entities for annual reporting periods beginning after December 15, 2017 and interim periods therein. In 2016, the FASB issued final amendments to clarify the implementation guidance for principal versus agent considerations (ASU 2016-08), accounting for licenses of intellectual property and identifying performance obligations (ASU 2016-10), narrow-scope improvements and practical expedients (ASU 2016-12) and technical corrections and improvements to topic 606 (ASU 2016-20) in its new revenue standard. We have performed a preliminary review of the requirements of the new revenue standard and are monitoring the activity of the FASB and the transition resource group as it relates to specific interpretive guidance. We have reviewed customer contracts and applied the five-step model of the new standard to our contracts as well as compared the results to our current accounting practices. At this point of our analysis, we do not believe that the adoption of this standard will have a material effect on our financial statements but will potentially expand our disclosures related to contracts with customers. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Fair Value of Financial Instruments Our financial instruments consist primarily of cash, accounts receivable, accounts payable and accrued expenses. The carrying amount of cash, accounts receivable, accounts payable and accrued expenses approximates their fair value because of the short-term maturity of such instruments, which are considered Level 1 assets under the fair value hierarchy. We categorize our assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy as defined by Accounting Standards Codification, or ASC, 820, Fair Value Measurements. Level 1 unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and Level 3 unobservable inputs for the asset or liability. At March 31, 2017 and 2016, we had no assets or liabilities that were valued at fair value on a recurring basis. The fair value of indefinite-lived assets or long-lived assets is measured on a non-recurring basis using significant unobservable inputs (Level 3) in connection with the Company’s impairment test. There was no impairment of intangible assets or long-lived assets during the three months ended March 31, 2017 and 2016. Revenue Recognition We recognize revenue on arrangements in accordance with ASC 605, Revenue Recognition. We recognize revenue only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and collectability is reasonably assured. Our OTC and prescription prenatal vitamin products are generally variations of the same product with slight modifications in formulation and marketing. The primary difference between our OTC and prescription prenatal vitamin products is the source of payment. Purchasers of our OTC prenatal vitamin products pay for the product directly while purchasers of our prescription prenatal vitamin products pay for the product primarily via third-party payers. Both OTC and prescription prenatal vitamin products share the same marketing support team utilizing similar marketing techniques. As of January 1, 2017, we ceased manufacturing and distributing our OTC product lines, except for Iron 21/7, which have declined steadily over time resulting in immaterial sales. The revenue that is generated by us from major customers is all generated from sales of our prescription prenatal vitamin products which is disclosed in Note 13. There are no major customers for our OTC prenatal vitamin or other products. Over-the-Counter Products We generate OTC revenue from product sales primarily to retail consumers. We recognize revenue from product sales upon shipment, when the rights of ownership and risk of loss have passed to the consumer. We include outbound shipping and handling fees, if any, in revenues, net, and bill them upon shipment. We include shipping expenses in cost of goods sold. A majority of our OTC customers pay for our products with credit cards, and we usually receive the cash settlement in two to three banking days. Credit card sales minimize accounts receivable balances relative to OTC sales. We provide an unconditional 30-day money-back return policy under which we accept product returns from our retail and eCommerce OTC customers. We recognize revenue from OTC sales, net of estimated returns and sales discounts. As of January 1, 2017, we ceased manufacturing and distributing our OTC product lines, except for Iron 21/7, which have declined steadily over time resulting in immaterial sales. Prescription Products We sell our name brand and generic prescription products primarily through wholesale distributors and retail pharmacy distributors. We recognize revenue from prescription product sales, net of sales discounts, chargebacks, wholesaler fees, customer rebates and estimated returns. Revenue related to prescription products sold through wholesale distributors is recognized when the prescription products are shipped to the distributors and the control of the products passes to each distributor. We accept returns of unsalable prescription products sold through wholesale distributors within a return period of six months prior to and up to 12 months following product expiration. Our prescription products currently have a shelf life of 24 months from the date of manufacture. Prior to September 1, 2016, we recognized revenue related to prescription products sold through retail pharmacy distributors when the product was dispensed by the retail pharmacy distributor, at which point all revenue and discounts related to such product were known or determinable and there was no right of return with respect to such product. On September 1, 2016, we centralized the distribution channel for both our retail pharmacy distributors and wholesale distributors, in order to facilitate sales to a broader population of retail pharmacies and mitigate exposure to any one retail pharmacy. Beginning on September 1, 2016, all of our prescription products are distributed under the wholesale distributor model described above. We offer various rebate programs in an effort to maintain a competitive position in the marketplace and to promote sales and customer loyalty. The consumer rebate program is designed to enable the end user to submit a coupon to us. If the coupon qualifies, we send a rebate check to the end user. We estimate the allowance for consumer rebates that we have offered based on our experience and industry averages, which is reviewed, and adjusted if necessary, on a quarterly basis. We record distributor fees based on amounts stated in contracts and estimate chargebacks based on the number of units sold each period. Share-Based Compensation We measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include options, restricted stock, restricted stock units, performance-based awards, share appreciation rights, and employee share purchase plans. We amortize such compensation amounts, if any, over the respective service periods of the award. We use the Black-Scholes-Merton option pricing model, or the Black-Scholes Model, an acceptable model in accordance with ASC 718, Compensation-Stock Compensation, to value options. Option valuation models require the input of assumptions, including the expected life of the stock-based awards, the estimated stock price volatility, the risk-free interest rate, and the expected dividend yield. The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the term of the instrument. Estimated volatility is a measure of the amount by which our stock price is expected to fluctuate each year during the term of the award. Prior to January 1, 2017, the expected volatility of share options was estimated based on a historical volatility analysis of peer entities whose stock prices were publicly available that were similar to the Company with respect to industry, stage of life cycle, market capitalization, and financial leverage. On January 1, 2017, we started using our own stock price in our volatility calculation along with two other peer entities whose stock prices were publicly available that were similar to the Company. Our calculation of estimated volatility is based on historical stock prices over a period equal to the expected term of the awards. The average expected life is based on the contractual terms of the stock option using the simplified method. We utilize a dividend yield of zero based on the fact that we have never paid cash dividends and have no current intention to pay cash dividends. Calculating share-based compensation expense requires the input of highly subjective judgment and assumptions, estimates of expected life of the share-based award, stock price volatility and risk-free interest rates. The assumptions used in calculating the fair value of share-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, our share-based compensation expense could be materially different in the future. Equity instruments (“instruments”) issued to non-employees are recorded on the basis of the fair value of the instruments, as required by ASC 505, Equity - Based Payments to Non-Employees, or ASC 505. ASC 505 defines the measurement date and recognition period for such instruments. In general, the measurement date is when either (a) a performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The estimated expense is recognized each period based on the current fair value of the award. As a result, the amount of expense related to awards to non-employees can fluctuate significantly during the period from the date of the grant through the final measurement date. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in ASC 505. We recognize the compensation expense for all share-based compensation granted based on the grant date fair value estimated in accordance with ASC 718. We generally recognize the compensation expense on a straight-line basis over the employee’s requisite service period. We adopted ASU 2016-09, effective January 1, 2017, electing to account for forfeitures when they occur. Prior to that, Research and Development Expenses Research and development, or R&D, expenses include internal R&D activities, services of external contract research organizations, or CROs, costs of their clinical research sites, manufacturing, laboratory supplies, scale-up and validation costs, and other activities. Internal R&D activity expenses include salaries, benefits, and non-cash share-based compensation expenses. Advance payments to be expensed in future research and development activities are capitalized, and were $186,205 at March 31, 2017 and $228,933 at December 31, 2016, all of which were included in other current assets on the accompanying consolidated balance sheets. CRO activity expenses include preclinical laboratory experiments and clinical trial studies. Other activity expenses include regulatory consulting and legal fees and costs. The activities undertaken by our regulatory consultants that were classified as R&D expenses include assisting, consulting with, and advising our in-house staff with respect to various FDA submission processes, clinical trial processes, and scientific writing matters, including preparing protocols and FDA submissions. Legal activities that were classified as R&D expenses related to designing experiments to generate data for patents and to further the formulation development process for our pipeline technologies. Outside legal counsel also provided professional research and advice regarding R&D, patents and regulatory matters. These consulting and legal expenses were direct costs associated with preparing, reviewing, and undertaking work for our clinical trials and investigative drugs. We charge internal R&D activities and other activity expenses to operations as incurred. We make payments to CROs based on agreed-upon terms, which may include payments in advance of a study starting date. We expense nonrefundable advance payments for goods and services that will be used in future R&D activities when the activity has been performed or when the goods have been received rather than when the payment is made. We review and accrue CRO expenses and clinical trial study expenses based on services performed and rely on estimates of those costs applicable to the completion stage of a study as provided by CROs. Estimated accrued CRO costs are subject to revisions as such studies progress to completion. We charge revisions expense in the period in which the facts that give rise to the revision become known. Segment Reporting We are managed and operated as one business, which is focused on creating and commercializing products targeted exclusively for women. Our business operations are managed by a single management team that reports to the President of our company. We do not operate separate lines of business with respect to any of our products and we do not prepare discrete financial information with respect to separate products. All product sales are derived from sales in the United States. Accordingly, we view our business as one reportable operating segment. |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 4 – INVENTORY Inventory consists of the following: March 31, December 31, Finished product $ 1,324,582 $ 1,062,285 Raw material 14,036 14,036 TOTAL INVENTORY $ 1,338,618 $ 1,076,321 |
OTHER CURRENT ASSETS
OTHER CURRENT ASSETS | 3 Months Ended |
Mar. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER CURRENT ASSETS | NOTE 5 – OTHER CURRENT ASSETS Other current assets consist of the following: March 31, December 31, Prepaid manufacturing costs $ 995,676 $ 991,809 Prepaid marketing costs 555,186 — Prepaid insurance 377,460 628,039 Prepaid research and development costs 121,756 100,035 Prepaid consulting 64,449 128,898 Prepaid vendor deposits 5,000 44,311 Other prepaid costs 368,594 405,960 TOTAL OTHER CURRENT ASSETS $ 2,488,121 $ 2,299,052 |
FIXED ASSETS
FIXED ASSETS | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS | NOTE 6 – FIXED ASSETS Fixed assets consist of the following: March 31, December 31, Accounting system $ 301,096 $ 301,096 Equipment 239,553 215,182 Computer hardware 80,211 80,211 Furniture and fixtures 116,542 113,079 Leasehold improvements 37,888 37,888 775,290 747,456 Accumulated depreciation (264,217 ) (230,617 ) TOTAL FIXED ASSETS $ 511,073 $ 516,839 Depreciation expense for the three months ended March 31, 2017 and 2016 was $33,600 and $8,363 respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2017 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
INTANGIBLE ASSETS | NOTE 7 – INTANGIBLE ASSETS The following table sets forth the gross carrying amount and accumulated amortization of our intangible assets as of March 31, 2017 and December 31, 2016: March 31, 2017 Gross Accumulated Amortization Net Weighted- Amortizing intangible assets: OPERA ® $ 31,951 $ (6,989 ) $ 24,962 12.5 Development costs of corporate website 91,743 (91,743 ) — n/a Approved hormone therapy drug candidate patents 1,100,784 (117,993 ) $ 982,791 15.75 Hormone therapy drug candidate patents (pending) 1,298,667 — 1,298,667 n/a Non-amortizing intangible assets: Multiple trademarks 190,940 — 190,940 indefinite Total $ 2,714,085 $ (216,725 ) $ 2,497,360 December 31, 2016 Gross Accumulated Amortization Net Weighted- Amortizing intangible assets: OPERA ® $ 31,951 $ (6,490 ) $ 25,461 12.75 Development costs of corporate website 91,743 (91,743 ) — n/a Approved hormone therapy drug candidate patents 1,093,452 (102,393 ) 991,059 16 Hormone therapy drug candidate patents (pending) 1,203,987 — 1,203,987 n/a Non-amortizing intangible assets: Multiple trademarks 185,465 185,465 indefinite Total $ 2,606,598 $ (200,626 ) $ 2,405,972 We capitalize external costs, consisting primarily of legal costs, related to securing our patents and trademarks. Once a patent is granted, we amortize the approved hormone therapy drug candidate patents using the straight line method over the estimated useful life of approximately 20 years, which is the life of intellectual property patents. If the patent is not granted, we write-off any capitalized patent costs at that time. Trademarks are perpetual and are not amortized. During the three months ended March 31, 2017 and year ended December 31, 2016, there was no impairment recognized related to intangible assets. In addition to numerous pending patent applications, as of March 31, 2017, we had 17 issued patents, including: ● 13 utility patents that relate to our combination progesterone and estradiol product candidates, which are owned by us and are U.S. jurisdiction patents with expiration dates in 2032. We have pending patent applications with respect to certain of these patents in Argentina, Australia, Brazil, Canada, Europe, Israel, Japan, Mexico, Russia, South Africa, and South Korea. ● two utility patent that relates to TX-004HR, our applicator-free vaginal estradiol softgel product candidate, which establishes an important intellectual property foundation for TX-004HR, which are owned by us and are U.S. jurisdiction patents with an expiration date in 2033. We have pending patent applications with respect to certain of these patents in Argentina, Australia, Brazil, Canada, Europe, Israel, Japan, Mexico, Russia, South Africa, and South Korea. ● one utility patent that relates to a pipeline transdermal patch technology, which is owned by us and is a U.S. jurisdiction patent with an expiration in 2032. We have pending patent application with respect to this patent in Australia, Brazil, Canada, Europe, Mexico, and Japan. ● one utility patent that relates to our OPERA® information technology platform, which is owned by us and is a U.S. jurisdiction patent with an expiration date in 2029. Amortization expense was $16,099 and $11,234 for the three months ended March 31, 2017 and 2016, respectively. Estimated amortization expense for the next five years for the patent cost currently being amortized is as follows: Year Ending Estimated 2017(9 months) $ 48,297 2018 $ 64,396 2019 $ 64,396 2020 $ 64,396 2021 $ 64,396 Thereafter $ 701,872 |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 3 Months Ended |
Mar. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
OTHER CURRENT LIABILITIES | NOTE 8 – OTHER CURRENT LIABILITIES Other current liabilities consist of the following: March 31, December 31, Accrued clinical trial costs $ 1,350,659 $ 1,281,080 Accrued payroll, bonuses and commission costs 2,163,635 3,531,440 Accrued compensated absences 853,961 665,561 Accrued legal and accounting expense 287,016 176,518 Accrued sales and marketing costs 1,623,877 665,773 Other accrued expenses 295,086 224,865 Allowance for wholesale distributor fees 141,299 76,510 Accrued royalties 48,311 26,507 Allowance for coupons and returns 966,632 794,816 Accrued rent 210,247 181,015 TOTAL OTHER CURRENT LIABILITIES $ 7,940,723 $ 7,624,085 |
NET LOSS PER SHARE
NET LOSS PER SHARE | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NOTE 9 – NET LOSS PER SHARE We calculate earnings per share, or EPS, in accordance with ASC 260, Earnings Per Share, which requires the computation and disclosure of two EPS amounts: basic and diluted. We compute basic EPS based on the weighted-average number of shares of common stock, par value $0.001 per share, or Common Stock, outstanding during the period. We compute diluted EPS based on the weighted-average number of shares of our Common Stock outstanding plus all potentially dilutive shares of our Common Stock outstanding during the period. Such potentially dilutive shares of our Common Stock consist of options and warrants and were excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive due to the net loss reported by us. The table below presents potentially dilutive securities that could affect our calculation of diluted net loss per share allocable to common stockholders for the periods presented. Three months ended March 31, March 31, Stock options 23,286,933 20,569,655 Warrants 10,374,071 12,281,059 33,661,004 32,850,714 Subsequent to March 31, 2017, certain individuals and entities exercised warrants to purchase 6,590,000 shares of Common Stock pursuant to the warrants’ cashless exercise provisions, wherein 4,762,208 shares of Common Stock were issued. In addition, warrants to purchase 566,666 shares of Common Stock were exercised for $1,139,000 in cash. See Note 15 - Subsequent Events for more details. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity: | |
STOCKHOLDERS' EQUITY | NOTE 10 – STOCKHOLDERS’ EQUITY Preferred Stock At March 31, 2017, we had 10,000,000 shares of preferred stock, par value $0.001, authorized for issuance, of which no shares of preferred stock were issued or outstanding. Common Stock At March 31, 2017, we had 350,000,000 shares of Common Stock authorized for issuance, of which 198,593,268 shares of Common Stock were issued and outstanding. Issuances During the Three Months Ended March 31, 2017 During the three months ended March 31, 2017, certain individuals exercised stock options to purchase 95,046 shares of Common Stock for $192,310 in cash. Issuances During the Three Months Ended March 31, 2016 On January 6, 2016, we entered into an underwriting agreement with Goldman Sachs & Co. and Cowen and Company, LLC, as the representatives of the several underwriters, or the Underwriters, relating to an underwritten public offering of 15,151,515 shares of our Common Stock at a public offering price of $8.25 per share. Under the terms of the underwriting agreement, we granted the Underwriters a 30-day option to purchase up to an aggregate of 2,272,727 additional shares of Common Stock, which option was exercised in full. The net proceeds to us from the offering were approximately $134,864,000, after deducting underwriting discounts and commissions and other estimated offering expenses payable by us. The offering closed on January 12, 2016 and we issued 17,424,242 shares of our Common Stock. During the three months ended March 31, 2016, certain individuals exercised stock options to purchase 340,045 shares of Common Stock for $786,450 in cash. Warrants to Purchase Common Stock As of March 31, 2017, we had warrants outstanding to purchase an aggregate of 10,374,071 shares of Common Stock with a weighted-average contractual remaining life of approximately 1 year, and exercise prices ranging from $0.24 to $8.20 per share, resulting in a weighted average exercise price of $2.27 per share. The valuation methodology used to determine the fair value of our warrants is the Black-Scholes-Merton valuation model, or the Black-Scholes Model. The Black-Scholes Model requires the use of a number of assumptions, including volatility of the stock price, the risk-free interest rate and the term of the warrant. During the three months ended March 31, 2017, we granted warrants to purchase 125,000 shares of Common Stock to outside consultants at an exercise price of $6.83. The fair value for these shares was determined by using the Black-Scholes Model on the date of the vesting using a term of five years; volatility of 63.24%; risk free rate of 1.47%; and dividend yield of 0%. The grant date fair value of the warrants was $3.67 per share. The warrants are vesting ratably over a 12-month period and have an expiration date of March 15, 2022. During the three months ended March 31, 2016, we granted warrants to purchase 120,000 shares of Common Stock to outside consultants at an exercise price of $7.59. The fair value for these shares was determined by using the Black-Scholes Model on the date of the vesting using a term of five years; volatility of 74.15%; risk free rate of 1.28%; and dividend yield of 0%. The grant date fair value of the warrants was $4.60 per share. The warrants are vesting ratably over a 12-month period and have an expiration date of January 21, 2021. During the three months ended March 31, 2017 and 2016, we recorded $47,686 and $127,465, respectively, as share based compensation expense in the accompanying consolidated financial statements related to warrants. As of March 31, 2017, unamortized costs associated with these warrants totaled approximately $569,000. In May 2013, we entered into a consulting agreement with Sancilio and Company, Inc., or SCI, to develop drug platforms to be used in our hormone replacement drug candidates. These services include support of our efforts to successfully obtain U.S. Food and Drug Administration, or the FDA, approval for our drug candidates, including a vaginal capsule for the treatment of vulvar and vaginal atrophy, or VVA. In connection with the agreement, SCI agreed to forfeit its rights to receive warrants to purchase 833,000 shares of our Common Stock that were to be granted pursuant to the terms of a prior consulting agreement dated May 17, 2012. As consideration under the agreement, we agreed to issue to SCI a warrant to purchase 850,000 shares of our Common Stock at $2.01 per share that has vested or will vest, as applicable, as follows: 1. 283,333 shares were earned on May 11, 2013 upon acceptance of an Investigational New Drug application by the FDA for an estradiol based drug candidate in a softgel vaginal capsule for the treatment of VVA; however, pursuant to the terms of the consulting agreement, the shares did not vest until June 30, 2013. The fair value of $405,066 for the shares vested on June 30, 2013 was determined by using the Black-Scholes Model on the date of vesting using a term of 5 years; a volatility of 45.89%; risk free rate of 1.12%; and a dividend yield of 0%. We recorded the entire $405,066 as non-cash compensation as of June 30, 2013; 2. 283,333 shares vested on June 30, 2013. The fair value of $462,196 for these shares was determined by using the Black-Scholes Model on the date of vesting using a term of 5 years; a volatility of 45.84%; risk free rate of 1.41%; and a dividend yield of 0%. During the three months ended March 31 2017 and 2016, we recorded $0 and $38,517, respectively, as non-cash compensation in the accompanying consolidated financial statements related to this warrant. As of June 30, 2016 this warrant was fully amortized; and 3. 283,334 shares will vest upon the receipt by us of any final FDA approval of a drug candidate that SCI helped us design. It is anticipated that this event will not occur before May 2017. In May 2012, we issued warrants to purchase an aggregate of 1,300,000 shares of Common Stock to an unaffiliated entity for services to be rendered over approximately five years beginning in May 2012. The warrants vested upon issuance. Services provided are to include (a) services in support of our drug development efforts, including services in support our ongoing and future drug development and commercialization efforts, regulatory approval efforts, third-party investment and financing efforts, marketing efforts, chemistry, manufacturing and controls efforts, drug launch and post-approval activities, and other intellectual property and know-how transfer associated therewith; (b) services in support of our efforts to successfully obtain New Drug Approval; and (c) other consulting services as mutually agreed upon from time to time in relation to new drug development opportunities. The warrants were valued at $1,532,228 on the date of the issuance using an exercise price of $2.57; a term of five years; a volatility of 44.71%; risk free rate of 0.74%; and a dividend yield of 0%. At March 31, 2017, we had $64,449 reported as prepaid expense-short term, associated with these warrants. During both the three months ended March 31, 2017 and 2016, we recorded $64,449 as non-cash compensation expense with respect to these warrants in the accompanying consolidated statements of operations. The contract will expire upon the commercial manufacture of a drug product. As of March 31, 2017, unamortized costs associated with the SCI warrants issued in 2013 and 2012 totaled approximately $64,449 and will be recognized over a period of three months. During the three months ended March 31, 2017, certain individuals exercised warrants to purchase 1,810,000 shares of our Common Stock for $2,460,000 in cash. During the three months ended March 31, 2016, certain individuals exercised warrants to purchase 561,372 shares of our Common Stock for $1,310,000 in cash. Options to Purchase Common Stock In 2009, we adopted the 2009 Long Term Incentive Compensation Plan, or the 2009 Plan, to provide financial incentives to employees, directors, advisers, and consultants of our company who are able to contribute towards the creation of or who have created stockholder value by providing them stock options and other stock and cash incentives, or the Awards. The Awards available under the 2009 Plan consist of stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock, performance units, and other stock or cash awards as described in the 2009 Plan. There are 25,000,000 shares authorized for issuance thereunder. Generally, the options vest annually over four years or as determined by our board of directors, upon each option grant. Options may be exercised by paying the price for shares or on a cashless exercise basis after they have vested and prior to the specified expiration date provided and applicable exercise conditions are met, if any. The expiration date is generally ten years from the date the option is issued. As of March 31, 2017, there were non-qualified stock options to purchase 18,163,459 shares of Common Stock outstanding under the 2009 Plan. As of March 31, 2017, there were 2,593,003 shares available to be issued under the 2009 Plan. In 2012, we adopted the 2012 Stock Incentive Plan, or the 2012 Plan, a non-qualified plan that was amended in August 2013. The 2012 Plan was designed to serve as an incentive for retaining qualified and competent key employees, officers, directors, and certain consultants and advisors of our company. The Awards available under the 2012 Plan consist of stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock, performance units, and other stock or cash awards as described in the 2012 Plan. Generally, the options vest annually over four years or as determined by our board of directors, upon each option grant. Options may be exercised by paying the price for shares or on a cashless exercise basis after they have vested and prior to the specified expiration date provided and applicable exercise conditions are met, if any. The expiration date is generally ten years from the date the option is issued. There are 10,000,000 shares of Common Stock authorized for issuance thereunder. As of March 31, 2017, there were non-qualified stock options to purchase 5,123,474 shares of Common Stock outstanding under the 2012 Plan. As of March 31, 2017, there were 4,795,000 shares available to be issued under the 2012 Plan. The valuation methodology used to determine the fair value of stock options is the Black-Scholes Model. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the risk-free interest rate, and the expected life of the stock options. The assumptions used in the Black-Scholes Model for options granted during the three months ended March 31, 2017 and 2016 are set forth in the table below. Three Months Three Months Risk-free interest rate 1.90% 1.70% Volatility 61.56-62.83% 71.22% Term (in years) 6-6.25 6.25 Dividend yield 0.00% 0.00% A summary of activity under the 2009 and 2012 Plans and related information follows: Number of Weighted Weighted Aggregate Balance at December 31, 2016 21,767,854 $ 3.56 5.8 $ 60,495,730 Granted 1,730,500 $ 6.83 Exercised (95,046 ) $ 2.02 $ 421,767 Expired/Forfeited (116,375 ) $ 7.46 Balance at March 31, 2017 23,286,933 $ 3.78 5.9 $ 85,606,859 Vested and Exercisable at March 31, 2017 18,514,058 $ 3.09 5.1 $ 81,091,380 Unvested at March 31, 2017 4,772,875 $ 6.48 9.2 $ 4,515,479 At March 31, 2017, our outstanding stock options had exercise prices ranging from $0.10 to $8.92 per share. The weighted average grant date fair value per share of options granted was $3.96 and $4.91 during the three months ended March 31, 2017 and 2016, respectively. Share-based compensation expense for options recognized in our results for the three months ended March 31, 2017 and 2016 ($1,301,060 and $4,151,259, respectively) is based on vested awards. At March 31, 2017, total unrecognized estimated compensation expense related to unvested options granted prior to that date was approximately $16,173,000 which may be adjusted for future changes in forfeitures. This cost is expected to be recognized over a weighted-average period of 2.7 years. No tax benefit was realized due to a continued pattern of operating losses. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11 – INCOME TAXES Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. We do not expect to pay any significant federal or state income tax for 2017 as a result of (i) the losses recorded during the three months ended March 31, 2017, (ii) additional losses expected for the remainder of 2017, and/or (iii) net operating loss carry forwards from prior years. Accounting standards require the consideration of a valuation allowance for deferred tax assets if it is “more likely than not” that some component or all of the benefits of deferred tax assets will not be realized. As of March 31, 2017, we maintain a full valuation allowance for all deferred tax assets. Based on these requirements, no provision or benefit for income taxes has been recorded. There were no recorded unrecognized tax benefits at the end of the reporting period. |
RELATED PARTIES
RELATED PARTIES | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | NOTE 12 – RELATED PARTIES In July 2015, J. Martin Carroll, a director of our company, was appointed to the board of directors of Catalent, Inc. From time to time, we have entered into agreements with Catalent, Inc. and its affiliates, or Catalent, in the normal course of business. Agreements with Catalent have been reviewed by independent directors of our company or a committee consisting of independent directors of our company since July 2015. During the three months ended March 31, 2017 and 2016, we were billed by Catalent approximately $705,000 and $1,465,000, respectively, for manufacturing activities related to our clinical trials, scale-up, registration batches, stability and validation testing. As of March 31, 2017 and December 31, 2016, there were amounts due to Catalent of approximately $93,000 and $57,000, respectively. |
BUSINESS CONCENTRATIONS
BUSINESS CONCENTRATIONS | 3 Months Ended |
Mar. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
BUSINESS CONCENTRATIONS | NOTE 13 - BUSINESS CONCENTRATIONS We purchase our products from several suppliers with approximately 100% and 95% of our purchases supplied from one vendor for the three months ended March 31, 2017 and 2016, respectively. We sell our prescription prenatal vitamin products to wholesale distributors, specialty pharmacies, specialty distributors, and chain drug stores that generally sell products to retail pharmacies, hospitals, and other institutional customers. As a result of developments in the pharmaceutical industry that negatively affected independent pharmacies, including such pharmacies’ reliance on third party payors, in 2016, we identified that payment periods for our retail pharmacy distributors were becoming longer than in prior years. As a result, during the third quarter of 2016, we centralized the distribution channel for both our retail pharmacy distributors and wholesale distributors, in order to facilitate sales to a broader population of retail pharmacies and minimize business risk exposure to any one retail pharmacy. During the third quarter of 2016, we entered into new distribution agreements with our retail pharmacy distributors to effectuate this centralization which were effective September 1, 2016. During the three months ended March 31, 2017, five customers each generated more than 10% of our total revenues and during the three months ended March 31, 2016 three customers each generated more than 10% of our total revenues. Revenue generated from five major customers combined accounted for approximately 72% of our recognized revenue for the three months ended March 31, 2017 and revenue generated from three major customers combined accounted for approximately 61% of our recognized revenue for the three months ended March 31, 2016. During the three months ended March 31, 2017, Pharmacy Innovations TX generated approximately $440,000 of our revenue, Pharmacy Innovations PA generated approximately $937,000 of our revenue, AmerisourceBergen generated approximately $526,000 of our revenue, Cardinal Health generated approximately $553,000 of our revenue and McKesson Corporation generated approximately $428,000 of our revenue. During the three months ended March 31, 2016, Woodstock Pharmaceutical and Compounding generated approximately $1,336,000 of our revenue; Medical Center Pharmacy generated approximately $680,000 of our revenue and Due West Pharmacy generated approximately $1,104,000 of our revenue. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14– COMMITMENTS AND CONTINGENCIES Operating Lease We lease administrative office space in Boca Raton, Florida pursuant to a non-cancelable operating lease that commenced on July 1, 2013 and originally provided for a 63-month term. On February 18, 2015, we entered into an agreement with the same lessors to lease additional administrative office space in the same location, pursuant to an addendum to such lease. In addition, on April 26, 2016, we entered into an agreement with the same lessors to lease additional administrative office space in the same location. This agreement was effective beginning May 1, 2016 and extended the original expiration of the lease term to October 31, 2021. On October 4, 2016, we entered into an agreement with the same lessors to lease additional administrative office space in the same location, pursuant to an addendum to such lease. This addendum is effective beginning November 1, 2016. The rental expense related to our current lease during the three months ended March 31, 2017 and 2016 was $250,067 and $118,550, respectively. As of March 31, 2017, future minimum rental payments on non-cancelable operating leases are as follows: Years Ending December 31, 2017 (9 months) $ 647,216 2018 942,305 2019 1,083,890 2020 1,102,667 2021 934,313 Total minimum lease payments $ 4,710,391 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 – SUBSEQUENT EVENTS In April 2017, certain individuals and entities exercised warrants to purchase 6,590,000 shares of Common Stock pursuant to the warrants’ cashless exercise provisions, wherein 4,762,208 shares of Common Stock were issued. In addition, warrants to purchase 566,666 shares of Common Stock were exercised for $1,139,000 in cash. On April 17, 2017, a securities class action lawsuit was filed against our company and certain of our officers and directors in the U.S. District Court for the Southern District of Florida (Case No. 9:17-cv-80473-RLR) that purports to state a claim for alleged violations of Sections 10(b) and 20 (a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder, based on statements made by the defendants concerning the NDA for TX-004HR. The complaint seeks unspecified damages, interest, attorneys’ fees and other costs. We believe this lawsuit to be without merit and intend to vigorously defend against it. The lawsuit is in the very early stages and, at this time, no assessment can be made as to its likely outcome or whether the outcome will be material to us. |
SUMMARY OF SIGNIFICANT ACCOUN21
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Our financial instruments consist primarily of cash, accounts receivable, accounts payable and accrued expenses. The carrying amount of cash, accounts receivable, accounts payable and accrued expenses approximates their fair value because of the short-term maturity of such instruments, which are considered Level 1 assets under the fair value hierarchy. We categorize our assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy as defined by Accounting Standards Codification, or ASC, 820, Fair Value Measurements. Level 1 unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and Level 3 unobservable inputs for the asset or liability. At March 31, 2017 and 2016, we had no assets or liabilities that were valued at fair value on a recurring basis. The fair value of indefinite-lived assets or long-lived assets is measured on a non-recurring basis using significant unobservable inputs (Level 3) in connection with the Company’s impairment test. There was no impairment of intangible assets or long-lived assets during the three months ended March 31, 2017 and 2016. |
Revenue Recognition | Revenue Recognition We recognize revenue on arrangements in accordance with ASC 605, Revenue Recognition. We recognize revenue only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and collectability is reasonably assured. Our OTC and prescription prenatal vitamin products are generally variations of the same product with slight modifications in formulation and marketing. The primary difference between our OTC and prescription prenatal vitamin products is the source of payment. Purchasers of our OTC prenatal vitamin products pay for the product directly while purchasers of our prescription prenatal vitamin products pay for the product primarily via third-party payers. Both OTC and prescription prenatal vitamin products share the same marketing support team utilizing similar marketing techniques. As of January 1, 2017, we ceased manufacturing and distributing our OTC product lines, except for Iron 21/7, which have declined steadily over time resulting in immaterial sales. The revenue that is generated by us from major customers is all generated from sales of our prescription prenatal vitamin products which is disclosed in Note 13. There are no major customers for our OTC prenatal vitamin or other products. |
Over-the-Counter Products | Over-the-Counter Products We generate OTC revenue from product sales primarily to retail consumers. We recognize revenue from product sales upon shipment, when the rights of ownership and risk of loss have passed to the consumer. We include outbound shipping and handling fees, if any, in revenues, net, and bill them upon shipment. We include shipping expenses in cost of goods sold. A majority of our OTC customers pay for our products with credit cards, and we usually receive the cash settlement in two to three banking days. Credit card sales minimize accounts receivable balances relative to OTC sales. We provide an unconditional 30-day money-back return policy under which we accept product returns from our retail and eCommerce OTC customers. We recognize revenue from OTC sales, net of estimated returns and sales discounts. As of January 1, 2017, we ceased manufacturing and distributing our OTC product lines, except for Iron 21/7, which have declined steadily over time resulting in immaterial sales. |
Prescription Products | Prescription Products We sell our name brand and generic prescription products primarily through wholesale distributors and retail pharmacy distributors. We recognize revenue from prescription product sales, net of sales discounts, chargebacks, wholesaler fees, customer rebates and estimated returns. Revenue related to prescription products sold through wholesale distributors is recognized when the prescription products are shipped to the distributors and the control of the products passes to each distributor. We accept returns of unsalable prescription products sold through wholesale distributors within a return period of six months prior to and up to 12 months following product expiration. Our prescription products currently have a shelf life of 24 months from the date of manufacture. Prior to September 1, 2016, we recognized revenue related to prescription products sold through retail pharmacy distributors when the product was dispensed by the retail pharmacy distributor, at which point all revenue and discounts related to such product were known or determinable and there was no right of return with respect to such product. On September 1, 2016, we centralized the distribution channel for both our retail pharmacy distributors and wholesale distributors, in order to facilitate sales to a broader population of retail pharmacies and mitigate exposure to any one retail pharmacy. Beginning on September 1, 2016, all of our prescription products are distributed under the wholesale distributor model described above. We offer various rebate programs in an effort to maintain a competitive position in the marketplace and to promote sales and customer loyalty. The consumer rebate program is designed to enable the end user to submit a coupon to us. If the coupon qualifies, we send a rebate check to the end user. We estimate the allowance for consumer rebates that we have offered based on our experience and industry averages, which is reviewed, and adjusted if necessary, on a quarterly basis. We record distributor fees based on amounts stated in contracts and estimate chargebacks based on the number of units sold each period. |
Share-Based Compensation | Share-Based Compensation We measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include options, restricted stock, restricted stock units, performance-based awards, share appreciation rights, and employee share purchase plans. We amortize such compensation amounts, if any, over the respective service periods of the award. We use the Black-Scholes-Merton option pricing model, or the Black-Scholes Model, an acceptable model in accordance with ASC 718, Compensation-Stock Compensation, to value options. Option valuation models require the input of assumptions, including the expected life of the stock-based awards, the estimated stock price volatility, the risk-free interest rate, and the expected dividend yield. The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the term of the instrument. Estimated volatility is a measure of the amount by which our stock price is expected to fluctuate each year during the term of the award. Prior to January 1, 2017, the expected volatility of share options was estimated based on a historical volatility analysis of peer entities whose stock prices were publicly available that were similar to the Company with respect to industry, stage of life cycle, market capitalization, and financial leverage. On January 1, 2017, we started using our own stock price in our volatility calculation along with two other peer entities whose stock prices were publicly available that were similar to the Company. Our calculation of estimated volatility is based on historical stock prices over a period equal to the expected term of the awards. The average expected life is based on the contractual terms of the stock option using the simplified method. We utilize a dividend yield of zero based on the fact that we have never paid cash dividends and have no current intention to pay cash dividends. Calculating share-based compensation expense requires the input of highly subjective judgment and assumptions, estimates of expected life of the share-based award, stock price volatility and risk-free interest rates. The assumptions used in calculating the fair value of share-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, our share-based compensation expense could be materially different in the future. Equity instruments (“instruments”) issued to non-employees are recorded on the basis of the fair value of the instruments, as required by ASC 505, Equity - Based Payments to Non-Employees, or ASC 505. ASC 505 defines the measurement date and recognition period for such instruments. In general, the measurement date is when either (a) a performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The estimated expense is recognized each period based on the current fair value of the award. As a result, the amount of expense related to awards to non-employees can fluctuate significantly during the period from the date of the grant through the final measurement date. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in ASC 505. We recognize the compensation expense for all share-based compensation granted based on the grant date fair value estimated in accordance with ASC 718. We generally recognize the compensation expense on a straight-line basis over the employee’s requisite service period. We adopted ASU 2016-09, effective January 1, 2017, electing to account for forfeitures when they occur. Prior to that, |
Research and Development Expenses | Research and Development Expenses Research and development, or R&D, expenses include internal R&D activities, services of external contract research organizations, or CROs, costs of their clinical research sites, manufacturing, laboratory supplies, scale-up and validation costs, and other activities. Internal R&D activity expenses include salaries, benefits, and non-cash share-based compensation expenses. Advance payments to be expensed in future research and development activities are capitalized, and were $186,205 at March 31, 2017 and $228,933 at December 31, 2016, all of which were included in other current assets on the accompanying consolidated balance sheets. CRO activity expenses include preclinical laboratory experiments and clinical trial studies. Other activity expenses include regulatory consulting and legal fees and costs. The activities undertaken by our regulatory consultants that were classified as R&D expenses include assisting, consulting with, and advising our in-house staff with respect to various FDA submission processes, clinical trial processes, and scientific writing matters, including preparing protocols and FDA submissions. Legal activities that were classified as R&D expenses related to designing experiments to generate data for patents and to further the formulation development process for our pipeline technologies. Outside legal counsel also provided professional research and advice regarding R&D, patents and regulatory matters. These consulting and legal expenses were direct costs associated with preparing, reviewing, and undertaking work for our clinical trials and investigative drugs. We charge internal R&D activities and other activity expenses to operations as incurred. We make payments to CROs based on agreed-upon terms, which may include payments in advance of a study starting date. We expense nonrefundable advance payments for goods and services that will be used in future R&D activities when the activity has been performed or when the goods have been received rather than when the payment is made. We review and accrue CRO expenses and clinical trial study expenses based on services performed and rely on estimates of those costs applicable to the completion stage of a study as provided by CROs. Estimated accrued CRO costs are subject to revisions as such studies progress to completion. We charge revisions expense in the period in which the facts that give rise to the revision become known. |
Segment Reporting | Segment Reporting We are managed and operated as one business, which is focused on creating and commercializing products targeted exclusively for women. Our business operations are managed by a single management team that reports to the President of our company. We do not operate separate lines of business with respect to any of our products and we do not prepare discrete financial information with respect to separate products. All product sales are derived from sales in the United States. Accordingly, we view our business as one reportable operating segment. |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventory consists of the following: March 31, December 31, Finished product $ 1,324,582 $ 1,062,285 Raw material 14,036 14,036 TOTAL INVENTORY $ 1,338,618 $ 1,076,321 |
OTHER CURRENT ASSETS (Tables)
OTHER CURRENT ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of other current assets | Other current assets consist of the following: March 31, December 31, Prepaid manufacturing costs $ 995,676 $ 991,809 Prepaid marketing costs 555,186 — Prepaid insurance 377,460 628,039 Prepaid research and development costs 121,756 100,035 Prepaid consulting 64,449 128,898 Prepaid vendor deposits 5,000 44,311 Other prepaid costs 368,594 405,960 TOTAL OTHER CURRENT ASSETS $ 2,488,121 $ 2,299,052 |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of fixed assets | Fixed assets consist of the following: March 31, December 31, Accounting system $ 301,096 $ 301,096 Equipment 239,553 215,182 Computer hardware 80,211 80,211 Furniture and fixtures 116,542 113,079 Leasehold improvements 37,888 37,888 775,290 747,456 Accumulated depreciation (264,217 ) (230,617 ) TOTAL FIXED ASSETS $ 511,073 $ 516,839 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of intangible assets | The following table sets forth the gross carrying amount and accumulated amortization of our intangible assets as of March 31, 2017 and December 31, 2016: March 31, 2017 Gross Accumulated Amortization Net Weighted- Amortizing intangible assets: OPERA ® $ 31,951 $ (6,989 ) $ 24,962 12.5 Development costs of corporate website 91,743 (91,743 ) — n/a Approved hormone therapy drug candidate patents 1,100,784 (117,993 ) $ 982,791 15.75 Hormone therapy drug candidate patents (pending) 1,298,667 — 1,298,667 n/a Non-amortizing intangible assets: Multiple trademarks 190,940 — 190,940 indefinite Total $ 2,714,085 $ (216,725 ) $ 2,497,360 December 31, 2016 Gross Accumulated Amortization Net Weighted- Amortizing intangible assets: OPERA ® $ 31,951 $ (6,490 ) $ 25,461 12.75 Development costs of corporate website 91,743 (91,743 ) — n/a Approved hormone therapy drug candidate patents 1,093,452 (102,393 ) 991,059 16 Hormone therapy drug candidate patents (pending) 1,203,987 — 1,203,987 n/a Non-amortizing intangible assets: Multiple trademarks 185,465 185,465 indefinite Total $ 2,606,598 $ (200,626 ) $ 2,405,972 |
Schedule of estimated amortization expense | Estimated amortization expense for the next five years for the patent cost currently being amortized is as follows: Year Ending Estimated 2017(9 months) $ 48,297 2018 $ 64,396 2019 $ 64,396 2020 $ 64,396 2021 $ 64,396 Thereafter $ 701,872 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of other current liabilities | Other current liabilities consist of the following: March 31, December 31, Accrued clinical trial costs $ 1,350,659 $ 1,281,080 Accrued payroll, bonuses and commission costs 2,163,635 3,531,440 Accrued compensated absences 853,961 665,561 Accrued legal and accounting expense 287,016 176,518 Accrued sales and marketing costs 1,623,877 665,773 Other accrued expenses 295,086 224,865 Allowance for wholesale distributor fees 141,299 76,510 Accrued royalties 48,311 26,507 Allowance for coupons and returns 966,632 794,816 Accrued rent 210,247 181,015 TOTAL OTHER CURRENT LIABILITIES $ 7,940,723 $ 7,624,085 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of potentially dilutive securities | The table below presents potentially dilutive securities that could affect our calculation of diluted net loss per share allocable to common stockholders for the periods presented. Three months ended March 31, March 31, Stock options 23,286,933 20,569,655 Warrants 10,374,071 12,281,059 33,661,004 32,850,714 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of assumptions used in the Black-Scholes Model of stock options | The assumptions used in the Black-Scholes Model for options granted during the three months ended March 31, 2017 and 2016 are set forth in the table below. Three Months Three Months Risk-free interest rate 1.90% 1.70% Volatility 61.56-62.83% 71.22% Term (in years) 6-6.25 6.25 Dividend yield 0.00% 0.00% |
Schedule of plan activity | A summary of activity under the 2009 and 2012 Plans and related information follows: Number of Weighted Weighted Aggregate Balance at December 31, 2016 21,767,854 $ 3.56 5.8 $ 60,495,730 Granted 1,730,500 $ 6.83 Exercised (95,046 ) $ 2.02 $ 421,767 Expired/Forfeited (116,375 ) $ 7.46 Balance at March 31, 2017 23,286,933 $ 3.78 5.9 $ 85,606,859 Vested and Exercisable at March 31, 2017 18,514,058 $ 3.09 5.1 $ 81,091,380 Unvested at March 31, 2017 4,772,875 $ 6.48 9.2 $ 4,515,479 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments | As of March 31, 2017, future minimum rental payments on non-cancelable operating leases are as follows: Years Ending December 31, 2017 (9 months) $ 647,216 2018 942,305 2019 1,083,890 2020 1,102,667 2021 934,313 Total minimum lease payments $ 4,710,391 |
BASIS OF PRESENTATION AND REC30
BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Details Narrative) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Basis Of Presentation And Recently Issued Accounting Pronouncements Details Narrative | |
Amount of adjustment for provisions related to forfeiture rates | $ 31,000 |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Related to Research and Development Activities [Member] | ||
Advance payments | $ 186,205 | $ 228,933 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Inventory | ||
Finished product | $ 1,324,582 | $ 1,062,285 |
Raw material | 14,036 | 14,036 |
TOTAL INVENTORY | $ 1,338,618 | $ 1,076,321 |
OTHER CURRENT ASSETS (Details)
OTHER CURRENT ASSETS (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Other Current Assets | ||
Prepaid manufacturing costs | $ 995,676 | $ 991,809 |
Prepaid marketing costs | 555,186 | |
Prepaid insurance | 377,460 | 628,039 |
Prepaid research and development costs | 121,756 | 100,035 |
Prepaid consulting | 64,449 | 128,898 |
Prepaid vendor deposits | 5,000 | 44,311 |
Other prepaid costs | 368,594 | 405,960 |
TOTAL OTHER CURRENT ASSETS | $ 2,488,121 | $ 2,299,052 |
FIXED ASSETS (Details)
FIXED ASSETS (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 775,290 | $ 747,456 |
Accumulated depreciation | (264,217) | (230,617) |
TOTAL FIXED ASSETS | 511,073 | 516,839 |
Accounting System [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | 301,096 | 301,096 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | 239,553 | 215,182 |
Computer Hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | 80,211 | 80,211 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | 116,542 | 113,079 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 37,888 | $ 37,888 |
FIXED ASSETS (Details Narrative
FIXED ASSETS (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation Expense | $ 33,600 | $ 8,363 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets | ||
Accumulated Amortization | $ (216,725) | $ (200,626) |
Indefinite-Lived Intangible Assets | ||
Gross Carrying Amount | 2,714,085 | 2,606,598 |
Net Amount | 2,497,360 | 2,405,972 |
Hormone Therapy Drug Candidate Patents - (Pending) [Member] | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 1,298,667 | 1,203,987 |
Net Amount | 1,298,667 | 1,203,987 |
Multiple Trademarks [Member] | ||
Indefinite-Lived Intangible Assets | ||
Gross Carrying Amount | 190,940 | 185,465 |
Net Amount | 190,940 | 185,465 |
Opera Software Patent [Member] | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 31,951 | 31,951 |
Accumulated Amortization | (6,989) | (6,490) |
Net Amount | $ 24,962 | $ 25,461 |
Weighted average remaining amortization period | 12 years 6 months | 12 years 9 months |
Development Costs Of Corporate Website [Member] | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | $ 91,743 | $ 91,743 |
Accumulated Amortization | (91,743) | (91,743) |
Approved Hormone Therapy Drug Candidate Patents [Member] | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 1,100,784 | 1,093,452 |
Accumulated Amortization | (117,993) | (102,393) |
Net Amount | $ 982,791 | $ 991,059 |
Weighted average remaining amortization period | 15 years 9 months | 16 years |
INTANGIBLE ASSETS (Details 1)
INTANGIBLE ASSETS (Details 1) | Dec. 31, 2016USD ($) |
Estimated amortization expense for the year: | |
2017(9 months) | $ 48,297 |
2,018 | 64,396 |
2,019 | 64,396 |
2,020 | 64,396 |
2,021 | 64,396 |
Thereafter | $ 701,872 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) | 3 Months Ended | |
Mar. 31, 2017USD ($)Number | Mar. 31, 2016USD ($) | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense | $ | $ 16,099 | $ 11,234 |
Number of issued patents | 17 | |
Approved Hormone Therapy Drug Candidate Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 20 years | |
Utility Patent Progesterone and Estradiol Products [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 13 | |
Utility Patent TX-004HR [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 2 | |
Utility Patent Pipeline Transdermal Patch Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 1 | |
Opera Software Patent [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of issued patents | 1 |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Other Liabilities Disclosure [Abstract] | ||
Accrued clinical trial costs | $ 1,350,659 | $ 1,281,080 |
Accrued payroll, bonuses and commission costs | 2,163,635 | 3,531,440 |
Accrued compensated absences | 853,961 | 665,561 |
Accrued legal and accounting expense | 287,016 | 176,518 |
Accrued sales and marketing costs | 1,623,877 | 665,773 |
Other accrued expenses | 295,086 | 224,865 |
Allowance for wholesale distributor fees | 141,299 | 76,510 |
Accrued royalties | 48,311 | 26,507 |
Allowance for coupons and returns | 966,632 | 794,816 |
Accrued rent | 210,247 | 181,015 |
TOTAL OTHER CURRENT LIABILITIES | $ 7,940,723 | $ 7,624,085 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from earnings per share calculation | 33,661,004 | 32,850,714 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from earnings per share calculation | 10,374,071 | 12,281,059 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from earnings per share calculation | 23,286,933 | 20,569,655 |
NET LOSS PER SHARE (Details Nar
NET LOSS PER SHARE (Details Narrative) - USD ($) | 1 Months Ended | ||
Apr. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Subsequent Event [Member] | |||
Shares issued for exercise of warrants, net (in shares) | 6,590,000 | ||
Stock issued during period, value, new issues | $ 4,762,208 | ||
Subsequent Event [Member] | Warrants [Member] | |||
Shares issued for exercise of warrants, net (in shares) | 566,666 | ||
Shares issued for exercise of warrants, net | $ 1,139,000 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - Stock Options [Member] | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 1.90% | 1.70% |
Volatility | 71.22% | |
Term (in years) | 6 years 3 months | |
Dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 61.56% | |
Term (in years) | 6 years | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 62.83% | |
Term (in years) | 6 years 3 months |
STOCKHOLDERS' EQUITY (Details 1
STOCKHOLDERS' EQUITY (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Options, Outstanding | |||
Options Exercised | 95,046 | 340,045 | |
Stock Options [Member] | |||
Options, Outstanding | |||
Options outstanding, beginning | 21,767,854 | ||
Options Granted | 1,730,500 | ||
Options Exercised | (95,046) | ||
Options Expired/Forfeited | (116,375) | ||
Options outstanding, ending | 23,286,933 | 21,767,854 | |
Vested and exercisable | 18,514,058 | ||
Unvested | 4,772,875 | ||
Options, Weighted Average Exercise Price | |||
Options outstanding, beginning | $ 3.56 | ||
Granted | 6.83 | ||
Exercised | 2.02 | ||
Expired/Forfeited | 7.46 | ||
Options outstanding, ending | 3.78 | $ 3.56 | |
Vested and exercisable | 3.09 | ||
Unvested | $ 6.48 | ||
Options, Weighted Average Remaining Contractual Life | |||
Options outstanding | 5 years 10 months 24 days | 5 years 9 months 18 days | |
Vested and exercisable | 5 years 1 month 6 days | ||
Unvested | 9 years 2 months 12 days | ||
Options outstanding, Aggregate Intrinsic Value | |||
Options outstanding, beginning | $ 60,495,730 | ||
Options exercised | 421,767 | ||
Options outstanding, ending | 85,606,859 | $ 60,495,730 | |
Vested and exercisable | 81,091,380 | ||
Unvested | $ 4,515,479 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | Jan. 12, 2016 | Jan. 06, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |||
Preferred stock, shares issued | 0 | 0 | |||
Preferred stock, shares outstanding | 0 | 0 | |||
Common stock, shares authorized | 350,000,000 | 350,000,000 | |||
Common stock, shares issued | 198,593,268 | 196,688,222 | |||
Common stock, shares outstanding | 198,593,268 | 196,688,222 | |||
Value of common stock issued during period for stock options exercised | $ 192,310 | $ 786,450 | |||
Number of common stock issued during period for stock options exercised (shares) | 95,046 | 340,045 | |||
Underwriting Agreement - Goldman And Cowen [Member] | |||||
Number of shares issued during the period | 17,424,242 | 15,151,515 | |||
Share price (in dollars per share) | $ 8.25 | ||||
Common stock issued during the period | $ 134,864,000 | ||||
Additional common stock issued under offering | 2,272,727 | ||||
Number of days of the option to purchase shares | 30 days |
STOCKHOLDERS' EQUITY (Details45
STOCKHOLDERS' EQUITY (Details Narrative 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Warrants: | ||
Warrants outstanding | $ 10,374,071 | |
Weighted-average contractual remaining life | 1 year | |
Weighted average exercise price of warrants (in dollars per share) | $ 2.27 | |
Share based compensation expense | $ 1,413,195 | $ 4,381,690 |
Expiration date of warrants | Mar. 15, 2022 | |
Outside Consultant Warrants [Member] | ||
Warrants: | ||
Exercise price of warrants (in dollars per share) | $ 6.83 | $ 7.59 |
Warrants granted (in shares) | 125,000 | 120,000 |
Grant date fair value (in dollars per share) | $ 3.67 | $ 4.60 |
Expiration date of warrants | Mar. 15, 2022 | Jan. 21, 2021 |
Vesting period of warrants | 12 months | 12 months |
Expected term | 5 years | 5 years |
Volatility rate | 63.24% | 74.15% |
Risk free rate | 1.47% | 1.28% |
Dividend yield | 0.00% | 0.00% |
Warrants [Member] | ||
Warrants: | ||
Share based compensation expense | $ 47,686 | $ 127,465 |
Unamortized costs | $ 569,000 | |
Minimum [Member] | ||
Warrants: | ||
Exercise price of warrants (in dollars per share) | $ 0.24 | |
Maximum [Member] | ||
Warrants: | ||
Exercise price of warrants (in dollars per share) | $ 8.20 |
STOCKHOLDERS' EQUITY (Details46
STOCKHOLDERS' EQUITY (Details Narrative 2) - USD ($) | Jun. 30, 2013 | May 11, 2013 | May 31, 2013 | May 31, 2012 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 |
Prepaid expenses - current | $ 368,594 | $ 405,960 | |||||
Recognition period of unamortized costs | 2 years 8 months 12 days | ||||||
SCI - Warrants [Member] | |||||||
Exercise price of warrants (in dollars per share) | $ 2.01 | ||||||
Warrants granted to purchase common stock (shares) | 850,000 | ||||||
Non-cash compensation | $ 0 | $ 38,517 | |||||
Unamortized costs of warrants | $ 64,449 | ||||||
Forfeited warrants granted to purchase common stock (shares) | 833,000 | ||||||
Recognition period of unamortized costs | 3 months | ||||||
SCI - Warrants [Member] | Tranche One [Member] | |||||||
Fair value of grant | $ 405,066 | ||||||
Non-cash compensation | 405,066 | ||||||
Vesting date of warrants | Jun. 30, 2013 | ||||||
Expected term | 5 years | ||||||
Volatility rate | 45.89% | ||||||
Risk free rate | 1.12% | ||||||
Dividend yield | 0.00% | ||||||
Vested warrants granted to purchase common stock (shares) | 283,333 | ||||||
SCI - Warrants [Member] | Tranche Two [Member] | |||||||
Fair value of grant | $ 462,196 | ||||||
Expected term | 5 years | ||||||
Volatility rate | 45.84% | ||||||
Risk free rate | 1.41% | ||||||
Dividend yield | 0.00% | ||||||
Vested warrants granted to purchase common stock (shares) | 283,333 | ||||||
SCI - Warrants [Member] | Tranche Three [Member] | |||||||
Description of shares to be vested | 283,334 shares will vest upon the receipt by us of any final FDA approval of a drug candidate that SCI helped us design. It is anticipated that this event will not occur before May 2017. | ||||||
Warrants - Unaffiliated Entity [Member] [Member] | |||||||
Exercise price of warrants (in dollars per share) | $ 2.57 | ||||||
Fair value of grant | $ 1,532,228 | ||||||
Warrants granted to purchase common stock (shares) | 1,300,000 | ||||||
Prepaid expenses - current | $ 64,449 | ||||||
Non-cash compensation | $ 64,449 | $ 64,449 | |||||
Expected term | 5 years | ||||||
Volatility rate | 44.71% | ||||||
Risk free rate | 0.74% | ||||||
Dividend yield | 0.00% |
STOCKHOLDERS' EQUITY (Details47
STOCKHOLDERS' EQUITY (Details Narrative 3) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Share-based compensation expense | $ 1,301,060 | $ 4,151,259 | |
Total unrecognized estimated compensation expense | $ 16,173,000 | ||
Recognized weighted-average period | 2 years 8 months 12 days | ||
Weighted average grant date fair value (per share) | $ 3.96 | $ 4.91 | |
Stock Options [Member] | |||
Options outstanding, ending | 23,286,933 | 21,767,854 | |
Option exercise prices (in dollars per shares) | $ 3.78 | $ 3.56 | |
Stock Options [Member] | Minimum [Member] | |||
Option exercise prices (in dollars per shares) | 0.10 | ||
Stock Options [Member] | Maximum [Member] | |||
Option exercise prices (in dollars per shares) | $ 8.92 | ||
2009 Long Term Incentive Compensation Plan [Member] | |||
Number of shares authorized for issuance | 25,000,000 | ||
Options outstanding, ending | 18,163,459 | ||
Number of shares available for issuance | 2,593,003 | ||
Vesting period | 4 years | ||
Expiration period | 10 years | ||
2012 Stock Incentive Plan [Member] | |||
Number of shares authorized for issuance | 10,000,000 | ||
Options outstanding, ending | 5,123,474 | ||
Number of shares available for issuance | 4,795,000 | ||
Vesting period | 4 years | ||
Expiration period | 10 years | ||
Warrants [Member] | Individuals [Member] | |||
Shares issued for exercise of warrants, net | $ 2,460,000 | $ 1,310,000 | |
Shares issued for exercise of warrants, net (in shares) | 1,810,000 | 561,372 |
RELATED PARTIES (Details Narrat
RELATED PARTIES (Details Narrative) - Catalent Inc.[Member] - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||
Payable - related party | $ 93,000 | $ 57,000 | |
Manufacturing activities billed from related party | $ 705,000 | $ 1,465,000 |
BUSINESS CONCENTRATIONS (Detail
BUSINESS CONCENTRATIONS (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Concentration Risk [Line Items] | ||
Revenues | $ 3,985,464 | $ 4,930,091 |
Supplier Concentration Risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk | 100.00% | 95.00% |
Customer Concentration Risk [Member] | Sales Revenue [Member] | Pharmacy Innovations TX [Member] | ||
Concentration Risk [Line Items] | ||
Revenues | $ 440,000 | |
Customer Concentration Risk [Member] | Sales Revenue [Member] | Pharmacy Innovations PA [Member] | ||
Concentration Risk [Line Items] | ||
Revenues | 937,000 | |
Customer Concentration Risk [Member] | Sales Revenue [Member] | AmerisourceBergen [Member] | ||
Concentration Risk [Line Items] | ||
Revenues | 526,000 | |
Customer Concentration Risk [Member] | Sales Revenue [Member] | Cardinal Health [Member] | ||
Concentration Risk [Line Items] | ||
Revenues | 553,000 | |
Customer Concentration Risk [Member] | Sales Revenue [Member] | McKesson Corporation [Member] | ||
Concentration Risk [Line Items] | ||
Revenues | $ 428,000 | |
Customer Concentration Risk [Member] | Sales Revenue [Member] | Woodstock Pharmaceutical and Compounding [Member] | ||
Concentration Risk [Line Items] | ||
Revenues | $ 1,336,000 | |
Customer Concentration Risk [Member] | Sales Revenue [Member] | Medical Center Pharmacy [Member] | ||
Concentration Risk [Line Items] | ||
Revenues | 680,000 | |
Customer Concentration Risk [Member] | Sales Revenue [Member] | Due West Pharmacy [Member] | ||
Concentration Risk [Line Items] | ||
Revenues | $ 1,104,000 | |
Customer Concentration Risk [Member] | Sales Revenue [Member] | Five Customers [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk | 72.00% | |
Customer Concentration Risk [Member] | Sales Revenue [Member] | Five Customers [Member] | Minimum [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk | 10.00% | |
Customer Concentration Risk [Member] | Sales Revenue [Member] | Three Customers [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk | 61.00% | |
Customer Concentration Risk [Member] | Sales Revenue [Member] | Three Customers [Member] | Minimum [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk | 10.00% |
COMMITMENTS AND CONTINGENCIES50
COMMITMENTS AND CONTINGENCIES (Details) | Dec. 31, 2016USD ($) |
Future minimum rental payments, year ending December 31, | |
2017 (9 months) | $ 647,216 |
2,018 | 942,305 |
2,019 | 1,083,890 |
2,020 | 1,102,667 |
2,021 | 934,313 |
Total minimum lease payments | $ 4,710,391 |
COMMITMENTS AND CONTINGENCIES51
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | May 01, 2016 | Mar. 31, 2017 | Mar. 31, 2016 |
Commitments and Contingencies Disclosure [Abstract] | |||
Non-cancelable operating lease term | 63 months | ||
Rental expense | $ 250,067 | $ 118,550 | |
Epiration date | Oct. 31, 2021 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] | 1 Months Ended |
Apr. 30, 2017USD ($)shares | |
Class of Warrant or Right [Line Items] | |
Shares issued for exercise of warrants, net (in shares) | shares | 6,590,000 |
Stock issued during period, value, new issues | $ | $ 4,762,208 |
Warrants [Member] | |
Class of Warrant or Right [Line Items] | |
Shares issued for exercise of warrants, net (in shares) | shares | 566,666 |
Shares issued for exercise of warrants, net | $ | $ 1,139,000 |