Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 18, 2019 | Jun. 30, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | TherapeuticsMD, Inc. | ||
Entity Central Index Key | 25,743 | ||
Document Type | 10-K | ||
Trading Symbol | TXMD | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 241,161,845 | ||
Entity Common Stock, Held by non-affiliates (shares) | 182,622,092 | ||
Entity Public Float | $ 1,139,561,854 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,018 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash | $ 161,613,077 | $ 127,135,628 |
Accounts receivable, net of allowance for doubtful accounts of $596,602 and $380,580, respectively | 11,063,821 | 4,328,802 |
Inventory | 3,267,670 | 1,485,358 |
Other current assets | 10,834,693 | 6,604,284 |
Total current assets | 186,779,261 | 139,554,072 |
Fixed assets, net | 472,683 | 437,055 |
Other Assets: | ||
License rights | 20,000,000 | |
Intangible assets, net | 4,092,679 | 3,099,747 |
Other assets | 324,855 | |
Security deposit | 314,446 | 139,036 |
Total other assets | 24,731,980 | 3,238,783 |
Total assets | 211,983,924 | 143,229,910 |
Current Liabilities: | ||
Accounts payable | 22,743,841 | 4,097,600 |
Accrued expenses and other current liabilities | 18,334,948 | 9,223,595 |
Total current liabilities | 41,078,789 | 13,321,195 |
Long-Term Liabilities: | ||
Long-term debt | 73,381,014 | |
Total liabilities | 114,459,803 | 13,321,195 |
Commitments and Contingencies - See Note 13 | ||
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: 240,462,439 and 216,429,642 issued and outstanding, respectively | 240,463 | 216,430 |
Additional paid-in capital | 616,559,938 | 516,351,405 |
Accumulated deficit | (519,276,280) | (386,659,120) |
Total stockholders' equity | 97,524,121 | 129,908,715 |
Total liabilities and stockholders' equity | $ 211,983,924 | $ 143,229,910 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 596,602 | $ 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 | 240,462,439 | 216,429,642 |
Common stock, outstanding | 240,462,439 | 216,429,642 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Revenues, net | $ 16,099,460 | $ 16,777,713 | $ 19,356,450 |
Cost of goods sold | 2,737,652 | 2,636,943 | 4,185,708 |
Gross profit | 13,361,808 | 14,140,770 | 15,170,742 |
Operating expenses: | |||
Sales, general, and administrative | 115,988,954 | 57,703,370 | 51,348,414 |
Research and development | 27,299,138 | 33,852,993 | 53,943,477 |
Depreciation and amortization | 293,886 | 213,117 | 132,451 |
Total operating expenses | 143,581,978 | 91,769,480 | 105,424,342 |
Operating loss | (130,220,170) | (77,628,710) | (90,253,600) |
Other (expense) income | |||
Miscellaneous income | 2,280,844 | 695,631 | 367,317 |
Interest expense | (4,677,834) | ||
Accreted interest | 7,699 | 10,824 | |
Total other (expense) income | (2,396,990) | 703,330 | 378,141 |
Loss before income taxes | (132,617,160) | (76,925,380) | (89,875,459) |
Provision for income taxes | |||
Net loss | $ (132,617,160) | $ (76,925,380) | $ (89,875,459) |
Loss per share, basic and diluted: | |||
Net loss per share, basic and diluted (in dollars per share) | $ (0.59) | $ (0.37) | $ (0.46) |
Weighted average number of common shares outstanding, basic and diluted (in shares) | 225,026,300 | 205,523,288 | 196,088,196 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Common Stock | Additional Paid in Capital | Accumulated Deficit | Total |
Beginning balance at Dec. 31, 2015 | $ 177,928 | $ 282,712,078 | $ (219,826,860) | $ 63,063,146 |
Beginning balance (in shares) at Dec. 31, 2015 | 177,928,041 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Shares issued in offerings, net of cost | $ 17,424 | 134,846,051 | 134,863,475 | |
Shares issued in offerings, net of cost (in shares) | 17,424,242 | |||
Shares issued for exercise of options, net | $ 723 | 1,372,277 | 1,373,000 | |
Shares issued for exercise of options, net (in shares) | 722,744 | |||
Shares issued for exercise of warrants, net | $ 613 | 988,447 | 989,060 | |
Shares issued for exercise of warrants, net (in shares) | 613,195 | |||
Share-based compensation | 17,076,199 | 17,076,199 | ||
Net loss | (89,875,459) | (89,875,459) | ||
Ending balance at Dec. 31, 2016 | $ 196,688 | 436,995,052 | (309,702,319) | 127,489,421 |
Ending balance (in shares) at Dec. 31, 2016 | 196,688,222 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Shares issued in offerings, net of cost | $ 12,400 | 68,560,235 | 68,572,635 | |
Shares issued in offerings, net of cost (in shares) | 12,400,000 | |||
Shares issued for exercise of options, net | $ 103 | 212,512 | 212,615 | |
Shares issued for exercise of options, net (in shares) | 102,546 | |||
Shares issued for exercise of warrants, net | $ 7,239 | 3,791,760 | 3,798,999 | |
Shares issued for exercise of warrants, net (in shares) | 7,238,874 | |||
Share-based compensation | 6,760,425 | 6,760,425 | ||
Adoption of ASU 2016-09 at Dec. 31, 2016 | 31,421 | (31,421) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | (76,925,380) | (76,925,380) | ||
Ending balance at Dec. 31, 2017 | $ 216,430 | 516,351,405 | (386,659,120) | $ 129,908,715 |
Ending balance (in shares) at Dec. 31, 2017 | 216,429,642 | 216,429,642 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Shares issued in offerings, net of cost | $ 18,578 | 89,889,219 | $ 89,907,797 | |
Shares issued in offerings, net of cost (in shares) | 18,578,430 | |||
Shares issued for exercise of options, net | $ 5,455 | 1,660,753 | 1,666,208 | |
Shares issued for exercise of options, net (in shares) | 5,454,367 | |||
Share-based compensation | 8,658,561 | 8,658,561 | ||
Net loss | (132,617,160) | (132,617,160) | ||
Ending balance at Dec. 31, 2018 | $ 240,463 | $ 616,559,938 | $ (519,276,280) | $ 97,524,121 |
Ending balance (in shares) at Dec. 31, 2018 | 240,462,439 | 240,462,439 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net loss | $ (132,617,160) | $ (76,925,380) | $ (89,875,459) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation of fixed assets | 181,412 | 141,601 | 77,906 |
Amortization of intangible assets | 112,474 | 71,516 | 54,545 |
Provision for doubtful accounts | 216,022 | 4,206 | 2,524,909 |
Share-based compensation | 8,661,967 | 6,889,323 | 17,411,021 |
Amortization of deferred financing costs | 269,859 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | (6,951,041) | 167,691 | (3,975,893) |
Inventory | (1,782,312) | (409,037) | (386,168) |
Other current assets | (2,332,335) | (4,434,130) | 709,907 |
Other assets | (324,855) | ||
Accounts payable | 18,646,241 | (3,260,914) | 4,232,340 |
Accrued expenses and other current liabilities | 9,107,947 | 1,599,510 | 84,559 |
Net cash used in operating activities | (106,811,781) | (76,155,614) | (69,142,333) |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Payment for intellectual property license | (20,000,000) | ||
Patent costs | (1,105,407) | (765,291) | (845,266) |
Purchase of fixed assets | (217,040) | (61,817) | (396,154) |
Payment of security deposit | (175,410) | (14,036) | |
Net cash used in investing activities | (21,497,857) | (827,108) | (1,255,456) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from sale of common stock, net of costs | 89,907,797 | 68,572,635 | 134,863,475 |
Proceeds from term loan | 75,000,000 | ||
Payment of deferred financing fees | (3,786,918) | ||
Proceeds from exercise of options | 1,666,208 | 212,615 | 989,060 |
Proceeds from exercise of warrants | 3,798,999 | 1,373,000 | |
Net cash provided by financing activities | 162,787,087 | 72,584,249 | 137,225,535 |
Increase (decrease) in cash | 34,477,449 | (4,398,473) | 66,827,746 |
Cash, beginning of period | 127,135,628 | 131,534,101 | 64,706,355 |
Cash, end of period | 161,613,077 | $ 127,135,628 | $ 131,534,101 |
Supplemental disclosure of cash flow information | |||
Interest paid | $ 1,890,166 |
THE COMPANY
THE COMPANY | 12 Months Ended |
Dec. 31, 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 healthcare company focused on creating and commercializing innovative products to support the lifespan of women and championing awareness of women’s healthcare issues, specifically, for pregnancy prevention, pregnancy, childbirth, nursing, pre-menopause, and menopause. At TherapeuticsMD, we combine entrepreneurial spirit, clinical expertise, and business leadership to develop and commercialize health solutions that enable new standards of care for women. Our solutions range from advanced hormone therapy pharmaceutical products to patient-controlled, long-acting contraceptive. We also manufacture and distribute branded and generic prescription prenatal vitamins under the vitaMedMD® and BocaGreenMD® brands. With our SYMBODA™ technology, we are developing and commercializing advanced hormone therapy pharmaceutical products to enable delivery of bio-identical hormones through a variety of dosage forms and administration routes. Our track record of commercialization allows us to efficiently leverage and grow our marketing and sales organization to commercialize our recently approved products. During 2018, U.S. Food and Drug Administration, or FDA, approval of our drugs has transitioned our company from predominately focused on conducting research and development to one focused on commercializing our drugs. In July 2018, we launched our recently 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. We are also focused on commercialization activities necessary for launch of BIJUVA™ and ANNOVERA™. BIJUVA™ is our hormone therapy combination of bio-identical 17ß-estradiol and bio-identical progesterone in a single, oral softgel capsule, for the treatment of moderate-to-severe vasomotor symptoms, or VMS, due to menopause in women with a uterus, which was approved by the FDA on October 28, 2018. ANNOVERA™ (segesterone acetate/ethinyl estradiol vaginal system), is the first and only patient-controlled, procedure-free, reversible prescription contraceptive that can prevent unintended pregnancy for up to a full year, which was approved by the FDA on August 10, 2018. On July 30, 2018, we entered into a license and supply agreement with Knight Therapeutics Inc., or Knight, pursuant to which we granted Knight an exclusive license to commercialize IMVEXXY® and BIJUVA™ in Canada and Israel. In addition, on July 30, 2018, we entered into an exclusive license agreement, or the Council License Agreement, with the Population Council, Inc., or the Population Council, to commercialize ANNOVERA™ in the U.S. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying consolidated financial statements include the accounts of our company and our wholly owned subsidiaries, VitaMed, BocaGreen and VitaCare. All intercompany balances and transactions have been eliminated in consolidation. Cash We maintain cash at financial institutions that at times may exceed the Federal Deposit Insurance Corporation, or the FDIC, insured limits of $250,000 per bank. We have never experienced any losses related to these funds. 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 Inventories Inventories represent hormone therapy drugs, packaged vitamins, nutritional products and supplements and raw materials, which are valued at the lower of cost or net realizable value using the average-cost 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 not capitalized any pre-launch inventory to date. Fixed Assets We state fixed assets at cost, net of accumulated depreciation. We charge maintenance costs, which do not significantly extend the useful lives of the respective assets, and repair costs to operating expenses as incurred. We compute depreciation using the straight-line method over the estimated useful lives of the related assets, which range from three to seven years. Leasehold improvements are depreciated over the shorter of their useful life or the term of the lease. We capitalize software and software development costs incurred to create and acquire computer software for internal use, principally related to software coding and application development. We begin to capitalize software development costs when both the preliminary project stage is completed and it is probable that the software will be used as intended. Capitalized software costs include only external direct costs and services utilized in developing or obtaining computer software. Capitalized software costs are amortized on a straight-line basis when placed into service over the estimated useful life, generally five to seven years. Intangible Assets We have adopted the provisions of Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, 350, Intangibles - Goodwill and Other Impairment of Long-Lived Assets We review the carrying values of fixed assets and long-lived intangible assets to be held and used for impairment whenever events or changes in circumstances indicate that their carrying values may not be recoverable. Such events or circumstances may include, among others, the following: ● significant declines in an asset’s market price; ● significant deterioration in an asset’s physical condition; ● significant changes in the nature or extent of an asset’s use or operation; ● significant adverse changes in the business climate that could impact an asset’s value, including adverse actions or assessments by regulators; ● accumulation of costs significantly in excess of original expectations related to the acquisition or construction of an asset; ● current-period operating or cash flow losses combined with a history of such losses or a forecast that demonstrates continuing losses associated with an asset’s use; and ● expectations that it is more likely than not that an asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. If impairment indicators are present, we determine whether an impairment loss should be recognized by testing the applicable asset or asset group’s carrying value for recoverability. This test requires long-lived assets to be grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, the determination of which requires judgment. We estimate the undiscounted future cash flows expected to be generated from the use and eventual disposal of the assets and compare that estimate to the respective carrying values in order to determine if such carrying values are recoverable. This assessment requires the exercise of judgment in assessing the future use of and projected value to be derived from the eventual disposal of the assets to be held and used. In our assessments, we also consider changes in asset utilization, including, if applicable, the temporary idling of capacity and the expected timing for placing this capacity back into production. If the carrying value of the assets is not recoverable, then we record a loss for the difference between the assets’ fair value and respective carrying values. We determine the fair value of the assets using an “income approach” based upon a forecast of all the expected discounted future net cash flows associated with the subject assets. Some of the more significant estimates and assumptions include market size and growth, market share, projected selling prices, manufacturing cost, and discount rate. We base estimates upon historical experience, our commercial relationships, market conditions, and available external information about future trends. We believe our current assumptions and estimates are reasonable and appropriate. Unanticipated events and changes in market conditions, however, could affect such estimates, resulting in the need for an impairment charge in future periods. There was no impairment of long-lived assets to be held and used during the years ended December 31, 2018, 2017, and 2016. We perform impairment tests for intangible assets with indefinite useful lives annually, or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of an intangible asset below its carrying value. The impairment test for assets with indefinite lives consists of a comparison of the fair value of the asset with its carrying amount. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. There was no impairment of indefinite lived intangible assets during the years ended December 31, 2018, 2017, and 2016. Fair Value of Financial Instruments Our financial instruments consist primarily of cash, accounts receivable, accounts payable, 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 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 December 31, 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 is measured on a non-recurring basis using significant unobservable inputs (Level 3) in connection with any required impairment test. There was no impairment of intangible assets during the years ended December 31, 2018, 2017, and 2016. The carrying amount for the long term debt as of December 31, 2018 (as discussed in Note 8) approximates fair value based on market activity for other debt instruments with similar characteristics and comparable risk (Level 2). Income Taxes We account for income taxes under the asset and liability method. We recognize deferred tax assets and liabilities for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which the related temporary differences are expected to be recovered or settled. We recognize the effect on deferred tax assets and liabilities of a change in tax rates when the rate change is enacted. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. In accordance with ASC 740, Income Taxes We recognize both interest and penalties related to uncertain tax positions as part of the income tax provision. At December 31, 2018 and 2017, we had no tax positions relating to open tax returns that were considered to be uncertain. Our U.S. federal and state tax returns since 2011, which was the first year we generated net operating losses, remain open to examination. 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 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 . We recognize the compensation expense for all share-based compensation granted to employees based on the grant date fair value estimated in accordance with ASC 718. We generally recognize the compensation expense on a straight-line basis over the employee’s requisite service period. We estimate the forfeiture rate based on our historical experience of forfeitures. If our actual forfeiture rate is materially different from our estimate, share-based compensation expense could be significantly different from what we have recorded in the current period. Revenue Recognition We adopted 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 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 Our products consist primarily of prescription vitamins and our recently approved product IMVEXXY®, which we began selling during the third quarter of 2018. 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. Based on our contracts, we invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. We disclose receivables from contracts with customers separately in the statement of financial position. 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. These estimates are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to the customer) or a current liability (if the amount is payable to a party other than a customer). 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. The estimated amount of variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. 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. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our original estimates, we will adjust these estimates, which would affect net product revenue and earnings in the period such changes in estimates become known. 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 do not allow product returns for prescription products that have been dispensed to a patient. We estimate the amount of our product sales that may be returned by our customers and record this estimate as a reduction of revenue in the period the related product revenue is recognized. Where historical rates of return exist, we use history as a basis to establish a returns reserve for products shipped to wholesalers. For our newly launched products, for which the right of return exists but for which we currently do not have history of product returns, we estimate returns based on available industry data, our own sales information and our visibility into the inventory remaining in the distribution channel. At the end of each reporting period, we may decide to constrain revenue for product returns based on information from various sources, including channel inventory levels and dating and sell-through data, the expiration dates of products currently being shipped, price changes of competitive products and any introductions of generic products. 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 accrued expenses and 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. Rebate and coupon estimates and distributor fees are recorded in accrued expenses and other current liabilities on the consolidated balance sheet. We estimate chargebacks based on number of units sold during the period taking into account prices stated in contracts and our historical experience. Estimates related to distributors fees, rebates, coupons and returns are disclosed in Note 7. We provide invoice discounts to our customers for prompt payment. Estimates relating to invoice discounts and chargebacks are deducted from gross product revenues at the time the revenues are recognized. As part of the commercial launch for IMVEXXY® during the third quarter of 2018, we introduced a co-pay assistance program where enrolled patients do not pay more than $35 for up to 12 IMVEXXY® prescription fills. This allows patients to access the product at a reasonable cost regardless of insurance coverage. We reimburse pharmacies for this discount through third-party vendors. We consider these payments as consideration paid to the customer and reflect such payments as a reduction of the transaction price as we do not receive a distinct good or service related to these payments. The variable consideration is estimated based on contract prices, the estimated percentage of patients that will utilize the copay assistance, the average assistance paid, the estimated levels of inventory in the distribution channel and the current level of prescriptions covered by patients’ insurance. Payers may change coverage levels for IMVEXXY® positively or negatively, at any time up to the time that we have formally contracted coverage with the payer. As such, the net transaction price of IMVEXXY® is susceptible to such changes in coverage levels, which are outside the influence of the Company. As a result, we constrain revenue recognized for IMVEXXY® to an amount that will not result in a significant revenue reversal in future periods. Our ability to estimate the net transaction price for IMVEXXY® is constrained by our estimates of the amount to be paid for the co-pay assistance program for IMVEXXY® which is directly related to the level of prescriptions paid for by insurance. As such, we record an accrual to reduce gross sales for the estimated co-pay and other patient assistance based on currently available third-party data and our internal analyses. We re-evaluate any constraint each reporting period. OTC Products Our over the counter, or 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 generated OTC revenue from product sales primarily to retail consumers. We recognized revenue from product sales upon shipment, when the rights of ownership and risk of loss have passed to the consumer. We included outbound shipping and handling fees, if any, in revenues, net, and bill them upon shipment. We included shipping expenses in cost of goods sold. A majority of our OTC customers paid for our products with credit cards, and we usually received the cash settlement in two to three banking days. Credit card sales minimized accounts receivable balances relative to OTC sales. We provided an unconditional 30-day money-back return policy under which we accept product returns from our retail and eCommerce OTC customers. We recognized revenue from OTC sales, net of estimated returns and sales discounts. Disaggregation of revenue The following table provides information about disaggregated revenue by product mix for the years ended December 31, 2018, 2017, and 2016: For the Years Ended December 31, 2018 2017 2016 Prescription vitamins $ 15,041,259 $ 16,744,831 $ 18,854,984 IMVEXXY® 1,058,201 — — OTC products — 32,882 501,466 Net revenue $ 16,099,460 $ 16,777,713 $ 19,356,450 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. Shipping and Handling Costs We expense all shipping and handling costs as incurred. We include these costs in cost of goods sold on the accompanying consolidated financial statements. Advertising Costs We expense advertising costs when incurred. Advertising costs were $1,682,746, $448,288, and $752,611 during the years ended December 31, 2018, 2017, and 2016, respectively. 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 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 to expense in the period in which the facts that give rise to the revision become known. Earnings Per Share We calculate earnings per share, or EPS, in accordance with ASC 260, Earnings Per Share As of December 31, 2018 2017 2016 Stock options 20,872,824 23,365,225 21,767,854 Warrants 3,007,571 3,115,905 12,060,071 Restricted stock awards 1,040,000 — — 24,920,395 26,481,130 33,827,925 Concentration of Credit Risk and other Risks and Uncertainties Financial instruments that potentially expose us to concentrations of credit risk consist primarily of cash and trade accounts receivable. Cash is on deposit with financial institutions in the United States and these deposits generally exceed the amount of insurance provided by the FDIC. We have not experienced any historical losses on its deposits of cash. Concentration of credit risk with respect to our trade accounts receivable from our customers is primarily limited to drug wholesalers and retail pharmacy distributors. Credit is extended to our customers based on an evaluation of a customer’s financial condition, and collateral is not required. Use of Estimates Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. The preparation of these financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates, including those related to contingencies, on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ, at times in material amounts, from these estimates under different assumptions or conditions. Recently Issued Accounting Pronouncements In August 2018, the FASB issued Accounting Standards Update, or ASU, 2018-13 which eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some disclosure requirements. The FASB developed the amendments to ASC 820 as part of its broader disclosure framework project, which aims to improve the effectiveness of disclosures in the notes to financial statements by focusing on requirements that clearly communicate the most important information to users of the financial statements. The new guidance is effective for all entities for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. An entity is permitted to early adopt either the entire standard or only the provisions that eliminate or modify requirements. We are currently evaluating the effect of this guidance on our disclosures. In June 2018, the FASB issued 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 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 do not expect that the adoption of this standard will have a material effect 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. In July 2018, the FASB amended the new leases standard and issued ASU 2018-11, Leases, (Topic 842): Targeted Improvements to give entities another option for transition and to provide lessors with a practical expedient. We plan to adopt ASU 2016-02 on January 1, 2019 utilizing the alternative transition method allowed for under ASU 2018-11. While we are still finalizing the quantitative and qualitative impact of adopting this new standard and the subsequent amendments, the most significant impact is expected to be the recognition of a right of use asset and lease liability on our statement of financial position related to the operating leases for our new and existing office space. Additionally, the adoption of the new standard will result in increased disclosure requirements in our quarterly and annual filings. 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 |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 3 – INVENTORY Inventory consists of the following: December 31, 2018 2017 Finished products $ 2,908,958 $ 1,485,358 Work in process 339,312 — Raw materials 19,400 — TOTAL INVENTORY $ 3,267,670 $ 1,485,358 |
OTHER CURRENT ASSETS
OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER CURRENT ASSETS | NOTE 4 – OTHER CURRENT ASSETS Other current assets consist of the following: December 31, 2018 2017 Prepaid sales and marketing costs $ 5,148,789 $ 5,335,936 Debt financing fees (Note 8) 1,898,074 — Prepaid insurance 790,465 680,243 Other prepaid costs 2,997,365 588,105 TOTAL OTHER CURRENT ASSETS 10,834,693 $ 6,604,284 |
FIXED ASSETS, NET
FIXED ASSETS, NET | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS, NET | NOTE 5 – FIXED ASSETS, NET Fixed assets, net consist of the following: December 31, 2018 2017 Accounting system $ 301,096 $ 301,096 Equipment 490,576 273,536 Furniture and fixtures 116,542 116,542 Computer hardware 80,211 80,211 Leasehold improvements 37,888 37,888 TOTAL FIXED ASSETS 1,026,313 809,273 Accumulated depreciation (553,630 ) (372,218 ) TOTAL FIXED ASSETS, NET $ 472,683 $ 437,055 Depreciation expense for the years ended December 31, 2018, 2017, and 2016 was $181,412, $141,601, and $77,906, respectively. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
INTANGIBLE ASSETS, NET | NOTE 6 – INTANGIBLE ASSETS, NET The following table sets forth the gross carrying amount, accumulated amortization and net carrying amount of our intangible assets as of December 31, 2018 and 2017: December 31, 2018 Gross Accumulated Net Weighted- Amortizable intangible assets: OPERA ® $ 31,951 $ (10,484 ) $ 21,467 10.75 Development costs of corporate website 91,743 (91,743 ) — n/a Approved hormone therapy drug candidate patents 2,234,129 (282,485 ) 1,951,644 14 Hormone therapy drug candidate patents (pending) 1,855,279 — 1,855,279 n/a Non-amortizable intangible assets: Multiple trademarks 264,289 — 264,289 indefinite TOTAL $ 4,477,391 $ (384,712 ) $ 4,092,679 December 31, 2017 Gross Accumulated Net Weighted- 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 years ended December 31, 2018 and 2017, there was no impairment recognized related to intangible assets. As of December 31, 2018, we had 21 issued domestic or U.S. patents and 24 issued foreign patents, including: ● 11 domestic patents and five foreign patents that relate to BIJUVA™ as well as 3 domestic patents that relate to non-approved doses of BIJUVA™. These patents establish an important intellectual property foundation for BIJUVA™ and are owned by us. The domestic patents will expire in 2032. The foreign patents will expire no earlier than 2032. In addition, we have pending patent applications relating to BIJUVA™ in the U.S., Argentina, Australia, Brazil, Canada, Europe, Israel, Japan, Mexico, Russia, South Africa, and South Korea; ● Three foreign patents that relate to our progesterone-only candidate, which are owned by us. The foreign patent will expire no earlier than 2033. In addition, we have pending patent applications with respect to our progesterone-only candidate in the U.S., Argentina, Australia, Brazil, Canada, Europe, Israel, Japan, Mexico, Russia, South Africa, and South Korea; ● Three domestic patents (two utility and one design) and 12 foreign patents (three utility and nine design) that relate to IMVEXXY®. These patents establish an important intellectual property foundation for IMVEXXY® and are owned by us. These domestic patents will expire in 2032 or 2033. The foreign utility patents will expire no earlier than 2033. The foreign design patents provide protection expiring no earlier than 2025. In certain jurisdictions, the foreign design patents provide protection through at least 2037. In addition, we have pending patent applications related to IMVEXXY® in the U.S., Argentina, Australia, Brazil, Canada, Europe, Israel, Japan, Mexico, New Zealand, Russia, South Africa, and South Korea; ● One domestic utility patent that relates to our topical-cream candidates, which is owned by us. The domestic patent will expire in 2035. We have pending patent applications with respect to our topical-cream candidates in the U.S., Argentina, Australia, Brazil, Canada, Europe, Israel, Japan, Mexico, Russia, South Africa, and South Korea; ● One domestic utility patent and four foreign patents that relate to our transdermal-patch candidates, which are owned by us. The domestic utility patent will expire in 2032. The foreign patents will expire no earlier than 2033. We have pending patent applications with respect to our transdermal-patch candidates in the U.S., Australia, Brazil, Canada, Europe, Mexico, Japan, and South Africa; ● One domestic utility patent that relates to our OPERA® information-technology platform, which is owned by us and will expire in 2029; and ● One domestic utility patent that relates to TX-009HR, a progesterone and estradiol product candidate, which is owned by us and will expire in 2037. We have pending patent applications with respect to TX-009HR in the U.S., Argentina, Australia, Brazil, Canada, Europe, Israel, Japan, Mexico, New Zealand, Russia, South Africa, and South Korea. Amortization expense was $112,474, $71,516, and $54,545 for the years ended December 31, 2018, 2017, and 2016, respectively. Estimated amortization expense, based on current patent cost being amortized, for the next five years is as follows: Year Ending Estimated 2019 $ 139,410 2020 $ 139,410 2021 $ 139,410 2022 $ 139,410 2023 $ 139,410 Thereafter $ 1,276,061 License Agreement with the Population Council On July 30, 2018, we entered into the Council License Agreement, with the Population Council to commercialize in the U.S. ANNOVERA™. We currently estimate that ANNOVERA™ will be commercially available as early as the third quarter of 2019 with a planned full commercial launch by the first quarter of 2020. Under the terms of the Council License Agreement, we paid the Population Council a milestone payment of $20,000,000 within 30 days following approval by the FDA of the NDA for ANNOVERA™ and will be required to pay the Population Council $20,000,000 within 30 days following the release of the first commercial batch of ANNOVERA™. The Population Council is also eligible to receive milestone payments and royalties from commercial sales of ANNOVERA™. We will assume responsibility for marketing expenses related to the commercialization of ANNOVERA™. The milestone payment of $20,000,000 upon the FDA’s approval of ANNOVERA™ in the third quarter of 2018 was recorded as a finite-lived intangible asset in the consolidated balance sheet and will be amortized on a straight-line basis once it becomes available for use which is expected to be upon release of first commercial batch of ANNOVERA TM We assess our intangible assets for impairment if indicators are present or changes in circumstance suggest that impairment may exist. If impairment indicators are present or changes in circumstance suggest that impairment may exist, we perform a recoverability test by comparing the sum of the estimated undiscounted cash flows of each intangible asset to its carrying value on the consolidated balance sheet. If the undiscounted cash flows used in the recoverability test are less than the carrying value, we would determine the fair value of the intangible asset and recognize an impairment loss if the carrying value of the intangible asset exceeds its fair value. We also evaluate the remaining useful life of intangible assets subject to amortization on a periodic basis to determine whether events and circumstances would indicate impairment or warrant a revision to the remaining useful life. If the estimate of an intangible asset’s remaining useful life is changed, we will amortize the remaining carrying value of the intangible asset prospectively over the revised remaining useful life. License Agreement with Knight Therapeutics Inc. On July 30, 2018, we entered into a license and supply agreement, or the Knight License Agreement, with Knight pursuant to which we granted Knight an exclusive license to commercialize IMVEXXY® and BIJUVA TM TM TM TM TM TM |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 7– ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following: December 31, 2018 2017 Accrued payroll, bonuses and commission costs $ 6,854,002 $ 4,240,379 Allowance for coupons and returns 5,294,120 1,432,846 Accrued sales and marketing costs 2,288,028 420,162 Accrued compensated absences 1,178,110 945,457 Allowance for wholesale distributor fees 792,891 172,973 Accrued legal and accounting expense 385,824 600,350 Accrued research and development 388,675 366,933 Accrued rent 365,155 327,099 Accrued rebates 412,570 76,917 Accrued royalties — 114,480 Other accrued expenses 375,573 525,999 TOTAL $ 18,334,948 $ 9,223,595 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 8 – 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). On July 30, 2018, we entered into Amendment No. 1 to the Credit Agreement in order to permit our entry into the Council License Agreement. Pursuant to the amendment, we were required to receive aggregate net cash proceeds of at least $75,000,000 from the issuance of our equity securities within thirty days of entering into the Council License Agreement, which we did in connection with the August 2018 underwritten public offering. 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, 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 IMVEXXY®. 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 BIJUVA TM TM TM 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 BIJUVA TM 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 December 31, 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 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 December 31, 2018, we had $75,000,000 in borrowings outstanding under the Term Loan, which are classified as long-term debt in the accompanying 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 2 and Tranche 3 milestones have been met. As of December 31, 2018, deferred financing fees related to Tranche 2 and Tranche 3 are included in other current assets in the accompanying consolidated financial statements. During the year ended December 31, 2018, we amortized $269,859, of debt issuance costs related to Tranche 1 as interest expense in our accompanying consolidated financial statements. The overall effective interest rate was approximately 11% as of December 31, 2018. As of December 31, 2018, the carrying value of debt consists of the following: December 31, Term Loan $ 75,000,000 Debt discount and financing fees (1,618,986 ) TOTAL LONG-TERM DEBT $ 73,381,014 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity: | |
STOCKHOLDERS' EQUITY | NOTE 9 – STOCKHOLDERS’ EQUITY Preferred Stock At December 31, 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 December 31, 2018, we had 350,000,000 shares of Common Stock authorized for issuance, of which 240,462,439 shares of our Common Stock were issued and outstanding. On August 1, 2018, we entered into an underwriting agreement with Goldman Sachs & Co. LLC, as representative of the underwriters, relating to an underwritten public offering of 12,745,098 shares of our Common Stock at a price of $5.10 per share. We granted the underwriters an option, exercisable for a period of 30 days, to purchase up to 1,911,764 additional shares of Common Stock. On August 2, 2018, the underwriters exercised the option in full. The net proceeds from the offering, including the exercise of the option to purchase additional shares, were approximately $69,908,000, after deducting the underwriting discount and offering expenses payable by us. The offering closed on August 6, 2018. In connection with the Knight License Agreement, on August 6, 2018, Knight entered into a subscription agreement with us, pursuant to which Knight purchased 3,921,568 of shares of our Common Stock concurrently with the closing of the underwritten public offering of Common Stock at a price of $5.10, for proceeds of $20,000,000. Issuances During 2018 During the year ended December 31, 2018, certain individuals exercised stock options to purchase 5,444,526 shares of Common Stock for $1,666,208 in cash. Also, during the year ended December 31, 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 2017 On September 25, 2017, we entered into an underwriting agreement with J.P. Morgan Securities LLC relating to an underwritten public offering of 12,400,000 shares of our Common Stock at a price of $5.55 per share. The net proceeds to us from the offering were approximately $68,573,000, after deducting estimated offering expenses payable by us. The offering closed on September 28, 2017 and we issued 12,400,000 shares of Common Stock. During the year ended December 31, 2017, certain individuals exercised stock options to purchase 102,546 shares of Common Stock for $212,615 in cash. Issuances During 2016 On January 6, 2016, we entered into an underwriting agreement with Goldman Sachs & Co. and Cowen and Company, LLC, as the representatives of the several underwriters relating to an underwritten public offering of 15,151,515 shares of our Common Stock at a public offering price of $8.25 per share. Under the terms of the underwriting agreement, we granted the Underwriters a 30-day option to purchase up to an aggregate of 2,272,727 additional shares of Common Stock, which the option was exercised in full. The net proceeds to us from the offering were approximately $134,864,000, after deducting underwriting discounts and commissions and other expenses payable by us. The offering closed on January 12, 2016 and we issued 17,424,242 shares of our Common Stock. During the year ended December 31, 2016, certain individuals exercised stock options to purchase 525,362 shares of Common Stock for $989,060 in cash. Also, during the same period, stock options to purchase 127,109 shares of Common Stock were exercised pursuant to the options’ashless exercise provisions, wherein 87,833 shares of Common Stock were issued. Warrants to Purchase Common Stock As of December 31, 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 1.6 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 yield and the term of the warrant. During the year ended December 31, 2018, we granted warrants to purchase 175,000 shares of Common Stock to outside consultants at an exercise price of $5.16 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 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 year ended December 31, 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 year ended December 31, 2016, we granted warrants to purchase 245,000 shares of Common Stock to outside consultants at the weighted average price of $7.90 per share. These warrants vest and have expiration dates as follows: warrants to purchase 75,000 shares of Common Stock vested on April 21, 2016 and have an expiration date of April 21, 2021, warrants to purchase 50,000 shares of Common Stock vest ratably over a 24-month period and have an expiration date of April 21, 2021, and warrants to purchase 120,000 shares of Common Stock vest ratable over a 12-month period and have an expiration date of January 21, 2021. We recorded share-based compensation expense related to warrants previously issued of $494,136, $313,271 and $936,974 for the years ended December 31, 2018, 2017 and 2016, respectively, in the accompanying consolidated financial statements. At December 31, 2018, total unrecognized estimated compensation expense related to unvested warrants was approximately $106,000 which is expected to be recognized over weighted-average period of 0.2 years. Summary of our Warrant activity during the year ended December 31, 2018: Number of Weighted Weighted Aggregate Balance at December 31, 2017 3,115,905 $ 2.58 1.8 $ 11,348,273 Granted 175,000 $ 5.16 Exercised — Expired (283,334 ) $ 2.01 Cancelled/Forfeited — Balance at December 31, 2018 3,007,571 $ 2.78 1.58 $ 4,826,403 Vested and Exercisable at December 31, 2018 2,963,818 $ 2.75 1.54 $ 4,826,403 Unvested at December 31, 2018 43,753 $ 5.16 4.21 $ 0 The weighted average fair value per share of warrants issued and the assumptions used in the Black-Scholes Model during the years ended December 31, 2018, 2017, and 2016 are set forth in the table below. 2018 2017 2016 Weighted average exercise price $ 5.16 $ 6.83 $ 7.90 Weighted average grant date fair value $ 2.79 $ 3.67 $ 4.78 Risk-free interest rate 2.36 % 1.47 % 1.04-1.28 % Volatility 62.12 % 63.24 % 74.10-74.15 % Term (in years) 5 5 5 Dividend yield 0.00 % 0.00 % 0.00 % 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 the stock price is expected to fluctuate each year during the term of the instrument. Our calculation of estimated volatility is based on historical stock prices over a period equal to the term of the instrument. The expected volatility of warrants was estimated based on a historical volatility analysis of our Company as well as peers that were similar to the Company with respect to industry, stage of life cycle, market capitalization, and financial leverage. 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 five 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 and are included in the warrant exercise details below; 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 five years; a volatility of 45.84%; risk free rate of 1.41%; and a dividend yield of 0%. During the years ended December 31, 2017, 2016, and 2015, we recorded $0, $0, and $77,026, respectively, as non-cash compensation in the accompanying consolidated financial statements related to this warrant. As of December 31, 2017 this warrant was fully amortized. These shares were exercised in 2017 and are included in the warrant exercise details below; 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 years ended December 31, 2018, 2017, and 2016, we recorded $0, $128,898, and $257,796, respectively as non-cash compensation with respect to these warrants in the accompanying consolidated financial statements. As of December 31, 2017, the SCI warrants issued in 2013 and 2012 were fully amortized. This warrant was fully exercised, of which 800,000 shares were exercised in 2017 and 500,000 shares were exercised in 2016. Warrant exercises During the year ended December 31, 2018, no warrants were exercised. During the year ended December 31, 2017, certain individuals exercised warrants to purchase 2,476,666 shares of Common Stock for $3,798,999 in cash, which included SCI warrants issued in 2012 and 2013. In addition, during the year ended December 31, 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 year ended December 31, 2016, certain individuals exercised warrants to purchase 722,744 shares of Common Stock for $1,373,000 in cash, of which 500,000 shares related to SCI warrant issued in 2012. Options to Purchase Common Stock of the Company In 2009, we adopted the 2009 Long Term Incentive Compensation Plan, or the 2009 Plan, to provide financial incentives to employees, directors, advisers, and consultants of our company who are able to contribute towards the creation of or who have created stockholder value by providing them stock options and other stock and cash incentives, or the Awards. The Awards available under the 2009 Plan consist of stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock, performance units, and other stock or cash awards as described in the 2009 Plan. There are 25,000,000 shares authorized for issuance thereunder. Generally, the options vest annually over four years or as determined by our board of directors, upon each option grant. Options may be exercised by paying the price for shares or on a cashless exercise basis after they have vested and prior to the specified expiration date provided and applicable exercise conditions are met, if any. The expiration date is generally ten years from the date the option is issued. As of December 31, 2018, there were non-qualified stock options to purchase 14,594,350 shares of Common Stock outstanding under the 2009 Plan. As of December 31, 2018, there were 866,912 shares 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 December 31, 2018, there were non-qualified stock options to purchase 6,278,474 shares of Common Stock outstanding and 1,040,000 restricted stock units outstanding under the 2009 Plan. As of December 31, 2018, there were 2,433,333 shares 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 ranges of assumptions used in the Black-Scholes Model during the years ended December 31, 2018, 2017, and 2016 are set forth in the table below. 2018 2017 2016 Weighted average exercise price $ 5.45 $ 6.60 $ 6.22 Weighted average grant date fair value $ 3.24 $ 3.82 $ 3.94 Risk-free interest rate 2.38-2.89 % 1.84-2.05 % 1.13-1.90 % Volatility 59.45-64.04 % 61.56-64.25 % 70.26-73.34 % Term (in years) 5.1-6.25 5.5-6.25 5.5-6.25 Dividend yield 0.00 % 0.00 % 0.00 % 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 expected term. Estimated volatility is a measure of the amount by which the stock price is expected to fluctuate each year during the term of an award. Our calculation of estimated volatility is based on historical stock prices over a period equal to the term of the awards. The expected volatility of share options was estimated based on a historical volatility analysis of our Company as well as peers that were similar to us with respect to industry, stage of life cycle, market capitalization, and financial leverage. 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. Future stock-based compensation may significantly differ based on changes in the fair value of our Common Stock and our estimates of expected volatility and the other relevant assumptions. A summary of activity under the 2009 and 2012 Plans and related information during the year ended December 31, 2018 is as follows: Number of Weighted Weighted Aggregate Balance at December 31, 2017 23,365,225 $ 3.78 5.13 $ 64,664,821 Granted 3,264,500 $ 5.45 Exercised (5,454,526 ) $ 0.31 $ 27,534,623 Expired (25,000 ) $ 7.76 Cancelled/Forfeited (277,375 ) $ 5.47 Balance at December 31, 2018 20,872,824 $ 4.93 5.94 $ 12,239,876 Vested and Exercisable at December 31, 2018 16,068,991 $ 4.61 5.09 $ 12,239,876 Unvested at December 31, 2018 4,803,833 $ 5.99 8.8 $ 0 At December 31, 2018, our outstanding options had exercise prices ranging from $0.10 to $8.92 per share. Share-based compensation expense related to options recognized in our results of operations for the years ended December 31, 2018, 2017, and 2016 was approximately $8,091,294, $6,447,154, and $16,139,225, respectively, and it is based on awards vested. At December 31, 2018, total unrecognized estimated compensation expense related to unvested options was approximately $12,175,000, which may be adjusted for future changes in forfeitures. This cost is expected to be recognized over a weighted-average period of 2.01 years. No tax benefit was realized due to a continued pattern of operating losses. Restricted Stock Restricted stock awards granted under our 2009 and 2012 Plans entitle the holder to receive, at the end of vesting period, a specified number of shares of our Common Stock. Share-based compensation expense is measured by the market value of our Common Stock on the day of the grant. The shares vest ratably over the period specified in the grant. There is no partial vesting and any unvested portion is forfeited. On December 13, 2018, we granted 1,040,000 restricted stock units to certain executive employees which will vest at the end of the third year. The grant date fair value was $4.06 per unit. During the year ended December 31, 2018, we recorded $73,132 in share-based compensation expense related to restricted stock units. At December 31, 2018, total unrecognized estimated compensation expense related to unvested restricted stock units was approximately $4,149,000, which may be adjusted for future changes in forfeitures. This cost is expected to be recognized over a weighted-average period of 2.95 years. At December 31, 2018, 1,040,000 restricted stock awards remained outstanding. Cash-Settled Stock Appreciation Rights (SARs) On July 1, 2018, we issued cash-settled SARs to certain consultants and employees. The SARs plan year begins on July 1 and ends on or immediately following June 30, 2019. SARs are granted with a grant price equal to the market value of a share of our Common Stock on the date of grant. Cash-settled SARs provide for the cash payment of the excess of the fair market value of our Common Stock on June 30, 2019 over the grant price. Cash-settled SARs have no effect on dilutive shares or shares outstanding as any appreciation of our Common Stock over the grant price is paid in cash and not in Common Stock. Cash settled SARs are recorded in our consolidated balance sheets as a liability until the date of exercise. The fair value of each SAR award is estimated using the Black-Scholes valuation model. In accordance with ASC Topic 718, “Stock Compensation,” the fair value of each SAR award is recalculated at the end of each reporting period and the liability and expense adjusted based on the new fair value and the percent vested. At December 31, 2018, we had 103,000 SARs outstanding and the liability related to SAR calculation was $3,406. The assumptions used to determine the fair value of the cash settled SAR awards at December 31, 2018 were life of 6 months, 49.7% volatility, 2.7% risk-free rate, and zero annual dividends. As of December 31, 2018, the fair value of SARs outstanding was $0.07 per award. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 10 – INCOME TAXES For financial reporting purposes, income before taxes includes the following components: 2018 2017 2016 United States (132,617,160 ) (76,925,380 ) (89,875,459 ) Total (132,617,160 ) (76,925,380 ) (89,875,459 ) For the years ended December 31, 2018, 2017, and 2016, there was no provision for income taxes, current or deferred. At December 31, 2018, we had a federal net operating loss carry forward of approximately $481,365,550. Approximately $338,668,076 of the federal net operating loss carry forward can be carried forward for 20 years and will begin to expire in 2031. The remaining $142,697,474 can be carried forward indefinitely. A reconciliation between taxes computed at the federal statutory rate and the consolidated effective tax rate is as follows: 2018 2017 2016 Federal statutory tax rate 21.0 % 34.0 % 34.0 % State tax rate, net of federal tax benefit 5.2 % 5.0 % 5.4 % Adjustment in valuation allowances (31.2 )% 22.6 % (40.3 )% Excess stock benefit 5.3 % 0.0 % 0.0 % Federal income tax rate change 0.0 % (60.8 )% — % Permanent and other differences (0.3 )% (0.8 )% 0.9 % Provision (benefit) for income taxes — — — Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The components of the net deferred income tax asset as of December 31, 2018, 2017, and 2016 are as follows: 2018 2017 2016 Deferred Income Tax Assets: Net operating losses $ 140,891,764 $ 99,596,321 $ 111,730,450 R&D Credit 186,347 186,347 186,347 Total deferred income tax asset 141,078,111 99,782,668 111,916,797 Valuation allowance (141,078,111 ) (99,782,668 ) (111,916,797 ) Deferred income tax assets, net $ — $ — $ — We believe that it is more likely than not that we will not generate sufficient future taxable income to realize the tax benefits related to the deferred tax assets on our balance sheet and as such, a valuation allowance has been established against the deferred tax assets for the period ended December 31, 2018. Unrecognized Tax Benefits As of the period ended December 31, 2018, we have no unrecognized tax benefits. On December 22, 2017, the U.S. federal government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act, or the Tax Act. The Tax Act makes broad and complex changes to the U.S. federal tax code, including, but not limited to reducing the U.S. federal corporate tax rate from 34 percent to 21 percent, effective January 1, 2018. As the result of our initial analysis of the impact of the Tax Act, we recorded a provisional amount of net tax expense of $46.7 million in 2017 related to the remeasurement of our deferred tax balances and other effects. We completed our accounting for the income tax effects of the Tax Act in 2018, and no material adjustments were required to the provisional amounts initially recorded. |
RELATED PARTIES
RELATED PARTIES | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | NOTE 11 – 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 years ended December 31, 2018, 2017 and 2016 we were billed by Catalent approximately $4,111,000, $3,646,000 and $3,647,000, respectively, for inventory related to our products, manufacturing activities related to our clinical trials, scale-up, registration batches, stability and validation testing. As of December 31, 2018 and 2017, there were amounts due to Catalent of approximately $88,000 and $523,000, respectively. In addition, we have minimum purchase requirements in place with Catalent as disclosed in Note 13, Commitments and Contingencies. |
BUSINESS CONCENTRATIONS
BUSINESS CONCENTRATIONS | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
BUSINESS CONCENTRATIONS | NOTE 12 - BUSINESS CONCENTRATIONS We purchase our prescription products from several suppliers with approximately 43%, 33% and 24% of our purchases were supplied by three vendors each, respectively, during the year ended December 31, 2018, and 100% and 98% of our purchases were supplied by one vendor each for the years ended December 31, 2017 and 2016, respectively. We sell our prescription 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 years ended December 31, 2018, 2017 and 2016, four, four and three customers each, respectively, accounted for more than 10% of our total net revenues. Net revenue from the four customers combined accounted for approximately 76% of our net recognized revenue for the year ended December 31, 2018 and approximately 59% of our recognized revenue for the year ended December 31, 2017. Net revenue from three customers combined accounted for approximately 41% of our net revenue during the year ended December 31, 2016. During the year ended December 31, 2018, McKesson Corporation accounted for approximately $1,610,000 of our revenue, Pillpack, Inc. accounted for approximately $5,075,000 of our revenue, AmerisourceBergen accounted for approximately $3,246,000 of our revenue and Cardinal Health accounted for approximately $2,308,000 of our revenue. During the year ended December 31, 2017, AmerisourceBergen accounted for approximately $2,667,000 of our revenue; McKesson Corporation accounted for approximately $1,959,000 of our revenue; Cardinal Health accounted for approximately $2,559,000 of our revenue and Pharmacy Innovations PA accounted for approximately $2,715,000 of our revenue. During the year ended December 31, 2016, Woodstock Pharmaceutical and Compounding accounted for approximately $2,247,000 of our revenue; Medical Center Pharmacy accounted for approximately $3,700,000 of our revenue and Pharmacy Innovations PA accounted for approximately $2,040,000 of our revenue. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 13 – COMMITMENTS AND CONTINGENCIES Operating Leases 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. As of December 31, 2018, future minimum rental payments on non-cancelable operating leases are as follows: Years Ending December 31, 2019 $ 1,094,116 2020 1,113,069 2021 943,127 Thereafter — Total minimum lease payments $ 3,150,312 In October 2018, we entered into a lease for new corporate offices in Boca Raton, Florida. The lease includes 56,212 rentable square feet, or full premises, of which lease on 7,561 square feet has commenced in 2018 and the lease on the remaining 48,651 square feet will commence no earlier than June 1, 2019, or full premises commencement date. The lease will expire 11 years after full premises commencement date, unless terminated earlier in accordance with the terms of the lease. We have the option to extend the term of the lease for two additional consecutive periods of five years. The term of the lease includes escalating rent and free rent periods. We are also responsible for certain other operating costs under the lease, including electricity and utility expenses. In addition, we will be entitled to reimbursement from the landlord of up to $1,800,000 for tenant improvements. As of December 31, 2018, future minimum rental payments on full premises related to the new operating leases are as follows, of which approximately $2.7 million relates to the lease on the suite that has commenced in 2018: Years Ending December 31, 2019 $ 48,288 2020 984,756 2021 1,779,384 2022 1,808,312 2023 1,837,963 Thereafter 12,390,298 Total minimum lease payments $ 18,849,001 The rental expense during the years ended December 31, 2018, 2017 and 2016 was approximately $1,068,275, $1,029,205 and $709,483, respectively. Intellectual Property Licenses We have license agreements with third parties that provide for minimum royalty, license, and exclusivity payments to be paid by us for access to certain technologies. In addition, we pay royalties as a percent of revenue as described in Note 6, Intangible Assets, to these consolidated financial statements. Purchase Commitments We have a manufacturing and supply agreement whereby we are required to purchase from Catalent a minimum of number of softgels during the first contract year and a higher number or softgels after the first contract year. If the minimum order quantities of specific products are not met, we are required to pay Catalent 50% of the difference between the total amount we would have paid to Catalent if the minimum requirement had been fulfilled and the sum of all purchases of our products from Catalent during the contract year. At December 31, 2018, we had minimum purchase obligations related to this agreement of approximately $2,600,000 over the next five years. This amount represents our estimate of the minimum required payments under the agreement. Legal Proceedings From time to time, we are involved in litigation and proceedings in the ordinary course of business. We are not currently involved in any legal proceeding that we believe would have a material effect on our consolidated financial condition, results of operations, or cash flows. Off-Balance Sheet Arrangements As of December 31, 2018, 2017, and 2016, we had no off-balance sheet arrangements that have had or are reasonably likely to have current or future effects on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. Employment Agreements We have entered into employment agreements with certain of our executives that provide for compensation and certain other benefits. Under certain circumstances, including a change in control, some of these agreements provide for severance or other payments, if those circumstances occur during the term of the employment agreement. |
SELECTED QUARTERLY FINANCIAL DA
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | NOTE 14 – SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) Summarized quarterly financial data for fiscal years 2018 and 2017 is as follows: 2018 Quarter (In thousands, except per share) 1st 2nd 3rd 4th Revenues $ 3,773 $ 3,763 $ 3,474 $ 5,089 Gross profit $ 3,139 $ 3,309 $ 2,775 $ 4,139 Net loss $ (24,402 ) $ (33,219 ) $ (35,605 ) $ (39,391 ) Loss per common share, basic and diluted $ (0.11 ) $ (0.15 ) $ (0.16 ) $ (0.17 ) 2017 Quarter (In thousands, except per share) 1st 2nd 3rd 4th Revenues $ 3,985 $ 4,250 $ 4,418 $ 4,125 Gross profit $ 3,326 $ 3,568 $ 3,717 $ 3,530 Net loss $ (21,156 ) $ (19,677 ) $ (14,665 ) $ (21,427 ) Loss per common share, basic and diluted $ (0.11 ) $ (0.10 ) $ (0.07 ) $ (0.10 ) |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of our company and our wholly owned subsidiaries, VitaMed, BocaGreen and VitaCare. All intercompany balances and transactions have been eliminated in consolidation. |
Cash | Cash We maintain cash at financial institutions that at times may exceed the Federal Deposit Insurance Corporation, or the FDIC, insured limits of $250,000 per bank. We have never experienced any losses related to these funds. |
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 |
Inventories | Inventories Inventories represent hormone therapy drugs, packaged vitamins, nutritional products and supplements and raw materials, which are valued at the lower of cost or net realizable value using the average-cost 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 not capitalized any pre-launch inventory to date. |
Fixed Assets | Fixed Assets We state fixed assets at cost, net of accumulated depreciation. We charge maintenance costs, which do not significantly extend the useful lives of the respective assets, and repair costs to operating expenses as incurred. We compute depreciation using the straight-line method over the estimated useful lives of the related assets, which range from three to seven years. Leasehold improvements are depreciated over the shorter of their useful life or the term of the lease. We capitalize software and software development costs incurred to create and acquire computer software for internal use, principally related to software coding and application development. We begin to capitalize software development costs when both the preliminary project stage is completed and it is probable that the software will be used as intended. Capitalized software costs include only external direct costs and services utilized in developing or obtaining computer software. Capitalized software costs are amortized on a straight-line basis when placed into service over the estimated useful life, generally five to seven years. |
Intangible Assets | Intangible Assets We have adopted the provisions of Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, 350, Intangibles - Goodwill and Other |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets We review the carrying values of fixed assets and long-lived intangible assets to be held and used for impairment whenever events or changes in circumstances indicate that their carrying values may not be recoverable. Such events or circumstances may include, among others, the following: ● significant declines in an asset’s market price; ● significant deterioration in an asset’s physical condition; ● significant changes in the nature or extent of an asset’s use or operation; ● significant adverse changes in the business climate that could impact an asset’s value, including adverse actions or assessments by regulators; ● accumulation of costs significantly in excess of original expectations related to the acquisition or construction of an asset; ● current-period operating or cash flow losses combined with a history of such losses or a forecast that demonstrates continuing losses associated with an asset’s use; and ● expectations that it is more likely than not that an asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. If impairment indicators are present, we determine whether an impairment loss should be recognized by testing the applicable asset or asset group’s carrying value for recoverability. This test requires long-lived assets to be grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, the determination of which requires judgment. We estimate the undiscounted future cash flows expected to be generated from the use and eventual disposal of the assets and compare that estimate to the respective carrying values in order to determine if such carrying values are recoverable. This assessment requires the exercise of judgment in assessing the future use of and projected value to be derived from the eventual disposal of the assets to be held and used. In our assessments, we also consider changes in asset utilization, including, if applicable, the temporary idling of capacity and the expected timing for placing this capacity back into production. If the carrying value of the assets is not recoverable, then we record a loss for the difference between the assets’ fair value and respective carrying values. We determine the fair value of the assets using an “income approach” based upon a forecast of all the expected discounted future net cash flows associated with the subject assets. Some of the more significant estimates and assumptions include market size and growth, market share, projected selling prices, manufacturing cost, and discount rate. We base estimates upon historical experience, our commercial relationships, market conditions, and available external information about future trends. We believe our current assumptions and estimates are reasonable and appropriate. Unanticipated events and changes in market conditions, however, could affect such estimates, resulting in the need for an impairment charge in future periods. There was no impairment of long-lived assets to be held and used during the years ended December 31, 2018, 2017, and 2016. We perform impairment tests for intangible assets with indefinite useful lives annually, or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of an intangible asset below its carrying value. The impairment test for assets with indefinite lives consists of a comparison of the fair value of the asset with its carrying amount. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. There was no impairment of indefinite lived intangible assets during the years ended December 31, 2018, 2017, and 2016. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Our financial instruments consist primarily of cash, accounts receivable, accounts payable, 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 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 December 31, 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 is measured on a non-recurring basis using significant unobservable inputs (Level 3) in connection with any required impairment test. There was no impairment of intangible assets during the years ended December 31, 2018, 2017, and 2016. The carrying amount for the long term debt as of December 31, 2018 (as discussed in Note 8) approximates fair value based on market activity for other debt instruments with similar characteristics and comparable risk (Level 2). |
Income Taxes | Income Taxes We account for income taxes under the asset and liability method. We recognize deferred tax assets and liabilities for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which the related temporary differences are expected to be recovered or settled. We recognize the effect on deferred tax assets and liabilities of a change in tax rates when the rate change is enacted. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. In accordance with ASC 740, Income Taxes We recognize both interest and penalties related to uncertain tax positions as part of the income tax provision. At December 31, 2018 and 2017, we had no tax positions relating to open tax returns that were considered to be uncertain. Our U.S. federal and state tax returns since 2011, which was the first year we generated net operating losses, remain open to examination. |
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 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 . We recognize the compensation expense for all share-based compensation granted to employees based on the grant date fair value estimated in accordance with ASC 718. We generally recognize the compensation expense on a straight-line basis over the employee’s requisite service period. We estimate the forfeiture rate based on our historical experience of forfeitures. If our actual forfeiture rate is materially different from our estimate, share-based compensation expense could be significantly different from what we have recorded in the current period. |
Revenue Recognition | Revenue Recognition We adopted 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 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 Our products consist primarily of prescription vitamins and our recently approved product IMVEXXY®, which we began selling during the third quarter of 2018. 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. Based on our contracts, we invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. We disclose receivables from contracts with customers separately in the statement of financial position. 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. These estimates are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to the customer) or a current liability (if the amount is payable to a party other than a customer). 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. The estimated amount of variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. 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. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our original estimates, we will adjust these estimates, which would affect net product revenue and earnings in the period such changes in estimates become known. 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 do not allow product returns for prescription products that have been dispensed to a patient. We estimate the amount of our product sales that may be returned by our customers and record this estimate as a reduction of revenue in the period the related product revenue is recognized. Where historical rates of return exist, we use history as a basis to establish a returns reserve for products shipped to wholesalers. For our newly launched products, for which the right of return exists but for which we currently do not have history of product returns, we estimate returns based on available industry data, our own sales information and our visibility into the inventory remaining in the distribution channel. At the end of each reporting period, we may decide to constrain revenue for product returns based on information from various sources, including channel inventory levels and dating and sell-through data, the expiration dates of products currently being shipped, price changes of competitive products and any introductions of generic products. 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 accrued expenses and 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. Rebate and coupon estimates and distributor fees are recorded in accrued expenses and other current liabilities on the consolidated balance sheet. We estimate chargebacks based on number of units sold during the period taking into account prices stated in contracts and our historical experience. Estimates related to distributors fees, rebates, coupons and returns are disclosed in Note 7. We provide invoice discounts to our customers for prompt payment. Estimates relating to invoice discounts and chargebacks are deducted from gross product revenues at the time the revenues are recognized. As part of the commercial launch for IMVEXXY® during the third quarter of 2018, we introduced a co-pay assistance program where enrolled patients do not pay more than $35 for up to 12 IMVEXXY® prescription fills. This allows patients to access the product at a reasonable cost regardless of insurance coverage. We reimburse pharmacies for this discount through third-party vendors. We consider these payments as consideration paid to the customer and reflect such payments as a reduction of the transaction price as we do not receive a distinct good or service related to these payments. The variable consideration is estimated based on contract prices, the estimated percentage of patients that will utilize the copay assistance, the average assistance paid, the estimated levels of inventory in the distribution channel and the current level of prescriptions covered by patients’ insurance. Payers may change coverage levels for IMVEXXY® positively or negatively, at any time up to the time that we have formally contracted coverage with the payer. As such, the net transaction price of IMVEXXY® is susceptible to such changes in coverage levels, which are outside the influence of the Company. As a result, we constrain revenue recognized for IMVEXXY® to an amount that will not result in a significant revenue reversal in future periods. Our ability to estimate the net transaction price for IMVEXXY® is constrained by our estimates of the amount to be paid for the co-pay assistance program for IMVEXXY® which is directly related to the level of prescriptions paid for by insurance. As such, we record an accrual to reduce gross sales for the estimated co-pay and other patient assistance based on currently available third-party data and our internal analyses. We re-evaluate any constraint each reporting period. OTC Products Our over the counter, or 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 generated OTC revenue from product sales primarily to retail consumers. We recognized revenue from product sales upon shipment, when the rights of ownership and risk of loss have passed to the consumer. We included outbound shipping and handling fees, if any, in revenues, net, and bill them upon shipment. We included shipping expenses in cost of goods sold. A majority of our OTC customers paid for our products with credit cards, and we usually received the cash settlement in two to three banking days. Credit card sales minimized accounts receivable balances relative to OTC sales. We provided an unconditional 30-day money-back return policy under which we accept product returns from our retail and eCommerce OTC customers. We recognized revenue from OTC sales, net of estimated returns and sales discounts. Disaggregation of revenue The following table provides information about disaggregated revenue by product mix for the years ended December 31, 2018, 2017, and 2016: For the Years Ended December 31, 2018 2017 2016 Prescription vitamins $ 15,041,259 $ 16,744,831 $ 18,854,984 IMVEXXY® 1,058,201 — — OTC products — 32,882 501,466 Net revenue $ 16,099,460 $ 16,777,713 $ 19,356,450 |
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. |
Shipping and Handling Costs | Shipping and Handling Costs We expense all shipping and handling costs as incurred. We include these costs in cost of goods sold on the accompanying consolidated financial statements. |
Advertising Costs | Advertising Costs We expense advertising costs when incurred. Advertising costs were $1,682,746, $448,288, and $752,611 during the years ended December 31, 2018, 2017, and 2016, respectively. |
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 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 to expense in the period in which the facts that give rise to the revision become known. |
Earnings Per Share | Earnings Per Share We calculate earnings per share, or EPS, in accordance with ASC 260, Earnings Per Share As of December 31, 2018 2017 2016 Stock options 20,872,824 23,365,225 21,767,854 Warrants 3,007,571 3,115,905 12,060,071 Restricted stock awards 1,040,000 — — 24,920,395 26,481,130 33,827,925 |
Concentration of Credit Risk and other Risks and Uncertainties | Concentration of Credit Risk and other Risks and Uncertainties Financial instruments that potentially expose us to concentrations of credit risk consist primarily of cash and trade accounts receivable. Cash is on deposit with financial institutions in the United States and these deposits generally exceed the amount of insurance provided by the FDIC. We have not experienced any historical losses on its deposits of cash. Concentration of credit risk with respect to our trade accounts receivable from our customers is primarily limited to drug wholesalers and retail pharmacy distributors. Credit is extended to our customers based on an evaluation of a customer’s financial condition, and collateral is not required. |
Use of Estimates | Use of Estimates Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. The preparation of these financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates, including those related to contingencies, on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ, at times in material amounts, from these estimates under different assumptions or conditions. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2018, the FASB issued Accounting Standards Update, or ASU, 2018-13 which eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some disclosure requirements. The FASB developed the amendments to ASC 820 as part of its broader disclosure framework project, which aims to improve the effectiveness of disclosures in the notes to financial statements by focusing on requirements that clearly communicate the most important information to users of the financial statements. The new guidance is effective for all entities for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. An entity is permitted to early adopt either the entire standard or only the provisions that eliminate or modify requirements. We are currently evaluating the effect of this guidance on our disclosures. In June 2018, the FASB issued 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 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 do not expect that the adoption of this standard will have a material effect 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. In July 2018, the FASB amended the new leases standard and issued ASU 2018-11, Leases, (Topic 842): Targeted Improvements to give entities another option for transition and to provide lessors with a practical expedient. We plan to adopt ASU 2016-02 on January 1, 2019 utilizing the alternative transition method allowed for under ASU 2018-11. While we are still finalizing the quantitative and qualitative impact of adopting this new standard and the subsequent amendments, the most significant impact is expected to be the recognition of a right of use asset and lease liability on our statement of financial position related to the operating leases for our new and existing office space. Additionally, the adoption of the new standard will result in increased disclosure requirements in our quarterly and annual filings. 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. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants and the SEC did not, and are not expected to, have a material effect on our results of operations or financial position. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of disaggregated revenue | The following table provides information about disaggregated revenue by product mix for the years ended December 31, 2018, 2017, and 2016: For the Years Ended December 31, 2018 2017 2016 Prescription vitamins $ 15,041,259 $ 16,744,831 $ 18,854,984 IMVEXXY® 1,058,201 — — OTC products — 32,882 501,466 Net revenue $ 16,099,460 $ 16,777,713 $ 19,356,450 |
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. As of December 31, 2018 2017 2016 Stock options 20,872,824 23,365,225 21,767,854 Warrants 3,007,571 3,115,905 12,060,071 Restricted stock awards 1,040,000 — — 24,920,395 26,481,130 33,827,925 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventory consists of the following: December 31, 2018 2017 Finished products $ 2,908,958 $ 1,485,358 Work in process 339,312 — Raw materials 19,400 — TOTAL INVENTORY $ 3,267,670 $ 1,485,358 |
OTHER CURRENT ASSETS (Tables)
OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of other current assets | Other current assets consist of the following: December 31, 2018 2017 Prepaid sales and marketing costs $ 5,148,789 $ 5,335,936 Debt financing fees (Note 8) 1,898,074 — Prepaid insurance 790,465 680,243 Other prepaid costs 2,997,365 588,105 TOTAL OTHER CURRENT ASSETS 10,834,693 $ 6,604,284 |
FIXED ASSETS, NET (Tables)
FIXED ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of fixed assets | Fixed assets, net consist of the following: December 31, 2018 2017 Accounting system $ 301,096 $ 301,096 Equipment 490,576 273,536 Furniture and fixtures 116,542 116,542 Computer hardware 80,211 80,211 Leasehold improvements 37,888 37,888 TOTAL FIXED ASSETS 1,026,313 809,273 Accumulated depreciation (553,630 ) (372,218 ) TOTAL FIXED ASSETS, NET $ 472,683 $ 437,055 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of intangible assets | The following table sets forth the gross carrying amount, accumulated amortization and net carrying amount of our intangible assets as of December 31, 2018 and 2017: December 31, 2018 Gross Accumulated Net Weighted- Amortizable intangible assets: OPERA ® $ 31,951 $ (10,484 ) $ 21,467 10.75 Development costs of corporate website 91,743 (91,743 ) — n/a Approved hormone therapy drug candidate patents 2,234,129 (282,485 ) 1,951,644 14 Hormone therapy drug candidate patents (pending) 1,855,279 — 1,855,279 n/a Non-amortizable intangible assets: Multiple trademarks 264,289 — 264,289 indefinite TOTAL $ 4,477,391 $ (384,712 ) $ 4,092,679 December 31, 2017 Gross Accumulated Net Weighted- 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, based on current patent cost being amortized, for the next five years is as follows: Year Ending Estimated 2019 $ 139,410 2020 $ 139,410 2021 $ 139,410 2022 $ 139,410 2023 $ 139,410 Thereafter $ 1,276,061 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses and current liabilities | Accrued expenses and other current liabilities consist of the following: December 31, 2018 2017 Accrued payroll, bonuses and commission costs $ 6,854,002 $ 4,240,379 Allowance for coupons and returns 5,294,120 1,432,846 Accrued sales and marketing costs 2,288,028 420,162 Accrued compensated absences 1,178,110 945,457 Allowance for wholesale distributor fees 792,891 172,973 Accrued legal and accounting expense 385,824 600,350 Accrued research and development 388,675 366,933 Accrued rent 365,155 327,099 Accrued rebates 412,570 76,917 Accrued royalties — 114,480 Other accrued expenses 375,573 525,999 TOTAL $ 18,334,948 $ 9,223,595 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of debt | As of December 31, 2018, the carrying value of debt consists of the following: December 31, Term Loan $ 75,000,000 Debt discount and financing fees (1,618,986 ) TOTAL LONG-TERM DEBT $ 73,381,014 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity: | |
Schedule of warrant activity | Summary of our Warrant activity during the year ended December 31, 2018: Number of Weighted Weighted Aggregate Balance at December 31, 2017 3,115,905 $ 2.58 1.8 $ 11,348,273 Granted 175,000 $ 5.16 Exercised — Expired (283,334 ) $ 2.01 Cancelled/Forfeited — Balance at December 31, 2018 3,007,571 $ 2.78 1.58 $ 4,826,403 Vested and Exercisable at December 31, 2018 2,963,818 $ 2.75 1.54 $ 4,826,403 Unvested at December 31, 2018 43,753 $ 5.16 4.21 $ 0 |
Schedule of assumptions used in the Black-Scholes Model of warrants issued | The weighted average fair value per share of warrants issued and the assumptions used in the Black-Scholes Model during the years ended December 31, 2018, 2017, and 2016 are set forth in the table below. 2018 2017 2016 Weighted average exercise price $ 5.16 $ 6.83 $ 7.90 Weighted average grant date fair value $ 2.79 $ 3.67 $ 4.78 Risk-free interest rate 2.36 % 1.47 % 1.04-1.28 % Volatility 62.12 % 63.24 % 74.10-74.15 % Term (in years) 5 5 5 Dividend yield 0.00 % 0.00 % 0.00 % |
Schedule of assumptions used in the Black-Scholes Model of stock options | The ranges of assumptions used in the Black-Scholes Model during the years ended December 31, 2018, 2017, and 2016 are set forth in the table below. 2018 2017 2016 Weighted average exercise price $ 5.45 $ 6.60 $ 6.22 Weighted average grant date fair value $ 3.24 $ 3.82 $ 3.94 Risk-free interest rate 2.38-2.89 % 1.84-2.05 % 1.13-1.90 % Volatility 59.45-64.04 % 61.56-64.25 % 70.26-73.34 % Term (in years) 5.1-6.25 5.5-6.25 5.5-6.25 Dividend yield 0.00 % 0.00 % 0.00 % |
Schedule of activity of 2009 and 2012 Plans | A summary of activity under the 2009 and 2012 Plans and related information during the year ended December 31, 2018 is as follows: Number of Weighted Weighted Aggregate Balance at December 31, 2017 23,365,225 $ 3.78 5.13 $ 64,664,821 Granted 3,264,500 $ 5.45 Exercised (5,454,526 ) $ 0.31 $ 27,534,623 Expired (25,000 ) $ 7.76 Cancelled/Forfeited (277,375 ) $ 5.47 Balance at December 31, 2018 20,872,824 $ 4.93 5.94 $ 12,239,876 Vested and Exercisable at December 31, 2018 16,068,991 $ 4.61 5.09 $ 12,239,876 Unvested at December 31, 2018 4,803,833 $ 5.99 8.8 $ 0 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income before taxes | For financial reporting purposes, income before taxes includes the following components: 2018 2017 2016 United States (132,617,160 ) (76,925,380 ) (89,875,459 ) Total (132,617,160 ) (76,925,380 ) (89,875,459 ) |
Schedule of tax rate reconciliation | A reconciliation between taxes computed at the federal statutory rate and the consolidated effective tax rate is as follows: 2018 2017 2016 Federal statutory tax rate 21.0 % 34.0 % 34.0 % State tax rate, net of federal tax benefit 5.2 % 5.0 % 5.4 % Adjustment in valuation allowances (31.2 )% 22.6 % (40.3 )% Excess stock benefit 5.3 % 0.0 % 0.0 % Federal income tax rate change 0.0 % (60.8 )% — % Permanent and other differences (0.3 )% (0.8 )% 0.9 % Provision (benefit) for income taxes — — — |
Schedule of components of the net deferred income tax asset | The components of the net deferred income tax asset as of December 31, 2018, 2017, and 2016 are as follows: 2018 2017 2016 Deferred Income Tax Assets: Net operating losses $ 140,891,764 $ 99,596,321 $ 111,730,450 R&D Credit 186,347 186,347 186,347 Total deferred income tax asset 141,078,111 99,782,668 111,916,797 Valuation allowance (141,078,111 ) (99,782,668 ) (111,916,797 ) Deferred income tax assets, net $ — $ — $ — |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments on operating leases | This addendum is effective beginning November 1, 2016. As of December 31, 2018, future minimum rental payments on non-cancelable operating leases are as follows: Years Ending December 31, 2019 $ 1,094,116 2020 1,113,069 2021 943,127 Thereafter — Total minimum lease payments $ 3,150,312 As of December 31, 2018, future minimum rental payments on full premises related to the new operating leases are as follows, of which approximately $2.7 million relates to the lease on the suite that has commenced in 2018: Years Ending December 31, 2019 $ 48,288 2020 984,756 2021 1,779,384 2022 1,808,312 2023 1,837,963 Thereafter 12,390,298 Total minimum lease payments $ 18,849,001 |
SELECTED QUARTERLY FINANCIAL _2
SELECTED QUARTERLY FINANCIAL DATA (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of summarized quarterly financial data | Summarized quarterly financial data for fiscal years 2018 and 2017 is as follows: 2018 Quarter (In thousands, except per share) 1st 2nd 3rd 4th Revenues $ 3,773 $ 3,763 $ 3,474 $ 5,089 Gross profit $ 3,139 $ 3,309 $ 2,775 $ 4,139 Net loss $ (24,402 ) $ (33,219 ) $ (35,605 ) $ (39,391 ) Loss per common share, basic and diluted $ (0.11 ) $ (0.15 ) $ (0.16 ) $ (0.17 ) 2017 Quarter (In thousands, except per share) 1st 2nd 3rd 4th Revenues $ 3,985 $ 4,250 $ 4,418 $ 4,125 Gross profit $ 3,326 $ 3,568 $ 3,717 $ 3,530 Net loss $ (21,156 ) $ (19,677 ) $ (14,665 ) $ (21,427 ) Loss per common share, basic and diluted $ (0.11 ) $ (0.10 ) $ (0.07 ) $ (0.10 ) |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues, net | $ 5,089,000 | $ 3,474,000 | $ 3,763,000 | $ 3,773,000 | $ 4,125,000 | $ 4,418,000 | $ 4,250,000 | $ 3,985,000 | $ 16,099,460 | $ 16,777,713 | $ 19,356,450 |
Prescription Vitamins [Member] | |||||||||||
Revenues, net | 15,041,259 | 16,744,831 | 18,854,984 | ||||||||
IMVEXXY R [Member] | |||||||||||
Revenues, net | $ 1,058,201 | ||||||||||
OTC Products [Member] | |||||||||||
Revenues, net | $ 32,882 | $ 501,466 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares excluded from earnings per share calculation | 24,920,395 | 26,481,130 | 33,827,925 |
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 | 12,060,071 |
Stock Options [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares excluded from earnings per share calculation | 20,872,824 | 23,365,225 | 21,767,854 |
Restricted Stock Awards [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares excluded from earnings per share calculation | 1,040,000 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 12 Months Ended | |||
Dec. 31, 2018USD ($)Number | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jan. 01, 2019USD ($) | |
Shelf life of prescription products following product expiration | 24 months | |||
Number of operating segments | Number | 1 | |||
Federal insurance limits | $ 250,000 | |||
Number of issued patents domestic | Number | 21 | |||
Number of issued patents foreign | Number | 24 | |||
Advertising costs | $ 1,682,746 | $ 448,288 | $ 752,611 | |
Customer A [Member] | Accounts Receivable [Member] | ||||
Concentration risk | 42.00% | 27.00% | ||
Customer B [Member] | Accounts Receivable [Member] | ||||
Concentration risk | 24.00% | 23.00% | ||
Customer C [Member] | Accounts Receivable [Member] | ||||
Concentration risk | 13.00% | 22.00% | ||
Customer D [Member] | Accounts Receivable [Member] | ||||
Concentration risk | 11.00% | |||
Minimum [Member] | ||||
Return period of unsalable prescription products | 6 months | |||
Minimum [Member] | Fixed Assets [Member] | ||||
Useful life of assets | 3 years | |||
Minimum [Member] | Software and Software Development Costs [Member] | ||||
Useful life of assets | 5 years | |||
Maximum [Member] | ||||
Return period of unsalable prescription products | 12 months | |||
Maximum [Member] | Fixed Assets [Member] | ||||
Useful life of assets | 7 years | |||
Maximum [Member] | Software and Software Development Costs [Member] | ||||
Useful life of assets | 7 years | |||
Maximum [Member] | IMVEXXY R [Member] | ||||
Enrolled patients co-pay for a set number of prescription refills | $ 35 | |||
ASU 2018-11, Leases [Member] | Minimum [Member] | ||||
Right of use asset | $ 4,000,000 | |||
Lease liability | 4,000,000 | |||
ASU 2018-11, Leases [Member] | Maximum [Member] | ||||
Right of use asset | 5,000,000 | |||
Lease liability | $ 5,000,000 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory | ||
Finished products | $ 2,908,958 | $ 1,485,358 |
Work in process | 339,312 | |
Raw materials | 19,400 | |
TOTAL INVENTORY | $ 3,267,670 | $ 1,485,358 |
OTHER CURRENT ASSETS (Details)
OTHER CURRENT ASSETS (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Other Current Assets | ||
Prepaid sales and marketing costs | $ 5,148,789 | $ 5,335,936 |
Debt financing fees (Note 8) | 1,898,074 | |
Prepaid insurance | 790,465 | 680,243 |
Other prepaid costs | 2,997,365 | 588,105 |
TOTAL OTHER CURRENT ASSETS | $ 10,834,693 | $ 6,604,284 |
FIXED ASSETS, NET (Details)
FIXED ASSETS, NET (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
TOTAL FIXED ASSETS, GROSS | $ 1,026,313 | $ 809,273 |
Accumulated depreciation | (553,630) | (372,218) |
TOTAL FIXED ASSETS, NET | 472,683 | 437,055 |
Acounting System [Member] | ||
Property, Plant and Equipment [Line Items] | ||
TOTAL FIXED ASSETS, GROSS | 301,096 | 301,096 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
TOTAL FIXED ASSETS, GROSS | 490,576 | 273,536 |
Furniture And Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
TOTAL FIXED ASSETS, GROSS | 116,542 | 116,542 |
Computer hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
TOTAL FIXED ASSETS, GROSS | 80,211 | 80,211 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
TOTAL FIXED ASSETS, GROSS | $ 37,888 | $ 37,888 |
FIXED ASSETS, NET (Details Narr
FIXED ASSETS, NET (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 181,412 | $ 141,601 | $ 77,906 |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets | ||
Accumulated Amortization | $ (384,712) | $ (272,141) |
Indefinite-Lived Intangible Assets | ||
Gross Carrying Amount | 4,477,391 | 3,371,888 |
Net Amount | 4,092,679 | 3,099,747 |
Hormone Therapy Drug Candidate Patents - (Pending) [Member] | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 1,855,279 | 1,721,305 |
Net Amount | 1,855,279 | 1,721,305 |
Multiple Trademarks [Member] | ||
Indefinite-Lived Intangible Assets | ||
Gross Carrying Amount | 264,289 | 233,275 |
Net Amount | 264,289 | 233,275 |
Domestic Utilty Patent - Opera Software [Member] | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 31,951 | 31,951 |
Accumulated Amortization | (10,484) | (8,487) |
Net Amount | $ 21,467 | $ 23,464 |
Weighted average remaining amortization period | 10 years 9 months | 11 years 9 months |
Approved Hormone Therapy Drug Candidate Patents [Member] | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | $ 2,234,129 | $ 1,293,614 |
Accumulated Amortization | (282,485) | (171,911) |
Net Amount | $ 1,951,644 | $ 1,121,703 |
Weighted average remaining amortization period | 14 years | 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, NET (Detai_2
INTANGIBLE ASSETS, NET (Details 1) | Dec. 31, 2018USD ($) |
Year Ending December 31, | |
2,019 | $ 139,410 |
2,020 | 139,410 |
2,021 | 139,410 |
2,022 | 139,410 |
2,023 | 139,410 |
Thereafter | $ 1,276,061 |
INTANGIBLE ASSETS, NET (Detai_3
INTANGIBLE ASSETS, NET (Details Narrative) | Aug. 06, 2018USD ($)$ / sharesshares | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($)Number | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | $ | $ 112,474 | $ 71,516 | $ 54,545 | ||
Subscription Agreement [Member] | Knight Therapeutics Inc. [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Issue of common stock shares (in shares) | shares | 3,921,568 | ||||
Common stock sale price (in dollars per share) | $ / shares | $ 5.10 | ||||
Gross proceeds | $ | $ 20,000,000 | ||||
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 | 21 | ||||
Foreign Patents [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Number of issued patents | 24 | ||||
Domestic Utility Patents [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Number of issued patents | 11 | ||||
Foreign Utility Patents [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Number of issued patents | 5 | ||||
Domestic Patents - TX-004HR [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Number of issued patents | 3 | ||||
Foreign Patents - TX-004HR [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Number of issued patents | 12 | ||||
Domestic Utility Patent - Transdermal Patch Candidates [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Number of issued patents | 1 | ||||
Foreign Utility Patent - Transdermal Patch Candidates [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Number of issued patents | 4 | ||||
Domestic Utilty Patent - Opera Software [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Number of issued patents | 1 | ||||
Domestic Patents - TX-009HR [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Number of issued patents | 1 | ||||
Foreign Patents Progesterone - Only Candidate [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Number of issued patents | 3 | ||||
Domestic Utility Patents Topical - Cream Candidates [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Number of issued patents | 1 | ||||
Council License Agreement [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Payment of milestone recorded as finite-lived intangible asset | $ | $ 20,000,000 | ||||
Council License Agreement [Member] | ANNOVERA [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Milestone payments upon FDA approval | $ | $ 20,000,000 | ||||
Milestone payments (payment after release of first commercial batch) | $ | $ 20,000,000 | ||||
Annual royalty rate reduction of initial rate during the six-month period from commercial sale of a generic equivalent | 50.00% | ||||
Annual royalty rate reduction of initial rate after the six-month period from commercial sale of a generic equivalent | 20.00% | ||||
Maximum costs and expenses for post approval study to be paid by the Company | $ | $ 20,000,000 | ||||
Council License Agreement [Member] | ANNOVERA [Member] | Step-based Royalty Payment One [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Royalty (percent) | 5.00% | ||||
Council License Agreement [Member] | ANNOVERA [Member] | Step-based Royalty Payment One [Member] | Maximum [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Net sales amount per step-based royalty | $ | $ 50,000,000 | ||||
Council License Agreement [Member] | ANNOVERA [Member] | Step-based Royalty Payment Three [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Royalty (percent) | 15.00% | ||||
Council License Agreement [Member] | ANNOVERA [Member] | Step-based Royalty Payment Three [Member] | Minimum [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Net sales amount per step-based royalty | $ | $ 150,000,000 | ||||
Council License Agreement [Member] | ANNOVERA [Member] | Step-based Royalty Payment Two [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Royalty (percent) | 10.00% | ||||
Council License Agreement [Member] | ANNOVERA [Member] | Step-based Royalty Payment Two [Member] | Minimum [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Net sales amount per step-based royalty | $ | $ 50,000,000 | ||||
Council License Agreement [Member] | ANNOVERA [Member] | Step-based Royalty Payment Two [Member] | Maximum [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Net sales amount per step-based royalty | $ | $ 150,000,000 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accrued payroll, bonuses and commission costs | $ 6,854,002 | $ 4,240,379 |
Allowance for coupons and returns | 5,294,120 | 1,432,846 |
Accrued sales and marketing costs | 2,288,028 | 420,162 |
Accrued compensated absences | 1,178,110 | 945,457 |
Allowance for wholesale distributor fees | 792,891 | 172,973 |
Accrued legal and accounting expense | 385,824 | 600,350 |
Accrued research and development | 388,675 | 366,933 |
Accrued rent | 365,155 | 327,099 |
Accrued rebates | 412,570 | 76,917 |
Accrued royalties | 114,480 | |
Other accrued expenses | 375,573 | 525,999 |
TOTAL | $ 18,334,948 | $ 9,223,595 |
DEBT (Details)
DEBT (Details) | Dec. 31, 2018USD ($) |
Debt Disclosure [Abstract] | |
Term Loan | $ 75,000,000 |
Debt discount and financing fees | (1,618,986) |
TOTAL LONG-TERM DEBT | $ 73,381,014 |
DEBT (Details Narrative)
DEBT (Details Narrative) | Jul. 30, 2018USD ($) | Jun. 07, 2018USD ($) | May 01, 2018USD ($)Number | Dec. 31, 2018USD ($) |
Proceeds from term loan | $ 75,000,000 | |||
Amortization of debt issuance costs | 269,859 | |||
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% | |||
Council License Agreement [Member] | ||||
Proceeds from term loan | $ 75,000,000 | |||
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 | 4,407,975 | |||
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 | |||
Proceeds from term loan | $ 75,000,000 | |||
Debt issuance costs | $ 3,786,918 | |||
Debt discount | $ 1,888,844 | |||
Effective interest rate | 11.00% | |||
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 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - Warrants [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of shares Warrants | ||
Warrants outstanding beginning | 3,115,905 | |
Warrants granted | 175,000 | |
Warrants expired | (283,334) | |
Warrants outstanding ending | 3,007,571 | 3,115,905 |
Vested and Exercisable ending | 2,963,818 | |
Unvested ending | 43,753 | |
Weighted Average Exercise Price | ||
Warrants outstanding beginning | 2.58 | |
Warrants granted | 5.16 | |
Warrants expired | 2.01 | |
Warrants outstanding ending | 2.78 | 2.58 |
Vested and Exercisable ending | 2.75 | |
Warrants Unvested ending | 5.16 | |
Weighted Average Remaining Contractual Life | ||
Warrants outstanding | 1 year 6 months 29 days | 1 year 9 months 18 days |
Warrants Vested and Exercisable ending | 1 year 6 months 14 days | |
Warrants Unvested ending | 4 years 2 months 16 days | |
Aggregate Intrinsic Value | ||
Warrants outstanding beginning | $ 11,348,273 | |
Warrants outstanding ending | 4,826,403 | $ 11,348,273 |
Vested and Exercisable ending | 4,826,403 | |
Unvested ending | $ 0 |
STOCKHOLDERS' EQUITY (Details 1
STOCKHOLDERS' EQUITY (Details 1) - Warrants [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average exercise price | 5.16 | 6.83 | 7.90 |
Weighted average grant date fair value | $ 2.79 | $ 3.67 | $ 4.78 |
Risk-free interest rate | 2.36% | 1.47% | |
Risk-free interest rate - minimum | 1.04% | ||
Risk-free interest rate - maximum | 1.28% | ||
Volatility | 62.12% | 63.24% | |
Volatility - minimum | 74.10% | ||
Volatility - maximum | 74.15% | ||
Term (in years) | 5 years | 5 years | 5 years |
Dividend yield | 0.00% | 0.00% | 0.00% |
STOCKHOLDERS' EQUITY (Details 2
STOCKHOLDERS' EQUITY (Details 2) - Stock Options [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average exercise price | $ 5.45 | $ 6.60 | $ 6.22 |
Weighted average grant date fair value | $ 3.24 | $ 3.82 | $ 3.94 |
Risk-free interest rate - minimum | 2.38% | 1.84% | 1.13% |
Risk-free interest rate - maximum | 2.89% | 2.05% | 1.90% |
Volatility - minimum | 59.45% | 61.56% | 70.26% |
Volatility - maximum | 64.04% | 64.25% | 73.34% |
Dividend yield | 0.00% | 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 | 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 | 6 years 3 months |
STOCKHOLDERS' EQUITY (Details 3
STOCKHOLDERS' EQUITY (Details 3) - Stock Options [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Options, Outstanding | ||
Options Outstanding beginning | 23,365,225 | |
Options Granted | 3,264,500 | |
Options Exercised | (5,454,526) | |
Options Expired | (25,000) | |
Options Cancelled/Forfeited | (277,375) | |
Options Outstanding ending | 20,872,824 | 23,365,225 |
Vested and Exercisable ending | 16,068,991 | |
Unvested ending | 4,803,833 | |
Options, Weighted Average Exercise Price | ||
Options Outstanding beginning | $ 3.78 | |
Granted | 5.45 | |
Exercised | 0.31 | |
Expired | 7.76 | |
Cancelled/Forfeited | 5.47 | |
Options Outstanding ending | 4.93 | $ 3.78 |
Vested and Exercisable ending | 4.61 | |
Unvested ending | $ 5.99 | |
Options, Weighted Average Remaining Contractual Life | ||
Options Outstanding | 5 years 11 months 8 days | 5 years 1 month 17 days |
Vested and Exercisable ending | 5 years 1 month 2 days | |
Unvested ending | 8 years 9 months 18 days | |
Options outstanding, Aggregate Intrinsic Value | ||
Options Outstanding beginning | $ 64,664,821 | |
Options exercised | 27,534,623 | |
Options Outstanding ending | 12,239,876 | $ 64,664,821 |
Vested and Exercisable ending | 12,239,876 | |
Unvested ending | $ 0 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | Aug. 06, 2018 | Sep. 28, 2017 | Sep. 25, 2017 | Aug. 01, 2017 | Jan. 12, 2016 | Jan. 06, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||||
Preferred stock, authorized | 10,000,000 | 10,000,000 | |||||||
Common stock, authorized | 350,000,000 | 350,000,000 | |||||||
Common stock, issued | 240,462,439 | 216,429,642 | |||||||
Common stock, outstanding | 240,462,439 | 216,429,642 | |||||||
Value of common stock issued during period for stock options exercised | $ 1,666,208 | $ 212,615 | $ 1,373,000 | ||||||
Proceeds from sale of common stock, net of costs | 89,907,797 | 68,572,635 | 134,863,475 | ||||||
Underwriting Agreement [Member] | Goldman Sachs & Co. LLC, [Member] | |||||||||
Issue of common stock (in shares) | 12,745,098 | ||||||||
Issue of common stock (in dollars per shares) | $ 5.10 | ||||||||
Common stock exercisable shares | 1,911,764 | ||||||||
Stock exercisable period | 30 days | ||||||||
Net Proceeds | $ 69,908,000 | ||||||||
Underwriting Agreement [Member] | J.P. Morgan Securities LLC [Member] | |||||||||
Issue of common stock (in shares) | 12,400,000 | 12,400,000 | |||||||
Issue of common stock (in dollars per shares) | $ 5.55 | ||||||||
Net Proceeds | $ 68,573,000 | ||||||||
Knight License Agreement [Member] | Knight Therapeutics Inc. [Member] | |||||||||
Issue of common stock (in shares) | 3,921,568 | ||||||||
Issue of common stock (in dollars per shares) | $ 5.10 | ||||||||
Net Proceeds | $ 20,000,000 | ||||||||
Underwriting Agreement - Goldman and Cowen [Member] | |||||||||
Number of shares offered in underwriting agreement | 15,151,515 | ||||||||
Share price (in dollars per share) | $ 8.25 | ||||||||
Number of days of the option to purchase shares | 30 days | ||||||||
Additional common stock issued under offering | 2,272,727 | ||||||||
Proceeds from sale of common stock, net of costs | $ 134,864,000 | ||||||||
Number of shares issued during the period | 17,424,242 | ||||||||
Stock Options [Member] | |||||||||
Value of common stock issued during period for stock options exercised | $ 1,666,208 | $ 212,615 | $ 989,060 | ||||||
Number of stock options exercised (in shares) | 5,444,526 | 102,546 | 525,362 | ||||||
Number of stock options exercised in cashless exercise (in shares) | 10,000 | 127,109 | |||||||
Number of common stock issued during period for stock options exercised in cashless exercise (in shares) | 9,841 | 87,833 |
STOCKHOLDERS' EQUITY (Details_2
STOCKHOLDERS' EQUITY (Details Narrative 1) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Warrants: | |||
Share based compensation expense | $ 8,661,967 | $ 6,889,323 | $ 17,411,021 |
Unrecognized estimated compensation expense period recognition | 2 years 1 month 6 days | ||
Outside Consultants Warrants [Member] | |||
Warrants: | |||
Exercise price of warrants (in dollars per share) | $ 5.16 | $ 6.83 | |
Warrants granted (in shares) | 175,000 | 125,000 | 245,000 |
Grant date fair value (in dollars per share) | $ 2.79 | $ 3.67 | $ 7.90 |
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% | |
Outside Consultants Warrants [Member] | Tranche One [Member] | |||
Warrants: | |||
Warrants granted (in shares) | 75,000 | ||
Expiration date of warrants | Apr. 21, 2021 | ||
Vesting date of warrants | Apr. 21, 2016 | ||
Outside Consultants Warrants [Member] | Tranche Two [Member] | |||
Warrants: | |||
Warrants granted (in shares) | 50,000 | ||
Expiration date of warrants | Apr. 21, 2021 | ||
Vesting period of warrants | 24 months | ||
Outside Consultants Warrants [Member] | Tranche Three [Member] | |||
Warrants: | |||
Warrants granted (in shares) | 120,000 | ||
Expiration date of warrants | Jan. 21, 2021 | ||
Vesting period of warrants | 12 months | ||
Warrants [Member] | |||
Warrants: | |||
Warrants outstanding | $ 3,007,571 | ||
Weighted-average contractual remaining life | 1 year 7 months 6 days | ||
Weighted average exercise price of warrants (in dollars per share) | 2.78 | 2.58 | |
Warrants granted (in shares) | 175,000 | ||
Grant date fair value (in dollars per share) | $ 2.79 | $ 3.67 | $ 4.78 |
Share based compensation expense | $ 494,136 | $ 313,271 | $ 936,974 |
Unrecognized estimated compensation expense | $ 106,000 | ||
Unrecognized estimated compensation expense period recognition | 2 months 12 days | ||
Warrants [Member] | Minimum [Member] | |||
Warrants: | |||
Exercise price of warrants (in dollars per share) | $ 0.24 | ||
Warrants [Member] | Maximum [Member] | |||
Warrants: | |||
Exercise price of warrants (in dollars per share) | $ 8.20 |
STOCKHOLDERS' EQUITY (Details_3
STOCKHOLDERS' EQUITY (Details Narrative 2) - USD ($) | Jun. 30, 2013 | May 11, 2013 | May 31, 2013 | May 31, 2012 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Non-cash compensation expense | $ 8,661,967 | $ 6,889,323 | $ 17,411,021 | |||||
Shares issued for exercise of warrants, net | 3,798,999 | 989,060 | ||||||
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 | |||||||
Expected term | 5 years | |||||||
Volatility rate | 44.71% | |||||||
Risk free rate | 0.74% | |||||||
Dividend yield | 0.00% | |||||||
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 | |||||||
Non-cash compensation expense | $ 0 | 0 | $ 77,026 | |||||
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] | ||||||||
Vesting date of warrants | Apr. 30, 2018 | |||||||
Unvested warrants | 283,334 | |||||||
Warrants - Cashless Exercise [Member] | Individuals [Member] | ||||||||
Warrants exercised | (6,590,000) | |||||||
Warrants - Unaffiliated Entity [Member] | ||||||||
Non-cash compensation expense | 0 | $ 128,898 | $ 257,796 | |||||
Warrants exercised | (800,000) | (500,000) | ||||||
Warrants [Member] | ||||||||
Non-cash compensation expense | $ 494,136 | $ 313,271 | $ 936,974 | |||||
Unvested warrants | 43,753 | |||||||
Warrants [Member] | Individuals [Member] | ||||||||
Shares issued for exercise of warrants, net | $ 3,798,999 | $ 1,373,000 | ||||||
Shares issued for exercise of warrants, net (in shares) | 2,476,666 | 722,744 | ||||||
Number of shares issued during the period | 4,762,208 | 500,000 |
STOCKHOLDERS' EQUITY (Details_4
STOCKHOLDERS' EQUITY (Details Narrative 3) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based compensation expense | $ 8,091,294 | $ 6,447,154 | $ 16,139,225 |
Total unrecognized estimated compensation expense | $ 12,175,000 | ||
Recognized weighted-average period | 2 years 1 month 6 days | ||
Shares issued for exercise of warrants, net | 3,798,999 | 989,060 | |
Proceeds from sale of common stock, net of costs | $ 89,907,797 | 68,572,635 | 134,863,475 |
Share based compensation expense | $ 8,661,967 | $ 6,889,323 | $ 17,411,021 |
Stock Options [Member] | |||
Options outstanding, ending | 20,872,824 | 23,365,225 | |
Options outstanding | $ 4.93 | $ 3.78 | |
Options Granted | 3,264,500 | ||
Stock Options [Member] | Minimum [Member] | |||
Option exercise prices (in dollars per shares) | $ 0.10 | ||
Stock Options [Member] | Maximum [Member] | |||
Option exercise prices (in dollars per shares) | $ 8.92 | ||
Cash-Settled Stock Appreciation Rights (SARs) [Member] | |||
Options outstanding, ending | 103,000 | ||
Options outstanding | $ 0.07 | ||
Expected term | 6 months | ||
Volatility rate | 49.70% | ||
Risk free rate | 2.70% | ||
Dividend yield | 0.00% | ||
Restricted Stock Units [Member] | |||
Grant date fair value (in dollars per share) | $ 4.06 | ||
Share based compensation expense | $ 73,132 | ||
Expected term | 2 years 11 months 12 days | ||
Unrecognized estimated compensation expense | $ 4,149,000 | ||
Options Granted | 1,040,000 | ||
2012 Stock Incentive Plan [Member] | |||
Number of shares authorized for issuance | 10,000,000 | ||
Options outstanding, ending | 6,278,474 | ||
Number of shares available for issuance | 2,433,333 | ||
2009 Long Term Incentive Compensation Plan [Member] | |||
Number of shares authorized for issuance | 25,000,000 | ||
Options outstanding, ending | 14,594,350 | ||
Number of shares available for issuance | 866,912 | ||
2009 Long Term Incentive Compensation Plan [Member] | Restricted Stock Units [Member] | |||
Options outstanding | $ 1,040,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income before taxes | $ (132,617,160) | $ (76,925,380) | $ (89,875,459) |
United States [Member] | |||
Income before taxes | $ (132,617,160) | $ (76,925,380) | $ (89,875,459) |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory tax rate | 21.00% | 34.00% | 34.00% |
State tax rate, net of federal tax benefit | 5.20% | 5.00% | 5.40% |
Adjustment in valuation allowances | (31.20%) | 22.60% | (40.30%) |
Excess stock benefit | 5.30% | 0.00% | 0.00% |
Federal income tax rate change | 0.00% | (60.80%) | |
Permanent and other differences | (0.30%) | (0.80%) | 0.90% |
Provision (benefit) for income taxes | 0.00% | 0.00% | 0.00% |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Income Tax Assets: | |||
Net operating losses | $ 140,891,764 | $ 99,596,321 | $ 111,730,450 |
R&D Credit | 186,347 | 186,347 | 186,347 |
Total deferred income tax asset | 141,078,111 | 99,782,668 | 111,916,797 |
Valuation allowance | (141,078,111) | (99,782,668) | (111,916,797) |
Deferred income tax assets, net | $ 0 | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Federal statutory tax rate | 21.00% | 34.00% | 34.00% |
Federal [Member] | |||
Net operating loss carry forward | $ 481,365,550 | ||
Net operating loss carry forward expiration date | Dec. 31, 2038 | ||
Federal [Member] | Expiration Period - 20 Years [Member] | |||
Net operating loss carry forward | $ 338,668,076 | ||
NOL carry forward period | 20 years | ||
Federal [Member] | Expiration Period - Indefinite [Member] | |||
Net operating loss carry forward | $ 142,697,474 |
RELATED PARTIES (Details Narrat
RELATED PARTIES (Details Narrative) - Catalent Inc.[Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||
Manufacturing activities billed from related party | $ 4,111,000 | $ 3,646,000 | $ 3,647,000 |
Payable - related party | $ 88,000 | $ 523,000 |
BUSINESS CONCENTRATIONS (Detail
BUSINESS CONCENTRATIONS (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Concentration Risk [Line Items] | |||
Minimum purchase commitments for softgels | $ 2,600,000 | ||
Payment for minimum purchase quantities of purchase commitments (percent) | 50.00% | ||
Customer Concentration [Member] | Sales Revenue [Member] | Four Major Customers [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk | 76.00% | 59.00% | |
Customer Concentration [Member] | Sales Revenue [Member] | Four Major Customers [Member] | Minimum [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk | 10.00% | 10.00% | |
Customer Concentration [Member] | Sales Revenue [Member] | Three Major Customers [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk | 41.00% | ||
Customer Concentration [Member] | Sales Revenue [Member] | Three Major Customers [Member] | Minimum [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk | 10.00% | ||
Customer Concentration - Pillpack [Member] | Sales Revenue [Member] | |||
Concentration Risk [Line Items] | |||
Revenues | $ 5,075,000 | ||
Customer Concentration - AmerisourceBergen [Member] | Sales Revenue [Member] | |||
Concentration Risk [Line Items] | |||
Revenues | 3,246,000 | $ 2,667,000 | |
Customer Concentration - Cardinal Health [Member] | Sales Revenue [Member] | |||
Concentration Risk [Line Items] | |||
Revenues | 2,308,000 | 2,559,000 | |
Customer Concentration - McKesson Corp [Member] | Sales Revenue [Member] | |||
Concentration Risk [Line Items] | |||
Revenues | $ 1,610,000 | 1,959,000 | |
Customer Concentration - Pharmacy Innovations, Pa [Member] | Sales Revenue [Member] | |||
Concentration Risk [Line Items] | |||
Revenues | $ 2,715,000 | $ 2,040,000 | |
Customer Concentration - Woodstock Pharmaceutical and Compounding [Member] | Sales Revenue [Member] | |||
Concentration Risk [Line Items] | |||
Revenues | 2,247,000 | ||
Customer Concentration - Medical Center Pharmacy [Member] | Sales Revenue [Member] | |||
Concentration Risk [Line Items] | |||
Revenues | $ 3,700,000 | ||
Products Supplier #1 [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk | 43.00% | 100.00% | 98.00% |
Products Supplier #2 [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk | 33.00% | ||
Products Supplier #3 [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk | 24.00% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) | Dec. 31, 2018USD ($) |
Non-Cancelable Operating Leases [Member] | |
Future minimum rental payments, years ending December 31, | |
2,019 | $ 1,094,116 |
2,020 | 1,113,069 |
2,021 | 943,127 |
Total minimum lease payments | 3,150,312 |
New Operating Leases [Member] | |
Future minimum rental payments, years ending December 31, | |
2,019 | 48,288 |
2,020 | 984,756 |
2,021 | 1,779,384 |
2,022 | 1,808,312 |
2,023 | 1,837,963 |
Thereafter | 12,390,298 |
Total minimum lease payments | $ 18,849,001 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | May 01, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Non-cancelable operating lease term | 63 months | |||
Rental expense | $ 1,068,275 | $ 1,029,205 | $ 709,483 | |
Expiration date | Oct. 31, 2021 | |||
Lease term | 11 years | |||
Description of lease renewal term | The option to extend the term of the lease for/r two additional consecutive periods of five years | |||
Lease renewal term | 5 years | |||
Reimbursement from landlord - tenant improvements | $ 1,800,000 | |||
New Operating Lease - Suite [Member] | ||||
Total future minimum payments | $ 2,700,000 |
SELECTED QUARTERLY FINANCIAL _3
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 5,089,000 | $ 3,474,000 | $ 3,763,000 | $ 3,773,000 | $ 4,125,000 | $ 4,418,000 | $ 4,250,000 | $ 3,985,000 | $ 16,099,460 | $ 16,777,713 | $ 19,356,450 |
Gross profit | 4,139,000 | 2,775,000 | 3,309,000 | 3,139,000 | 3,530,000 | 3,717,000 | 3,568,000 | 3,326,000 | 13,361,808 | 14,140,770 | 15,170,742 |
Net loss | $ (39,391,000) | $ (35,605,000) | $ (33,219,000) | $ (24,402,000) | $ (21,427,000) | $ (14,665,000) | $ (19,677,000) | $ (21,156,000) | $ (132,617,160) | $ (76,925,380) | $ (89,875,459) |
Loss per common share, basic and diluted (in dollars per shares) | $ (0.17) | $ (0.16) | $ (0.15) | $ (0.11) | $ (0.10) | $ (0.07) | $ (0.10) | $ (0.11) | $ (0.59) | $ (0.37) | $ (0.46) |