Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 23, 2018 | |
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 | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 216,834,059 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash | $ 154,386,930 | $ 127,135,628 |
Accounts receivable, net of allowance for doubtful accounts of $418,604 and $380,580, respectively | 5,625,987 | 4,328,802 |
Inventory | 1,880,577 | 1,485,358 |
Other current assets | 5,203,734 | 6,604,284 |
Total current assets | 167,097,228 | 139,554,072 |
Fixed assets, net | 403,574 | 437,055 |
Other Assets: | ||
Intangible assets, net | 3,488,401 | 3,099,747 |
Prepaid expenses-long term | 759,229 | |
Security deposit | 150,522 | 139,036 |
Total other assets | 4,398,152 | 3,238,783 |
Total assets | 171,898,954 | 143,229,910 |
Current Liabilities: | ||
Accounts payable | 11,427,160 | 4,097,600 |
Accrued expenses and other current liabilities | 9,785,210 | 9,223,595 |
Total current liabilities | 21,212,370 | 13,321,195 |
Long-term Liabilities: | ||
Long-term debt | 73,141,311 | |
Total long-term liabilities | 73,141,311 | |
Total liabilities | 94,353,681 | 13,321,195 |
Commitments and Contingencies - See Note 15 | ||
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: 216,834,059 and 216,429,642 issued and outstanding, respectively | 216,834 | 216,430 |
Additional paid-in capital | 521,608,436 | 516,351,405 |
Accumulated deficit | (444,279,997) | (386,659,120) |
Total stockholders' equity | 77,545,273 | 129,908,715 |
Total liabilities and stockholders' equity | $ 171,898,954 | $ 143,229,910 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 418,604 | $ 380,580 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 350,000,000 | 350,000,000 |
Common stock, issued | 216,834,059 | 216,429,642 |
Common stock, outstanding | 216,834,059 | 216,429,642 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Revenues, net | $ 3,763,010 | $ 4,250,433 | $ 7,536,402 | $ 8,235,897 |
Cost of goods sold | 454,161 | 681,725 | 1,087,784 | 1,341,360 |
Gross profit | 3,308,849 | 3,568,708 | 6,448,618 | 6,894,537 |
Operating expenses: | ||||
Sales, general, and administration | 29,466,770 | 14,628,927 | 50,224,007 | 31,466,544 |
Research and development | 6,798,380 | 8,716,395 | 13,837,677 | 16,441,235 |
Depreciation and amortization | 65,603 | 53,189 | 125,224 | 102,888 |
Total operating expense | 36,330,753 | 23,398,511 | 64,186,908 | 48,010,667 |
Operating loss | (33,021,904) | (19,829,803) | (57,738,290) | (41,116,130) |
Other income (expense): | ||||
Miscellaneous income | 334,238 | 149,054 | 648,795 | 275,022 |
Accreted interest | 3,832 | 7,699 | ||
Interest expense | (531,382) | (531,382) | ||
Total other (expense) income | (197,144) | 152,886 | 117,413 | 282,721 |
Loss before taxes | (33,219,048) | (19,676,917) | (57,620,877) | (40,833,409) |
Net loss | $ (33,219,048) | $ (19,676,917) | $ (57,620,877) | $ (40,833,409) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.15) | $ (0.10) | $ (0.27) | $ (0.20) |
Weighted average number of common shares outstanding | 216,640,186 | 203,384,610 | 216,583,067 | 200,602,778 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (57,620,877) | $ (40,833,409) |
Adjustments to reconcile net loss to net cash flows used in operating activities: | ||
Depreciation of fixed assets | 79,201 | 69,000 |
Amortization of intangible assets | 46,023 | 33,888 |
Provision for (recovery of) doubtful accounts | 38,024 | (18,106) |
Share-based compensation | 4,128,440 | 3,051,357 |
Amortization of deferred financing costs | 30,155 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,335,209) | 1,122,386 |
Inventory | (395,219) | (337,694) |
Other current assets | 2,539,394 | (58,601) |
Accounts payable | 7,329,560 | 749,520 |
Accrued interest | 501,227 | |
Accrued expenses and other current liabilities | 60,388 | (2,443,867) |
Net cash used in operating activities | (44,598,893) | (38,665,526) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Patent costs | (434,677) | (367,602) |
Purchase of fixed assets | (45,720) | (35,849) |
Payment of security deposit | (11,486) | |
Net cash used in investing activities | (491,883) | (403,451) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from term loan | 75,000,000 | |
Payment of deferred financing fees | (3,786,918) | |
Proceeds from exercise of options | 1,128,996 | 212,360 |
Proceeds from exercise of warrants | 3,798,999 | |
Net cash provided by financing activities | 72,342,078 | 4,011,359 |
Increase (decrease) in cash | 27,251,302 | (35,057,618) |
Cash, beginning of period | 127,135,628 | 131,534,101 |
Cash, end of period | $ 154,386,930 | $ 96,476,483 |
THE COMPANY
THE COMPANY | 6 Months Ended |
Jun. 30, 2018 | |
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 commercializing our recently U.S. Food and Drug Administration, or FDA, approved product, IMVEXXY™ (estradiol vaginal inserts) for the treatment of moderate-to-severe dyspareunia (vaginal pain associated with sexual activity), a symptom of vulvar and vaginal atrophy, or VVA, due to menopause, and pursuing the regulatory approvals and pre-commercialization activities necessary for commercialization of TX-001HR, our bio-identical hormone therapy combination of 17ß- estradiol and progesterone in a single, oral softgel drug candidate, for the treatment of moderate to severe vasomotor symptoms, or VMS, due to menopause in menopausal women with an intact uterus. The new drug application, or NDA, for TX-001HR has a Prescription Drug User Fee Act target action date for the completion of the FDA’s review of October 28, 2018. IMVEXXY™ and TX-001HR 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. 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. |
BASIS OF PRESENTATION AND RECEN
BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 30, 2018 | |
Basis Of Presentation And Recently Issued Accounting Pronouncements Abstract | |
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, 2017, as filed with the Securities and Exchange Commission, or the SEC, from which we derived the accompanying consolidated balance sheet as of December 31, 2017. 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 June 2018, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2018-07 to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. The new guidance expands the scope of Accounting Standards Codification, or ASC, 718 to include share-based payments granted to nonemployees in exchange for goods or services used or consumed in an entity’s own operations and supersedes the guidance in ASC 505-50. The guidance is effective for public business entities in annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted, including in an interim period for which financial statements have not been issued, but not before an entity adopts ASC 606. We are currently evaluating the effect of this guidance on our consolidated financial statements and disclosures. 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 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. This 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 obligation. 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 adopted this standard under the modified retrospective method to all contracts not completed as of January 1, 2018 and the adoption did not have a material effect on our financial statements but we expanded our disclosures related to contracts with customers in Note 3. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2018 | |
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 and long-term debt. 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 June 30, 2018 and 2017, 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 and six months ended June 30, 2018 and 2017. The carrying amounts for the Term Loan (as discussed in Note 9) approximate fair value based on market activity for other debt instruments with similar characteristics and comparable risk. Trade Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are customer obligations due under normal trade terms. We review accounts receivable for uncollectible accounts and credit card charge-backs and provide an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. We consider trade accounts receivable past due for more than 90 days to be delinquent. We write off delinquent receivables against our allowance for doubtful accounts based on individual credit evaluations, the results of collection efforts, and specific circumstances of customers. We record recoveries of accounts previously written off when received as an increase in the allowance for doubtful accounts. To the extent data we use to calculate these estimates does not accurately reflect bad debts, adjustments to these reserves may be required. Inventories Inventories are valued at the lower of cost or net realizable value. Inventories related to packaged vitamins, nutritional products and supplements and raw materials are valued using the average-cost method and inventories related to our progesterone and estradiol products are valued using first in first out method. We review our inventory for excess or obsolete inventory and write-down obsolete or otherwise unmarketable inventory to its estimated net realizable value. Obsolescence may occur due to product expiring or product improvements rendering previous versions obsolete. Pre-Launch Inventory Inventory costs associated with product candidates that have not yet received regulatory approval are capitalized if we believe there is probable future commercial use and future economic benefit. If the probability of future commercial use and future economic benefit cannot be reasonably determined, then pre-launch inventory costs associated with such product candidates are expensed as research and development expenses during the period the costs are incurred. We have no capitalized pre-launch inventory as of June 30, 2018 and 2017. Revenue Recognition We adopted Accounting Standards Codification, or ASC, 606 on January 1, 2018 using the modified retrospective method for all contracts not completed as of the date of adoption. ASC 606 states that a contract is considered “completed” if all (or substantially all) of the revenue was recognized in accordance with revenue guidance that was in effect before the date of initial application. Because all (or substantially all) of the revenue related to sales of our products has been recognized under ASC 605 prior to the date of initial application of the new standard, the contracts are considered completed under the ASC 606. Based on our evaluation of ASC 606, we concluded that a cumulative adjustment was not necessary upon implementation of ASC 606 on January 1, 2018. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. The provisions of ASC 606 include a five-step process by which we determine revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which we expect to be entitled in exchange for those goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation. Prescription Products As of June 30, 2018, we have not recognized any revenue related to our recently approved product: IMVEXXY™. We sell our name brand and generic prescription products primarily through wholesale distributors and retail pharmacy distributors. We have one performance obligation related to prescription products sold through wholesale distributors which is to transfer promised goods to a customer and two performance obligations related to products sold through retail pharmacy distributors, which are to: (1) transfer promised goods and (2) provide customer service for an immaterial fee. We treat shipping as a fulfillment activity rather than as a separate obligation. We recognize prescription revenue only when we satisfy performance obligations by transferring a promised good or service to a customer. A good or service is considered to be transferred when the customer receives the goods or service or obtains control. Control refers to the customer’s ability to direct the use of, and obtain substantially all of the remaining benefits from, an asset. All of our performance obligations, and associated revenue, are transferred to customers at a point in time. Payment for goods or services sold by us is typically due between 30 and 60 days after an invoice is sent to the customer. The transaction price of a contract is the amount of consideration which we expect to be entitled to in exchange for transferring promised goods or services to a customer. Prescription products are sold at fixed wholesale acquisition cost, or WAC, determined based on our list price. However, the total transaction price is variable as it is calculated net of estimated product returns, chargebacks, rebates, coupons, discounts and wholesaler fees. In order to determine the transaction price, we estimate the amount of variable consideration at the outset of the contract either utilizing the expected value or most likely amount method, depending on the facts and circumstances relative to the contract or each variable consideration. We include amounts of variable consideration in a contract’s transaction price only to the extent that we have a relatively high level of confidence that the amounts will not be subject to significant reversals, that is, downward adjustments to revenue recognized for satisfied performance obligations. In determining amounts of variable consideration to include in a contract’s transaction price, we rely on our historical experience and other evidence that supports our qualitative assessment of whether revenue would be subject to a significant reversal. We consider all the facts and circumstances associated with both the risk of a revenue reversal arising from an uncertain future event and the magnitude of the reversal if that uncertain event were to occur. When determining if variable consideration should be constrained, we consider whether there are factors outside our control that could result in a significant reversal of revenue. In making these assessments, we consider the likelihood and magnitude of a potential reversal of revenue. These estimates are re-assessed each reporting period as required. 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. We recognize the amount of expected returns as a refund liability, representing the obligation to return the customer’s consideration. Since our returns primarily consist of expired and short dated products that will not be resold, we do not record a return asset for the right to recover the goods returned by the customer at the time of the initial sale (when recognition of revenue is deferred due to the anticipated return). Return estimates are recorded in the other current liabilities on the consolidated balance sheet. We offer various rebate and discount programs in an effort to maintain a competitive position in the marketplace and to promote sales and customer loyalty. We estimate the allowance for consumer rebates and coupons that we have offered based on our experience and industry averages, which is reviewed, and adjusted if necessary, on a quarterly basis. Estimates relating to these rebates and coupons are deducted from gross product revenues at the time the revenues are recognized. We record distributor fees based on amounts stated in contracts. Rebates estimates are recorded in accrued expenses and coupon estimates and distributor fees are recorded in the other current liabilities on the consolidated balance sheet. We estimate chargebacks based on prices stated in contracts based the number of units sold each period. We provide invoice discounts to our customers for prompt payment. We deduct invoice discounts and chargebacks from our gross product revenues at the time such discounts are earned by customers. OTC Products Our OTC and prescription prenatal vitamin products are generally variations of the same product with slight modifications in formulation and marketing. As of January 1, 2017, we decided to focus on selling our prescription vitamins and ceased manufacturing and distributing our OTC product lines, except for Iron 21/7 which we ceased manufacturing in October 2017. 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. Disaggregation of revenue We sell our name brand and generic prescription products primarily through wholesale distributors and retail pharmacy distributors which accounted for all sales during 2018 and the vast majority of sales during 2017. As of January 1, 2017, we decided to focus on selling our prescription vitamins and ceased manufacturing and distributing our OTC product lines, except for Iron 21/7 which we ceased manufacturing in October 2017. The sales of Iron 21/7 during the three months ended June 30, 2018 and 2017 were approximately $0 and $12,000, respectively, and $0 and $20,000 for the six months ended June 30, 2018 and 2017, respectively. Contract assets and contract liabilities Based on our contracts, we invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. Accordingly, our contracts do not give rise to contract assets or liabilities under ASC 606. Accounts receivable are recorded when the right to consideration becomes unconditional. We disclose receivables from contracts with customers separately in the statement of financial position. Estimates related to cash discounts and chargebacks are included in net accounts receivable. Estimates related to distributors fees, rebates, coupons and returns are disclosed in Note 8. 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 began using our own stock price in our volatility calculation along with the other peer entities whose stock prices were publicly available that were similar to our 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, including forfeiture rates, 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. Effective January 1, 2017, we account for forfeitures when they occur. 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, scale-up and validation costs, and other activities. Internal R&D activity expenses include laboratory supplies, salaries, benefits, and non-cash share-based compensation expenses. 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 U.S. Food and Drug Administration, or the 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 include 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 | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 4 – INVENTORY Inventory consists of the following: June 30, 2018 December 31, 2017 Finished product $ 1,652,700 $ 1,485,358 Work in process 227,877 — TOTAL INVENTORY $ 1,880,577 $ 1,485,358 |
OTHER CURRENT ASSETS
OTHER CURRENT ASSETS | 6 Months Ended |
Jun. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER CURRENT ASSETS | NOTE 5 – OTHER CURRENT ASSETS Other current assets consist of the following: June 30, 2018 December 31, 2017 Prepaid sales and marketing costs $ 2,646,988 $ 5,335,936 Debt financing fees 1,138,844 — Prepaid insurance 535,446 680,243 Other prepaid costs 846,889 523,694 Prepaid vendor deposits 35,567 64,411 TOTAL OTHER CURRENT ASSETS $ 5,203,734 $ 6,604,284 |
FIXED ASSETS, NET
FIXED ASSETS, NET | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS, NET | NOTE 6 – FIXED ASSETS, NET Fixed assets, net consist of the following: June 30, 2018 December 31, 2017 Accounting system $ 301,096 $ 301,096 Equipment 319,257 273,536 Furniture and fixtures 116,542 116,542 Computer hardware 80,211 80,211 Leasehold improvements 37,888 37,888 854,994 809,273 Accumulated depreciation (451,420 ) (372,218 ) TOTAL FIXED ASSETS, NET $ 403,574 $ 437,055 Depreciation expense for the three months ended June 30, 2018 and 2017 was $40,777 and $35,400, respectively, and $79,201 and $69,000 for the six months ended June 30, 2018 and 2017, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2018 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
INTANGIBLE ASSETS | NOTE 7 – INTANGIBLE ASSETS The following tables sets forth the gross carrying amount, accumulated amortization and net carrying amount of our intangible assets as of June 30, 2018 and December 31, 2017: June 30, 2018 Gross Carrying Amount Accumulated Amortization Net Amount Weighted- Average Remaining Amortization Period (yrs.) Amortizable intangible assets: OPERA ® $ 31,951 $ (9,486 ) $ 22,465 11.25 Development costs of corporate website 91,743 (91,743 ) — n/a Approved hormone therapy drug candidate patents 1,662,562 (216,934 ) 1,445,628 14.5 Hormone therapy drug candidate patents (pending) 1,769,681 — 1,769,681 n/a Non-amortizable intangible assets: Multiple trademarks 250,627 — 250,627 indefinite Total $ 3,806,564 $ (318,163 ) $ 3,488,401 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Amount Weighted- Average Remaining Amortization Period (yrs.) Amortizable intangible assets: OPERA ® $ 31,951 $ (8,487 ) $ 23,464 11.75 Development costs of corporate website 91,743 (91,743 ) — n/a Approved hormone therapy drug candidate patents 1,293,614 (171,911 ) 1,121,703 15 Hormone therapy drug candidate patents (pending) 1,721,305 — 1,721,305 n/a Non-amortizable intangible assets: Multiple trademarks 233,275 — 233,275 indefinite Total $ 3,371,888 $ (272,141 ) $ 3,099,747 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 and six months ended June 30, 2018 and year ended December 31, 2017, there was no impairment recognized related to intangible assets. We have numerous pending foreign and domestic patent applications. As of June 30, 2018, we had 20 issued foreign patents and 19 issued domestic, or U.S., patents including: ● 13 domestic utility patents that relate to our combination progesterone and estradiol product candidates, which are owned by us. These domestic utility patents will expire in 2032. In addition, we have pending patent applications with respect to our combination progesterone and estradiol product candidates in the U.S., Argentina, Australia, Brazil, Canada, Europe, Israel, Japan, Mexico, Russia, South Africa, and South Korea; ● Three domestic patents that relate to Imvexxy®, our applicator-free vaginal estradiol softgel product. These patents establish an important intellectual property foundation for Imvexxy® and are owned by us. These domestic patents will expire in 2032 or 2033. In addition, we have pending patent applications related to Imvexxy® in the U.S., Argentina, Australia, Brazil, Canada, Europe, Israel, Japan, Mexico, Russia, South Africa, and South Korea; ● One domestic utility patent that relates to our pipeline transdermal patch technology, which is owned by us. The domestic utility patent will expire in 2032. We have pending patent applications with respect to this technology in the U.S., Australia, Brazil, Canada, Europe, Mexico, Japan, and South Africa; and ● One utility patent that relates to our OPERA® information-technology platform, which is owned by us and is a domestic patent that will expire in 2029. ● One domestic utility patent that relates to TX-009HR, our progesterone and estradiol product candidate, which is owned by us and will expire in 2037. Amortization expense was $24,826 and $17,789 for the three months ended June 30, 2018 and 2017, respectively and $46,023 and $33,888 for the six months ended June 30, 2018 and 2017, respectively. Estimated amortization expense for the next five years for the patent cost currently being amortized is as follows: Year Ending December 31, Estimated Amortization 2018(6 months) $ 49,652 2019 $ 99,304 2020 $ 99,304 2021 $ 99,304 2022 $ 99,304 Thereafter $ 1,021,225 |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 6 Months Ended |
Jun. 30, 2018 | |
Other Liabilities Disclosure [Abstract] | |
OTHER CURRENT LIABILITIES | NOTE 8 – OTHER CURRENT LIABILITIES Other current liabilities consist of the following: June 30, 2018 December 31, 2017 Accrued payroll, bonuses and commission costs $ 2,825,316 $ 4,240,379 Allowance for coupons and returns 1,802,125 1,432,846 Accrued sales and marketing costs 1,412,570 420,162 Accrued compensated absences 1,039,684 945,457 Accrued legal and accounting expense 688,012 600,350 Accrued research and development 492,577 366,933 Accrued interest 501,227 — Accrued rent 383,110 327,099 Other accrued expenses 234,937 525,999 Accrued rebates 207,018 76,917 Allowance for wholesale distributor fees 198,634 172,973 Accrued royalties — 114,480 TOTAL OTHER CURRENT LIABILITIES $ 9,785,210 $ 9,223,595 |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 9 – DEBT On May 1, 2018, we entered into a Credit and Security Agreement, or the Credit Agreement, with MidCap Financial Trust, or MidCap, as agent, or Agent, and as lender, and the additional lenders party thereto from time to time (together with MidCap as a lender, the Lenders). The Credit Agreement provides a secured term loan facility in an aggregate principal amount of up to $200,000,000, or the Term Loan. Under the terms of the Credit Agreement, the Term Loan will be made in three separate tranches, each, a Tranche, with each Tranche to be made available to us, at our option, upon our achievement of certain milestones. The first Tranche of $75,000,000, or Tranche 1, was drawn by us on June 7, 2018, following approval by the FDA of the NDA for our TX-004HR drug candidate. The second Tranche of $75,000,000, or Tranche 2, may be drawn by us on or before May 31, 2019, provided that we satisfy certain conditions described in the Credit Agreement, including (i) that Tranche 1 has been drawn, (ii) the approval by the FDA of the NDA for our TX001HR drug candidate and (iii) we have consummated our first commercial sale in the United States of TX-001HR. The third Tranche of $50,000,000, or Tranche 3, may be drawn by us on or before December 31, 2019, provided that we satisfy certain conditions described in the Credit Agreement, including that (i) Tranche 2 has been drawn and (ii) we have generated at least $75,000,000 of consolidated net revenue attributable to commercial sales of TX-001HR and TX-004HR during the twelve-month period ending immediately prior to the funding of Tranche 3. Amounts borrowed under the Term Loan bear interest at a rate equal to the sum of (i) one-month LIBOR (subject to a LIBOR floor of 1.50%) plus (ii) 7.75% per annum. Interest on amounts borrowed under the Term Loan is due and payable monthly in arrears. Principal on each Tranche is payable in 36 equal monthly installments beginning May 1, 2020 until paid in full on May 1, 2023, or the Maturity Date. However, if we generate at least $95,000,000 of consolidated net revenue attributable to commercial sales of TX-001HR and TX-004HR by December 31, 2019, we may extend the interest-only period by an additional 12 months to May 1, 2021. Interest expense related to this Term Loan for the three and six months ending June 30, 2018 was $501,227. The Term Loan may be prepaid, in whole or in part, subject to a prepayment fee on the amount being prepaid (or required to be prepaid, if such amount is greater) of (i) 4.0% for the first year following the Tranche 1 funding date, (ii) 3.0% for the second year following the Tranche 1 funding date and (iii) 2.0% thereafter. Upon repayment of the Term Loan at the Maturity Date or prepayment on any earlier date, we will be required to pay a termination payment based on the principal amount paid or prepaid. In connection with the execution of the Credit Agreement, we paid the Agent, for the benefit of all Lenders, an origination fee equal to 1.00% of the maximum potential amount of the Term Loan. We are also required to pay the Agent an annual administration fee of 0.25% based on the amounts borrowed under the Term Loan, in addition to other fees and expenses. Our obligations under the Credit Agreement are secured, subject to customary permitted liens and other agreed upon exceptions, by a first priority perfected security interest in all of our existing and after-acquired assets. Our obligations under the Credit Agreement are guaranteed by each of our future direct and indirect subsidiaries (other than certain non-U.S. subsidiaries of ours and certain U.S. subsidiaries substantially all of whose assets consist of equity interests in non-U.S. subsidiaries, subject to certain exceptions). The Credit Agreement contains customary restrictions and covenants. Among other requirements, we must (i) maintain a minimum cash balance of $50,000,000 and (ii) achieve certain minimum consolidated net revenue amounts attributable to commercial sales of our products. As of June 30, 2018, we were in compliance with the covenants under the Credit Agreement. The Credit Agreement also contains customary covenants that limit, among other things, our ability to (i) incur indebtedness, (ii) incur liens on our property, (iii) pay dividends or make other distributions, (iv) sell our assets, (v) make certain loans or investments, (vi) merge or consolidate, (vii) voluntarily repay or prepay certain permitted indebtedness and (viii) enter into transactions with affiliates, in each case subject to certain exceptions. The Credit Agreement contains customary representations and warranties and events of default relating to, among other things, payment defaults, breaches of covenants, the occurrence of any fact, event or circumstance that could reasonably be expected to result in a Material Adverse Effect (as defined in the Credit Agreement), delisting of the our common stock, par value $0.001 per share, or Common Stock, bankruptcy and insolvency, cross defaults with certain material indebtedness and certain material contracts, judgments and inaccuracies of representations and warranties. Upon or after an event of default, the agent and the Lenders may declare all or a portion of our obligations under the Credit Agreement to be immediately due and payable and exercise other rights and remedies provided for under the Credit Agreement. As of June 30, 2018, we had $75,000,000 in borrowings outstanding under the Term Loan, which are classified as long-term debt in the accompanying unaudited consolidated financial statements. We incurred $3,786,918 in debt issuance costs related to the Term Loan. Debt financing fees related to the entire Term Loan have been allocated pro rata between the funded and unfunded portions of each tranche. Allocated debt financing fees related to Tranche 1 of $1,888,844 have been reclassified to debt discount and are accreted to interest expense using the effective interest method. Debt financing fees associated with unfunded tranches are deferred as assets until Tranche 1 and Tranche 2 milestones have been met. Deferred financing fees related to Tranche 1 are included in Other current assets and deferred financing fees related to Tranche 2 are included in Prepaid expenses - long term in the accompanying unaudited consolidated financial statements. During the three and six months ended June 30, 2018, we amortized $30,155 of debt issuance costs related to Tranche 1 as interest expense in our accompanying unaudited consolidated financial statements. The overall effective interest rate was 10.6% as of June 30, 2018. As of June 30, 2018, the carrying value of debt consists of the following: June 30, 2018 Term Loan $ 75,000,000 Debt discount and financing fees (1,858,689 ) Total long-term debt $ 73,141,311 |
NET LOSS PER SHARE
NET LOSS PER SHARE | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NOTE 10 – 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 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 and six months ended June 30, 2018 June 30, 2017 Stock options 25,210,899 23,402,100 Warrants 3,007,571 3,115,905 28,218,470 26,518,005 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2018 | |
Stockholders' Equity: | |
STOCKHOLDERS' EQUITY | NOTE 11 – STOCKHOLDERS’ EQUITY Preferred Stock At June 30, 2018, 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 June 30, 2018, we had 350,000,000 shares of Common Stock authorized for issuance, of which 216,834,059 shares of Common Stock were issued and outstanding. Issuances During the Three and Six Months Ended June 30, 2018 During the three months ended June 30, 2018, certain individuals exercised stock options to purchase 249,785 shares of Common Stock for $1,084,939 in cash. During the six months ended June 30, 2018, certain individuals exercised stock options to purchase 394,576 shares of Common Stock for $1,128,996 in cash. Also, during the six months ended June 30, 2018, stock options to purchase 10,000 shares of Common Stock were exercised pursuant to the options’ cashless exercise provisions, wherein 9,841 shares of Common Stock were issued. Issuances During the Three and Six Months Ended March 31, 2017 During the three months ended June 30, 2017, certain individuals exercised stock options to purchase 5,000 shares of Common Stock for $20,050 in cash. During the six months ended June 30, 2017, certain individuals exercised stock options to purchase 100,046 shares of Common Stock for $212,360 in cash. Warrants to Purchase Common Stock As of June 30, 2018, we had warrants outstanding to purchase an aggregate of 3,007,571 shares of Common Stock with a weighted-average contractual remaining life of approximately 2.08 years, and exercise prices ranging from $0.24 to $8.20 per share, resulting in a weighted average exercise price of $2.78 per share. The valuation methodology used to determine the fair value of our warrants 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, dividend rate and the term of the warrant. During the six months ended June 30, 2018, we granted warrants to purchase 175,000 shares of Common Stock to outside consultants at an exercise price of $5.16. The fair value for these warrants was determined by using the Black-Scholes Model on the date of the grant using a term of 5 years; volatility of 62.1%; risk free rate of 2.36%; and dividend yield of 0%. The grant date fair value of the warrants was $2.79 per share. The warrants vest ratably over a 12-month period and have an expiration date of March 15, 2023. During the six months ended June 30, 2017, we granted warrants to purchase 125,000 shares of Common Stock to outside consultants at an exercise price of $6.83 per share. The fair value for these warrants was determined by using the Black-Scholes Model on the date of the grant 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 vest ratably over a 12-month period and have an expiration date of March 15, 2022. During the three months ended June 30, 2018 and 2017, we recorded $164,840 and $69,089, respectively, and during the six months ended June 30, 2018 and 2017, we recorded $256,315 and $115,774, respectively, as share based compensation expense in the accompanying consolidated financial statements related to warrants. As of June 30, 2018, total unrecognized estimated compensation expense related to the unvested portion of these warrants was approximately $345,000 which is expected to be recognized over a weighted-average period of 0.7 years. 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 FDA approval for our drug candidates, including a vaginal capsule for the treatment of 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. These shares were exercised in 2017. 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%. As of June 30, 2016, this warrant was fully amortized. These shares were exercised in 2017; and 3. 283,334 shares were going to vest upon the receipt by us, prior to the warrant expiration date of April 30, 2018, of any final FDA approval of a drug candidate that SCI helped us design. Since the receipt of such approval did not occur before warrant’s expiration date, the warrant expired on April 30, 2018. In May 2012, we issued warrants to purchase an aggregate of 1,300,000 shares of Common Stock to SCI 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%. During the three months ended June 30, 2018 and 2017, we recorded $0 and $64,449, respectively, and during the six months ended June 30, 2018 and 2017, we recorded $0 and $128,898, respectively, as non-cash compensation with respect to these warrants in the accompanying consolidated financial statements. This warrant was fully exercised, of which 800,000 shares were exercised in 2017 and 500,000 shares were exercised in 2016. As of June 30, 2018, the SCI warrants issued in 2013 and 2012 were fully amortized. During the three months ended June 30, 2018, no warrants were exercised. During the three months ended June 30, 2017, certain individuals exercised warrants to purchase 666,666 shares of Common Stock for $1,338,999 in cash. In addition, during the three months ended June 30, 2017, certain individuals 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. During the six months ended June 30, 2018, no warrants were exercised. During the six months ended June 30, 2017, certain individuals exercised warrants to purchase 2,476,666 shares of Common Stock for $3,798,999 in cash. In addition, during the three months ended June 30, 2017, certain individuals 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. 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 of Common Stock 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 June 30, 2018, there were non-qualified stock options to purchase 18,932,425 shares of Common Stock outstanding under the 2009 Plan. As of June 30, 2018, there were 1,578,787 shares of Common Stock available to be issued under 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 June 30, 2018, there were non-qualified stock options to purchase 6,278,474 shares of Common Stock outstanding under the 2012 Plan. As of June 30, 2018, there were 3,473,333 shares of Common Stock available to be issued under 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 six months ended June 30, 2018 and 2017 are set forth in the table below. Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 Risk-free interest rate 2.38-2.63% 1.84-2.01% Volatility 61.82-64.04% 61.56-63.95% Term (in years) 5.1-6.25 5.5-6.25 Dividend yield 0.00 % 0.00 % A summary of activity under the 2009 and 2012 Plans and related information follows: Number of Shares Underlying Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value Balance at December 31, 2017 23,365,225 $ 3.78 5.13 $ 64,664,821 Granted 2,315,500 $ 5.26 Exercised (404,576 ) $ 2.79 $ 1,386,827 Expired/Forfeited (62,250 ) $ 7.61 Balance at June 30, 2018 25,210,899 $ 3.92 5.16 $ 69,013,547 Vested and Exercisable at June 30, 2018 20,565,025 $ 3.46 4.30 $ 66,096,342 Unvested at June 30, 2018 4,645,874 $ 5.98 8.96 $ 2,917,204 At June 30, 2018, 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 $3.15 and $3.82 during the six months ended June 30, 2018 and 2017, respectively. Share-based compensation expense for options recognized in our results of operations for the three months ended June 30, 2018 and 2017 ($2,212,241 and $1,505,625, respectively) and for the six months ended June 30, 2018 and 2017 ($3,872,125 and $2,806,685, respectively) is based on vested awards. At June 30, 2018, total unrecognized estimated compensation expense related to unvested options granted prior to that date was approximately $13,817,000 which may be adjusted for future forfeitures. This cost is expected to be recognized over a weighted-average period of 2.4 years. No tax benefit was realized due to a continued pattern of operating losses. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 12 – 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 2018 as a result of (i) the losses recorded during the six months ended June 30, 2018, (ii) additional losses expected for the remainder of 2018, 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 June 30, 2018, 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 | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | NOTE 13 – 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 June 30, 2018 and 2017, we were billed by Catalent approximately $1,266,000 and $1,754,000, respectively, for manufacturing activities related to our clinical trials, scale-up, registration batches, stability and validation testing. During the six months ended June 30, 2018 and 2017, we were billed by Catalent approximately $2,040,000 and $2,460,000, respectively, for manufacturing activities related to our clinical trials, scale-up, registration batches, stability and validation testing. As of June 30, 2018 and December 31, 2017, there were amounts due to Catalent of approximately $751,000 and $523,000, respectively. |
BUSINESS CONCENTRATIONS
BUSINESS CONCENTRATIONS | 6 Months Ended |
Jun. 30, 2018 | |
Risks and Uncertainties [Abstract] | |
BUSINESS CONCENTRATIONS | NOTE 14 – BUSINESS CONCENTRATIONS We purchase our products from several suppliers with approximately 100% of our purchases supplied from one vendor for both the six months ended June 30, 2018 and 2017. 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. During the six months ended June 30, 2018, four customers each generated more than 10% of our total revenues. During the six months ended June 30, 2017, five customers each generated more than 10% of our total revenues. Revenue generated from four major customers combined accounted for approximately 71% of our recognized revenue for the six months ended June 30, 2018 and revenue generated from five major customers combined accounted for approximately 70% of our recognized revenue for the six months ended June 30, 2017. During the six months ended June 30, 2018, PI Services generated approximately $981,000 of our revenue, Pillpack, Inc. generated approximately $2,088,000 of our revenue, AmerisourceBergen generated approximately $1,283,000 of our revenue and Cardinal Health generated approximately $971,000 of our revenue. During the six months ended June 30, 2017, Pharmacy Innovations TX generated approximately $834,000 of our revenue, Pharmacy Innovations PA generated approximately $1,863,000 of our revenue, AmerisourceBergen generated approximately $1,053,000 of our revenue, Cardinal Health generated approximately $1,119,000 of our revenue and McKesson Corporation generated approximately $907,000 of our revenue. 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. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 15 – 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 June 30, 2018 and 2017 was approximately $257,000 and $265,000, respectively. The rental expense related to our current lease during both the six months ended June 30, 2018 and 2017 was $515,000. As of June 30, 2018, future minimum rental payments on non-cancelable operating leases are as follows: Years Ending December 31, 2018 (6 months) $ 499,831 2019 1,094,116 2020 1,113,069 2021 943,127 2022 — Total minimum lease payments $ 3,650,143 |
SUMMARY OF SIGNIFICANT ACCOUN21
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
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 and long-term debt. 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 June 30, 2018 and 2017, 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 and six months ended June 30, 2018 and 2017. The carrying amounts for the Term Loan (as discussed in Note 9) approximate fair value based on market activity for other debt instruments with similar characteristics and comparable risk. |
Trade Accounts Receivable and Allowance for Doubtful Accounts | Trade Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are customer obligations due under normal trade terms. We review accounts receivable for uncollectible accounts and credit card charge-backs and provide an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. We consider trade accounts receivable past due for more than 90 days to be delinquent. We write off delinquent receivables against our allowance for doubtful accounts based on individual credit evaluations, the results of collection efforts, and specific circumstances of customers. We record recoveries of accounts previously written off when received as an increase in the allowance for doubtful accounts. To the extent data we use to calculate these estimates does not accurately reflect bad debts, adjustments to these reserves may be required. |
Inventories | Inventories Inventories are valued at the lower of cost or net realizable value. Inventories related to packaged vitamins, nutritional products and supplements and raw materials are valued using the average-cost method and inventories related to our progesterone and estradiol products are valued using first in first out method. We review our inventory for excess or obsolete inventory and write-down obsolete or otherwise unmarketable inventory to its estimated net realizable value. Obsolescence may occur due to product expiring or product improvements rendering previous versions obsolete. Pre-Launch Inventory Inventory costs associated with product candidates that have not yet received regulatory approval are capitalized if we believe there is probable future commercial use and future economic benefit. If the probability of future commercial use and future economic benefit cannot be reasonably determined, then pre-launch inventory costs associated with such product candidates are expensed as research and development expenses during the period the costs are incurred. We have no capitalized pre-launch inventory of June 30, 2018 and 2017. |
Revenue Recognition | Revenue Recognition We adopted Accounting Standards Codification, or ASC, 606 on January 1, 2018 using the modified retrospective method for all contracts not completed as of the date of adoption. ASC 606 states that a contract is considered “completed” if all (or substantially all) of the revenue was recognized in accordance with revenue guidance that was in effect before the date of initial application. Because all (or substantially all) of the revenue related to sales of our products has been recognized under ASC 605 prior to the date of initial application of the new standard, the contracts are considered completed under the ASC 606. Based on our evaluation of ASC 606, we concluded that a cumulative adjustment was not necessary upon implementation of ASC 606 on January 1, 2018. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. The provisions of ASC 606 include a five-step process by which we determine revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which we expect to be entitled in exchange for those goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation. Prescription Products As of June 30, 2018, we have not recognized any revenue related to our recently approved product: IMVEXXY™. We sell our name brand and generic prescription products primarily through wholesale distributors and retail pharmacy distributors. We have one performance obligation related to prescription products sold through wholesale distributors which is to transfer promised goods to a customer and two performance obligations related to products sold through retail pharmacy distributors, which are to: (1) transfer promised goods and (2) provide customer service for an immaterial fee. We treat shipping as a fulfillment activity rather than as a separate obligation. We recognize prescription revenue only when we satisfy performance obligations by transferring a promised good or service to a customer. A good or service is considered to be transferred when the customer receives the goods or service or obtains control. Control refers to the customer’s ability to direct the use of, and obtain substantially all of the remaining benefits from, an asset. All of our performance obligations, and associated revenue, are transferred to customers at a point in time. Payment for goods or services sold by us is typically due between 30 and 60 days after an invoice is sent to the customer. The transaction price of a contract is the amount of consideration which we expect to be entitled to in exchange for transferring promised goods or services to a customer. Prescription products are sold at fixed wholesale acquisition cost, or WAC, determined based on our list price. However, the total transaction price is variable as it is calculated net of estimated product returns, chargebacks, rebates, coupons, discounts and wholesaler fees. In order to determine the transaction price, we estimate the amount of variable consideration at the outset of the contract either utilizing the expected value or most likely amount method, depending on the facts and circumstances relative to the contract or each variable consideration. We include amounts of variable consideration in a contract’s transaction price only to the extent that we have a relatively high level of confidence that the amounts will not be subject to significant reversals, that is, downward adjustments to revenue recognized for satisfied performance obligations. In determining amounts of variable consideration to include in a contract’s transaction price, we rely on our historical experience and other evidence that supports our qualitative assessment of whether revenue would be subject to a significant reversal. We consider all the facts and circumstances associated with both the risk of a revenue reversal arising from an uncertain future event and the magnitude of the reversal if that uncertain event were to occur. When determining if variable consideration should be constrained, we consider whether there are factors outside our control that could result in a significant reversal of revenue. In making these assessments, we consider the likelihood and magnitude of a potential reversal of revenue. These estimates are re-assessed each reporting period as required. 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. We recognize the amount of expected returns as a refund liability, representing the obligation to return the customer’s consideration. Since our returns primarily consist of expired and short dated products that will not be resold, we do not record a return asset for the right to recover the goods returned by the customer at the time of the initial sale (when recognition of revenue is deferred due to the anticipated return). Return estimates are recorded in the other current liabilities on the consolidated balance sheet. We offer various rebate and discount programs in an effort to maintain a competitive position in the marketplace and to promote sales and customer loyalty. We estimate the allowance for consumer rebates and coupons that we have offered based on our experience and industry averages, which is reviewed, and adjusted if necessary, on a quarterly basis. Estimates relating to these rebates and coupons are deducted from gross product revenues at the time the revenues are recognized. We record distributor fees based on amounts stated in contracts. Rebates estimates are recorded in accrued expenses and coupon estimates and distributor fees are recorded in the other current liabilities on the consolidated balance sheet. We estimate chargebacks based on prices stated in contracts based the number of units sold each period. We provide invoice discounts to our customers for prompt payment. We deduct invoice discounts and chargebacks from our gross product revenues at the time such discounts are earned by customers. OTC Products Our OTC and prescription prenatal vitamin products are generally variations of the same product with slight modifications in formulation and marketing. As of January 1, 2017, we decided to focus on selling our prescription vitamins and ceased manufacturing and distributing our OTC product lines, except for Iron 21/7 which we ceased manufacturing in October 2017. 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. Disaggregation of revenue We sell our name brand and generic prescription products primarily through wholesale distributors and retail pharmacy distributors which accounted for all sales during 2018 and the vast majority of sales during 2017. As of January 1, 2017, we decided to focus on selling our prescription vitamins and ceased manufacturing and distributing our OTC product lines, except for Iron 21/7 which we ceased manufacturing in October 2017. The sales of Iron 21/7 during the three months ended June 30, 2018 and 2017 were approximately $0 and $12,000, respectively, and $0 and $20,000 for the six months ended June 30, 2018 and 2017, respectively. Contract assets and contract liabilities Based on our contracts, we invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. Accordingly, our contracts do not give rise to contract assets or liabilities under ASC 606. Accounts receivable are recorded when the right to consideration becomes unconditional. We disclose receivables from contracts with customers separately in the statement of financial position. Estimates related to cash discounts and chargebacks are included in net accounts receivable. Estimates related to distributors fees, rebates, coupons and returns are disclosed in Note 8. |
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 began using our own stock price in our volatility calculation along with the other peer entities whose stock prices were publicly available that were similar to our 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, including forfeiture rates, 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. Effective January 1, 2017, we account for forfeitures when they occur. |
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, scale-up and validation costs, and other activities. Internal R&D activity expenses include laboratory supplies, salaries, benefits, and non-cash share-based compensation expenses. 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 U.S. Food and Drug Administration, or the 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 include 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) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventory consists of the following: June 30, 2018 December 31, 2017 Finished product $ 1,652,700 $ 1,485,358 Work in process 227,877 — TOTAL INVENTORY $ 1,880,577 $ 1,485,358 |
OTHER CURRENT ASSETS (Tables)
OTHER CURRENT ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of other current assets | Other current assets consist of the following: June 30, 2018 December 31, 2017 Prepaid sales and marketing costs $ 2,646,988 $ 5,335,936 Debt financing fees 1,138,844 — Prepaid insurance 535,446 680,243 Other prepaid costs 846,889 523,694 Prepaid vendor deposits 35,567 64,411 TOTAL OTHER CURRENT ASSETS $ 5,203,734 $ 6,604,284 |
FIXED ASSETS, NET (Tables)
FIXED ASSETS, NET (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of fixed assets | Fixed assets, net consist of the following: June 30, 2018 December 31, 2017 Accounting system $ 301,096 $ 301,096 Equipment 319,257 273,536 Furniture and fixtures 116,542 116,542 Computer hardware 80,211 80,211 Leasehold improvements 37,888 37,888 854,994 809,273 Accumulated depreciation (451,420 ) (372,218 ) TOTAL FIXED ASSETS, NET $ 403,574 $ 437,055 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of intangible assets | The following tables sets forth the gross carrying amount, accumulated amortization and net carrying amount of our intangible assets as of June 30, 2018 and December 31, 2017: June 30, 2018 Gross Carrying Amount Accumulated Amortization Net Amount Weighted- Average Remaining Amortization Period (yrs.) Amortizable intangible assets: OPERA ® $ 31,951 $ (9,486 ) $ 22,465 11.25 Development costs of corporate website 91,743 (91,743 ) — n/a Approved hormone therapy drug candidate patents 1,662,562 (216,934 ) 1,445,628 14.5 Hormone therapy drug candidate patents (pending) 1,769,681 — 1,769,681 n/a Non-amortizable intangible assets: Multiple trademarks 250,627 — 250,627 indefinite Total $ 3,806,564 $ (318,163 ) $ 3,488,401 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Amount Weighted- Average Remaining Amortization Period (yrs.) Amortizable intangible assets: OPERA ® $ 31,951 $ (8,487 ) $ 23,464 11.75 Development costs of corporate website 91,743 (91,743 ) — n/a Approved hormone therapy drug candidate patents 1,293,614 (171,911 ) 1,121,703 15 Hormone therapy drug candidate patents (pending) 1,721,305 — 1,721,305 n/a Non-amortizable intangible assets: Multiple trademarks 233,275 — 233,275 indefinite Total $ 3,371,888 $ (272,141 ) $ 3,099,747 |
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 December 31, Estimated Amortization 2018(6 months) $ 49,652 2019 $ 99,304 2020 $ 99,304 2021 $ 99,304 2022 $ 99,304 Thereafter $ 1,021,225 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of other current liabilities | Other current liabilities consist of the following: June 30, 2018 December 31, 2017 Accrued payroll, bonuses and commission costs $ 2,825,316 $ 4,240,379 Allowance for coupons and returns 1,802,125 1,432,846 Accrued sales and marketing costs 1,412,570 420,162 Accrued compensated absences 1,039,684 945,457 Accrued legal and accounting expense 688,012 600,350 Accrued research and development 492,577 366,933 Accrued interest 501,227 — Accrued rent 383,110 327,099 Other accrued expenses 234,937 525,999 Accrued rebates 207,018 76,917 Allowance for wholesale distributor fees 198,634 172,973 Accrued royalties — 114,480 TOTAL OTHER CURRENT LIABILITIES $ 9,785,210 $ 9,223,595 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of debt | As of June 30, 2018, the carrying value of debt consists of the following: June 30, 2018 Term Loan $ 75,000,000 Debt discount and financing fees (1,858,689 ) Total long-term debt $ 73,141,311 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 and six months ended June 30, 2018 June 30, 2017 Stock options 25,210,899 23,402,100 Warrants 3,007,571 3,115,905 28,218,470 26,518,005 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Stockholders' Equity: | |
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 six months ended June 30, 2018 and 2017 are set forth in the table below. Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 Risk-free interest rate 2.38-2.63% 1.84-2.01% Volatility 61.82-64.04% 61.56-63.95% Term (in years) 5.1-6.25 5.5-6.25 Dividend yield 0.00 % 0.00 % |
Schedule of 2009 and 2012 Plans activity | A summary of activity under the 2009 and 2012 Plans and related information follows: Number of Shares Underlying Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value Balance at December 31, 2017 23,365,225 $ 3.78 5.13 $ 64,664,821 Granted 2,315,500 $ 5.26 Exercised (404,576 ) $ 2.79 $ 1,386,827 Expired/Forfeited (62,250 ) $ 7.61 Balance at June 30, 2018 25,210,899 $ 3.92 5.16 $ 69,013,547 Vested and Exercisable at June 30, 2018 20,565,025 $ 3.46 4.30 $ 66,096,342 Unvested at June 30, 2018 4,645,874 $ 5.98 8.96 $ 2,917,204 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments on non-cancelable operating leases | As of June 30, 2018, future minimum rental payments on non-cancelable operating leases are as follows: Years Ending December 31, 2018 (6 months) $ 499,831 2019 1,094,116 2020 1,113,069 2021 943,127 2022 — Total minimum lease payments $ 3,650,143 |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)Number | Jun. 30, 2017USD ($) | |
Shelf life of prescription products following product expiration | 24 months | |||
Number of operating segments | Number | 1 | |||
Iron 21/7 [Member] | ||||
Revenue | $ | $ 0 | $ 12,000 | $ 0 | $ 20,000 |
Minimum [Member] | ||||
Return period of unsalable prescription products | 6 months | |||
Maximum [Member] | ||||
Return period of unsalable prescription products | 12 months |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Inventory | ||
Finished product | $ 1,652,700 | $ 1,485,358 |
Work in process | 227,877 | |
TOTAL INVENTORY | $ 1,880,577 | $ 1,485,358 |
OTHER CURRENT ASSETS (Details)
OTHER CURRENT ASSETS (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Other Current Assets | ||
Prepaid sales and marketing costs | $ 2,646,988 | $ 5,335,936 |
Debt financing fees | 1,138,844 | |
Prepaid insurance | 535,446 | 680,243 |
Other prepaid costs | 846,889 | 523,694 |
Prepaid vendor deposits | 35,567 | 64,411 |
TOTAL OTHER CURRENT ASSETS | $ 5,203,734 | $ 6,604,284 |
FIXED ASSETS, NET (Details)
FIXED ASSETS, NET (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 854,994 | $ 809,273 |
Accumulated depreciation | (451,420) | (372,218) |
TOTAL FIXED ASSETS | 403,574 | 437,055 |
Acounting 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 | 319,257 | 273,536 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | 116,542 | 116,542 |
Computer hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | 80,211 | 80,211 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 37,888 | $ 37,888 |
FIXED ASSETS, NET (Details Narr
FIXED ASSETS, NET (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 40,777 | $ 35,400 | $ 79,201 | $ 69,000 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets | ||
Accumulated Amortization | $ (318,163) | $ (272,141) |
Indefinite-Lived Intangible Assets | ||
Gross Carrying Amount | 3,806,564 | 3,371,888 |
Net Amount | 3,488,401 | 3,099,747 |
Hormone Therapy Drug Candidate Patents - (Pending) [Member] | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 1,769,681 | 1,721,305 |
Net Amount | 1,769,681 | 1,721,305 |
Multiple Trademarks [Member] | ||
Indefinite-Lived Intangible Assets | ||
Gross Carrying Amount | 250,627 | 233,275 |
Net Amount | 250,627 | 233,275 |
Domestic Utilty Patent - Opera Software [Member] | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 31,951 | 31,951 |
Accumulated Amortization | (9,486) | (8,487) |
Net Amount | $ 22,465 | $ 23,464 |
Weighted average remaining amortization period | 11 years 3 months | 11 years 9 months |
Approved Hormone Therapy Drug Candidate Patents [Member] | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | $ 1,662,562 | $ 1,293,614 |
Accumulated Amortization | (216,934) | (171,911) |
Net Amount | $ 1,445,628 | $ 1,121,703 |
Weighted average remaining amortization period | 14 years 6 months | 15 years |
Development Costs Of Corporate Website [Member] | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | $ 91,743 | $ 91,743 |
Accumulated Amortization | $ (91,743) | $ (91,743) |
INTANGIBLE ASSETS (Details 1)
INTANGIBLE ASSETS (Details 1) | Jun. 30, 2018USD ($) |
Year Ending December 31, | |
2018(6 months) | $ 49,652 |
2,019 | 99,304 |
2,020 | 99,304 |
2,021 | 99,304 |
2,022 | 99,304 |
Thereafter | $ 1,021,225 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($)Number | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)Number | Jun. 30, 2017USD ($) | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ | $ 24,826 | $ 17,789 | $ 46,023 | $ 33,888 |
Approved Hormone Therapy Drug Candidate Patents [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Useful Life | 20 years | |||
Domestic U.S. Patents [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Number of issued patents | 19 | 19 | ||
Foreign Patents [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Number of issued patents | 20 | 20 | ||
Domestic Utility Patents [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Number of issued patents | 13 | 13 | ||
Domestic Patents - TX-004HR [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Number of issued patents | 3 | 3 | ||
Domestic Utility Patent - Pipeline Transdermal Patch Technology [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Number of issued patents | 1 | 1 | ||
Domestic Utilty Patent - Opera Software [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Number of issued patents | 1 | 1 | ||
Domestic Patents - TX-009HR [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Number of issued patents | 1 | 1 |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Other Liabilities Disclosure [Abstract] | ||
Accrued payroll, bonuses and commission costs | $ 2,825,316 | $ 4,240,379 |
Allowance for coupons and returns | 1,802,125 | 1,432,846 |
Accrued sales and marketing costs | 1,412,570 | 420,162 |
Accrued compensated absences | 1,039,684 | 945,457 |
Accrued legal and accounting expense | 688,012 | 600,350 |
Accrued research and development | 492,577 | 366,933 |
Accrued interest | 501,227 | |
Accrued rent | 383,110 | 327,099 |
Other accrued expenses | 234,937 | 525,999 |
Accrued rebates | 207,018 | 76,917 |
Allowance for wholesale distributor fees | 198,634 | 172,973 |
Accrued royalties | 114,480 | |
TOTAL OTHER CURRENT LIABILITIES | $ 9,785,210 | $ 9,223,595 |
DEBT (Details)
DEBT (Details) | Jun. 30, 2018USD ($) |
Debt Disclosure [Abstract] | |
Term Loan | $ 75,000,000 |
Debt discount and financing fees | (1,858,689) |
Total long-term debt | $ 73,141,311 |
DEBT (Details Narrative)
DEBT (Details Narrative) | Jun. 07, 2018USD ($) | May 01, 2018USD ($)Number | Jun. 30, 2018USD ($) | Jun. 30, 2018USD ($) |
Proceeds from term loan | $ 75,000,000 | |||
Amortization of debt issuance costs | $ 30,155 | 30,155 | ||
First Year After Tranche 1 Funding Date [Member] | ||||
Prepayment fee (percent) | 4.00% | |||
Second Year After Tranche 1 Funding Date [Member] | ||||
Prepayment fee (percent) | 3.00% | |||
Third Year and Thereafter After Tranche 1 Funding Date [Member] | ||||
Prepayment fee (percent) | 2.00% | |||
Term Loan [Member] | ||||
Borrowing capacity under loan facility | $ 200,000,000 | |||
Number of tranches under term loan facility | 3 | |||
Revenue requirement to extend interest-only period | $ 95,000,000 | |||
Description of Interest Rate | one-month LIBOR (subject to a LIBOR floor of 1.50%) plus (ii) 7.75% per annum | |||
Basis spread of loan | 7.75% | |||
LIBOR floor | 1.50% | |||
Number of principal installment payments | Number | 36 | |||
Maturity date | May 1, 2023 | |||
Interest-only period extension | 12 months | |||
Interest expense - debt | 501,227 | 501,227 | ||
Minimum cash balance requirement under credit agreement | $ 50,000,000 | |||
Loan origination fee (percent) | 1.00% | |||
Annual administration fee (percent) | 0.25% | |||
Term Loan [Member] | Tranche 1 [Member] | ||||
Borrowings outstanding | 75,000,000 | 75,000,000 | ||
Proceeds from term loan | $ 75,000,000 | |||
Debt issuance costs | $ 3,786,918 | |||
Debt discount | $ 1,888,844 | $ 1,888,844 | ||
Effective interest rate | 10.60% | 10.60% | ||
Term Loan [Member] | Tranche 2 [Member] | ||||
Borrowing capacity under loan facility | $ 75,000,000 | |||
Term Loan [Member] | Tranche 3 [Member] | ||||
Borrowing capacity under loan facility | 50,000,000 | |||
Revenue requirement to draw on term loan tranche | $ 75,000,000 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive shares excluded from earnings per share calculation | 28,218,470 | 26,518,005 | 28,218,470 | 26,518,005 |
Warrants [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive shares excluded from earnings per share calculation | 3,007,571 | 3,115,905 | 3,007,571 | 3,115,905 |
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive shares excluded from earnings per share calculation | 25,210,899 | 23,402,100 | 25,210,899 | 23,402,100 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - Stock Options [Member] | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate - minimum | 2.38% | 1.84% |
Risk-free interest rate - maximum | 2.63% | 2.01% |
Volatility - minimum | 61.82% | 61.56% |
Volatility - maximum | 64.04% | 63.95% |
Dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Term | 5 years 1 month 6 days | 5 years 6 months |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Term | 6 years 3 months | 6 years 3 months |
STOCKHOLDERS' EQUITY (Details 1
STOCKHOLDERS' EQUITY (Details 1) - Stock Options [Member] - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Options, Outstanding | ||
Options outstanding beginning | 23,365,225 | |
Options Granted | 2,315,500 | |
Options Exercised | (404,576) | |
Expired/Forfeited | (62,250) | |
Options outstanding ending | 25,210,899 | 23,365,225 |
Vested and Exercisable ending | 20,565,025 | |
Unvested ending | 4,645,874 | |
Options, Weighted Average Exercise Price | ||
Options outstanding beginning | $ 3.78 | |
Granted | 5.26 | |
Exercised | 2.79 | |
Expired/Forfeited | 7.61 | |
Options outstanding ending | 3.92 | $ 3.78 |
Vested and Exercisable ending | 3.46 | |
Unvested ending | $ 5.98 | |
Options, Weighted Average Remaining Contractual Life | ||
Options outstanding | 5 years 1 month 28 days | 5 years 1 month 17 days |
Vested and Exercisable ending | 4 years 3 months 18 days | |
Unvested ending | 8 years 11 months 16 days | |
Options outstanding, Aggregate Intrinsic Value | ||
Options outstanding beginning | $ 64,664,821 | |
Options exercised | 1,386,827 | |
Options outstanding ending | 69,013,547 | $ 64,664,821 |
Vested and Exercisable ending | 66,096,342 | |
Unvested ending | $ 2,917,204 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - Stock Options [Member] - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Value of common stock issued during period for stock options exercised | $ 1,084,939 | $ 20,050 | $ 1,128,996 | $ 212,360 |
Number of stock options exercised (in shares) | 249,785 | 5,000 | 394,576 | 100,046 |
Number of stock options exercised in cashless exercise (in shares) | 10,000 | |||
Number of common stock issued during period for stock options exercised in cashless exercise (in shares) | 9,841 |
STOCKHOLDERS' EQUITY (Details46
STOCKHOLDERS' EQUITY (Details Narrative 1) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Warrants: | ||||
Share based compensation expense | $ 4,128,440 | $ 3,051,357 | ||
Unrecognized estimated compensation expense period recognition | 2 years 4 months 24 days | |||
Outside Consultants Warrants [Member] | ||||
Warrants: | ||||
Exercise price of warrants (in dollars per share) | $ 5.16 | $ 6.83 | $ 5.16 | $ 6.83 |
Warrants granted (in shares) | 175,000 | 125,000 | ||
Grant date fair value (in dollars per share) | $ 2.79 | $ 3.67 | ||
Expiration date of warrants | Mar. 15, 2023 | Mar. 15, 2022 | ||
Vesting period of warrants | 12 months | 12 months | ||
Expected term | 5 years | 5 years | ||
Volatility rate | 62.10% | 63.24% | ||
Risk free rate | 2.36% | 1.47% | ||
Dividend yield | 0.00% | 0.00% | ||
Warrants [Member] | ||||
Warrants: | ||||
Warrants outstanding | $ 3,007,571 | $ 3,007,571 | ||
Weighted-average contractual remaining life | 2 years 9 months 18 days | |||
Weighted average exercise price of warrants (in dollars per share) | $ 2.78 | $ 2.78 | ||
Share based compensation expense | $ 164,840 | $ 69,089 | $ 256,315 | $ 115,774 |
Unrecognized estimated compensation expense | $ 345,000 | $ 345,000 | ||
Unrecognized estimated compensation expense period recognition | 8 months 12 days | |||
Warrants [Member] | Minimum [Member] | ||||
Warrants: | ||||
Exercise price of warrants (in dollars per share) | $ 0.24 | $ 0.24 | ||
Warrants [Member] | Maximum [Member] | ||||
Warrants: | ||||
Exercise price of warrants (in dollars per share) | $ 8.20 | $ 8.20 |
STOCKHOLDERS' EQUITY (Details47
STOCKHOLDERS' EQUITY (Details Narrative 2) - USD ($) | Jun. 30, 2013 | May 31, 2013 | May 31, 2012 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Non-cash compensation expense | $ 4,128,440 | $ 3,051,357 | |||||||
SCI - Warrants [Member] | |||||||||
Exercise price of warrants (in dollars per share) | $ 2.01 | ||||||||
Warrants granted to purchase common stock (shares) | 850,000 | ||||||||
Forfeited warrants granted to purchase common stock (shares) | 833,000 | ||||||||
SCI - Warrants [Member] | Tranche One [Member] | |||||||||
Fair value of grant | $ 405,066 | ||||||||
Non-cash compensation expense | $ 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 | ||||||||
Vesting date of warrants | Jun. 30, 2013 | ||||||||
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] | |||||||||
Expired warrants | 283,334 | ||||||||
SCI Warrants for Services [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 | ||||||||
Non-cash compensation expense | $ 0 | $ 64,449 | $ 0 | $ 128,898 | |||||
Expected term | 5 years | ||||||||
Volatility rate | 44.71% | ||||||||
Risk free rate | 0.74% | ||||||||
Dividend yield | 0.00% | ||||||||
Warrants exercised | (800,000) | (500,000) |
STOCKHOLDERS' EQUITY (Details48
STOCKHOLDERS' EQUITY (Details Narrative 3) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Share-based compensation expense | $ 2,212,241 | $ 1,505,625 | $ 3,872,125 | $ 2,806,685 | |
Total unrecognized estimated compensation expense | $ 13,817,000 | $ 13,817,000 | |||
Recognized weighted-average period | 2 years 4 months 24 days | ||||
Stock Options [Member] | |||||
Options outstanding, ending | 25,210,899 | 25,210,899 | 23,365,225 | ||
Weighted average grant date fair value per share of options granted | $ 3.15 | $ 3.82 | |||
Stock Options [Member] | Minimum [Member] | |||||
Option exercise prices (in dollars per shares) | $ 0.10 | 0.10 | |||
Stock Options [Member] | Maximum [Member] | |||||
Option exercise prices (in dollars per shares) | $ 8.92 | $ 8.92 | |||
2012 Stock Incentive Plan [Member] | |||||
Number of shares authorized for issuance | 10,000,000 | 10,000,000 | |||
Options outstanding, ending | 6,278,474 | 6,278,474 | |||
Number of shares available for issuance | 3,473,333 | 3,473,333 | |||
2009 Long Term Incentive Compensation Plan [Member] | |||||
Number of shares authorized for issuance | 25,000,000 | 25,000,000 | |||
Options outstanding, ending | 18,932,425 | 18,932,425 | |||
Number of shares available for issuance | 1,578,787 | 1,578,787 | |||
Warrants [Member] | |||||
Recognized weighted-average period | 8 months 12 days | ||||
Warrants [Member] | Individuals [Member] | |||||
Shares issued for exercise of warrants, net | $ 1,338,999 | $ 3,798,999 | |||
Shares issued for exercise of warrants, net (in shares) | 666,666 | 2,476,666 | |||
Number of warrants exercised in cashless exercise (in shares) | 6,590,000 | ||||
Number of common stock issued during period for warrants exercised in cashless exercise (in shares) | 4,762,208 |
RELATED PARTIES (Details Narrat
RELATED PARTIES (Details Narrative) - Catalent Inc.[Member] - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||||
Manufacturing activities billed from related party | $ 1,266,000 | $ 1,754,000 | $ 2,040,000 | $ 2,460,000 | |
Payable - related party | $ 751,000 | $ 751,000 | $ 523,000 |
BUSINESS CONCENTRATIONS (Detail
BUSINESS CONCENTRATIONS (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Purchases Supplied - One Vendor [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk | 100.00% | 100.00% |
Customer Concentration [Member] | Sales Revenue [Member] | Four Major Customers [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk | 71.00% | |
Customer Concentration [Member] | Sales Revenue [Member] | Four Major Customers [Member] | Minimum [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk | 10.00% | |
Customer Concentration [Member] | Sales Revenue [Member] | Five Major Customers [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk | 70.00% | |
Customer Concentration [Member] | Sales Revenue [Member] | Five Major Customers [Member] | Minimum [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk | 10.00% | |
Customer Concentration - Pi Services [Member] | Sales Revenue [Member] | ||
Concentration Risk [Line Items] | ||
Revenues | $ 981,000 | |
Customer Concentration - Pillpack [Member] | Sales Revenue [Member] | ||
Concentration Risk [Line Items] | ||
Revenues | 2,088,000 | |
Customer Concentration - AmerisourceBergen [Member] | Sales Revenue [Member] | ||
Concentration Risk [Line Items] | ||
Revenues | 1,283,000 | $ 1,053,000 |
Customer Concentration - Cardinal Health [Member] | Sales Revenue [Member] | ||
Concentration Risk [Line Items] | ||
Revenues | $ 971,000 | 1,119,000 |
Customer Concentration - Pharmacy Innovations, Tx [Member] | Sales Revenue [Member] | ||
Concentration Risk [Line Items] | ||
Revenues | 834,000 | |
Customer Concentration - Pharmacy Innovations, Pa [Member] | Sales Revenue [Member] | ||
Concentration Risk [Line Items] | ||
Revenues | 1,863,000 | |
Customer Concentration - McKesson Corp [Member] | Sales Revenue [Member] | ||
Concentration Risk [Line Items] | ||
Revenues | $ 907,000 |
COMMITMENTS AND CONTINGENCIES51
COMMITMENTS AND CONTINGENCIES (Details) | Jun. 30, 2018USD ($) |
Future minimum rental payments, years ending December 31, | |
2018 (6 months) | $ 499,831 |
2,019 | 1,094,116 |
2,020 | 1,113,069 |
2,021 | 943,127 |
Total minimum lease payments | $ 3,650,143 |
COMMITMENTS AND CONTINGENCIES52
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | May 01, 2016 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Commitments and Contingencies Disclosure [Abstract] | |||||
Non-cancelable operating lease term | 63 months | ||||
Rental expense | $ 257,000 | $ 265,000 | $ 515,000 | $ 515,000 | |
Expiration date | Oct. 31, 2021 |