Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 06, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | Teligent, Inc. | ||
Entity Central Index Key | 352,998 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 306.1 | ||
Trading Symbol | TLGT | ||
Entity Common Stock, Shares Outstanding | 53,226,382 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 66,006 | $ 87,191 |
Accounts receivable, net | 21,735 | 14,028 |
Inventories | 12,708 | 8,985 |
Prepaid expenses and other receivables | 2,847 | 6,597 |
Total current assets | 103,296 | 116,801 |
Property, plant and equipment, net | 26,215 | 8,706 |
Intangible assets, net | 52,465 | 54,320 |
Goodwill | 446 | 426 |
Other | 804 | 482 |
Total assets | 183,226 | 180,735 |
Current liabilities: | ||
Accounts payable | 4,614 | 3,955 |
Accrued expenses | 10,349 | 6,267 |
Deferred income, current | 0 | 476 |
Capital lease obligation, current | 0 | 70 |
Total current liabilities | 14,963 | 10,768 |
Convertible 3.75% senior notes, net of debt discount and debt issuance costs (face of $143,750) | 111,391 | 102,964 |
Deferred tax liability | 205 | 244 |
Total liabilities | 126,559 | 113,976 |
Stockholders’ equity: | ||
Common stock, $0.01 par value, 100,000,000 shares authorized; 53,148,441 and 53,000,689 shares issued and outstanding as of December 31, 2016 and December 31, 2015, respectively | 551 | 549 |
Additional paid-in capital | 102,624 | 99,258 |
Accumulated deficit | (44,903) | (32,918) |
Accumulated other comprehensive loss, net of taxes | (1,605) | (130) |
Total stockholders’ equity | 56,667 | 66,759 |
Total liabilities and stockholders’ equity | 183,226 | 180,735 |
Series A Convertible Preferred Stock | ||
Stockholders’ equity: | ||
Convertible preferred stock | 0 | 0 |
Series C Convertible Preferred Stock | ||
Stockholders’ equity: | ||
Convertible preferred stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized (in shares) | 100,000,000 | 100,000,000 |
Common Stock, Shares Issued (in shares) | 53,148,441 | 53,000,689 |
Common Stock, Shares Outstanding (in shares) | 53,148,441 | 53,000,689 |
Convertible Notes Payable | ||
Stated interest rate | 3.75% | 3.75% |
Face amount of the Notes | $ 143,750,000 | $ 143,750,000 |
Series A Convertible Preferred Stock | ||
Preferred Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized (in shares) | 100 | 100 |
Preferred Stock, Shares Issued (in shares) | 0 | 0 |
Preferred Stock, Shares Outstanding (in shares) | 0 | 0 |
Series C Convertible Preferred Stock | ||
Preferred Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized (in shares) | 1,550 | 1,550 |
Preferred Stock, Shares Issued (in shares) | 0 | 0 |
Preferred Stock, Shares Outstanding (in shares) | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | |||
Product sales, net | $ 65,904 | $ 43,497 | $ 32,104 |
Research and development services and other income | 977 | 753 | 1,636 |
Total revenues | 66,881 | 44,250 | 33,740 |
Costs and Expenses: | |||
Cost of revenues | 32,194 | 22,935 | 16,948 |
Selling, general and administrative expenses | 15,005 | 11,336 | 5,976 |
Product development and research expenses | 17,140 | 13,171 | 6,910 |
Total costs and expenses | 64,339 | 47,442 | 29,834 |
Operating income (loss) | 2,542 | (3,192) | 3,906 |
Other Income (Expense): | |||
Change in the fair value of derivative liability | 0 | 23,144 | 2,300 |
Foreign currency exchange gain (loss) | (936) | 109 | 0 |
Interest and other expense, net | (13,304) | (13,358) | (782) |
Income (loss) before income tax expense (benefit) | (11,698) | 6,703 | 5,424 |
Income tax expense | 287 | 35 | 173 |
Net income (loss) income attributable to common stockholders | $ (11,985) | $ 6,668 | $ 5,251 |
Basic earnings (loss) per share (in dollars per share) | $ (0.23) | $ 0.13 | $ 0.11 |
Diluted earnings (loss) per share (in dollars per share) | $ (0.23) | $ (0.07) | $ 0.09 |
Weighted average shares of common stock outstanding: | |||
Basic (in shares) | 53,078,158 | 52,872,814 | 49,817,721 |
Diluted (in shares) | 53,078,158 | 67,111,995 | 64,207,190 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ (11,985) | $ 6,668 | $ 5,251 |
Other comprehensive loss, net of tax | |||
Foreign currency translation adjustment | (1,475) | (130) | 0 |
Other comprehensive loss | (1,475) | (130) | 0 |
Comprehensive income (loss) | $ (13,460) | $ 6,538 | $ 5,251 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net income (loss) | $ (11,985) | $ 6,668 | $ 5,251 |
Reconciliation of net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization of fixed assets | 946 | 560 | 415 |
Amortization of license fee | 0 | 100 | 100 |
Provision for write down of inventory | 1,400 | 50 | 228 |
Issuance of stock to consultant | 189 | 0 | 80 |
Stock based compensation | 3,090 | 2,273 | 823 |
Amortization of debt issuance costs | 828 | 1,132 | 107 |
Amortization of intangibles | 2,833 | 514 | 120 |
Foreign currency exchange loss (gain) | 936 | (109) | 0 |
Amortization of debt discount on convertible 3.75% senior notes | 7,599 | 6,680 | 261 |
Change in the fair value of derivative liability | 0 | (23,144) | (2,300) |
Loss on disposal of property | 16 | 0 | 0 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (7,681) | 1,250 | (9,419) |
Inventories | (5,042) | (3,578) | (143) |
Prepaid expenses and other current receivables | 3,427 | (5,408) | (1,075) |
Other assets | 316 | (14) | 0 |
Accounts payable and accrued expenses | 4,702 | (2,849) | 2,346 |
Deferred income | (476) | 362 | (685) |
Net cash used in operating activities | 1,098 | (15,513) | (3,891) |
Cash flows from investing activities: | |||
Capital expenditures | (18,551) | (5,998) | (834) |
Acquisition of product rights and other related assets | 0 | (35,418) | 0 |
Product acquisition costs, net | (3,421) | (11,652) | (2,958) |
Net cash used in investing activities | (21,972) | (53,068) | (3,792) |
Cash flows from financing activities: | |||
Proceeds from convertible 3.75% senior notes, net of $4,765 | 0 | 0 | 138,985 |
Proceeds from issuance of stock, net | 0 | (3) | 24,858 |
Proceeds from note payable, net of debt issuance costs | 0 | 0 | 2,755 |
Principal payments on note payable, bank | 0 | (3,160) | (3,000) |
Proceeds from exercise of common stock options and warrants | 96 | 165 | 837 |
Principal payments on capital lease obligations | (70) | (132) | (64) |
Recovery from stockholder, net | (36) | 19 | 0 |
Excess tax benefits from stock compensation | 0 | 0 | 94 |
Net cash provided by (used in) financing activities | (10) | (3,111) | 164,465 |
Effect of exchange rate on cash and cash equivalents | (301) | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | (20,884) | (71,692) | 156,782 |
Cash and cash equivalents at beginning of year | 87,191 | 158,883 | 2,101 |
Cash and cash equivalents at end of year | 66,006 | 87,191 | 158,883 |
Supplemental Cash flow information: | |||
Cash payments for interest | 5,393 | 5,517 | 178 |
Cash payments for income taxes | 113 | 123 | 23 |
Non cash investing and financing transactions: | |||
Reclassification of derivative liability to equity | 0 | 18,256 | 0 |
Issuance of stock to consultant | 0 | 31 | 0 |
Bifurcation of derivative from convertible 3.75% senior notes | 0 | 0 | 41,400 |
Payable related to product acquisition costs | 0 | 0 | 6,000 |
Restricted Stock | |||
Non cash investing and financing transactions: | |||
Issuance of restricted stock | $ 0 | $ 347 | $ 0 |
CONSOLIDATED STATEMENTS OF CAS7
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - Convertible Notes Payable $ in Thousands | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Stated interest rate | 3.75% |
Payment of debt issuance costs | $ 4,765 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Treasury Stock | Series A Convertible Preferred StockPreferred Stock | Series C Convertible Preferred StockPreferred Stock |
Balance at Dec. 31, 2013 | $ 7,191 | $ 487 | $ 51,541 | $ 0 | $ (44,837) | $ 0 | $ 0 | $ 0 |
Balance (in shares) at Dec. 31, 2013 | 46,748,575 | 0 | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of stock pursuant to a public offering, net of associated fees of $1,868 | 24,858 | $ 53 | 24,805 | |||||
Issuance of stock pursuant to a public offering, net of associated fees of $1,868 (in shares) | 5,347,500 | |||||||
Issuance of stock to consultant | 80 | 80 | ||||||
Issuance of stock to consultant (in shares) | 10,000 | |||||||
Stock based compensation expense | 823 | 823 | ||||||
Stock warrants exercised | 328 | $ 3 | 325 | |||||
Stock warrants exercised (in shares) | 270,546 | |||||||
Stock options exercised | 509 | $ 5 | 504 | |||||
Stock options exercised (in shares) | 443,166 | |||||||
Excess tax benefits from stock compensation | 94 | 94 | ||||||
Reclassification of derivative liability to equity | 0 | |||||||
Net income (loss) | 5,251 | 5,251 | ||||||
Balance at Dec. 31, 2014 | 39,134 | $ 548 | 78,172 | 0 | (39,586) | 0 | $ 0 | $ 0 |
Balance (in shares) at Dec. 31, 2014 | 52,819,787 | 0 | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of stock to consultant | 31 | 31 | ||||||
Issuance of stock to consultant (in shares) | 5,000 | |||||||
Stock based compensation expense | 2,273 | 2,273 | ||||||
Stock warrants exercised | 82 | 82 | ||||||
Stock warrants exercised (in shares) | 67,636 | |||||||
Stock options exercised | 83 | $ 1 | 82 | |||||
Stock options exercised (in shares) | 75,766 | |||||||
Issuance of restricted stock | 346 | 346 | ||||||
Issuance of restricted stock (in shares) | 32,500 | |||||||
Reclassification of derivative liability to equity | 18,256 | 18,256 | ||||||
Recovery from stockholder, net | 19 | 19 | ||||||
Costs related to stock issuance | (3) | (3) | ||||||
Cumulative translation adjustment | (130) | (130) | ||||||
Net income (loss) | 6,668 | 6,668 | ||||||
Balance at Dec. 31, 2015 | 66,759 | $ 549 | 99,258 | (130) | (32,918) | 0 | $ 0 | $ 0 |
Balance (in shares) at Dec. 31, 2015 | 53,000,689 | 0 | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of stock to consultant | 189 | 189 | ||||||
Issuance of stock to consultant (in shares) | 25,000 | |||||||
Stock based compensation expense | 3,090 | 3,090 | ||||||
Stock options exercised | 96 | $ 1 | 95 | |||||
Stock options exercised (in shares) | 61,834 | |||||||
Excess tax benefits from stock compensation | 28 | 28 | ||||||
Issuance of restricted stock | 1 | $ 1 | ||||||
Issuance of restricted stock (in shares) | 60,918 | |||||||
Reclassification of derivative liability to equity | 0 | |||||||
Recovery from stockholder, net | (36) | (36) | ||||||
Cumulative translation adjustment | (1,475) | (1,475) | ||||||
Net income (loss) | (11,985) | (11,985) | ||||||
Balance at Dec. 31, 2016 | $ 56,667 | $ 551 | $ 102,624 | $ (1,605) | $ (44,903) | $ 0 | $ 0 | $ 0 |
Balance (in shares) at Dec. 31, 2016 | 53,148,441 | 0 | 0 |
CONSOLIDATED STATEMENTS OF STO9
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Stock issuance associated fees | $ 1,868 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Nature of the Business Teligent, Inc. is a Delaware corporation incorporated in 1977. On October 22, 2015, the Company announced the change of its name from IGI Laboratories, Inc. to Teligent, Inc. effective as of October 23, 2015. The Company’s office, research and development facilities and manufacturing facilities are located at 105 Lincoln Avenue, Buena, New Jersey. The Company is a specialty generic pharmaceutical company. Under our own label, the Company currently markets and sells generic topical and branded generic and generic injectable pharmaceutical products in the United States and Canada. In the US, we are currently marketing 16 generic topical pharmaceutical products and four branded generic pharmaceutical products. Through the completion of an acquisition, we now sell a total of 30 generic and branded generic injectable products and medical devices in Canada. Generic pharmaceutical products are bioequivalent to their brand name counterparts. We also provide development, formulation, and manufacturing services to the pharmaceutical, over-the-counter, or OTC, and cosmetic markets. The Company also provides development, formulation and manufacturing services to the pharmaceutical, over-the-counter (“OTC”) and cosmetic markets. We operate our business under one segment. As of the date of this report, the Company has 34 Abbreviated New Drug Applications, or ANDAs, on file with the United States Food and Drug Administration, or FDA, for additional pharmaceutical products. On October 14, 2015, the Company provided written notice to the NYSE MKT LLC (the “NYSE MKT”) that the Company intended to transfer the listing of the Company’s common stock from the NYSE MKT to the NASDAQ Global Select Market, and withdraw the listing and registration of the common stock from the NYSE MKT. The Company’s common stock ceased trading on the NYSE MKT at the close of business on October 23, 2015, and began trading on the NASDAQ Global Select Market on October 26, 2015. As discussed in Note 7, on November 13, 2015, the Company acquired all of the rights, title and interest in the development, production, marketing, import and distribution of all pharmaceutical products of Alveda Pharmaceuticals Inc. (“Alveda”) pursuant to two asset purchase agreements, one relating to the acquisition of all of the intellectual property-related assets of Alveda (the “IP-Related APA”) and the other relating to the acquisition of all other assets of Alveda (the “Non-IP Related APA,” and, together with the IP-Related APA, the “APAs”). Teligent also develops, manufactures, fills, and packages topical semi-solid and liquid products for branded and generic pharmaceutical customers, as well as the OTC and cosmetic markets. These products are used in a wide range of applications from cosmetics and cosmeceuticals to the prescription treatment of conditions like dermatitis, psoriasis, and eczema. Teligent has also started selling injectable products as of the fourth quarter of 2015, consistent with the Company's TICO strategy. Teligent has continued to make progress on its facility expansion in Buena, New Jersey, to support the increased capacity demand expected from future product approvals from the FDA. As the Company continues to execute its TICO strategy, it will compete in other markets, including the ophthalmic generic pharmaceutical market, and expects to face other competitors. Principles of Consolidation The consolidated financial statements include the accounts of Teligent, Inc. and its wholly-owned and majority-owned subsidiaries. All inter-company accounts and transactions have been eliminated. The Company consolidated the following entities: Igen, Inc., Teligent Pharma. Inc., Teligent Luxembourg S.à.r.l., Teligent OÜ, Teligent Canada Inc., and Teligent Jersey Limited., in addition to the following inactive entities: Microburst Energy, Inc., Blood Cells, Inc. and Flavorsome, Ltd. Cash Equivalents Cash equivalents consist of short-term investments, which have original maturities of 90 days or less. These include direct obligations of the U.S. Treasury, including bills, notes and bonds, as well as obligations issued or guaranteed by agencies or instrumentalities of the U.S. government including government-sponsored enterprises, or GSEs. Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, trade receivables, restricted cash, notes payable, accounts payable, capital leases and other accrued liabilities at December 31, 2016 approximate their fair value for all periods presented. The Company measures fair value in accordance with ASC 820-10, “Fair Value Measurements and Disclosures”. ASC 820-10 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820-10 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company measures its derivative liability at fair value. The derivative convertible option related to the Notes issued December 16, 2014 was valued using the “with” and “without” analysis. A “with” and “without” analysis is a standard valuation technique for valuing embedded derivatives by first considering the value of the Notes with the option and then considering the value of the Notes without the option. The difference is the fair value of the embedded derivatives. The convertible note derivative is classified within Level 3 because it is valued using the “with” and “without” method, which does utilize inputs that are unobservable in the market. On May 20, 2015, the Company received approval to increase its authorized shares sufficient to allow for the conversion of the entire note into equity at the annual shareholders meeting. Therefore, the derivative liability of $18.3 million was reclassified into stockholders equity. As of December 31, 2016 , the net carrying value of the Notes was approximately $111.4 million compared to their face value of $143.75 million . However, this variance is due to the conversion feature in the Notes rather than to changes in market interest rates. The Notes carry a fixed interest rate and therefore do not subject the Company to interest rate risk. The Company recorded a change in the fair value of the derivative liability through May 20, 2015 of $23.1 million for the year ended December 31, 2015. On May 20, 2015, the Company recorded the final change in fair value and subsequently reclassified the value of the derivative liability into stockholders equity due to the approval of sufficient shares. Accounts Receivable and Allowance for Doubtful Accounts The Company extends credit to its contract services customers based upon credit evaluations in the normal course of business, primarily with 30 -day terms. The Company does not require collateral from its customers. Bad debt provisions are provided for on the allowance method based on historical experience and management’s evaluation of outstanding accounts receivable. The Company reviews the allowance for doubtful accounts regularly, and past due balances are reviewed individually for collectability. The Company charges off uncollectible receivables against the allowance when the likelihood of collection is remote. The Company extends credit to wholesaler and distributor customers and national retail chain customers, based upon credit evaluations, in the normal course of business, primarily with 60 -day terms. The Company maintains customer-related accruals and allowances that consist primarily of chargebacks, rebates, sales returns, shelf stock allowances, administrative fees and other incentive programs. Some of these adjustments relate specifically to the generic prescription pharmaceutical business. Typically, the aggregate gross-to-net adjustments related to these customers can exceed 50% of the gross sales through this distribution channel. Certain of these accruals and allowances are recorded in the balance sheet as current liabilities and others are recorded as a reduction to accounts receivable. Concentration of Credit Risk Financial instruments, which subject the Company to concentrations of credit risk, consist primarily of cash equivalents and trade receivables. These include direct obligations of the U.S. Treasury, including bills, notes and bonds, as well as obligations issued or guaranteed by agencies or instrumentalities of the U.S. government including GSEs, which are not federally insured. The Company maintains its cash in accounts with quality financial institutions. Although the Company currently believes that the financial institutions with which the Company does business will be able to fulfill their commitments to us, there is no assurance that those institutions will be able to continue to do so. In 2016, the Company had sales to three customers which individually accounted for more than 10% of the Company’s total revenue. These customers had sales of $13.5 million , $8.6 million and $6.8 million , respectively, and represented 43% of total revenues in the aggregate. Accounts receivable related to the Company’s major customers comprised 81% of all accounts receivable as of December 31, 2016. In 2015, the Company had sales to three customers which individually accounted for more than 10% of the Company’s total revenue. These customers had sales of $12.3 million , $5.8 million and $5.0 million , respectively, and represented 52% of total revenues in the aggregate. Accounts receivable related to the Company’s major customers comprised 83% of all accounts receivable as of December 31, 2015. In 2014, the Company had sales to two customers which individually accounted for more than 10% of the Company’s total revenue. These customers had sales of $10.5 million and $4.4 million , respectively, and represented 44% of total revenues in the aggregate. Accounts receivable related to the Company’s major customers comprised 42% of all accounts receivable as of December 31, 2014. The Company had net revenue from one product, econazole nitrate cream, which accounted for 8% , 45% and 38% of total revenues in 2016, 2015 and 2014, respectively. The Company had net revenue in 2016 from lidocaine ointment, which accounted for 23% of total revenues, which we launched at the end of the first quarter of 2016. Inventories Inventories are valued at the lower of cost, using the first-in, first-out (“FIFO”) method, or market. The Company records an inventory reserve for losses associated with dated and expired raw materials. This reserve is based on management’s current knowledge with respect to inventory levels, planned production, and extension capabilities of materials on hand. Management does not believe the Company’s inventory is subject to significant risk of obsolescence in the near term. Reserve for obsolescence included in inventory at December 31, 2016 and 2015 were $0.3 million and $0.1 million respectively. Property, Plant and Equipment Depreciation and amortization of property, plant and equipment is provided for under the straight-line method over the assets’ estimated useful lives as follows: Useful Lives Buildings and improvements 10 - 30 years Machinery and equipment 3 - 15 years Repair and maintenance costs are charged to operations as incurred while major improvements are capitalized. When assets are retired or disposed, the related cost and accumulated depreciation thereon are removed and any gains or losses are included in operating results. Intangible Assets Definite-lived intangible assets are stated at cost less accumulated amortization. Amortization of definite-lived intangible assets is computed on a straight-line basis over the assets’ estimated useful lives, generally for periods ranging from 10 to 15 years . The Company continually evaluates the reasonableness of the useful lives of these assets. Indefinite-lived intangible assets are not amortized, but instead are tested at least annually for impairment. Costs to renew or extend the term of a recognized intangible asset are expensed as incurred. In-Process Research and Development Amounts allocated to in-process research and development (“IPR&D”) in connection with a business combination are recorded at fair value and are considered indefinite-lived intangible assets subject to the impairment testing in accordance with the Company’s impairment testing policy for indefinite-lived intangible assets. As products in development are approved for sale, amounts will be allocated to product rights and will be amortized over their estimated useful lives. These valuations reflect, among other things, the impact of changes to the development programs, the projected development and regulatory time frames and the current competitive environment. Changes in any of the Company’s assumptions may result in a reduction to the estimated fair value of the IPR&D asset and could result in future impairment charges. Goodwill Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is tested for impairment on an annual basis during the fourth quarter of each fiscal year or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company first performs a qualitative assessment to determine if the quantitative impairment test is required. If changes in circumstances indicate an asset may be impaired, the Company performs the quantitative impairment test. In accordance with accounting standards, a two-step quantitative method is used for determining goodwill impairment. In the first step, the Company determines the fair value. If the net book value exceeds its fair value, the second step of the impairment test which requires allocation of the fair value to all of its assets and liabilities using the acquisition method prescribed under authoritative guidance for business combinations would then be performed. Any residual fair value is allocated to goodwill. An impairment charge is recognized only if the implied fair value of our reporting unit’s goodwill is less than its carrying amount. The carrying value of goodwill at December 31, 2016 was $0.4 million . We believe it is unlikely that there will be a material change in the future estimates or assumptions used to test for impairment losses on goodwill. However, if actual results were not consistent with our estimates or assumptions, we could be exposed to an impairment charge. Acquisitions The Company accounts for acquired businesses using the acquisition method of accounting, which requires with limited exceptions, that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date. Transaction costs are expensed as incurred. Any excess of the consideration transferred over the assigned values of the net assets acquired is recorded as goodwill. When net assets that do not constitute a business are acquired, no goodwill is recognized. Contingent consideration, if any, is included as part of the acquisition cost and is recognized at fair value as of the acquisition date. Any liability resulting from contingent consideration is remeasured to fair value at each reporting date until the contingency is resolved. These changes in fair value are recognized in earnings. Long-Lived Assets In accordance with the provisions of ASC 360-10-55, the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. In performing such review for recoverability, the Company compares expected future cash flows of assets to the carrying value of the long-lived assets and related identifiable intangibles. If the expected future cash flows (undiscounted) are less than the carrying amount of such assets, the Company recognizes an impairment loss for the difference between the carrying value of the assets and their estimated fair value, with fair values being determined using projected discounted cash flows at the lowest level of cash flows identifiable in relation to the assets being reviewed. As of December 31, 2016 , no impairments existed. Foreign Currency Translation The net assets of international subsidiaries where the local currencies have been determined to be the functional currencies are translated into U.S. dollars using current exchange rates. The U.S. dollar effects that arise from translating the net assets of these subsidiaries at changing rates are recorded in the foreign currency translation account, which is included in Accumulated other comprehensive income (loss) (AOCI) and reflected as a separate component of equity. For those subsidiaries where the U.S. dollar has been determined to be the functional currency, non-monetary foreign currency assets and liabilities are translated using historical rates, while monetary assets and liabilities are translated at current rates, with the U.S. dollar effects of rate changes included in Other (income) expense, net . Accrued Expenses Accrued expenses represent various obligations of the Company including certain operating expenses and taxes payable. For the fiscal year ended December 31, 2016, and 2015, the largest components of accrued expenses were: 2016 2015 (in thousands) Wholesaler fees $ 3,505 $ 2,523 Capital expenditures 2,475 482 Payroll 1,706 1,167 Royalties 843 744 Consulting fees 608 432 Interest expense 240 240 Other 972 679 $ 10,349 $ 6,267 License Fee License fee is amortized on a straight-line basis over the life of the agreement ( 10 years ). Accounting for Environmental Costs Accruals for environmental remediation are recorded when it is probable a liability has been incurred and costs are reasonably estimable. The estimated liabilities are recorded at undiscounted amounts. Environmental insurance recoveries are included in the statement of operations in the year in which the issue is resolved through settlement or other appropriate legal process. Income Taxes The Company records income taxes in accordance with ASC 740-10, “Accounting for Income Taxes,” under the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to operating loss and tax credit carry forwards and differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded based on a determination of the ultimate realizability of future deferred tax assets. A valuation allowance equal to 100% of the net deferred tax assets has been recognized due to uncertainty regarding the future realization of these assets. The Company complies with the provisions of ASC 740-10-25 that clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance with ASC 740-10, “Accounting for Income Taxes,” and prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. Additionally, ASC 740-10 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. There were no unrecognized tax benefits as of the date of adoption. As such, there are no unrecognized tax benefits included in the balance sheet that would, if recognized, affect the effective tax rate. Revenue Recognition The Company considers revenue realized or realizable and earned when it has persuasive evidence of an arrangement, delivery has occurred or contractual services rendered, the sales price is fixed or determinable, and collection is reasonably assured in conformity with ASC 605, Revenue Recognition . The Company derives its revenues from three basic types of transactions: sales of its own generic pharmaceutical topical products, sales of manufactured product for its customers included in product sales, and research and product development services and other services performed for third parties. Due to differences in the substance of these transaction types, the transactions require, and the Company utilizes, different revenue recognition policies for each. Product Sales : Product Sales, net, include Company Product Sales and Contract Manufacturing Sales. Company Product Sales : The Company records revenue from Company product sales when title and risk of ownership have been transferred to the customer, which is typically upon delivery of products to the customer. Revenue and Provision for Sales Returns and Allowances As is customary in the pharmaceutical industry, the Company’s gross product sales from Company label products are subject to a variety of deductions in arriving at reported net product sales. When the Company recognizes revenue from the sale of products, an estimate of sales returns and allowances (“SRA”) is recorded, which reduces product sales. Accounts receivable and/or accrued expenses are also reduced and/or increased by the SRA amount. These adjustments include estimates for chargebacks, rebates, cash discounts and returns and other allowances. These provisions are estimates based on historical payment experience, historical relationship to revenues, estimated customer inventory levels and current contract sales terms with direct and indirect customers. The estimation process used to determine our SRA provision has been applied on a consistent basis and no material adjustments have been necessary to increase or decrease our reserves for SRA as a result of a significant change in underlying estimates. The Company will use a variety of methods to assess the adequacy of our SRA reserves to ensure that our financial statements are fairly stated. These will include periodic reviews of customer inventory data, customer contract programs, subsequent actual payment experience, and product pricing trends to analyze and validate the SRA reserves. The provision for chargebacks is our most significant sales allowance. A chargeback represents an amount payable in the future to a wholesaler for the difference between the invoice price paid to the Company by our wholesale customer for a particular product and the negotiated contract price that the wholesaler’s customer pays for that product. The Company’s chargeback provision and related reserve varies with changes in product mix, changes in customer pricing and changes to estimated wholesaler inventories. The provision for chargebacks also takes into account an estimate of the expected wholesaler sell-through levels to indirect customers at contract prices. The Company will validate the chargeback accrual quarterly through a review of the inventory reports obtained from our largest wholesale customers. This customer inventory information is used to verify the estimated liability for future chargeback claims based on historical chargeback and contract rates. These large wholesalers represent 90% - 95% of the Company’s chargeback payments. The Company continually monitors current pricing trends and wholesaler inventory levels to ensure the liability for future chargebacks is fairly stated. Net revenues and accounts receivable balances in the Company’s consolidated financial statements are presented net of SRA estimates. Certain SRA balances are included in accounts payable and accrued expenses. Gross-To-Net Sales Deductions Years ended December 31, 2016 2015 2014 Gross Company product sales $ 217,633 $ 99,721 $ 51,136 Reduction to gross product sales: Chargebacks and billbacks 141,343 50,127 26,940 Sales discounts and other allowances 27,419 17,974 4,366 Total reduction to gross product sales $ 168,762 $ 68,101 $ 31,306 Company product sales, net $ 48,871 $ 31,620 $ 19,830 The annual activity in the Company's allowance for customer deductions and doubtful accounts for the three years ended December 31, 2016 is as follows (in thousands): Returns Chargebacks & Rebates Discounts Doubtful Accounts TOTAL Balance at December 31, 2013 $ 56 $ 1,746 $ 142 $ 16 $ 1,960 Provision 767 31,040 1,060 — 32,867 Charges processed (149 ) (28,234 ) (857 ) — (29,240 ) Balance at December 31, 2014 $ 674 $ 4,552 $ 345 $ 16 $ 5,587 Provision 1,724 65,713 2,201 74 69,712 Charges processed (1,464 ) (57,815 ) (1,754 ) — (61,033 ) Balance at December 31, 2015 $ 934 $ 12,450 $ 792 $ 90 $ 14,266 Provision 3,568 160,556 4,667 347 169,138 Charges processed (2,192 ) (137,125 ) (2,156 ) (20 ) (141,493 ) Balance at December 31, 2016 $ 2,310 $ 35,881 $ 3,303 $ 417 $ 41,911 Accounts receivable are presented net of SRA balances of $41.5 million and $14.2 million at December 31, 2016 and 2015, respectively. Accounts payable and accrued expenses include $3.5 million and $2.5 million at December 31, 2016 and 2015, respectively, for certain fees related to services provided by the wholesalers. Wholesale fees of $3.7 million , $6.3 million and $3.1 million for the years ended December 31, 2016, 2015 and 2014, respectively, were included in cost of goods sold. In addition, in connection with four of the 16 products the Company currently manufactures, markets and distributes in its own label in the U.S., in accordance with an agreement entered into in December of 2011, the Company is required to pay a royalty calculated based on net sales to one of its pharmaceutical partners. The royalty is calculated based on contracted terms of 40% of net sales for the four products, which is to be paid quarterly to the pharmaceutical partner that the agreement is with. In accordance with the agreement, net sales exclude fees related to services provided by the wholesalers. Accounts payable and accrued expenses include $0.8 million and $0.7 million at December 31, 2016 and 2015, respectively, related to these royalties. Royalty expense of $3.0 million , $3.6 million and $3.6 million was included in cost of goods sold for the years ended December 31, 2016, 2015, and 2014 respectively. The Company includes significant estimates to arrive at net product sales arising from wholesaler chargebacks, Medicaid and Medicare rebates, allowances and other pricing and promotional programs. Contract Manufacturing Sales : The Company recognizes revenue when title transfers to its customers, which is generally upon shipment of products. These shipments are made in accordance with sales commitments and related sales orders entered into with customers either verbally or in written form. The revenues associated with these transactions, net of appropriate cash discounts, product returns and sales reserves, are recorded upon shipment of the products and are included in product sales, net on the Company's Consolidated Statement of Operations. Research and Development Income : The Company establishes agreed upon product development agreements with its customers to perform product development services. Product development revenues are recognized in accordance with the product development agreement upon the completion of the phases of development and when the Company has no future performance obligations relating to that phase of development. Revenue recognition requires the Company to assess progress against contracted obligations to assure completion of each stage. These payments are generally non-refundable and are reported as deferred until they are recognizable as revenue. If no such arrangement exists, product development fees are recognized ratably over the entire period during which the services are performed. Other types of revenue include royalty or licensing revenue, and would be recognized based upon the contractual agreement upon completion of the earnings process. In making such assessments, judgments are required to evaluate contingencies such as potential variances in schedule and the costs, the impact of change orders, liability claims, contract disputes and achievement of contractual performance standards. Changes in total estimated contract cost and losses, if any, are recognized in the period they are determined. Billings on research and development contracts are typically based upon terms agreed upon by the Company and customer and are stated in the contracts themselves and do not always align with the revenues recognized by the Company. Licensing and Royalty Income: Revenues earned under licensing or sublicensing contracts are recognized as earned in accordance with the terms of the agreements. The Company recognizes royalty revenue based on royalty reports received from the licensee. The Company does not have current plans to have meaningful revenue from licensing and royalty agreements in 2017. Stock-Based Compensation ASC 718-10 defines the fair-value-based method of accounting for stock-based employee compensation plans and transactions used by the Company to account for its issuances of equity instruments to record compensation cost for stock-based employee compensation plans at fair value as well as to acquire goods or services from non-employees. Transactions in which the Company issues stock-based compensation to employees, directors and advisors and for goods or services received from non-employees are accounted for based on the fair value of the equity instruments issued. The Company utilizes pricing models in determining the fair values of options and warrants issued as stock-based compensation. These pricing models utilize the market price of the Company’s common stock and the exercise price of the option or warrant, as well as time value and volatility factors underlying the positions. Stock-based compensation expense is recognized over the vesting period of the grant. Debt Issuance Costs Expenses related to debt financing activities are capitalized and amortized on an effective interest method, over the term of the loan. See detailed amounts per year in Notes 5 and 8. ASU 2015-3 specifies that debt issuance costs are to be netted against the carrying value of the financial liability. Under prior guidance, debt issuance costs were recognized as a deferred charge and reported as a separate asset on the balance sheet. The updated guidance aligns the treatment of debt issuance costs and debt discounts in that both reduce the carrying value of the liability. Amortization of debt issuance costs is to be recorded as interest expense on the income statement. Product Development and Research The Company’s research and development costs are expensed as incurred. Shipping and Handling Costs Costs related to shipping and handling is comprised of outbound freight and the associated labor. These costs are recorded in costs of sales. Earnings (Loss) per Common Share Basic earnings (loss) per share of common stock is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share of common stock is computed using the weighted average number of shares of common stock and potential dilutive common stock equivalents outstanding during the period. Potential dilutive common stock equivalents include shares issuable upon the conversion of the notes and the exercise of options and warrants. Due to the net loss for the year ended Decemb |
Liquidity
Liquidity | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity | Liquidity The Company’s principal sources of liquidity are cash and cash equivalents of approximately $66 million at December 31, 2016 and cash from operations. The Company terminated its $10 million credit facility with General Electric Capital Corporation, as agent, and GE Capital Bank and certain other institutions, as lenders, in February 2016. See Note 8. The Company may require additional funding and this funding will depend, in part, on the timing and structure of potential business arrangements. If necessary, the Company may continue to seek to raise additional capital through the sale of its equity or through a strategic alliance with a third party. There may also be additional acquisition and growth opportunities that may require external financing. There can be no assurance that such financing will be available on terms acceptable to the Company, or at all. The Company also has the ability to defer certain product development and other programs, if necessary. The Company believes that our existing capital resources will be sufficient to support its current business plan and operations beyond March 2018. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories as of December 31, 2016 and 2015 consisted of: 2016 2015 (in thousands) Raw materials $ 6,546 $ 4,833 Work in progress — 128 Finished goods 6,162 4,024 $ 12,708 $ 8,985 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment, at cost, as of December 31, 2016 and 2015 , consisted of: 2016 2015 (in thousands) Land $ 257 $ 257 Building and improvements 8,515 5,296 Machinery and equipment 8,583 5,270 Construction in progress 15,496 3,594 32,851 14,417 Less accumulated depreciation and amortization (6,636 ) (5,711 ) Property, plant and equipment, net $ 26,215 $ 8,706 The Company recorded depreciation and amortization expense of $946,000 , $560,000 and $415,000 in 2016 , 2015 and 2014 , respectively. |
Convertible 3.75% Senior Notes
Convertible 3.75% Senior Notes | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Convertible 3.75% Senior Notes | Convertible 3.75% Senior Notes On December 16, 2014, the Company issued $125 million aggregate principal amount of 3.75% Convertible Senior Notes due 2019, or the Notes. On December 22, 2014, the Company announced the closing of the initial purchasers’ exercise in full of their option to purchase an additional $18.75 million aggregate principal amount. The Notes were offered and sold only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The net proceeds from the sale of the Notes were approximately $139 million , after deducting underwriting fees and other related expenses of approximately $4.8 million . Accrued interest in the amount of $0.2 million related to the Notes was included in accrued expenses. The Notes bear interest at a fixed rate of 3.75% per year, payable semiannually in arrears on June 15 and December 15 of each year, beginning on June 15, 2015 and mature on December 15, 2019, unless earlier repurchased, redeemed or converted. The Notes are convertible into shares of the Company’s common stock, cash or a combination thereof. The Notes are convertible at an initial conversion price of approximately $11.29 per share, which is equivalent to an initial conversion rate of 88.5716 shares per $1,000 principal amount of Notes, subject to adjustment in certain events, such as distributions of dividends or stock splits. Holders may convert their Notes at their option prior to September 15, 2019, when or if certain conditions have been met or circumstances have occurred, such as the Company’s stock price exceeds 130% of the conversion price under the Notes for a designated period of time, or the trading price of the Notes is, for a designated period of time, less than 98% of the closing sale price of the Company’s common stock multiplied by the then-current conversion rate of the Notes, or the Company calls Notes for redemption, or certain specified corporate events occur. Holders may also convert their Notes at their option at any time on or after September 15, 2019 and prior to the close of business on the business day immediately preceding the stated maturity date. In addition, following the occurrence of certain changes of control of the Company described in the Indenture governing the Notes or termination of trading of the Company’s common stock or other securities into which the Notes are convertible (a “make-whole fundamental change”) or the delivery by the Company of a notice of redemption, the conversion rate for a holder who elects to convert its Notes in connection with such make-whole fundamental change or such notice of redemption will increase in certain circumstances. Additionally, subject to certain conditions, the Company may redeem for cash any or all outstanding Notes on or after December 19, 2017 in an amount equal to the outstanding principal amount of such Notes, plus accrued and unpaid interest. The Notes and any common stock issuable upon conversion of the Notes have not been registered under the Securities Act, applicable state securities laws or the securities laws of any other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from registration requirements. The Company does not intend to file a registration statement for the resale of the Notes or any common stock issuable upon conversion of the Notes, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful. Since the Company did not have sufficient authorized shares available to share-settle the conversion option in full prior to May 20, 2015, the embedded conversion option did not qualify for equity classification and instead was separately valued and accounted for as a derivative liability. On December 16, 2014, the initial value allocated to the derivative liability was $43.7 million of the $143.75 million principal amount of the Notes, which represents a discount to the debt to be amortized through interest expense using the effective interest method through the maturity of the Notes. Accordingly, the effective interest rate used to amortize the debt discount on the Notes is 12.94% . During each reporting period through May 20, 2015, the derivative liability was marked to fair value with the change in fair value recorded in the consolidated statement of operations. This resulted in a change in the fair value of the derivative liability of $23.1 million for the year ended December 31, 2015. On May 20, 2015, the Company received shareholder approval for the increase in the number of shares of common stock authorized and available for issuance upon conversion of the Notes. As a result, the conversion option can now be share-settled in full, and now qualifies for equity classification, and the bifurcated derivative liability no longer needs to be accounted for as a separate derivative on a prospective basis as of May 20, 2015. The remaining unamortized debt discount that arose at the date of debt issuance from the original bifurcation will continue to be amortized using the effective interest method through interest expense. After adjusting the derivative liability to market value on May 20, 2015, the Company reclassified the remaining $18.3 million value of the derivative liability to stockholders equity. The remaining unamortized discount and unamortized debt financing costs will be amortized over the remaining term of the debt of 3.0 years . At December 31, 2016 and December 31, 2015 , the net carrying amount of the liability component and the remaining unamortized debt discount were as follows: December 31, 2016 December 31, 2015 (in thousands) (in thousands) Face amount of the Notes $ 143,750 $ 143,750 Unamortized discount 29,160 36,759 Debt issuance costs $ 3,199 $ 4,027 Carrying amount of the Notes $ 111,391 $ 102,964 Debt issuance costs associated with the Notes, include fees of $3.2 million at December 31, 2016 and $4.0 million at December 31, 2015 . The assumptions used in connection with the valuation of the convertible option of the Notes issued December 16, 2014 utilizing the “with” and “without” method, discussed in Note 2 was as follows: Initial Measurement Measurement Measurement Issue date 12/17/2014 12/17/2014 12/17/2014 Maturity date 12/15/2019 12/15/2019 12/15/2019 Term 4.99 4.92 4.57 Principal (millions) 143.75 143.75 143.75 Coupon 3.75 % 3.75 % 3.75 % Seniority Senior unsecured Senior unsecured Senior unsecured Conversion shares 88.572 88.572 88.572 Conversion price $ 11.29 $ 11.29 $ 11.29 Stock price $ 9.45 $ 8.80 $ 5.73 Risk free rate 1.61 % 1.64 % 1.44 % Volatility (rounded) 40.00 % 40.00 % 46.00 % The table below provides a reconciliation of beginning and ending balances for the liability measured at fair value using significant observable and unobservable inputs (Level 3). The table reflects the gains associated with the decrease in fair value and the reclassification of the balance of the derivative liability. Initial Measurement Decrease in Fair Value December 31, 2014 Decrease in Fair Value January 1, 2015 to Reclassification of derivative liability to equity on December 31, 2015 Fair value of convertible feature of 3.75% senior notes $ 43,700 $ 2,300 $ 41,400 $ 23,144 $ 18,256 $ — For the year ended December 31, 2016 and December 31, 2015 , the Company recorded the following expenses in relation to the Notes: December 31, December 31, December 31, (in thousands) (in thousands) (in thousands) Interest Expense at 3.75% coupon rate $ 5,391 $ 5,391 $ 225 Debt discount amortization 7,599 6,680 261 Amortization of deferred financing costs 828 728 28 Total interest expense (1) $ 13,818 $ 12,799 $ 514 (1) Included within “Interest and other expense, net” on the Consolidated Statements of Operations |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions On November 13, 2015, the Company completed its acquisition of all of the rights, title and interest in the development, production, marketing, import and distribution of all pharmaceutical products of Alveda. In connection with the closing of the Acquisition, the Company formed three subsidiaries: Teligent Luxembourg S.à.r.l., a private limited company incorporated under the laws of the Grand Duchy of Luxembourg and wholly-owned by the Company ("LuxCo"); Teligent OÜ, a private limited company incorporated under the laws of the Republic of Estonia that is wholly-owned by LuxCo ("EstoniaCo"); and Teligent Canada Inc., a company incorporated under the laws of the Province of British Columbia that is wholly-owned by LuxCo ("CanadaCo"). Effective immediately prior to the closing, the Company assigned its rights and obligations under the IP-Related APA to EstoniaCo and assigned its rights and obligations under the Non-IP Related APA to CanadaCo, The Company capitalized these subsidiaries and funded the Acquisition as follows: the Company funded LuxCo by way of an equity contribution in the amount of $3,374,549 in accordance with the terms and conditions of the Contribution Agreement, by and between the Company and LuxCo, dated as of November 13, 2015 (the "Contribution Agreement"), and extended a loan in a principal amount of $28,185,847 in accordance with the terms and provisions of a loan agreement, by and between the Company and LuxCo dated as of November 13, 2015 (the "LuxCo Loan Agreement"). The LuxCo Loan Agreement has a maturity date of November 4, 2022 . The initial interest rate under the LuxCo Loan Agreement is 0.49% per annum, which shall reset annually to be equal to the short-term Applicable Federal Rate published by the Internal Revenue Service (the "AFR"). LuxCo, in turn, extended a loan to EstoniaCo in the same principal amount on the same terms (except that the interest rate is increased by 25 basis points). In addition, the Company funded CanadaCo by extending a loan in a principal amount of $3,746,094 in accordance with the terms and provisions of a loan agreement, by and between the Company and CanadaCo dated as of November 13, 2015 (the "CanadaCo Loan Agreement"). The initial interest rate under the CanadaCo Loan Agreement is 0.49% per annum, which shall reset annually to be equal to the short-term AFR. Also in connection with the closing of the Acquisition, CanadaCo and EstoniaCo entered into a distribution agreement pursuant to which CanadaCo has agreed to purchase from EstoniaCo certain products and act as the exclusive distributor of such products in Canada (the "Distribution Agreement"). In consideration for the supply of the products, CanadaCo agrees to pay an established per-unit amount for each packaging configuration unit of the product, with such price to be negotiated by the parties from time to time throughout the effective period. As a result, EstoniaCo shall manage all contract manufacturing arrangements with third parties and the sale of all such manufactured products to CanadaCo, which, in turn, shall manage the sale to third parties of all such finished products in Canada. The Distribution Agreement shall have an initial term of two years from the effective date, with automatic one -year renewals, unless terminated earlier by either party. The Company has the right to use licenses and product registrations, access to intellectual property rights (“IPR”) (including know-how, and patents) to use, import, have imported, offer for sale, sell, manufacture and commercialize the devices in Canada. The Alveda Acquisition has been accounted for using the acquisition method of accounting. This method requires that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date. Acquisition related costs were expensed as incurred. The Company utilized the Multi-Period Excess Earnings Method (MPEEM) income approach to value intangible assets. Key assumptions utilized in the analysis of the intangibles were the revenue base, cost of goods sold, operating expenses, income tax rate and discount rate. The following table summarizes the consideration paid for Alveda, the total acquisition related costs incurred by the Company during 2015 in connection with the acquisition, and the fair values of the assets acquired and liabilities assumed (amounts in thousands): Consideration: Fair value of total consideration transferred $ 35,418 Acquisition-related costs* : $ 2,256 Estimated fair value of identifiable assets acquired and liabilities assumed: Accounts receivable $ 911 Inventories 2,673 Prepaid expenses and other current assets 4 Property and equipment 6 Goodwill, deductible 440 Developed Technology 24,858 In-process research and development 3,816 Customer relationships 3,615 Accounts payable and other assumed liabilities (661 ) Deferred tax liability (244 ) *At closing, the Company also paid $5.2 million related to Canadian goods and services tax (GST) and the harmonized sales tax (HST), which is not included in the above table as consideration or acquisition related costs, and all amounts have been refunded in 2016. The following sets forth the major categories of the Company’s intangible assets acquired from Alveda and the weighted-average remaining amortization period as of December 31, 2015 for those assets that are not already fully amortized (dollar amounts in thousands): Gross Carrying Accumulated Net Carrying Weighted Average Technology 25,243 (210 ) 25,033 14.9 years In-process research and development 3,875 — 3,875 N/A - Indefinite lived Customer relationships 3,460 (43 ) 3,417 9.9 years Total 32,578 (253 ) 32,325 As of December 31, 2016 , $10.8 million of revenues and $1.6 million net income from CanadaCo are included in the Company’s earnings. Pro Forma Information (unaudited): The following pro forma information presents the results of operations for the years ended December 31, 2015 , and December 31, 2014 , as if the Alveda acquisition occurred on January 1, 2014: (amounts in thousands, except for per share amounts) For the Years Ended December 31, 2015 December 31, 2014 Total Revenue $ 55,767 $ 47,284 Net income $ 8,443 $ 6,525 Basic earnings per share $ 0.16 $ 0.13 Diluted earnings (loss) per share $ (0.04 ) $ 0.11 The above pro forma results are presented for illustrative purposes and are not intended to represent or be indicative of the actual results of operations of the merged companies that would have been achieved had the acquisition occurred at January 1, 2014, nor are they intended to represent or be indicative of future results of operations. These pro forma results require significant estimates and judgments. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The Company acquired the assets of Canadian pharmaceutical company Alveda Pharmaceuticals, Inc., in November 2015. As a result of the acquisition, we recorded goodwill of $0.4 million . We assess the recoverability of the carrying value of goodwill in the fourth quarter of each year, and whenever events occur or circumstances change that would, more likely than not, reduce the fair value of our reporting unit below its carrying value. There have been no events or changes in circumstances that would have reduced the fair value of our reporting unit below its carrying value. No impairment losses were recognized during the year ended December 31, 2016 . Changes in goodwill during the two years ended December 31, 2016 were as follows (in thousands): Goodwill December 31, 2014 $ — Acquisition 440 Impairments — Foreign currency translation (14 ) December 31, 2015 426 Acquisition — Impairments — Foreign currency translation 20 December 31, 2016 $ 446 Intangible Assets The following sets forth the major categories of the Company’s intangible assets and the weighted-average remaining amortization period as of December 31, 2016 and December 31, 2015 for those assets that are not already fully amortized (dollar amounts in thousands): December 31, 2016 Gross Carrying Accumulated Net Carrying Weighted Average Trademarks and Technology $ 35,403 $ (3,123 ) $ 32,280 13.8 In-process research and development 17,024 — 17,024 N/A - Indefinite lived Customer relationships 3,565 (404 ) 3,161 9.1 Total $ 55,992 $ (3,527 ) $ 52,465 December 31, 2015 Gross Carrying Accumulated Net Carrying Weighted Average Trademarks and Technology $ 37,203 $ (651 ) $ 36,552 14.8 In-process research and development 14,351 — 14,351 N/A - Indefinite lived Customer relationships 3,460 (43 ) 3,417 9.9 Total $ 55,014 $ (694 ) $ 54,320 Changes in intangibles during the two years ended December 31, 2016 were as follows (in thousands): Trademarks and IPR&D Customer December 31, 2014 $ 1,646 $ — $ — Acquisition 34,992 14,292 3,615 Amortization (471 ) — (43 ) Foreign currency translation 385 59 (155 ) December 31, 2015 36,552 14,351 3,417 Acquisition 661 2,811 — Amortization (2,472 ) — (361 ) Foreign currency translation (2,461 ) (138 ) 105 December 31, 2016 $ 32,280 $ 17,024 $ 3,161 Assuming no additions, disposals or adjustments are made to the carrying values and/or useful lives of the intangible assets, annual amortization expense on product rights and other related intangibles for each of the following five years is estimated to be as follows (in thousands): Year ending Amortization December 31, Expense * 2017 2,712 2018 2,712 2019 2,712 2020 2,712 2021 2,712 Thereafter 22,017 *IPR&D amounts will be amortized once products become saleable, and are not included in the table The useful lives of the Company’s intangibles is as follows: Intangibles Category Amortizable Life Trademarks and Technology 15 years Customer Relationships 10 years |
Note Payable - General Electric
Note Payable - General Electric Capital Corporation | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Note Payable - General Electric Capital Corporation | Note Payable - General Electric Capital Corporation On November 18, 2014, the Company entered into an asset-based revolving senior secured credit facility (the “Credit Agreement”) with General Electric Capital Corporation, as agent (the “Agent”), and GE Capital Bank and the other financial institutions party thereto, as lenders (the “Lenders”), pursuant to which the Lenders agreed to extend credit facilities to the Company (the “Financing”). To secure payment of the amounts financed under the Credit Agreement, the Company and the Agent entered into a Guaranty and Security Agreement (the “Guaranty and Security Agreement”). Under the terms of the Guaranty and Security Agreement, the Company granted to the Agent, for the benefit of the Lenders and other secured parties, a continuing security interest in and against substantially all of its tangible and intangible assets, except intellectual property, and each of the Company’s direct and indirect future subsidiaries shall guarantee the Company’s’ obligations under the Credit Agreement. Under the Credit Agreement, the Company could request revolving loan advances up to an aggregate total amount of $10 million which may be increased to $15 million at the request of the Company if certain conditions are met. The Company may also request an incremental facility for revolving loan commitments of up to $10 million . Borrowings under the Credit Agreement may be made as prime rate loans with an applicable margin of 3.0% per annum or 1, 2, 3 or 6 month LIBOR loans with an applicable margin of 4.0% per annum. At December 31, 2016 , the interest rate in effect was 4.2% . Availability under the Credit Agreement is calculated as 85% of the book value of eligible accounts at such time multiplied by a liquidity factor, less any reserves established by the Agent. We had $3.2 million outstanding loans under our GE Capital Credit Agreement at December 31, 2015 . The Company paid the balance of $3.2 million on August 24, 2015. In accordance with the Credit Agreement, the Company is required to provide the Lenders information related to working capital by which the Lenders will calculate the available line of credit, defined in the agreement as the Borrowing Base Certificate. The Credit Agreement was amended on September 16, 2015 to reduce the unused line fee from 0.5% to 0.375% . The term of the Credit Agreement is up to five years from November 18, 2014. The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among others, covenants that limit or restrict the Company’s ability to incur indebtedness, grant liens, merge or consolidate, dispose of assets, make investments, make acquisitions, enter into certain transactions with affiliates, pay dividends or make distributions, or repurchase stock, in each case, subject to customary exceptions for a loan facility of this size and type. In addition, the Credit Agreement contains customary events of default (subject to customary cure periods for certain events of default), including, among others, non-payment, inaccuracy of representations and warranties, covenant defaults, cross-default to material agreements, cross-default to material indebtedness, bankruptcy and insolvency and material judgment defaults. The Company must meet certain financial reporting and audit requirements, as defined by the credit agreement. In December 2015, the Company notified the bank of the termination of the line of credit. On February 10, 2016, the Company formally terminated the line of credit. The Company was in compliance with all covenants of the Credit Agreement for the borrowing period up to February 10, 2016. Debt issuance costs of $432,000 were being amortized over the life of the Credit Agreement. The Company included the unamortized financing costs at December 31, 2015 in the amount of $351,000 in interest expense, net in 2015. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The 1999 Director Stock Option Plan, as amended (the “Director Plan”), provides for the grant of stock options to non-employee directors of the Company at an exercise price equal to the fair market value per share on the date of the grant. An aggregate of 1,975,000 shares have been approved and authorized for issuance pursuant to the Director Plan. A total of 2,634,798 options have been granted to non-employee directors through December 31, 2016 and 807,782 of those have been forfeited through December 31, 2016 and returned to the option pool for future issuance. The options granted under the Director Plan vest in full one year after their respective grant dates and have a maximum term of ten years . As of December 31, 2016 , there were 650,000 shares of common stock options outstanding. As of December 31, 2016 , the 147,984 options available were transferred to a plan that has superseded the Director Plan, as discussed further in this section. The 1999 Stock Incentive Plan, as amended (“1999 Plan”), replaced all previously authorized employee stock option plans, and no additional options may be granted under those previous plans. Under the 1999 Plan, options or stock awards may be granted to all of the Company’s employees, officers, directors, consultants and advisors to purchase a maximum of 3,200,000 shares of common stock. However, pursuant to the terms of the 1999 Plan, no awards may be granted after March 16, 2009. A total of 2,892,500 options, having a maximum term of ten years , have been granted at 100% of the fair market value of the Company’s common stock at the date of grant. Options outstanding under the 1999 Plan are generally exercisable in cumulative increments over four years commencing one year from date of grant. On June 26, 2009, the Board of Directors adopted, and the Company’s stockholders subsequently approved by partial written consent, the IGI Laboratories, Inc. 2009 Equity Incentive Plan (the “2009 Plan”). The 2009 Plan became effective on July 29, 2009. The 2009 Plan allows the Company to continue to grant options and restricted stock, as under the 1999 Plan, but also authorizes the Board of Directors to grant a broad range of other equity-based awards, including stock appreciation rights, restricted stock units ("RSUs") and performance awards. The 2009 Plan has been created, pursuant to and consistent with the Company’s current compensation philosophy, to assist the Company in attracting, retaining and rewarding designated employees, directors, consultants and other service providers of the Company and its subsidiaries and affiliates, in a manner that will be cost efficient to the Company from both an economic and financial accounting perspective. On April 12, 2010, the Board of Directors adopted, and the Company’s stockholders subsequently approved, an amendment and restatement of the 2009 Plan to increase the number of shares of Common Stock available for grant under such plan by adding 2,000,000 shares of Common Stock. The 2009 Plan, as amended on May 29, 2010, authorizes up to 5,000,000 shares of the Company’s common stock for issuance pursuant to the terms of the 2009 Plan. The maximum number of shares that may be subject to awards made to any individual in any single calendar year under the 2009 Plan is 1,000,000 shares. As of December 31, 2016 , there were 179,900 RSUs outstanding, 1,341,746 shares of stock outstanding, and 3,216,369 shares of common stock options outstanding. As of December 31, 2016 , the 92,883 options available were transferred to a plan that has superseded the 2009 Plan, as discussed further in this section. On May 25, 2016, the Board of Directors approved the Company's 2016 Equity Incentive Plan (the "2016 Plan"). The 2016 Plan provides for the issuance of awards of up to 2,000,000 shares of the Company's common stock, plus any shares of common stock that are represented by awards granted under our Director Plan and 2009 Plan that are forfeited, expire or are canceled without delivery of shares of common stock or which result in the forfeiture of shares of common stock back to the Company on or after May 25, 2016. Generally, shares of common stock reserved for awards under the 2016 Plan that lapse or are canceled, will be added back to the share reserve available for future awards. However, shares of common stock tendered in payment for an award or shares of common stock withheld for taxes will not be available again for grant. The 2016 Plan provides that no participant may receive awards for more than 1,000,000 shares of common stock in any fiscal year. As the 2016 Plan supersedes both the Director Plan and the 2009 Plan, any available shares from both are now incorporated into the 2016 Plan. As of December 31, 2016 , there were 20,000 shares of common stock outstanding and options to purchase 239,000 shares of common stock outstanding. As of December 31, 2016 , there were a total of 1,981,867 shares of common stock available under the 2016 Plan. As of December 31, 2016 , there were options to purchase 4,105,369 shares of common stock outstanding collectively in the Director Plan, 2009 Plan, and the 2016 Plan. In the interest of maintaining consistency with the Company's 2016 Equity Incentive Plan, on March 13, 2017, the Company entered into (i) an amendment to the option agreements governing each option grant currently outstanding under the Company's 2009 Equity Incentive Plan, and (ii) an amendment to the restricted stock unit, or RSU, agreements governing each RSU grant currently outstanding under the 2009 Plan. The amendments provide for the automatic vesting upon a change of control of the Company of each option grant and RSU grant, as applicable, outstanding under the 2009 Plan. The forms of amendment are attached hereto as Exhibits 10.31 and 10.32, respectively, and are incorporated by reference herein. Stock Options The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing formula that uses assumptions noted in the following table. Expected volatilities and risk-free interest rates are based upon the expected life of the grant. Assumptions 2016 2015 2014 Expected dividends 0 % 0 % 0 % Risk free rate 1.14 % 1.11 % 0.74% – 1.2% Expected volatility 68.0% - 71.3% 52.7% - 68.3% 44.0% - 53.0% Expected term (in years) 3.1 – 3.3 years 3.2 – 3.3 years 3.2 - 3.3 years Estimated volatility was calculated using the historical volatility of the Company’s stock over the expected life of the options. The expected life of the options was estimated based on the Company’s historical data. The forfeiture rates are estimated based on historical employment/directorship termination experience. The risk free interest rate is based on U.S. Treasury yields for securities with terms approximating the terms of the grants. The assumptions used in the Black-Scholes option valuation model are highly subjective, and can materially affect the resulting valuation. Stock option transactions in each of the past three years under the aforementioned plans in total were: Shares Exercise Weighted January 1, 2014 shares issuable under options 2,643,500 $ .55 - $3.03 $ 1.12 Granted 397,500 2.96 - 10.55 5.89 Exercised (443,166 ) .55 - 1.95 1.15 Expired — — — Forfeited (161,000 ) 1.10 - 5.65 2.71 December 31, 2014 shares issuable under options 2,436,834 .76 - 10.55 1.79 Granted 1,357,000 5.55 - 10.67 9.20 Exercised (75,766 ) .76 - 3.62 1.10 Expired — — — Forfeited (125,334 ) 1.40 – 10.67 8.99 December 31, 2015 shares issuable under options 3,592,734 .79 - 10.67 4.36 Granted 739,135 4.72 - 8.81 7.26 Exercised (61,834 ) 1.10 - 6.51 1.54 Expired — — — Forfeited (164,666 ) 4.55 - 10.67 8.37 December 31, 2016 shares issuable under options 4,105,369 $ .79 - $10.67 4.76 The following table summarizes information concerning outstanding and exercisable options as of December 31, 2016 : Options Outstanding Options Exercisable Range of Number of Weighted Weighted Number of Weighted $0.79 to $1.00 50,000 3.01 $ 0.79 50,000 $ 0.79 1.01 to 1.50 1,808,400 5.11 1.07 1,808,400 1.07 1.51 to 10.67 2,246,969 8.35 7.82 805,803 7.15 $0.79 to $10.67 4,105,369 6.86 $ 4.76 2,664,203 $ 2.90 The following table summarizes information concerning outstanding and exercisable options as of December 31, 2015 : Options Outstanding Options Exercisable Range of Number of Weighted Weighted Number of Weighted $0.79 to $1.00 50,000 4.01 $ 0.79 50,000 $ 0.79 1.01 to 1.50 1,862,400 6.14 1.07 1,851,400 1.07 1.51 to 10.67 1,680,334 8.96 8.10 289,997 4.02 $0.79 to $10.67 3,592,734 7.43 $ 4.36 2,191,397 $ 1.45 The following table summarizes information concerning outstanding and exercisable options as of December 31, 2014 : Options Outstanding Options Exercisable Range of Number of Weighted Weighted Number of Weighted $0.76 to $1.00 97,000 3.04 $ 0.78 97,000 $ 0.78 1.01 to 1.50 1,887,500 7.14 1.07 1,448,664 1.08 1.51 to 10.55 452,334 8.68 5.02 110,333 1.78 $0.76 to $10.55 2,436,834 7.26 $ 1.79 1,655,997 $ 1.11 The Company has recorded an aggregate of $2.3 million, $1.7 million and $0.3 million related to its stock option based expenses in cost of sales, product development and research expenses, and selling, general and administrative expenses on the accompanying Consolidated Statements of Operations for the years ended December 31, 2016 , 2015 and 2014 , respectively. The aggregate intrinsic value of options outstanding was $11.5 million at December 31, 2016 , $17.4 million at December 31, 2015 and $17.1 million at December 31, 2014 . The aggregate intrinsic value of the options exercisable was $11.3 million at December 31, 2016 , $16.3 million at December 31, 2015 and $12.7 million at December 31, 2014 . The total intrinsic value of the options exercised during 2016 , 2015 and 2014 was $0.3 million, $0.6 million and $3.4 million, respectively. A summary of non-vested options at December 31, 2016 and changes during the year ended December 31, 2016 is presented below: Options Weighted Non-vested options at January 1, 2016 1,401,337 $ 3.60 Granted 739,135 3.45 Vested (574,469 ) 3.46 Forfeited (124,837 ) 3.42 Non-vested options at December 31, 2016 1,441,166 $ 3.58 As of December 31, 2016 , there was $3.4 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements under the Plan. The costs will be recognized through December 2018. Restricted Stock and RSUs The Company periodically grants restricted stock and RSU awards to certain officers and other employees that typically vest one to three years from their grant date. On December 30, 2013, in accordance with the terms of the employment agreement between Jason Grenfell-Gardner, President and CEO, and the Company executed on July 30, 2012, a restricted stock award in the amount of 325,000 shares was granted to Jason Grenfell-Gardner, with one third of the shares of restricted stock vested on December 31, 2013, and the remaining two thirds of the shares of restricted stock vesting in equal amounts on July 30, 2014 and July 30, 2015. The Company recognized $0.8 million, $0.6 million and $0.5 million, respectively, of compensation expense during the years ended December 31, 2016 , 2015 and 2014 related to restricted stock awards and RSUs. Stock compensation expense is recognized over the vesting period of the restricted stock and RSUs. At December 31, 2016 , the Company had approximately $1.0 million of total unrecognized compensation cost related to non-vested restricted stock and RSUs, all of which will be recognized through September 2018. A summary of non-vested shares of restricted stock and changes during each of the past three years is as follows: Number of Weighted Average Non-vested balance at January 1, 2014 246,001 $ 2.64 Changes during the period: Shares granted — — Shares vested (137,667 ) 2.46 Shares forfeited — Non-vested balance at January 1, 2015 108,334 $ 2.86 Changes during the period: Shares granted 32,500 10.67 Shares vested (140,834 ) 4.66 Shares forfeited — Non-vested balance at December 31, 2015 — $ — There has been no activity in the year ended 2016. A summary of non-vested RSUs and changes during each of the past three years is as follows: Number of Weighted Average Non-vested balance at January 1, 2015 — $ — Changes during the period: Shares granted 230,250 10.32 Shares vested (32,500 ) 10.67 Shares forfeited (15,000 ) 10.67 Non-vested balance at December 31, 2015 182,750 $ 10.23 Changes during the period: Shares granted 58,068 7.50 Shares vested (60,918 ) 10.13 Shares forfeited — — Non-vested balance at December 31, 2016 179,900 $ 9.35 There was no RSU activity for the year ended December 31, 2014 . |
Stock Warrants
Stock Warrants | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stock Warrants | Stock Warrants Stock warrants as of December 31, 2016 , 2015 and 2014 consisted of: 2016 2015 2014 Warrants Weighted Warrants Weighted Warrants Weighted Beginning balance — $ — 84,000 $ 1.21 354,546 $ 1.21 Stock warrants granted — — — — — — Stock warrants expired — — (16,364 ) 1.21 — — Stock warrants exercised — — (67,636 ) 1.21 (270,546 ) 1.21 Ending balance — $ — — $ — 84,000 $ 1.21 In connection with the private placement of the Company’s Common Stock on December 8, 2010, the Company granted common stock warrants to purchase up to 338,182 and 16,364 shares, respectively, to each of its two placement agents for $1.21 per share which expired on December 8, 2015. There were no stock warrant activities during 2016 and no outstanding warrants as of December 31, 2016. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes During the year ended December 31, 2016, the Company began significant operations in certain foreign countries and is, accordingly, subject to tax in those foreign jurisdictions. Income (Loss) before income tax for the years ended December 31, 2016, 2015 and 2014 consisted of the following (in thousands): 2016 2015 2014 (in thousands) U.S. operations (9,514 ) 6,911 5,424 Foreign operations (2,184 ) (208 ) — Global Total $ (11,698 ) $ 6,703 $ 5,424 The Company’s current tax expense was $287,000 , $35,000 and $173,000 for the years ended December 31, 2016 , 2015 and 2014 , respectively. The provision for income taxes attributable to continuing operations before income taxes for the years ended December 31, 2016 , 2015 and 2014 is as follows (in thousands): 2016 2015 2014 Current tax expense (benefit): Federal $ 26 $ — $ 97 State and local 35 19 76 Foreign 272 28 Total current tax expense 333 47 173 Deferred tax expense: Federal — — — State and local — — — Foreign (46 ) (12 ) Total deferred tax expense (46 ) (12 ) — Total income tax expense $ 287 $ 35 $ 173 The provision for (benefit from) income taxes differed from the amount of income taxes determined by applying the applicable federal tax rate ( 34% ) to pretax income (loss) from continuing operations as a result of the following (in thousands): 2016 2015 2014 Expected Statutory expense (benefit) $ (3,977 ) $ 2,244 $ 1,844 Change in the fair values of derivative and amortization of debt discount 2,584 (5,597 ) (693 ) Other non-deductible expenses 63 7 3 Change in valuation allowance 590 3,254 (1,031 ) Rate differential - foreign vs. US 822 114 — State income taxes, net of federal benefit 23 13 50 Federal tax impact of state tax benefit, net 154 — — Exchange gain $ 28 $ — $ — $ 287 $ 35 $ 173 Deferred tax assets included in the Consolidated Balance Sheets as of December 31, 2016 and 2015 consisted of the following: 2016 2015 (in thousands) Current Assets: Allowance for doubtful accounts $ 118 $ 6 Inventory reserve 467 157 Accrued expenses 831 1,005 Total current assets 1,416 1,168 Long Term Assets (Liabilities): Property, plant and equipment 317 348 Intangible assets (205 ) (256 ) Tax operating loss carry forwards 10,962 11,283 Tax credit carry forwards 254 291 Non-employee stock options 2,302 1,238 Other (1 ) (7 ) Total Long Term Assets (Liabilities) 13,629 12,897 Gross Deferred Tax Asset (Liability) 15,045 14,065 Less Valuation Allowance (15,250 ) (14,309 ) Deferred taxes, net $ (205 ) $ (244 ) The Company evaluates the recoverability of its net deferred tax assets based on its history of operating results, its expectations for the future, and the expiration dates of the net operating loss carry forwards. Based on the preponderance of the evidence, the Company has concluded that it is more likely than not that it will be unable to realize the net deferred tax assets in the immediate future and has established a valuation allowance for all such net deferred tax assets. Accordingly, the Company has provided a valuation allowance of $15.3 million and $14.3 million for the years ended December 31, 2016 and 2015 , respectively, on its net deferred tax assets. The valuation allowance increased during the year 2015 by $1.0 million related to changes in deferred tax assets for the year ended December 31, 2016 . Operating loss and tax credit carry forwards as of December 31, 2016 were as follows: 2016 2015 (in thousands) Federal: Net operating losses (expiring through 2035) $ 31,336 $ 32,870 Research tax credits (expiring through 2025) 168 168 Alternative minimum tax credits (available without expiration) 86 70 State: Net Operating Losses: Tennessee (expiring in 2030) 529 568 New Jersey (expiring in 2035) 1,764 822 Illinois (expiring in 2035) 222 255 Foreign Net operating losses (no expiration) 232 10 At December 31, 2016 , the Company’s U.S. federal net operating loss carryforwards will expire as follows: Year Net Operating Loss (in thousands) 2017 - 2021 $ 7,187 2022 - 2026 2,268 2027 - 2031 11,373 2032 and thereafter 10,508 Total $ 31,336 The above excludes net operating losses of $3.3 million which, if realized would be accounted for as additional paid-in capital. The Company’s ability to use net operating loss carry forwards is subject to substantial limitation in future periods under certain provisions of Section 382 of the Internal Revenue Code of 1986, as amended, which limit the utilization of net operating losses upon a more than 50% change in ownership of the Company’s stock that is held by 5% or greater stockholders. The Company examined the application of Section 382 with respect to an ownership change that took place during 2010, as well as the limitation on the application of net operating loss carry forwards. The Company believes that operating losses subsequent to the change date in 2010 (aggregating $15.3 million ) are not subject to Section 382 limitations. The Company has estimated that the annual limitation starting in 2010 aggregates from $1.0 million to $2.3 million per year including the effect of amortization of built in gains. The Company's loss carryforwards may be further limited in the future if additional ownership changes occur. ASU 2016-09 “Improvements to Employee Share-Based Payment Accounting” issued by FASB, allows recognition of windfall profits as a tax benefit, either as a reduction of current income tax expense or (as in the case of the Company) a deferred tax asset resulting from an increase in net operating loss carryforwards. The effective date for implementation of this change is for years beginning after December 15, 2016 with a cumulative adjustment to retained earnings as of the beginning of the year of adoption. The Company does not anticipate any adjustment to retained earnings related to the increase in net operating losses since deferred tax assets related to net operating losses are fully reserved. The Company had previously recognized $122,000 of windfall tax benefits in additional paid in capital and will adjust retained earnings by that amount during the first quarter of 2017. The Company is subject to the provisions of ASC 740-10-25, Income Taxes (ASC 740). ASC 740 prescribes a more likely-than-not threshold for the financial statement recognition of uncertain tax positions. ASC 740 clarifies the accounting for income taxes by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. On a quarterly basis, the Company undergoes a process to evaluate whether income tax accruals are in accordance with ASC 740 guidance on uncertain tax positions. For federal purposes, post 1998 tax years remain open to examination as a result of net operating loss carryforwards. The Company is currently open to audit by the appropriate state income taxing authorities for tax years 2012 through 2015. The Company has not recorded any liability for uncertain tax positions at December 31, 2016 or December 31, 2015. |
Lease Commitments
Lease Commitments | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Lease Commitments | Lease Commitments The Company’s commitments and contingencies consisted of operating leases for warehouse and office space and equipment. Future minimum lease payments under non-cancelable operating leases are as follows: Commitments 2017 $ 548 2018 458 2019 421 2020 426 2021 392 Thereafter 742 $ 2,987 Rent expense was $934,400 , $360,000 and $216,200 for the years ended December 31, 2016 , 2015 and 2014 , respectively. |
Legal and U.S. Regulatory Proce
Legal and U.S. Regulatory Proceedings | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal and U.S. Regulatory Proceedings | Legal and U.S. Regulatory Proceedings On March 2, 2001, the Company became aware of environmental contamination resulting from an unknown heating oil leak at its former manufacturing facility. The Company immediately notified the New Jersey Department of Environmental Protection (“NJ DEP”) and the local authorities, and hired a contractor to assess the exposure and required clean up. The total estimated costs for the clean-up and remediation is $889,000 , of which approximately $122,000 remains accrued as of December 31, 2016 . Based on information provided to the Company from its environmental consultant and what is known to date, the Company believes the reserve is sufficient for the remaining remediation of the environmental contamination. There is a possibility, however, that the remediation costs may exceed the Company’s estimates. The restricted cash, included in other assets on the Consolidated Balance Sheet of $122,000 as of December 31, 2016 and $124,000 as of December 31, 2015 represents a restricted escrow account set up on the requirement of the NJ DEP for the soil remediation work. These funds will be released to the Company upon the NJ DEP’s approval when the remediation is completed. On December 19, 2013, the Company filed a complaint in the United States District Court for the District of Delaware against Mallinckrodt LLC, Mallinckrodt, Inc. and Nuvo Research Inc., collectively refer to as Mallinckrodt, seeking a declaration of non-infringement of United States Patent Nos. 8,217,078 and 8,546,450 so that the Company can bring our generic diclofenac sodium topical solution 1.5% to market at the earliest possible date under applicable statutory and FDA regulatory provisions. On January 10, 2014, Mallinckrodt filed an answer and counterclaim alleging that the Company infringed the patents at issue. On June 26, 2014, the Company entered into a settlement agreement with Mallinckrodt, pursuant to which Mallinckrodt granted us a non-exclusive license to launch the Company’s diclofenac sodium topical solution 1.5% product on March 28, 2015. There was no material impact on the Company’s financial statements as a result of the settlement. We received approval to sell the diclofenac sodium topical solution 1.5% from the FDA in July 2015. On May 21, 2015, Horizon Pharma Ireland Limited, HZNP Limited and Horizon Pharma USA, Inc. (collectively, “Horizon”) filed a complaint in the United States District Court for the District of New Jersey against the Company alleging infringement of certain United States patents based upon our submission to the FDA of an Abbreviated New Drug Application (“ANDA”) seeking FDA approval to market diclofenac topical solution 2% w/w before the expiration of the patents asserted in the complaint. On June 30, 2015, August 11, 2015, September 17, 2015, October 27, 2015 and February 5, 2016, Horizon filed additional complaints in the United States District Court for the District of New Jersey against the Company alleging infringement of other of its United States patents in relation to the Company’s submission of the same ANDA. On July 21, 2015, September 11, 2015, October 6, 2015, October 21, 2015 and December 17, 2015, and March 17, 2016 the Company filed answers, affirmative defenses and counterclaims with respect to the complaints filed by Horizon. In those filings, the Company asserted that the patents alleged to be infringed in the complaints filed by Horizon are invalid and not infringed by us. On April 27, 2016, Horizon and the Company filed a stipulation of dismissal to dismiss the cases. The court entered an order dismissing the cases on May 2, 2016. On May 9, 2016, Horizon and the Company entered into a settlement agreement. Under the settlement agreement, the Company obtained a license to market diclofenac topical solution 2% no later than January 10, 2029 or earlier in certain circumstances, including the resolution by settlement or court decision of other third party litigation involving diclofenac topical solution 2% or the market entry by other third party generic versions of diclofenac topical solution 2% . At this time, the Company cannot estimate if or when any of those earlier events might occur. No consideration was exchanged as part of the settlement. The Company has not recorded accruals related to this case and has not yet received final approval. On December 4, 2015, Galderma Laboratories, L.P. and Galderma S.A. (collectively, “Galderma”) filed a complaint in the United States District Court for the Northern District of Texas against the Company alleging infringement of United States Patent No. 6,106,848 based upon the Company’s submission to the FDA of an ANDA seeking FDA approval to market clobetasol propionate lotion 0.05% before the expiration patent asserted in the complaint. On January 5, 2016, Galderma and the Company entered into a Settlement and License Agreement the terms of which are confidential. On January 22, 2016, the case was dismissed with prejudice. From December 20, 2016 to January 26, 2017, eight putative class action antitrust lawsuits have been filed against Teligent Inc. along with co-defendants including Taro Pharmaceuticals U.S.A., Inc., Perrigo New York Inc., Fougera Pharmaceuticals Inc., and Sandoz, Inc. The actions are currently pending in the District of New Jersey and Eastern District of Pennsylvania, and a consolidation motion is currently pending before the Judicial Panel on Multidistrict Litigation. The class plaintiffs seek to represent nationwide or state classes consisting of persons who directly purchased, indirectly purchased or reimbursed patients for the purchase of generic econazole from any of the defendants from June 1, 2014 (or later in some complaints) until the time the defendants’ allegedly unlawful conduct ceased or will cease. The plaintiffs allege a conspiracy to fix prices for generic econazole, in violation of federal antitrust laws or state antitrust, consumer protection, and other laws. Plaintiffs seek treble damages for alleged price overcharges for generic econazole during the alleged period of conspiracy, and the indirect purchaser class plaintiffs seek injunctive relief against Teligent. All of these cases are in their initial stages. The parties are negotiating briefing schedules for motions to dismiss, which will be filed after the Judicial Panel on Multidistrict Litigation determines an appropriate forum. Due to the early stage of these cases, we are unable to form a judgment at this time as to whether an unfavorable outcome is either probable or remote or to provide an estimate of the amount or range of potential loss. We believe these cases are without merit, and we intend to vigorously defend against these claims. |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefits | Employee Benefits The Company has a 401(k) contribution plan, pursuant to which employees may elect to contribute to the plan, in whole percentages, up to 100% of compensation. Employees’ contributions are subject to a minimum contribution by participants of 1% of compensation and a maximum contribution of $18,000 for 2016 , $18,000 for 2015 and $17,500 for 2014 , plus a catch-up contribution of up to $6,000 for 2016 , $6,000 for 2015 and $5,500 for 2014 , if a participant qualifies. The Company matches 100% of the first 3% of compensation contributed by participants and 50% of the next 2% of compensation contributed by participants. The Company contribution is in the form of cash, which is vested immediately. The Company has recorded charges to expense related to this plan of approximately $228,619 , $172,965 and $126,600 in 2016 , 2015 and 2014 , respectively. |
Asset Purchase Agreements
Asset Purchase Agreements | 12 Months Ended |
Dec. 31, 2016 | |
Asset Purchase Agreement Disclosure [Abstract] | |
Asset Purchase Agreements | Asset Purchase Agreements Sebela On March 31, 2016, the Company entered into an Asset Purchase Agreement and certain other ancillary agreements with Sebela International Limited, an Irish company resident in Bermuda (" Sebela "). The Company acquired all rights, title and interests of Sebela in its existing inventory and certain of its contracts associated with two medical devices, which the Company had previously developed. The transaction is accounted for as a purchase of the product and product rights, and as such the initial payment and related costs to acquire the assets (excluding inventory) are included as part of product acquisition costs totaling $330,000 . The Company will amortize the costs over fifteen years , the useful life of the acquired products and product rights. In addition, the Company purchased approximately $69,000 of inventory related to the products acquired. Concordia On October 5, 2015, the Company, together with a wholly-owned subsidiary of the Company incorporated under the laws of Jersey (the “Company Subsidiary”, and together with the Company, the “Purchasers”), entered into an Asset Purchase Agreement (the “Purchase Agreement”) and certain other ancillary agreements with Concordia Pharmaceuticals Inc., S.à.r.l., Barbados Branch (“Concordia”), pursuant to which the Company acquired all rights, title and interests of Concordia in the existing inventory and certain contracts associated with three currently marketed injectable pharmaceutical products (Fortaz®, Zinacef ™ , and Zantac® Injection) (the “Inventory”), and the Company Subsidiary acquired all rights, title and interests of Concordia in, among other things, certain other contracts, product registrations and books and records associated with those products (together with the Inventory and other assets acquired by the Company, the “Purchased Assets”). The transaction was also completed on October 5, 2015. The transaction is accounted for as a purchase of the product and product rights, and as such the initial payment and related costs to acquire the assets (excluding inventory) are included as part of product acquisition costs totaling $10,100,000 . The Company will amortize the costs over fifteen years , the useful life of the acquired products and products rights. In addition, Teligent Pharma Inc. purchased approximately $1,200,000 of inventory related to the three products acquired. On December 10, 2015, the Company, together with Teligent Jersey Limited, a wholly-owned subsidiary of the Company incorporated under the laws of Jersey (the “Company Subsidiary, ” and together with the Company, the “Purchasers”) , entered into a First Amendment to the Asset Purchase Agreement (the “First Amendment”) with Concordia, which amends the Asset Purchase Agreement, dated October 5, 2015, by and between the Purchasers and the Seller (the “Purchase Agreement”). The First Amendment amends the Purchase Agreement to include certain additional intellectual property rights in the Purchased Assets relating to the “TWISTVIAL” trademark. In connection with the First Amendment, on December 10, 2015, the Company Subsidiary also entered into a Trademark Assignment Agreement by and between the Company Subsidiary and the Seller, pursuant to which the Seller sold, conveyed, assigned, transferred and delivered the “TWISTVIAL” trademark associated with certain of the Purchased Assets. AstraZeneca On September 24, 2014, the Company entered into an Asset Purchase Agreement with AstraZeneca, in which the Company acquired all rights, titles and interests of AstraZeneca and its affiliates in Abbreviated New Drug Applications and New Drug Applications associated with eighteen products (collectively the “Purchased Regulatory Approvals”) and certain documents relating thereto (together with the Purchased Regulatory Approvals, the “Purchased Assets”). The transaction was accounted for as a purchase of the product and product rights, and as such the initial payment, related costs to acquire the assets, and a milestone payment were all included as part of product acquisition costs totaling $6.9 million. In addition, the Company agreed to pay, for each product manufactured by the Company pursuant to a Purchased Regulatory Approval, a royalty on future gross profits from product sales. Notwithstanding the foregoing, as amended in the First Amendment to the Asset Purchase Agreement by and between the Company and AstraZeneca, dated November 13, 2015, the Company at any time prior to June 30, 2016, could satisfy in full its royalty obligations with a single payment of $3.0 million . The Company elected to make the single payment as of June 30, 2016, bringing the total costs related to the asset purchase to $9.9 million and relieving the Company from any future royalties to AstraZeneca. The Company will amortize the costs over fifteen years , the useful life of the acquired products and product rights, commencing when the product can be sold. Valeant On September 30, 2014, the Company entered into two Asset Purchase Agreements (each, a “Valeant Purchase Agreement” and together, the “Valeant Asset Purchase Agreements”) one with Valeant Pharmaceuticals North America LLC and one with Valeant Pharmaceuticals Luxembourg SARL (together, “Valeant”), pursuant to which the Company acquired all rights, titles and interests of Valeant and their respective affiliates in Abbreviated New Drug Applications and New Drug Applications associated with two products (collectively, the “Valeant Purchased Regulatory Approvals”) and certain documents relating thereto (together with the Valeant Purchased Regulatory Approvals, the “Valeant Purchased Assets”). Pursuant to the terms of the Valeant Asset Purchase Agreements, the Company also acquired the option (each, an “Option” and, collectively, the “Options”) to purchase Abbreviated New Drug Applications and New Drug Applications associated with three additional products (the “Additional Assets”). The transaction is accounted for as a purchase of the product and product rights, and as such the initial payment and related costs to acquire the asset are included as part of product acquisition costs totaling $3,565,000 . The Company will amortize the costs over fifteen years , the useful life of the acquired products and products rights, commencing when the product can be sold. In consideration for the purchase of the Valeant Purchased Assets, the Company paid Valeant an aggregate of $1,500,000 in cash. In consideration for the purchase of the Additional Assets, the Company may exercise any Option, in its sole discretion, and pay $750,000 for each of two additional products and $500,000 for one additional product, for a total aggregate of $2,000,000 if all Options are exercised. The Company exercised its Option and purchased the one additional product for $0.5 million on November 18, 2014. On March 27, 2015, the Company exercised its Option and purchased the two additional products for a total of $1.5 million in cash. The transaction is accounted for as a purchase of the product and product rights and, as such, the initial payment and related costs to acquire the Valeant Purchased Assets are included as part of product acquisition costs totaling $3.5 million . The Company will amortize the costs over fifteen years , the useful life of the acquired product and product rights, commencing when the product can be sold. |
Quarterly Results (Unaudited)
Quarterly Results (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results (Unaudited) | Quarterly Results (Unaudited) The following is a summary of certain quarterly financial information for the fiscal years 2016 and 2015 : First Second Third Fourth Total (in thousands, except per share data) Year Ended December 31, 2016 Total revenues, net $ 15,657 $ 17,138 $ 16,151 $ 17,935 $ 66,881 Gross profit 7,955 9,556 8,014 9,162 34,687 Operating income (loss) 837 1,076 303 326 2,542 Net loss (950 ) (2,901 ) (2,703 ) (5,431 ) (11,985 ) Net loss attributable to common stockholders (950 ) (2,901 ) (2,703 ) (5,431 ) (11,985 ) Basic loss per share $ (0.02 ) $ (0.05 ) $ (0.05 ) $ (0.11 ) $ (0.23 ) Diluted loss per share $ (0.02 ) $ (0.05 ) $ (0.05 ) $ (0.11 ) $ (0.23 ) Year Ended December 31, 2015 Total revenues, net $ 10,671 $ 8,893 $ 11,615 $ 13,071 $ 44,250 Gross profit 5,628 3,666 6,077 5,944 21,315 Operating income (loss) 1,098 (1,911 ) 391 (2,769 ) (3,192 ) Net income (loss) 6,555 9,376 (2,888 ) (6,375 ) 6,668 Net income (loss) attributable to common stockholders 6,555 9,376 (2,888 ) (6,375 ) 6,668 Basic income (loss) per share $ 0.12 $ 0.18 $ (0.05 ) $ (0.12 ) $ 0.13 Diluted income (loss) per share $ 0.01 $ (0.03 ) $ (0.05 ) $ (0.12 ) $ (0.07 ) |
SCHEDULE II-VALUATION AND QUALI
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule of Valuation and Qualifying Accounts Disclosure | SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS (in thousands) Additions Balance at Charged to Charged Deductions Balance at Year Ended December 31, 2014 Change in Tax Valuation Allowance $ 12,062 — — 1,092 $ 10,970 Allowance for Doubtful Accounts $ 16 — — — $ 16 Reserve for Inventory Obsolescence $ 166 228 (12 ) 170 $ 212 Year Ended December 31, 2015 Change in Tax Valuation Allowance $ 10,970 — 3,339 — $ 14,309 Allowance for Doubtful Accounts $ 16 74 — — $ 90 Reserve for Inventory Obsolescence $ 212 51 (8 ) 134 $ 121 Year Ended December 31, 2016 Change in Tax Valuation Allowance $ 14,309 — 941 — $ 15,250 Allowance for Doubtful Accounts $ 90 347 20 $ 417 Reserve for Inventory Obsolescence $ 121 777 — 583 $ 315 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Nature of Business | Nature of the Business Teligent, Inc. is a Delaware corporation incorporated in 1977. On October 22, 2015, the Company announced the change of its name from IGI Laboratories, Inc. to Teligent, Inc. effective as of October 23, 2015. The Company’s office, research and development facilities and manufacturing facilities are located at 105 Lincoln Avenue, Buena, New Jersey. The Company is a specialty generic pharmaceutical company. Under our own label, the Company currently markets and sells generic topical and branded generic and generic injectable pharmaceutical products in the United States and Canada. In the US, we are currently marketing 16 generic topical pharmaceutical products and four branded generic pharmaceutical products. Through the completion of an acquisition, we now sell a total of 30 generic and branded generic injectable products and medical devices in Canada. Generic pharmaceutical products are bioequivalent to their brand name counterparts. We also provide development, formulation, and manufacturing services to the pharmaceutical, over-the-counter, or OTC, and cosmetic markets. The Company also provides development, formulation and manufacturing services to the pharmaceutical, over-the-counter (“OTC”) and cosmetic markets. We operate our business under one segment. As of the date of this report, the Company has 34 Abbreviated New Drug Applications, or ANDAs, on file with the United States Food and Drug Administration, or FDA, for additional pharmaceutical products. On October 14, 2015, the Company provided written notice to the NYSE MKT LLC (the “NYSE MKT”) that the Company intended to transfer the listing of the Company’s common stock from the NYSE MKT to the NASDAQ Global Select Market, and withdraw the listing and registration of the common stock from the NYSE MKT. The Company’s common stock ceased trading on the NYSE MKT at the close of business on October 23, 2015, and began trading on the NASDAQ Global Select Market on October 26, 2015. As discussed in Note 7, on November 13, 2015, the Company acquired all of the rights, title and interest in the development, production, marketing, import and distribution of all pharmaceutical products of Alveda Pharmaceuticals Inc. (“Alveda”) pursuant to two asset purchase agreements, one relating to the acquisition of all of the intellectual property-related assets of Alveda (the “IP-Related APA”) and the other relating to the acquisition of all other assets of Alveda (the “Non-IP Related APA,” and, together with the IP-Related APA, the “APAs”). Teligent also develops, manufactures, fills, and packages topical semi-solid and liquid products for branded and generic pharmaceutical customers, as well as the OTC and cosmetic markets. These products are used in a wide range of applications from cosmetics and cosmeceuticals to the prescription treatment of conditions like dermatitis, psoriasis, and eczema. Teligent has also started selling injectable products as of the fourth quarter of 2015, consistent with the Company's TICO strategy. Teligent has continued to make progress on its facility expansion in Buena, New Jersey, to support the increased capacity demand expected from future product approvals from the FDA. As the Company continues to execute its TICO strategy, it will compete in other markets, including the ophthalmic generic pharmaceutical market, and expects to face other competitors. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Teligent, Inc. and its wholly-owned and majority-owned subsidiaries. All inter-company accounts and transactions have been eliminated. The Company consolidated the following entities: Igen, Inc., Teligent Pharma. Inc., Teligent Luxembourg S.à.r.l., Teligent OÜ, Teligent Canada Inc., and Teligent Jersey Limited., in addition to the following inactive entities: Microburst Energy, Inc., Blood Cells, Inc. and Flavorsome, Ltd. |
Cash Equivalents | Cash Equivalents Cash equivalents consist of short-term investments, which have original maturities of 90 days or less. These include direct obligations of the U.S. Treasury, including bills, notes and bonds, as well as obligations issued or guaranteed by agencies or instrumentalities of the U.S. government including government-sponsored enterprises, or GSEs. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, trade receivables, restricted cash, notes payable, accounts payable, capital leases and other accrued liabilities at December 31, 2016 approximate their fair value for all periods presented. The Company measures fair value in accordance with ASC 820-10, “Fair Value Measurements and Disclosures”. ASC 820-10 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820-10 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company measures its derivative liability at fair value. The derivative convertible option related to the Notes issued December 16, 2014 was valued using the “with” and “without” analysis. A “with” and “without” analysis is a standard valuation technique for valuing embedded derivatives by first considering the value of the Notes with the option and then considering the value of the Notes without the option. The difference is the fair value of the embedded derivatives. The convertible note derivative is classified within Level 3 because it is valued using the “with” and “without” method, which does utilize inputs that are unobservable in the market. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company extends credit to its contract services customers based upon credit evaluations in the normal course of business, primarily with 30 -day terms. The Company does not require collateral from its customers. Bad debt provisions are provided for on the allowance method based on historical experience and management’s evaluation of outstanding accounts receivable. The Company reviews the allowance for doubtful accounts regularly, and past due balances are reviewed individually for collectability. The Company charges off uncollectible receivables against the allowance when the likelihood of collection is remote. The Company extends credit to wholesaler and distributor customers and national retail chain customers, based upon credit evaluations, in the normal course of business, primarily with 60 -day terms. The Company maintains customer-related accruals and allowances that consist primarily of chargebacks, rebates, sales returns, shelf stock allowances, administrative fees and other incentive programs. Some of these adjustments relate specifically to the generic prescription pharmaceutical business. Typically, the aggregate gross-to-net adjustments related to these customers can exceed 50% of the gross sales through this distribution channel. Certain of these accruals and allowances are recorded in the balance sheet as current liabilities and others are recorded as a reduction to accounts receivable. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments, which subject the Company to concentrations of credit risk, consist primarily of cash equivalents and trade receivables. These include direct obligations of the U.S. Treasury, including bills, notes and bonds, as well as obligations issued or guaranteed by agencies or instrumentalities of the U.S. government including GSEs, which are not federally insured. The Company maintains its cash in accounts with quality financial institutions. Although the Company currently believes that the financial institutions with which the Company does business will be able to fulfill their commitments to us, there is no assurance that those institutions will be able to continue to do so. |
Inventories | Inventories Inventories are valued at the lower of cost, using the first-in, first-out (“FIFO”) method, or market. The Company records an inventory reserve for losses associated with dated and expired raw materials. This reserve is based on management’s current knowledge with respect to inventory levels, planned production, and extension capabilities of materials on hand. Management does not believe the Company’s inventory is subject to significant risk of obsolescence in the near term. |
Property, Plant and Equipment | Property, Plant and Equipment Depreciation and amortization of property, plant and equipment is provided for under the straight-line method over the assets’ estimated useful lives as follows: Useful Lives Buildings and improvements 10 - 30 years Machinery and equipment 3 - 15 years Repair and maintenance costs are charged to operations as incurred while major improvements are capitalized. When assets are retired or disposed, the related cost and accumulated depreciation thereon are removed and any gains or losses are included in operating results. |
Intangible Assets | Intangible Assets Definite-lived intangible assets are stated at cost less accumulated amortization. Amortization of definite-lived intangible assets is computed on a straight-line basis over the assets’ estimated useful lives, generally for periods ranging from 10 to 15 years . The Company continually evaluates the reasonableness of the useful lives of these assets. Indefinite-lived intangible assets are not amortized, but instead are tested at least annually for impairment. Costs to renew or extend the term of a recognized intangible asset are expensed as incurred. |
In-Process Research and Development | In-Process Research and Development Amounts allocated to in-process research and development (“IPR&D”) in connection with a business combination are recorded at fair value and are considered indefinite-lived intangible assets subject to the impairment testing in accordance with the Company’s impairment testing policy for indefinite-lived intangible assets. As products in development are approved for sale, amounts will be allocated to product rights and will be amortized over their estimated useful lives. These valuations reflect, among other things, the impact of changes to the development programs, the projected development and regulatory time frames and the current competitive environment. Changes in any of the Company’s assumptions may result in a reduction to the estimated fair value of the IPR&D asset and could result in future impairment charges. |
Goodwill | Goodwill Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is tested for impairment on an annual basis during the fourth quarter of each fiscal year or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company first performs a qualitative assessment to determine if the quantitative impairment test is required. If changes in circumstances indicate an asset may be impaired, the Company performs the quantitative impairment test. In accordance with accounting standards, a two-step quantitative method is used for determining goodwill impairment. In the first step, the Company determines the fair value. If the net book value exceeds its fair value, the second step of the impairment test which requires allocation of the fair value to all of its assets and liabilities using the acquisition method prescribed under authoritative guidance for business combinations would then be performed. Any residual fair value is allocated to goodwill. An impairment charge is recognized only if the implied fair value of our reporting unit’s goodwill is less than its carrying amount. |
Acquisitions | Acquisitions The Company accounts for acquired businesses using the acquisition method of accounting, which requires with limited exceptions, that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date. Transaction costs are expensed as incurred. Any excess of the consideration transferred over the assigned values of the net assets acquired is recorded as goodwill. When net assets that do not constitute a business are acquired, no goodwill is recognized. Contingent consideration, if any, is included as part of the acquisition cost and is recognized at fair value as of the acquisition date. Any liability resulting from contingent consideration is remeasured to fair value at each reporting date until the contingency is resolved. These changes in fair value are recognized in earnings. |
Long-Lived Assets | Long-Lived Assets In accordance with the provisions of ASC 360-10-55, the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. In performing such review for recoverability, the Company compares expected future cash flows of assets to the carrying value of the long-lived assets and related identifiable intangibles. If the expected future cash flows (undiscounted) are less than the carrying amount of such assets, the Company recognizes an impairment loss for the difference between the carrying value of the assets and their estimated fair value, with fair values being determined using projected discounted cash flows at the lowest level of cash flows identifiable in relation to the assets being reviewed. |
Foreign Currency Translation | Foreign Currency Translation The net assets of international subsidiaries where the local currencies have been determined to be the functional currencies are translated into U.S. dollars using current exchange rates. The U.S. dollar effects that arise from translating the net assets of these subsidiaries at changing rates are recorded in the foreign currency translation account, which is included in Accumulated other comprehensive income (loss) (AOCI) and reflected as a separate component of equity. For those subsidiaries where the U.S. dollar has been determined to be the functional currency, non-monetary foreign currency assets and liabilities are translated using historical rates, while monetary assets and liabilities are translated at current rates, with the U.S. dollar effects of rate changes included in Other (income) expense, net . |
Accrued Expenses | Accrued Expenses Accrued expenses represent various obligations of the Company including certain operating expenses and taxes payable. |
License Fee | License Fee License fee is amortized on a straight-line basis over the life of the agreement ( 10 years ). |
Accounting for Environmental Costs | Accounting for Environmental Costs Accruals for environmental remediation are recorded when it is probable a liability has been incurred and costs are reasonably estimable. The estimated liabilities are recorded at undiscounted amounts. Environmental insurance recoveries are included in the statement of operations in the year in which the issue is resolved through settlement or other appropriate legal process. |
Income Taxes | Income Taxes The Company records income taxes in accordance with ASC 740-10, “Accounting for Income Taxes,” under the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to operating loss and tax credit carry forwards and differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded based on a determination of the ultimate realizability of future deferred tax assets. A valuation allowance equal to 100% of the net deferred tax assets has been recognized due to uncertainty regarding the future realization of these assets. The Company complies with the provisions of ASC 740-10-25 that clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance with ASC 740-10, “Accounting for Income Taxes,” and prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. Additionally, ASC 740-10 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. There were no unrecognized tax benefits as of the date of adoption. As such, there are no unrecognized tax benefits included in the balance sheet that would, if recognized, affect the effective tax rate. |
Revenue Recognition | Revenue Recognition The Company considers revenue realized or realizable and earned when it has persuasive evidence of an arrangement, delivery has occurred or contractual services rendered, the sales price is fixed or determinable, and collection is reasonably assured in conformity with ASC 605, Revenue Recognition . The Company derives its revenues from three basic types of transactions: sales of its own generic pharmaceutical topical products, sales of manufactured product for its customers included in product sales, and research and product development services and other services performed for third parties. Due to differences in the substance of these transaction types, the transactions require, and the Company utilizes, different revenue recognition policies for each. Product Sales : Product Sales, net, include Company Product Sales and Contract Manufacturing Sales. Company Product Sales : The Company records revenue from Company product sales when title and risk of ownership have been transferred to the customer, which is typically upon delivery of products to the customer. Revenue and Provision for Sales Returns and Allowances As is customary in the pharmaceutical industry, the Company’s gross product sales from Company label products are subject to a variety of deductions in arriving at reported net product sales. When the Company recognizes revenue from the sale of products, an estimate of sales returns and allowances (“SRA”) is recorded, which reduces product sales. Accounts receivable and/or accrued expenses are also reduced and/or increased by the SRA amount. These adjustments include estimates for chargebacks, rebates, cash discounts and returns and other allowances. These provisions are estimates based on historical payment experience, historical relationship to revenues, estimated customer inventory levels and current contract sales terms with direct and indirect customers. The estimation process used to determine our SRA provision has been applied on a consistent basis and no material adjustments have been necessary to increase or decrease our reserves for SRA as a result of a significant change in underlying estimates. The Company will use a variety of methods to assess the adequacy of our SRA reserves to ensure that our financial statements are fairly stated. These will include periodic reviews of customer inventory data, customer contract programs, subsequent actual payment experience, and product pricing trends to analyze and validate the SRA reserves. The provision for chargebacks is our most significant sales allowance. A chargeback represents an amount payable in the future to a wholesaler for the difference between the invoice price paid to the Company by our wholesale customer for a particular product and the negotiated contract price that the wholesaler’s customer pays for that product. The Company’s chargeback provision and related reserve varies with changes in product mix, changes in customer pricing and changes to estimated wholesaler inventories. The provision for chargebacks also takes into account an estimate of the expected wholesaler sell-through levels to indirect customers at contract prices. The Company will validate the chargeback accrual quarterly through a review of the inventory reports obtained from our largest wholesale customers. This customer inventory information is used to verify the estimated liability for future chargeback claims based on historical chargeback and contract rates. These large wholesalers represent 90% - 95% of the Company’s chargeback payments. The Company continually monitors current pricing trends and wholesaler inventory levels to ensure the liability for future chargebacks is fairly stated. Net revenues and accounts receivable balances in the Company’s consolidated financial statements are presented net of SRA estimates. Certain SRA balances are included in accounts payable and accrued expenses. Contract Manufacturing Sales : The Company recognizes revenue when title transfers to its customers, which is generally upon shipment of products. These shipments are made in accordance with sales commitments and related sales orders entered into with customers either verbally or in written form. The revenues associated with these transactions, net of appropriate cash discounts, product returns and sales reserves, are recorded upon shipment of the products and are included in product sales, net on the Company's Consolidated Statement of Operations. Research and Development Income : The Company establishes agreed upon product development agreements with its customers to perform product development services. Product development revenues are recognized in accordance with the product development agreement upon the completion of the phases of development and when the Company has no future performance obligations relating to that phase of development. Revenue recognition requires the Company to assess progress against contracted obligations to assure completion of each stage. These payments are generally non-refundable and are reported as deferred until they are recognizable as revenue. If no such arrangement exists, product development fees are recognized ratably over the entire period during which the services are performed. Other types of revenue include royalty or licensing revenue, and would be recognized based upon the contractual agreement upon completion of the earnings process. In making such assessments, judgments are required to evaluate contingencies such as potential variances in schedule and the costs, the impact of change orders, liability claims, contract disputes and achievement of contractual performance standards. Changes in total estimated contract cost and losses, if any, are recognized in the period they are determined. Billings on research and development contracts are typically based upon terms agreed upon by the Company and customer and are stated in the contracts themselves and do not always align with the revenues recognized by the Company. Licensing and Royalty Income: Revenues earned under licensing or sublicensing contracts are recognized as earned in accordance with the terms of the agreements. The Company recognizes royalty revenue based on royalty reports received from the licensee. The Company does not have current plans to have meaningful revenue from licensing and royalty agreements in 2017. |
Stock-Based Compensation | Stock-Based Compensation ASC 718-10 defines the fair-value-based method of accounting for stock-based employee compensation plans and transactions used by the Company to account for its issuances of equity instruments to record compensation cost for stock-based employee compensation plans at fair value as well as to acquire goods or services from non-employees. Transactions in which the Company issues stock-based compensation to employees, directors and advisors and for goods or services received from non-employees are accounted for based on the fair value of the equity instruments issued. The Company utilizes pricing models in determining the fair values of options and warrants issued as stock-based compensation. These pricing models utilize the market price of the Company’s common stock and the exercise price of the option or warrant, as well as time value and volatility factors underlying the positions. Stock-based compensation expense is recognized over the vesting period of the grant. |
Debt Issuance Costs | Debt Issuance Costs Expenses related to debt financing activities are capitalized and amortized on an effective interest method, over the term of the loan. See detailed amounts per year in Notes 5 and 8. ASU 2015-3 specifies that debt issuance costs are to be netted against the carrying value of the financial liability. Under prior guidance, debt issuance costs were recognized as a deferred charge and reported as a separate asset on the balance sheet. The updated guidance aligns the treatment of debt issuance costs and debt discounts in that both reduce the carrying value of the liability. Amortization of debt issuance costs is to be recorded as interest expense on the income statement. |
Product Development and Research | Product Development and Research The Company’s research and development costs are expensed as incurred. |
Shipping and Handling Costs | Shipping and Handling Costs Costs related to shipping and handling is comprised of outbound freight and the associated labor. These costs are recorded in costs of sales. |
Earnings (Loss) per Common Share | Earnings (Loss) per Common Share Basic earnings (loss) per share of common stock is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share of common stock is computed using the weighted average number of shares of common stock and potential dilutive common stock equivalents outstanding during the period. Potential dilutive common stock equivalents include shares issuable upon the conversion of the notes and the exercise of options and warrants. Due to the net loss for the year ended December 31, 2016, the effect of the Company’s potential dilutive common stock equivalents was anti-dilutive; as a result, the basic and diluted weighted average number of common shares outstanding and net loss per common share are the same. |
Derivatives | Derivatives The Company accounts for its derivative instruments in accordance with ASC 815-10, “Derivatives and Hedging” (“ASC 815-10”). ASC 815-10 establishes accounting and reporting standards requiring that derivative instruments, including derivative instruments embedded in other contracts, be recorded on the balance sheet as either an asset or liability measured at its fair value. ASC 815-10 also requires that changes in the fair value of derivative instruments be recognized currently in results of operations unless specific hedge accounting criteria are met. The Company has not entered into hedging activities to date. The Company’s derivative liability is the embedded convertible option of its Convertible Notes issued December 16, 2014 (as defined in Note 6), which has been recorded as a liability at fair value until May 20, 2015, and was revalued at each reporting date, with changes in the fair value of the instruments included in the consolidated statements of operations as non-operating income (expense). Due to the approval of the sufficient shares at the Company’s annual shareholder meeting, the liability for the embedded derivative was reclassified to equity on May 20, 2015. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include valuation of the derivative liability, SRA allowances, allowances for excess and obsolete inventories, allowances for doubtful accounts, provisions for income taxes and related deferred tax asset valuation allowances, stock based compensation, the impairment of long-lived assets (including intangibles and goodwill) and accruals for environmental cleanup and remediation costs. Actual results could differ from those estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2016, the FASB issued ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers". The update provides users with classification guidance on thirteen specific areas of correction or improvement topics as follows: 1) Loan Guarantee Fees, 2) Contract Costs - Impairment Testing, 3) Contract Costs - Interaction of Impairment Testing with Guidance in Other Topics, 4) Provisions for Losses on Construction-Type and Production-Type Contracts, 5) Scope of Topic 606, 6) Disclosure of Remaining Performance Obligations, 7) Disclosure of Prior-Period Performance Obligations, 8) Contract Modifications Example, 9) Contract Asset versus Receivable, 10) Refund Liability, 11) Advertising Costs, 12) Fixed-Odds Wagering Contracts in the Casino Industry and 13) Cost Capitalization for Advisors to Private Funds and Public Funds. The amendments affect the guidance in update 2014-09, which is effective for fiscal years beginning after December 15, 2017 for public business entities, including interim periods within those fiscal years. For the Company, the amendments are effective January 1, 2018. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In December 2016, the FASB issued ASU 2016-19, Technical Corrections and Improvements. The update is to address suggestions received from stakeholders on the Accounting Standards Codification and to make other incremental improvements to GAAP. It contains amendments that affect a wide variety of Topics in the Accounting Standards Codification and applies to all reporting entities within the scope of the affected accounting guidance. Most of the amendments are effective upon issuance of the update. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): "Restricted Cash (a consensus of the FASB Emerging Issues Task Force)". The update addresses the diversity in the industry with respect to classification and presentation of changes in restricted cash on the statement of cash flows. These amendments require that a statement of cash flows explain the restricted cash change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. It affects those reporting entities that are required to evaluate whether they should consolidate a variable interest entity "VIE". The amendments in this update are effective for fiscal years beginning after December 15, 2017 for public business entities, including interim periods within those fiscal years. For the Company, the amendments are effective January 1, 2018. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810): "Interests Held through Related Parties That Are Under Common Control". The update was issued to amend the consolidation guidance on how a reporting entity that is a single decision maker of a VIE should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. It affects those reporting entities that are required to evaluate whether they should consolidate a VIE. The amendments in this update are effective for fiscal years beginning after December 15, 2017 for public business entities, including interim periods within those fiscal years. For the Company, the amendments are effective January 1, 2018. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): "Intra-Entity Transfers of Assets Other Than Inventory". The update addresses income tax consequences of intra-entity transfers of assets other than inventory. It seeks to clarify the authoritative guidance about the prohibition of the recognition of current and deferred income taxes for intra-entity asset transfers until the asset has been sold to an outside party. Instead, this update now eliminates that prohibition and states that an entity should recognize the income tax consequences when the transfer occurs. The amendments in this update are effective for fiscal years beginning after December 15, 2017 for public business entities, including interim periods within those fiscal years. For the Company, the amendments are effective January 1, 2018. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): “Classification of Certain Cash Receipts and Cash Payments (a Consensus of the Emerging Issues Task Force)”. The update provides users with classification guidance on eight specific cash flow topics as follows: 1) Debt Prepayment or Debt Extinguishment Costs, 2) Settlement of Zero-Coupon Debt Instruments or Other Debt Instruments with Coupon Interest Rates That Are Insignificant in Relation to the Effective Interest Rate of the Borrowing, 3) Contingent Consideration Payments Made after a Business Combination, 4) Proceeds from the Settlement of Insurance Claims, 5) Proceeds from the Settlement of Corporate-Owned Life Insurance Policies, including Bank-Owned Life Insurance Policies, 6) Distributions Received from Equity Method Investees, 7) Beneficial Interests in Securitization Transactions and 8) Separately Identifiable Cash Flows and Application of the Predominance Principle. The amendments in this update are effective for fiscal years beginning after December 15, 2017 for public business entities, including interim periods within those fiscal years. For the Company, the amendments are effective January 1, 2018. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): “Measurement of Credit Losses on Financial Instruments”. The update provides users with more useful information for decision making regarding expected credit losses on financial instruments/commitments to extend credit held by a reporting entity at each reporting date. The amendments affect loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. Credit quality of the entity’s assets now plays a key role in this update. The amendments in this update are effective for fiscal years beginning after December 15, 2019 for public business entities, including interim periods within those fiscal years. For the Company, the amendments are effective January 1, 2020. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): “Narrow-Scope Improvements and Practical Expedients”. The update addresses issues identified by the FASB-IASB Joint Transition Resource Group (TRG), a group formed in June 2014 in order to inform the Boards about potential implementation issues that could arise as a result of organizations implementing the May 2014 revenue guidance. It affects entities that enter into contracts with customers to transfer goods or services within an entity’s ordinary activities in exchange for consideration. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In May 2016, the FASB issued ASU 2016-11, Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): “Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting (SEC Update)”. The update is a result of adoption of Topic 606, Revenue from Contracts with Customers. SEC Staff Observer comments found in Topic 605 are therefore not recommended to be relied upon and have been superseded. The comments are found in the following topics: 1) Revenue and Expense Recognition for Freight Services in Process, 2) Accounting for Shipping and Handling Fees and Costs, 3) Accounting for Consideration Given by a Vendor to a Customer (including Reseller of the Vendor’s Products), and 4) Accounting for Gas-Balancing Arrangements. As these amendments require changes to the U.S. GAAP Financial Reporting Taxonomy, they will be incorporated into the proposed 2017 Taxonomy and finalized as part of the annual release process. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): “Improvements to Employee Share-Based Payment Accounting”. The update includes multiple provisions intended to simplify various aspects of the accounting for share-based payments, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this update are effective for public companies for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any interim or annual period. The Company has evaluated the impact of this ASU on its consolidated financial statements and as a result, will adjust retained earnings in 2017 for the amounts previously recognized as windfall tax benefits in additional paid in capital. In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842): “Recognition and Measurement of Financial Assets and Financial Liabilities”. The update supersedes Topic 840, Leases and requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. Topic 842 retains a distinction between finance leases and operating leases, with cash payments from operating leases classified within operating activities in the statement of cash flows. The amendments in this update are effective for fiscal years beginning after December 15, 2018 for public business entities, which for the Company means January 1, 2019. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): “Simplifying the Accounting for Measurement-Period Adjustments”. The update eliminates the requirement to retrospectively adjust the provisional amounts recognized at the acquisition date with a corresponding adjustment to goodwill during the measurement period when new information is obtained about the facts and circumstances that existed as of the acquisition date, that if known, would have affected the measurement of the amounts initially recognized or would have resulted in the recognition of additional assets or liabilities. The amendments in this update are effective for fiscal years beginning after December 15, 2015, which for the Company means January 1, 2016, and should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this update. Early application is permitted for financial statements that have not been issued. The Company has concluded the adoption of this ASU will not have any significant impact on its consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): “Simplifying the Measurement of Inventory”. ASU 2015-11 requires inventory measured using any method other than last-in, first out (“LIFO”) or the retail inventory method to be subsequently measured at the lower of cost or net realizable value, rather than at the lower of cost or market. Under this ASU, subsequent measurement of inventory using the LIFO and retail inventory method is unchanged. ASU 2015-11 is effective prospectively for fiscal years, and for interim periods within those years, beginning after December 15, 2016. Early application is permitted. The Company does not expect the adoption of this ASU will have any significant impact on its consolidated financial statements. |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Property, Plant and Equipment | Depreciation and amortization of property, plant and equipment is provided for under the straight-line method over the assets’ estimated useful lives as follows: Useful Lives Buildings and improvements 10 - 30 years Machinery and equipment 3 - 15 years Property, plant and equipment, at cost, as of December 31, 2016 and 2015 , consisted of: 2016 2015 (in thousands) Land $ 257 $ 257 Building and improvements 8,515 5,296 Machinery and equipment 8,583 5,270 Construction in progress 15,496 3,594 32,851 14,417 Less accumulated depreciation and amortization (6,636 ) (5,711 ) Property, plant and equipment, net $ 26,215 $ 8,706 |
Schedule of Accrued Expenses | For the fiscal year ended December 31, 2016, and 2015, the largest components of accrued expenses were: 2016 2015 (in thousands) Wholesaler fees $ 3,505 $ 2,523 Capital expenditures 2,475 482 Payroll 1,706 1,167 Royalties 843 744 Consulting fees 608 432 Interest expense 240 240 Other 972 679 $ 10,349 $ 6,267 |
Schedule of Gross-to-Net Sales Deductions | Gross-To-Net Sales Deductions Years ended December 31, 2016 2015 2014 Gross Company product sales $ 217,633 $ 99,721 $ 51,136 Reduction to gross product sales: Chargebacks and billbacks 141,343 50,127 26,940 Sales discounts and other allowances 27,419 17,974 4,366 Total reduction to gross product sales $ 168,762 $ 68,101 $ 31,306 Company product sales, net $ 48,871 $ 31,620 $ 19,830 |
Schedule of Annual Activity Allowance for Customer Deductions Disclosure | The annual activity in the Company's allowance for customer deductions and doubtful accounts for the three years ended December 31, 2016 is as follows (in thousands): Returns Chargebacks & Rebates Discounts Doubtful Accounts TOTAL Balance at December 31, 2013 $ 56 $ 1,746 $ 142 $ 16 $ 1,960 Provision 767 31,040 1,060 — 32,867 Charges processed (149 ) (28,234 ) (857 ) — (29,240 ) Balance at December 31, 2014 $ 674 $ 4,552 $ 345 $ 16 $ 5,587 Provision 1,724 65,713 2,201 74 69,712 Charges processed (1,464 ) (57,815 ) (1,754 ) — (61,033 ) Balance at December 31, 2015 $ 934 $ 12,450 $ 792 $ 90 $ 14,266 Provision 3,568 160,556 4,667 347 169,138 Charges processed (2,192 ) (137,125 ) (2,156 ) (20 ) (141,493 ) Balance at December 31, 2016 $ 2,310 $ 35,881 $ 3,303 $ 417 $ 41,911 |
Schedule of Earnings Per Share, Basic and Diluted | For the years ended December 31, 2016, 2015 and 2014 (in thousands except shares and per share data) 2016 2015 2014 Basic earnings (loss) per share computation: Net income (loss) attributable to common stockholders —basic $ (11,985 ) $ 6,668 $ 5,251 Weighted average common shares —basic 53,078,158 52,872,814 49,817,721 Basic earnings (loss) per share $ (0.23 ) $ 0.13 $ 0.11 Dilutive earnings (loss) per share computation: Net income (loss) attributable to common stockholders —basic $ (11,985 ) $ 6,668 $ 5,251 Interest expense related to convertible 3.75% senior notes — 5,391 224 Amortization of discount related to convertible 3.75% senior notes — $ 6,680 $ — Change in the fair value of derivative — $ (23,144 ) $ — Net income (loss) attributable to common stockholders —diluted $ (11,985 ) $ (4,405 ) $ 5,475 Share Computation: Weighted average common shares —basic 53,078,158 52,872,814 49,817,721 Effect of convertible 3.75% senior notes — 12,732,168 12,732,168 Effect of dilutive stock options and warrants — 1,507,013 1,657,301 Weighted average common shares outstanding —diluted 53,078,158 67,111,995 64,207,190 Diluted net earnings (loss) per share $ (0.23 ) $ (0.07 ) $ 0.09 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories as of December 31, 2016 and 2015 consisted of: 2016 2015 (in thousands) Raw materials $ 6,546 $ 4,833 Work in progress — 128 Finished goods 6,162 4,024 $ 12,708 $ 8,985 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Depreciation and amortization of property, plant and equipment is provided for under the straight-line method over the assets’ estimated useful lives as follows: Useful Lives Buildings and improvements 10 - 30 years Machinery and equipment 3 - 15 years Property, plant and equipment, at cost, as of December 31, 2016 and 2015 , consisted of: 2016 2015 (in thousands) Land $ 257 $ 257 Building and improvements 8,515 5,296 Machinery and equipment 8,583 5,270 Construction in progress 15,496 3,594 32,851 14,417 Less accumulated depreciation and amortization (6,636 ) (5,711 ) Property, plant and equipment, net $ 26,215 $ 8,706 |
Convertible 3.75% Senior Notes
Convertible 3.75% Senior Notes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Convertible debt | At December 31, 2016 and December 31, 2015 , the net carrying amount of the liability component and the remaining unamortized debt discount were as follows: December 31, 2016 December 31, 2015 (in thousands) (in thousands) Face amount of the Notes $ 143,750 $ 143,750 Unamortized discount 29,160 36,759 Debt issuance costs $ 3,199 $ 4,027 Carrying amount of the Notes $ 111,391 $ 102,964 |
Long-term debt assumptions | The assumptions used in connection with the valuation of the convertible option of the Notes issued December 16, 2014 utilizing the “with” and “without” method, discussed in Note 2 was as follows: Initial Measurement Measurement Measurement Issue date 12/17/2014 12/17/2014 12/17/2014 Maturity date 12/15/2019 12/15/2019 12/15/2019 Term 4.99 4.92 4.57 Principal (millions) 143.75 143.75 143.75 Coupon 3.75 % 3.75 % 3.75 % Seniority Senior unsecured Senior unsecured Senior unsecured Conversion shares 88.572 88.572 88.572 Conversion price $ 11.29 $ 11.29 $ 11.29 Stock price $ 9.45 $ 8.80 $ 5.73 Risk free rate 1.61 % 1.64 % 1.44 % Volatility (rounded) 40.00 % 40.00 % 46.00 % |
Fair value of convertible notes | The table below provides a reconciliation of beginning and ending balances for the liability measured at fair value using significant observable and unobservable inputs (Level 3). The table reflects the gains associated with the decrease in fair value and the reclassification of the balance of the derivative liability. Initial Measurement Decrease in Fair Value December 31, 2014 Decrease in Fair Value January 1, 2015 to Reclassification of derivative liability to equity on December 31, 2015 Fair value of convertible feature of 3.75% senior notes $ 43,700 $ 2,300 $ 41,400 $ 23,144 $ 18,256 $ — |
Schedule of expenses for convertible notes | For the year ended December 31, 2016 and December 31, 2015 , the Company recorded the following expenses in relation to the Notes: December 31, December 31, December 31, (in thousands) (in thousands) (in thousands) Interest Expense at 3.75% coupon rate $ 5,391 $ 5,391 $ 225 Debt discount amortization 7,599 6,680 261 Amortization of deferred financing costs 828 728 28 Total interest expense (1) $ 13,818 $ 12,799 $ 514 (1) Included within “Interest and other expense, net” on the Consolidated Statements of Operations |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisition | The following table summarizes the consideration paid for Alveda, the total acquisition related costs incurred by the Company during 2015 in connection with the acquisition, and the fair values of the assets acquired and liabilities assumed (amounts in thousands): Consideration: Fair value of total consideration transferred $ 35,418 Acquisition-related costs* : $ 2,256 Estimated fair value of identifiable assets acquired and liabilities assumed: Accounts receivable $ 911 Inventories 2,673 Prepaid expenses and other current assets 4 Property and equipment 6 Goodwill, deductible 440 Developed Technology 24,858 In-process research and development 3,816 Customer relationships 3,615 Accounts payable and other assumed liabilities (661 ) Deferred tax liability (244 ) *At closing, the Company also paid $5.2 million related to Canadian goods and services tax (GST) and the harmonized sales tax (HST), which is not included in the above table as consideration or acquisition related costs, and all amounts have been refunded in 2016. |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired | The following sets forth the major categories of the Company’s intangible assets acquired from Alveda and the weighted-average remaining amortization period as of December 31, 2015 for those assets that are not already fully amortized (dollar amounts in thousands): Gross Carrying Accumulated Net Carrying Weighted Average Technology 25,243 (210 ) 25,033 14.9 years In-process research and development 3,875 — 3,875 N/A - Indefinite lived Customer relationships 3,460 (43 ) 3,417 9.9 years Total 32,578 (253 ) 32,325 |
Pro Forma Information | The following pro forma information presents the results of operations for the years ended December 31, 2015 , and December 31, 2014 , as if the Alveda acquisition occurred on January 1, 2014: (amounts in thousands, except for per share amounts) For the Years Ended December 31, 2015 December 31, 2014 Total Revenue $ 55,767 $ 47,284 Net income $ 8,443 $ 6,525 Basic earnings per share $ 0.16 $ 0.13 Diluted earnings (loss) per share $ (0.04 ) $ 0.11 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in goodwill during the two years ended December 31, 2016 were as follows (in thousands): Goodwill December 31, 2014 $ — Acquisition 440 Impairments — Foreign currency translation (14 ) December 31, 2015 426 Acquisition — Impairments — Foreign currency translation 20 December 31, 2016 $ 446 |
Schedule of Finite and Indefinite Lived Intangible Assets | The following sets forth the major categories of the Company’s intangible assets and the weighted-average remaining amortization period as of December 31, 2016 and December 31, 2015 for those assets that are not already fully amortized (dollar amounts in thousands): December 31, 2016 Gross Carrying Accumulated Net Carrying Weighted Average Trademarks and Technology $ 35,403 $ (3,123 ) $ 32,280 13.8 In-process research and development 17,024 — 17,024 N/A - Indefinite lived Customer relationships 3,565 (404 ) 3,161 9.1 Total $ 55,992 $ (3,527 ) $ 52,465 December 31, 2015 Gross Carrying Accumulated Net Carrying Weighted Average Trademarks and Technology $ 37,203 $ (651 ) $ 36,552 14.8 In-process research and development 14,351 — 14,351 N/A - Indefinite lived Customer relationships 3,460 (43 ) 3,417 9.9 Total $ 55,014 $ (694 ) $ 54,320 |
Schedule of Changes in Intangible Assets Other Than Goodwill | Changes in intangibles during the two years ended December 31, 2016 were as follows (in thousands): Trademarks and IPR&D Customer December 31, 2014 $ 1,646 $ — $ — Acquisition 34,992 14,292 3,615 Amortization (471 ) — (43 ) Foreign currency translation 385 59 (155 ) December 31, 2015 36,552 14,351 3,417 Acquisition 661 2,811 — Amortization (2,472 ) — (361 ) Foreign currency translation (2,461 ) (138 ) 105 December 31, 2016 $ 32,280 $ 17,024 $ 3,161 |
Schedule of Finite-Lived Intangible Assets Future Amortization Expense | Assuming no additions, disposals or adjustments are made to the carrying values and/or useful lives of the intangible assets, annual amortization expense on product rights and other related intangibles for each of the following five years is estimated to be as follows (in thousands): Year ending Amortization December 31, Expense * 2017 2,712 2018 2,712 2019 2,712 2020 2,712 2021 2,712 Thereafter 22,017 *IPR&D amounts will be amortized once products become saleable, and are not included in the table |
Schedule of Finite-Lived Intangible Assets Useful Lives | The useful lives of the Company’s intangibles is as follows: Intangibles Category Amortizable Life Trademarks and Technology 15 years Customer Relationships 10 years |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Valuation Assumptions | The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing formula that uses assumptions noted in the following table. Expected volatilities and risk-free interest rates are based upon the expected life of the grant. Assumptions 2016 2015 2014 Expected dividends 0 % 0 % 0 % Risk free rate 1.14 % 1.11 % 0.74% – 1.2% Expected volatility 68.0% - 71.3% 52.7% - 68.3% 44.0% - 53.0% Expected term (in years) 3.1 – 3.3 years 3.2 – 3.3 years 3.2 - 3.3 years |
Schedule of Stock Option Transactions | Stock option transactions in each of the past three years under the aforementioned plans in total were: Shares Exercise Weighted January 1, 2014 shares issuable under options 2,643,500 $ .55 - $3.03 $ 1.12 Granted 397,500 2.96 - 10.55 5.89 Exercised (443,166 ) .55 - 1.95 1.15 Expired — — — Forfeited (161,000 ) 1.10 - 5.65 2.71 December 31, 2014 shares issuable under options 2,436,834 .76 - 10.55 1.79 Granted 1,357,000 5.55 - 10.67 9.20 Exercised (75,766 ) .76 - 3.62 1.10 Expired — — — Forfeited (125,334 ) 1.40 – 10.67 8.99 December 31, 2015 shares issuable under options 3,592,734 .79 - 10.67 4.36 Granted 739,135 4.72 - 8.81 7.26 Exercised (61,834 ) 1.10 - 6.51 1.54 Expired — — — Forfeited (164,666 ) 4.55 - 10.67 8.37 December 31, 2016 shares issuable under options 4,105,369 $ .79 - $10.67 4.76 |
Schedule of Outstanding and Exercisable Stock Options | The following table summarizes information concerning outstanding and exercisable options as of December 31, 2016 : Options Outstanding Options Exercisable Range of Number of Weighted Weighted Number of Weighted $0.79 to $1.00 50,000 3.01 $ 0.79 50,000 $ 0.79 1.01 to 1.50 1,808,400 5.11 1.07 1,808,400 1.07 1.51 to 10.67 2,246,969 8.35 7.82 805,803 7.15 $0.79 to $10.67 4,105,369 6.86 $ 4.76 2,664,203 $ 2.90 The following table summarizes information concerning outstanding and exercisable options as of December 31, 2015 : Options Outstanding Options Exercisable Range of Number of Weighted Weighted Number of Weighted $0.79 to $1.00 50,000 4.01 $ 0.79 50,000 $ 0.79 1.01 to 1.50 1,862,400 6.14 1.07 1,851,400 1.07 1.51 to 10.67 1,680,334 8.96 8.10 289,997 4.02 $0.79 to $10.67 3,592,734 7.43 $ 4.36 2,191,397 $ 1.45 The following table summarizes information concerning outstanding and exercisable options as of December 31, 2014 : Options Outstanding Options Exercisable Range of Number of Weighted Weighted Number of Weighted $0.76 to $1.00 97,000 3.04 $ 0.78 97,000 $ 0.78 1.01 to 1.50 1,887,500 7.14 1.07 1,448,664 1.08 1.51 to 10.55 452,334 8.68 5.02 110,333 1.78 $0.76 to $10.55 2,436,834 7.26 $ 1.79 1,655,997 $ 1.11 |
Nonvested Stock Option Activity | A summary of non-vested options at December 31, 2016 and changes during the year ended December 31, 2016 is presented below: Options Weighted Non-vested options at January 1, 2016 1,401,337 $ 3.60 Granted 739,135 3.45 Vested (574,469 ) 3.46 Forfeited (124,837 ) 3.42 Non-vested options at December 31, 2016 1,441,166 $ 3.58 |
Schedule of Nonvested Shares of Restricted Stock | A summary of non-vested shares of restricted stock and changes during each of the past three years is as follows: Number of Weighted Average Non-vested balance at January 1, 2014 246,001 $ 2.64 Changes during the period: Shares granted — — Shares vested (137,667 ) 2.46 Shares forfeited — Non-vested balance at January 1, 2015 108,334 $ 2.86 Changes during the period: Shares granted 32,500 10.67 Shares vested (140,834 ) 4.66 Shares forfeited — Non-vested balance at December 31, 2015 — $ — There has been no activity in the year ended 2016. A summary of non-vested RSUs and changes during each of the past three years is as follows: Number of Weighted Average Non-vested balance at January 1, 2015 — $ — Changes during the period: Shares granted 230,250 10.32 Shares vested (32,500 ) 10.67 Shares forfeited (15,000 ) 10.67 Non-vested balance at December 31, 2015 182,750 $ 10.23 Changes during the period: Shares granted 58,068 7.50 Shares vested (60,918 ) 10.13 Shares forfeited — — Non-vested balance at December 31, 2016 179,900 $ 9.35 |
Stock Warrants (Tables)
Stock Warrants (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stock Warrants | Stock warrants as of December 31, 2016 , 2015 and 2014 consisted of: 2016 2015 2014 Warrants Weighted Warrants Weighted Warrants Weighted Beginning balance — $ — 84,000 $ 1.21 354,546 $ 1.21 Stock warrants granted — — — — — — Stock warrants expired — — (16,364 ) 1.21 — — Stock warrants exercised — — (67,636 ) 1.21 (270,546 ) 1.21 Ending balance — $ — — $ — 84,000 $ 1.21 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Loss From Continuing Operations | Income (Loss) before income tax for the years ended December 31, 2016, 2015 and 2014 consisted of the following (in thousands): 2016 2015 2014 (in thousands) U.S. operations (9,514 ) 6,911 5,424 Foreign operations (2,184 ) (208 ) — Global Total $ (11,698 ) $ 6,703 $ 5,424 |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes attributable to continuing operations before income taxes for the years ended December 31, 2016 , 2015 and 2014 is as follows (in thousands): 2016 2015 2014 Current tax expense (benefit): Federal $ 26 $ — $ 97 State and local 35 19 76 Foreign 272 28 Total current tax expense 333 47 173 Deferred tax expense: Federal — — — State and local — — — Foreign (46 ) (12 ) Total deferred tax expense (46 ) (12 ) — Total income tax expense $ 287 $ 35 $ 173 |
Schedule of Effective Income Tax Rate Reconciliation | The provision for (benefit from) income taxes differed from the amount of income taxes determined by applying the applicable federal tax rate ( 34% ) to pretax income (loss) from continuing operations as a result of the following (in thousands): 2016 2015 2014 Expected Statutory expense (benefit) $ (3,977 ) $ 2,244 $ 1,844 Change in the fair values of derivative and amortization of debt discount 2,584 (5,597 ) (693 ) Other non-deductible expenses 63 7 3 Change in valuation allowance 590 3,254 (1,031 ) Rate differential - foreign vs. US 822 114 — State income taxes, net of federal benefit 23 13 50 Federal tax impact of state tax benefit, net 154 — — Exchange gain $ 28 $ — $ — $ 287 $ 35 $ 173 |
Schedule of Deferred Tax Assets | Deferred tax assets included in the Consolidated Balance Sheets as of December 31, 2016 and 2015 consisted of the following: 2016 2015 (in thousands) Current Assets: Allowance for doubtful accounts $ 118 $ 6 Inventory reserve 467 157 Accrued expenses 831 1,005 Total current assets 1,416 1,168 Long Term Assets (Liabilities): Property, plant and equipment 317 348 Intangible assets (205 ) (256 ) Tax operating loss carry forwards 10,962 11,283 Tax credit carry forwards 254 291 Non-employee stock options 2,302 1,238 Other (1 ) (7 ) Total Long Term Assets (Liabilities) 13,629 12,897 Gross Deferred Tax Asset (Liability) 15,045 14,065 Less Valuation Allowance (15,250 ) (14,309 ) Deferred taxes, net $ (205 ) $ (244 ) |
Summary of Operating Loss and Tax Credit Carryforward | Operating loss and tax credit carry forwards as of December 31, 2016 were as follows: 2016 2015 (in thousands) Federal: Net operating losses (expiring through 2035) $ 31,336 $ 32,870 Research tax credits (expiring through 2025) 168 168 Alternative minimum tax credits (available without expiration) 86 70 State: Net Operating Losses: Tennessee (expiring in 2030) 529 568 New Jersey (expiring in 2035) 1,764 822 Illinois (expiring in 2035) 222 255 Foreign Net operating losses (no expiration) 232 10 |
Summary Of Operating Loss Carryforwards Expiration | At December 31, 2016 , the Company’s U.S. federal net operating loss carryforwards will expire as follows: Year Net Operating Loss (in thousands) 2017 - 2021 $ 7,187 2022 - 2026 2,268 2027 - 2031 11,373 2032 and thereafter 10,508 Total $ 31,336 |
Lease Commitments (Tables)
Lease Commitments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Future Minimum Lease Payments | Future minimum lease payments under non-cancelable operating leases are as follows: Commitments 2017 $ 548 2018 458 2019 421 2020 426 2021 392 Thereafter 742 $ 2,987 |
Quarterly Results (Unaudited) (
Quarterly Results (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The following is a summary of certain quarterly financial information for the fiscal years 2016 and 2015 : First Second Third Fourth Total (in thousands, except per share data) Year Ended December 31, 2016 Total revenues, net $ 15,657 $ 17,138 $ 16,151 $ 17,935 $ 66,881 Gross profit 7,955 9,556 8,014 9,162 34,687 Operating income (loss) 837 1,076 303 326 2,542 Net loss (950 ) (2,901 ) (2,703 ) (5,431 ) (11,985 ) Net loss attributable to common stockholders (950 ) (2,901 ) (2,703 ) (5,431 ) (11,985 ) Basic loss per share $ (0.02 ) $ (0.05 ) $ (0.05 ) $ (0.11 ) $ (0.23 ) Diluted loss per share $ (0.02 ) $ (0.05 ) $ (0.05 ) $ (0.11 ) $ (0.23 ) Year Ended December 31, 2015 Total revenues, net $ 10,671 $ 8,893 $ 11,615 $ 13,071 $ 44,250 Gross profit 5,628 3,666 6,077 5,944 21,315 Operating income (loss) 1,098 (1,911 ) 391 (2,769 ) (3,192 ) Net income (loss) 6,555 9,376 (2,888 ) (6,375 ) 6,668 Net income (loss) attributable to common stockholders 6,555 9,376 (2,888 ) (6,375 ) 6,668 Basic income (loss) per share $ 0.12 $ 0.18 $ (0.05 ) $ (0.12 ) $ 0.13 Diluted income (loss) per share $ 0.01 $ (0.03 ) $ (0.05 ) $ (0.12 ) $ (0.07 ) |
Summary of Significant Accoun39
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Buildings and improvements | Minimum | |
Summary of Significant Accounting Policies Details Depreciation of Property Plant and Equipment [Line Items] | |
Property, plant and equipment useful life | 10 years |
Buildings and improvements | Maximum | |
Summary of Significant Accounting Policies Details Depreciation of Property Plant and Equipment [Line Items] | |
Property, plant and equipment useful life | 30 years |
Machinery and equipment | Minimum | |
Summary of Significant Accounting Policies Details Depreciation of Property Plant and Equipment [Line Items] | |
Property, plant and equipment useful life | 3 years |
Machinery and equipment | Maximum | |
Summary of Significant Accounting Policies Details Depreciation of Property Plant and Equipment [Line Items] | |
Property, plant and equipment useful life | 15 years |
Summary of Significant Accoun40
Summary of Significant Accounting Policies (Details 1) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Accrued Liabilities [Line Items] | ||
Wholesaler fees | $ 3,505 | $ 2,523 |
Capital expenditures | 2,475 | 482 |
Payroll | 1,706 | 1,167 |
Royalties | 843 | 744 |
Interest expense | 240 | 240 |
Other | 972 | 679 |
Accrued expenses | 10,349 | 6,267 |
Consulting fees | ||
Schedule of Accrued Liabilities [Line Items] | ||
Consulting fees | $ 608 | $ 432 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reduction to gross product sales: | |||
Company product sales, net | $ 65,904 | $ 43,497 | $ 32,104 |
Gross net adjustments | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gross Company product sales | 217,633 | 99,721 | 51,136 |
Reduction to gross product sales: | |||
Chargebacks and billbacks | 141,343 | 50,127 | 26,940 |
Sales discounts and other allowances | 27,419 | 17,974 | 4,366 |
Total reduction to gross product sales | 168,762 | 68,101 | 31,306 |
Company product sales, net | $ 48,871 | $ 31,620 | $ 19,830 |
Summary of Significant Accoun42
Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Valuation allowances and reserves balance, beginning of year | $ 14,266 | $ 5,587 | $ 1,960 |
Provision | 169,138 | 69,712 | 32,867 |
Charges processed | (141,493) | (61,033) | (29,240) |
Valuation allowances and reserves balance, end of year | 41,911 | 14,266 | 5,587 |
Returns | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Valuation allowances and reserves balance, beginning of year | 934 | 674 | 56 |
Provision | 3,568 | 1,724 | 767 |
Charges processed | (2,192) | (1,464) | (149) |
Valuation allowances and reserves balance, end of year | 2,310 | 934 | 674 |
Chargebacks & Rebates | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Valuation allowances and reserves balance, beginning of year | 12,450 | 4,552 | 1,746 |
Provision | 160,556 | 65,713 | 31,040 |
Charges processed | (137,125) | (57,815) | (28,234) |
Valuation allowances and reserves balance, end of year | 35,881 | 12,450 | 4,552 |
Discounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Valuation allowances and reserves balance, beginning of year | 792 | 345 | 142 |
Provision | 4,667 | 2,201 | 1,060 |
Charges processed | (2,156) | (1,754) | (857) |
Valuation allowances and reserves balance, end of year | 3,303 | 792 | 345 |
Doubtful Accounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Valuation allowances and reserves balance, beginning of year | 90 | 16 | 16 |
Provision | 347 | 74 | 0 |
Charges processed | (20) | 0 | 0 |
Valuation allowances and reserves balance, end of year | $ 417 | $ 90 | $ 16 |
Summary of Significant Accoun43
Summary of Significant Accounting Policies (Details 4) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | May 20, 2015 | Dec. 16, 2014 | |
Basic earnings (loss) per share computation: | |||||||||||||
Net income (loss) attributable to common stockholders —basic | $ (5,431) | $ (2,703) | $ (2,901) | $ (950) | $ (6,375) | $ (2,888) | $ 9,376 | $ 6,555 | $ (11,985) | $ 6,668 | $ 5,251 | ||
Weighted average common shares —basic (in shares) | 53,078,158 | 52,872,814 | 49,817,721 | ||||||||||
Basic net income (loss) per share (in dollars per share) | $ (0.11) | $ (0.05) | $ (0.05) | $ (0.02) | $ (0.12) | $ (0.05) | $ 0.18 | $ 0.12 | $ (0.23) | $ 0.13 | $ 0.11 | ||
Dilutive earnings (loss) per share computation: | |||||||||||||
Net income (loss) attributable to common stockholders —basic | $ (5,431) | $ (2,703) | $ (2,901) | $ (950) | $ (6,375) | $ (2,888) | $ 9,376 | $ 6,555 | $ (11,985) | $ 6,668 | $ 5,251 | ||
Interest expense related to convertible 3.75% senior notes | 0 | 5,391 | 224 | ||||||||||
Amortization of discount related to convertible 3.75% senior notes | 0 | 6,680 | 0 | ||||||||||
Change in the fair value of derivative | 0 | (23,144) | 0 | ||||||||||
Net income (loss) attributable to common stockholders —diluted | $ (11,985) | $ (4,405) | $ 5,475 | ||||||||||
Share Computation: | |||||||||||||
Weighted average common shares —basic (in shares) | 53,078,158 | 52,872,814 | 49,817,721 | ||||||||||
Effect of convertible 3.75% senior notes (in shares) | 0 | 12,732,168 | 12,732,168 | ||||||||||
Effect of dilutive stock options and warrants (in shares) | 0 | 1,507,013 | 1,657,301 | ||||||||||
Weighted average common shares outstanding —diluted (in shares) | 53,078,158 | 67,111,995 | 64,207,190 | ||||||||||
Diluted earnings (loss) per share (in dollars per share) | $ (0.11) | $ (0.05) | $ (0.05) | $ (0.02) | $ (0.12) | $ (0.05) | $ (0.03) | $ 0.01 | $ (0.23) | $ (0.07) | $ 0.09 | ||
Convertible debt | |||||||||||||
Share Computation: | |||||||||||||
Stated interest rate | 3.75% | 3.75% | 3.75% | 3.75% | 3.75% |
Summary of Significant Accoun44
Summary of Significant Accounting Policies (Details Textual) | May 20, 2015USD ($) | Dec. 31, 2016USD ($)derivativeapplicationproductsegment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Nov. 13, 2015agreement |
Summary of Significant Accounting Policies Details [Line Items] | |||||
Operating segments | segment | 1 | ||||
Number of ANDAs on file | application | 34 | ||||
Number of asset purchase agreements | agreement | 2 | ||||
Unrecognized tax benefits | $ 0 | ||||
Unrecognized tax benefits that would impact the effective tax rate | 0 | ||||
Reclassification of derivative liability to equity | $ 18,300,000 | 0 | $ 18,256,000 | $ 0 | |
Change in the fair value of derivative liability | 0 | 23,144,000 | 2,300,000 | ||
Inventory reserve for obsolescence | 300,000 | 100,000 | |||
Goodwill | 446,000 | 426,000 | 0 | ||
Impairments | 0 | ||||
Accounts payable and accrued liabilities | 3,500,000 | 2,500,000 | |||
Wholesaler fees | $ 3,700,000 | 6,300,000 | 3,100,000 | ||
Percentage of net sales for royalty | 40.00% | ||||
Royalties | $ 843,000 | 744,000 | |||
Royalty expense | $ 3,000,000 | 3,600,000 | $ 3,600,000 | ||
Number of derivatives | derivative | 0 | ||||
Convertible Notes Payable | |||||
Summary of Significant Accounting Policies Details [Line Items] | |||||
Reclassification of derivative liability to equity | 18,300,000 | ||||
Net carrying value | $ 111,400,000 | ||||
Face value of debt | $ 143,750,000 | ||||
Change in the fair value of derivative liability | 23,100,000 | ||||
Convertible debt | |||||
Summary of Significant Accounting Policies Details [Line Items] | |||||
Reclassification of derivative liability to equity | $ 18,256,000 | ||||
Change in the fair value of derivative liability | $ 23,100,000 | ||||
Licensing Agreements | |||||
Summary of Significant Accounting Policies Details [Line Items] | |||||
Intangible assets useful life | 10 years | ||||
Net sales revenue | |||||
Summary of Significant Accounting Policies Details [Line Items] | |||||
Concentration risk | 43.00% | 52.00% | 44.00% | ||
Accounts receivable | |||||
Summary of Significant Accounting Policies Details [Line Items] | |||||
Concentration risk | 81.00% | 83.00% | 42.00% | ||
Customer one | Sales | |||||
Summary of Significant Accounting Policies Details [Line Items] | |||||
Sales revenue | $ 13,500,000 | $ 12,300,000 | $ 10,500,000 | ||
Customer two | Sales | |||||
Summary of Significant Accounting Policies Details [Line Items] | |||||
Sales revenue | 8,600,000 | 5,800,000 | $ 4,400,000 | ||
Customer three | Sales | |||||
Summary of Significant Accounting Policies Details [Line Items] | |||||
Sales revenue | $ 6,800,000 | 5,000,000 | |||
Maximum | |||||
Summary of Significant Accounting Policies Details [Line Items] | |||||
Intangible assets useful life | 15 years | ||||
Wholesaler percent of chargeback payments | 95.00% | ||||
Minimum | |||||
Summary of Significant Accounting Policies Details [Line Items] | |||||
Intangible assets useful life | 10 years | ||||
Wholesaler percent of chargeback payments | 90.00% | ||||
Net Of SRA Balance | |||||
Summary of Significant Accounting Policies Details [Line Items] | |||||
Accounts receivable net | $ 41,500,000 | $ 14,200,000 | |||
US | |||||
Summary of Significant Accounting Policies Details [Line Items] | |||||
Generic products marketed | product | 16 | ||||
Branded generic products marketed | product | 4 | ||||
Products which the company pays royalties | product | 4 | ||||
Products manufactured, marketed, and distributed | product | 16 | ||||
Canada | |||||
Summary of Significant Accounting Policies Details [Line Items] | |||||
Generic and branded generic products marketed | product | 30 | ||||
Contract Services | |||||
Summary of Significant Accounting Policies Details [Line Items] | |||||
Terms of customer credit | 30 days | ||||
Wholesalers, Distributors, National Retail Chains | |||||
Summary of Significant Accounting Policies Details [Line Items] | |||||
Terms of customer credit | 60 days | ||||
Econazole Nitrate Cream | Product Concentration Risk | Net sales revenue | |||||
Summary of Significant Accounting Policies Details [Line Items] | |||||
Concentration risk | 8.00% | 45.00% | 38.00% | ||
Lidocaine Ointment | Product Concentration Risk | Net sales revenue | |||||
Summary of Significant Accounting Policies Details [Line Items] | |||||
Concentration risk | 23.00% |
Liquidity (Details Textual)
Liquidity (Details Textual) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Nov. 18, 2014 | Dec. 31, 2013 |
Liquidity Details [Line Items] | |||||
Cash and cash equivalents | $ 66,006,000 | $ 87,191,000 | $ 158,883,000 | $ 2,101,000 | |
General Electric Capital Corporation | |||||
Liquidity Details [Line Items] | |||||
Line of credit maximum borrowing capacity | $ 10,000,000 | $ 15,000,000 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 6,546 | $ 4,833 |
Work in progress | 0 | 128 |
Finished goods | 6,162 | 4,024 |
Total | $ 12,708 | $ 8,985 |
Property, Plant and Equipment47
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property Plant and Equipment | $ 32,851 | $ 14,417 |
Less accumulated depreciation and amortization | (6,636) | (5,711) |
Property, plant and equipment, net | 26,215 | 8,706 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property Plant and Equipment | 257 | 257 |
Building and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property Plant and Equipment | 8,515 | 5,296 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property Plant and Equipment | 8,583 | 5,270 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property Plant and Equipment | $ 15,496 | $ 3,594 |
Property, Plant and Equipment48
Property, Plant and Equipment (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 946 | $ 560 | $ 415 |
Convertible 3.75% Senior Note49
Convertible 3.75% Senior Notes (Details Textual) - USD ($) | May 20, 2015 | Dec. 31, 2014 | Dec. 22, 2014 | Dec. 16, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | |||||||
Proceeds from convertible 3.75% senior notes | $ 0 | $ 0 | $ 138,985,000 | ||||
Accrued interest | 240,000 | 240,000 | |||||
Change in the fair value of derivative liability | 0 | 23,144,000 | 2,300,000 | ||||
Reclassification of derivative liability to equity | $ 18,300,000 | 0 | 18,256,000 | 0 | |||
Deferred financing costs | $ 3,200,000 | 4,000,000 | |||||
Convertible debt | |||||||
Debt Instrument [Line Items] | |||||||
Face amount of the Notes | $ 143,750,000 | $ 143,750,000 | $ 143,750,000 | $ 143,750,000 | |||
Stated interest rate | 3.75% | 3.75% | 3.75% | 3.75% | 3.75% | ||
Conversion price (in dollars per share) | $ 11.29 | $ 11.29 | $ 11.29 | $ 11.29 | $ 11.29 | ||
Initial conversion rate per $1,000 principal (in shares) | 88.572 | 88.572 | 88.572 | 88.5716 | |||
Conversion conditions, stock price (greater than) | 130.00% | ||||||
Conversion conditions, trading price (less than) | 98.00% | ||||||
Proceeds from convertible 3.75% senior notes | $ 139,000,000 | ||||||
Payment of debt issuance costs | 4,800,000 | ||||||
Accrued interest | 200,000 | ||||||
Derivative liability | $ 43,700,000 | ||||||
Effective interest rate | 12.94% | ||||||
Change in the fair value of derivative liability | $ 23,100,000 | ||||||
Reclassification of derivative liability to equity | $ 18,256,000 | ||||||
Remaining discount amortization period | 3 years | ||||||
Initial Issuance | Convertible debt | |||||||
Debt Instrument [Line Items] | |||||||
Face amount of the Notes | $ 125,000,000 | ||||||
Additional Principal | Convertible debt | |||||||
Debt Instrument [Line Items] | |||||||
Face amount of the Notes | $ 18,750,000 |
Convertible 3.75% Senior Note50
Convertible 3.75% Senior Notes (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Debt issuance costs | $ 3,200 | $ 4,000 |
Convertible Notes Payable | ||
Debt Instrument [Line Items] | ||
Face amount of the Notes | 143,750 | 143,750 |
Unamortized discount | 29,160 | 36,759 |
Debt issuance costs | 3,199 | 4,027 |
Carrying amount of the Notes | $ 111,391 | $ 102,964 |
Convertible 3.75% Senior Note51
Convertible 3.75% Senior Notes (Details 1) - Convertible debt - USD ($) | May 20, 2015 | Dec. 31, 2014 | Dec. 16, 2014 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||
Term | 4 years 6 months 25 days | 4 years 11 months 1 day | 4 years 11 months 26 days | |
Face amount of the Notes | $ 143,750,000 | $ 143,750,000 | $ 143,750,000 | |
Coupon | 3.75% | 3.75% | 3.75% | 3.75% |
Conversion shares (in shares) | 88.572 | 88.572 | 88.572 | 88.5716 |
Conversion price (in dollars per share) | $ 11.29 | $ 11.29 | $ 11.29 | $ 11.29 |
Stock price (in dollars per share) | $ 5.73 | $ 8.80 | $ 9.45 | |
Risk free rate | 1.44% | 1.64% | 1.61% | |
Volatility (rounded) | 46.00% | 40.00% | 40.00% |
Convertible 3.75% Senior Note52
Convertible 3.75% Senior Notes (Details 2) - USD ($) $ in Thousands | May 20, 2015 | Dec. 31, 2014 | May 20, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 16, 2014 |
Reclassification of derivative liability to equity | $ 18,300 | $ 0 | $ 18,256 | $ 0 | |||
Convertible debt | |||||||
Initial Measurement | $ 41,400 | $ 0 | $ 41,400 | $ 43,700 | |||
Decrease in Fair Value | $ 2,300 | $ 23,144 | |||||
Reclassification of derivative liability to equity | $ 18,256 |
Convertible 3.75% Senior Note53
Convertible 3.75% Senior Notes (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
Debt discount amortization | $ 7,599 | $ 6,680 | $ 261 |
Amortization of deferred financing costs | 828 | 1,132 | 107 |
Convertible Notes Payable | |||
Debt Instrument [Line Items] | |||
Interest Expense at 3.75% coupon rate | 5,391 | 5,391 | 225 |
Debt discount amortization | 7,599 | 6,680 | 261 |
Amortization of deferred financing costs | 828 | 728 | 28 |
Total interest expense | $ 13,818 | $ 12,799 | $ 514 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | Nov. 13, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Estimated fair value of identifiable assets acquired and liabilities assumed: | ||||
Goodwill, deductible | $ 446 | $ 426 | $ 0 | |
Alveda Acquisition | ||||
Business Acquisition [Line Items] | ||||
Fair value of total consideration transferred | $ 35,418 | |||
Acquisition-related costs | 2,256 | |||
Estimated fair value of identifiable assets acquired and liabilities assumed: | ||||
Accounts receivable | 911 | |||
Inventories | 2,673 | |||
Prepaid expenses and other current assets | 4 | |||
Property and equipment | 6 | |||
Goodwill, deductible | 440 | |||
Accounts payable and other assumed liabilities | (661) | |||
Deferred tax liability | (244) | |||
Alveda Acquisition | Technology | ||||
Estimated fair value of identifiable assets acquired and liabilities assumed: | ||||
Property and equipment | 24,858 | |||
Alveda Acquisition | In-process research and development (IPR&D) | ||||
Estimated fair value of identifiable assets acquired and liabilities assumed: | ||||
Property and equipment | 3,816 | |||
Alveda Acquisition | Customer relationships | ||||
Estimated fair value of identifiable assets acquired and liabilities assumed: | ||||
Property and equipment | $ 3,615 |
Acquisitions (Details 1)
Acquisitions (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets gross carrying amount | $ 55,992 | $ 55,014 |
Intangible assets accumulated amortization | (3,527) | (694) |
Intangible assets net carrying amount | 52,465 | 54,320 |
Alveda Acquisition | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets gross carrying amount | 32,578 | |
Intangible assets accumulated amortization | (253) | |
Intangible assets net carrying amount | 32,325 | |
Technology | Alveda Acquisition | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets gross carrying amount | 25,243 | |
Intangible assets accumulated amortization | (210) | |
Intangible assets net carrying amount | $ 25,033 | |
Intangible assets remaining amortization period | 14 years 10 months 24 days | |
In-process research and development (IPR&D) | Alveda Acquisition | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets gross carrying amount | $ 3,875 | |
Intangible assets net carrying amount | 3,875 | |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets accumulated amortization | $ (404) | $ (43) |
Intangible assets remaining amortization period | 9 years 1 month 24 days | 9 years 10 months 24 days |
Customer relationships | Alveda Acquisition | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets gross carrying amount | $ 3,460 | |
Intangible assets accumulated amortization | (43) | |
Intangible assets net carrying amount | $ 3,417 | |
Intangible assets remaining amortization period | 9 years 10 months 24 days |
Acquisitions (Details 2)
Acquisitions (Details 2) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Business Combinations [Abstract] | ||
Total Revenue | $ 55,767 | $ 47,284 |
Net income | $ 8,443 | $ 6,525 |
Basic earnings per share (in Dollars per share) | $ 0.16 | $ 0.13 |
Diluted earnings (loss) per share (in Dollars per share) | $ (0.04) | $ 0.11 |
Acquisitions (Details Textual)
Acquisitions (Details Textual) | Nov. 13, 2015USD ($)subsidiary | Dec. 31, 2016USD ($) |
Alveda Acquisition | ||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||
Subsidiaries formed | subsidiary | 3 | |
Payments for other taxes | $ 5,200,000 | |
LuxCo | ||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||
Equity contribution | 3,374,549 | |
Loan principal amount | $ 28,185,847 | |
Stated interest rate | 0.49% | |
Interest rate basis points | 0.25% | |
CanadaCo | ||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||
Loan principal amount | $ 3,746,094 | |
Stated interest rate | 0.49% | |
Initial term | 2 years | |
Renewal term | 1 year | |
Pro forma revenue | $ 10,800,000 | |
Pro forma net loss | $ 1,600,000 |
Goodwill and Intangible Asset58
Goodwill and Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Roll Forward] | ||
Goodwill beginning balance | $ 426,000 | $ 0 |
Acquisition | 0 | 440,000 |
Impairments | 0 | 0 |
Foreign currency translation | 20,000 | (14,000) |
Goodwill ending balance | $ 446,000 | $ 426,000 |
Goodwill and Intangible Asset59
Goodwill and Intangible Assets (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets accumulated amortization | $ (3,527) | $ (694) | |
Finite-lived intangible assets, net carrying amount | 52,465 | 54,320 | |
Intangible assets gross carrying amount | 55,992 | 55,014 | |
Intangible assets net carrying amount | 52,465 | 54,320 | |
In-process research and development (IPR&D) | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets | 17,024 | 14,351 | $ 0 |
Trademarks and Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, gross carrying amount | 35,403 | 37,203 | |
Intangible assets accumulated amortization | (3,123) | (651) | |
Finite-lived intangible assets, net carrying amount | $ 32,280 | $ 36,552 | 1,646 |
Intangible assets remaining amortization period | 13 years 9 months 18 days | 14 years 9 months 18 days | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, gross carrying amount | $ 3,565 | $ 3,460 | |
Intangible assets accumulated amortization | (404) | (43) | |
Finite-lived intangible assets, net carrying amount | $ 3,161 | $ 3,417 | $ 0 |
Intangible assets remaining amortization period | 9 years 1 month 24 days | 9 years 10 months 24 days |
Goodwill and Intangible Asset60
Goodwill and Intangible Assets (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Finite-lived Intangible Assets [Roll Forward] | |||
Intangible assets net beginning balance | $ 54,320 | ||
Amortization | (2,833) | $ (514) | $ (120) |
Intangible assets net ending balance | 52,465 | 54,320 | |
In-process research and development (IPR&D) | |||
Indefinite-lived Intangible Assets [Roll Forward] | |||
Indefinite intangible assets net beginning balance | 14,351 | 0 | |
Acquisition | 2,811 | 14,292 | |
Foreign currency translation | (138) | 59 | |
Indefinite intangible assets net ending balance | 17,024 | 14,351 | 0 |
Trademarks and Technology | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Intangible assets net beginning balance | 36,552 | 1,646 | |
Acquisition | 661 | 34,992 | |
Amortization | (2,472) | (471) | |
Foreign currency translation | (2,461) | 385 | |
Intangible assets net ending balance | 32,280 | 36,552 | 1,646 |
Customer relationships | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Intangible assets net beginning balance | 3,417 | 0 | |
Acquisition | 0 | 3,615 | |
Amortization | (361) | (43) | |
Foreign currency translation | 105 | (155) | |
Intangible assets net ending balance | $ 3,161 | $ 3,417 | $ 0 |
Goodwill and Intangible Asset61
Goodwill and Intangible Assets (Details 3) $ in Thousands | Dec. 31, 2016USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,017 | $ 2,712 |
2,018 | 2,712 |
2,019 | 2,712 |
2,020 | 2,712 |
2,021 | 2,712 |
Thereafter | $ 22,017 |
Goodwill and Intangible Asset62
Goodwill and Intangible Assets (Details 4) | 12 Months Ended |
Dec. 31, 2016 | |
Trademarks and Technology | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets useful life | 15 years |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets useful life | 10 years |
Goodwill and Intangible Asset63
Goodwill and Intangible Assets (Details Textual) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Nov. 13, 2015 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 446,000 | $ 426,000 | $ 0 | |
Impairment losses | $ 0 | $ 0 | ||
Alveda Acquisition | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 440,000 |
Note Payable - General Electr64
Note Payable - General Electric Capital Corporation (Details Textual) - General Electric Capital Corporation - USD ($) | Sep. 16, 2015 | Aug. 24, 2015 | Nov. 18, 2014 | Dec. 31, 2016 | Dec. 31, 2015 |
Line of Credit Facility [Line Items] | |||||
Credit agreement maximum amount outstanding (up to) | $ 10,000,000 | $ 3,200,000 | |||
Line of credit maximum borrowing capacity | 15,000,000 | $ 10,000,000 | |||
Line of credit current borrowing capacity | $ 10,000,000 | ||||
Interest rate | 4.20% | ||||
Availability under credit agreement, percentage of book value | 85.00% | ||||
Debt issuance costs | $ 432,000 | ||||
Interest expense, net | $ 351,000 | ||||
Line of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Repayment of debt | $ 3,200,000 | ||||
Credit agreement term | 5 years | ||||
Amended Credit Agreement | |||||
Line of Credit Facility [Line Items] | |||||
Unused line fee | 0.375% | 0.50% | |||
Prime Rate | Line of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Applicable margin | 3.00% | ||||
LIBOR | Line of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Applicable margin | 4.00% |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock Based Compensation [Line Items] | |||
Expected dividends | 0.00% | 0.00% | 0.00% |
Risk free rate | 1.14% | 1.11% | |
Minimum | |||
Stock Based Compensation [Line Items] | |||
Risk free rate | 0.74% | ||
Expected volatility | 68.00% | 52.70% | 44.00% |
Expected term (in years) | 3 years 1 month 6 days | 3 years 2 months 12 days | 3 years 2 months 12 days |
Maximum | |||
Stock Based Compensation [Line Items] | |||
Risk free rate | 1.20% | ||
Expected volatility | 71.30% | 68.30% | 53.00% |
Expected term (in years) | 3 years 3 months 18 days | 3 years 3 months 18 days | 3 years 3 months 18 days |
Stock-Based Compensation (Det66
Stock-Based Compensation (Details 1) - Employee Stock Option - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Number of Options Outstanding (in shares) | 3,592,734 | 2,436,834 | 2,643,500 |
Number of Options Granted (in shares) | 739,135 | 1,357,000 | 397,500 |
Number of Options Exercised (in shares) | (61,834) | (75,766) | (443,166) |
Number of Options Expired (in shares) | 0 | 0 | 0 |
Number of Options Forfeited (in shares) | (164,666) | (125,334) | (161,000) |
Number of Options Outstanding (in shares) | 4,105,369 | 3,592,734 | 2,436,834 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Shares issuable under options exercise price per share (in dollars per share) | $ 4.36 | $ 1.79 | $ 1.12 |
Granted, exercise price per share (in dollars per share) | 7.26 | 9.20 | 5.89 |
Exercised, exercise price per share (in dollars per share) | 1.54 | 1.10 | 1.15 |
Expired, exercise price per share (in dollars per share) | 0 | 0 | 0 |
Forfeited, exercise price per share (in dollars per share) | 8.37 | 8.99 | 2.71 |
Shares issuable under options exercise price per share (in dollars per share) | 4.76 | 4.36 | 1.79 |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Shares issuable under options exercise price per share (in dollars per share) | 0.79 | 0.76 | 0.55 |
Granted, exercise price per share (in dollars per share) | 4.72 | 5.55 | 2.96 |
Exercised, exercise price per share (in dollars per share) | 1.10 | 0.76 | 0.55 |
Forfeited, exercise price per share (in dollars per share) | 4.55 | 1.40 | 1.10 |
Shares issuable under options exercise price per share (in dollars per share) | 0.79 | 0.79 | 0.76 |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Shares issuable under options exercise price per share (in dollars per share) | 10.67 | 10.55 | 3.03 |
Granted, exercise price per share (in dollars per share) | 8.81 | 10.67 | 10.55 |
Exercised, exercise price per share (in dollars per share) | 6.51 | 3.62 | 1.95 |
Forfeited, exercise price per share (in dollars per share) | 10.67 | 10.67 | 5.65 |
Shares issuable under options exercise price per share (in dollars per share) | $ 10.67 | $ 10.67 | $ 10.55 |
Stock-Based Compensation (Det67
Stock-Based Compensation (Details 2) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
$0.79 to $1.00 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options Outstanding, Exercise Price Range, Lower Range Limit (in dollars per share) | $ 0.79 | $ 0.79 | |
Options Outstanding, Exercise Price Range, Upper Range Limit (in dollars per share) | $ 1 | $ 1 | |
Options Outstanding, Number of Options (in shares) | 50,000 | 50,000 | |
Options Outstanding, Weighted Average Remaining Contractual Term | 3 years 4 days | 4 years 4 days | |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 0.79 | $ 0.79 | |
Options Exercisable, Number of Options (in shares) | 50,000 | 50,000 | |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 0.79 | $ 0.79 | |
1.01 to 1.50 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options Outstanding, Exercise Price Range, Lower Range Limit (in dollars per share) | 1.01 | 1.01 | $ 1.01 |
Options Outstanding, Exercise Price Range, Upper Range Limit (in dollars per share) | $ 1.50 | $ 1.50 | $ 1.50 |
Options Outstanding, Number of Options (in shares) | 1,808,400 | 1,862,400 | 1,887,500 |
Options Outstanding, Weighted Average Remaining Contractual Term | 5 years 1 month 11 days | 6 years 1 month 20 days | 7 years 1 month 20 days |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 1.07 | $ 1.07 | $ 1.07 |
Options Exercisable, Number of Options (in shares) | 1,808,400 | 1,851,400 | 1,448,664 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 1.07 | $ 1.07 | $ 1.08 |
1.51 to 10.67 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options Outstanding, Exercise Price Range, Lower Range Limit (in dollars per share) | 1.51 | 1.51 | |
Options Outstanding, Exercise Price Range, Upper Range Limit (in dollars per share) | $ 10.67 | $ 10.67 | |
Options Outstanding, Number of Options (in shares) | 2,246,969 | 1,680,334 | |
Options Outstanding, Weighted Average Remaining Contractual Term | 8 years 3 months 35 days | 8 years 11 months 16 days | |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 7.82 | $ 8.10 | |
Options Exercisable, Number of Options (in shares) | 805,803 | 289,997 | |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 7.15 | $ 4.02 | |
$0.79 to $10.67 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options Outstanding, Exercise Price Range, Lower Range Limit (in dollars per share) | 0.79 | 0.79 | |
Options Outstanding, Exercise Price Range, Upper Range Limit (in dollars per share) | $ 10.67 | $ 10.67 | |
Options Outstanding, Number of Options (in shares) | 4,105,369 | 3,592,734 | |
Options Outstanding, Weighted Average Remaining Contractual Term | 6 years 8 months 70 days | 7 years 5 months 5 days | |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 4.76 | $ 4.36 | |
Options Exercisable, Number of Options (in shares) | 2,664,203 | 2,191,397 | |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 2.90 | $ 1.45 | |
$0.76 to $1.00 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options Outstanding, Exercise Price Range, Lower Range Limit (in dollars per share) | 0.76 | ||
Options Outstanding, Exercise Price Range, Upper Range Limit (in dollars per share) | $ 1 | ||
Options Outstanding, Number of Options (in shares) | 97,000 | ||
Options Outstanding, Weighted Average Remaining Contractual Term | 3 years 14 days | ||
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 0.78 | ||
Options Exercisable, Number of Options (in shares) | 97,000 | ||
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 0.78 | ||
1.51 to 10.55 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options Outstanding, Exercise Price Range, Lower Range Limit (in dollars per share) | 1.51 | ||
Options Outstanding, Exercise Price Range, Upper Range Limit (in dollars per share) | $ 10.55 | ||
Options Outstanding, Number of Options (in shares) | 452,334 | ||
Options Outstanding, Weighted Average Remaining Contractual Term | 8 years 8 months 5 days | ||
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 5.02 | ||
Options Exercisable, Number of Options (in shares) | 110,333 | ||
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 1.78 | ||
$0.76 to $10.55 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options Outstanding, Exercise Price Range, Lower Range Limit (in dollars per share) | 0.76 | ||
Options Outstanding, Exercise Price Range, Upper Range Limit (in dollars per share) | $ 10.55 | ||
Options Outstanding, Number of Options (in shares) | 2,436,834 | ||
Options Outstanding, Weighted Average Remaining Contractual Term | 7 years 3 months 4 days | ||
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 1.79 | ||
Options Exercisable, Number of Options (in shares) | 1,655,997 | ||
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 1.11 |
Stock-Based Compensation (Det68
Stock-Based Compensation (Details 3) - Non Vested | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Non-vested options at beginning of period (in shares) | shares | 1,401,337 |
Options, Granted (in shares) | shares | 739,135 |
Option, Vested (in shares) | shares | (574,469) |
Options, Forfeited (in shares) | shares | (124,837) |
Non-vested options at end of period (in shares) | shares | 1,441,166 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Weighted Average Grant Date Fair Value, Non-vested options at beginning of period (in dollars per share) | $ / shares | $ 3.60 |
Weighted Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares | 3.45 |
Weighted Average Grant Date Fair Value, Vested (in dollars per share) | $ / shares | 3.46 |
Weighted Average Grant Date Fair Value, Forfeited (in dollars per share) | $ / shares | 3.42 |
Weighted Average Grant Date Fair Value, Non-vested options at end of period (in dollars per share) | $ / shares | $ 3.58 |
Stock-Based Compensation (Det69
Stock-Based Compensation (Details 4) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Number of Restricted Stock, Non-vested Balance Beginning (in shares) | 0 | 108,334 | 246,001 |
Shares granted (in shares) | 32,500 | 0 | |
Shares vested (in shares) | (140,834) | (137,667) | |
Shares forfeited (in shares) | 0 | 0 | |
Number of Restricted Stock, Non-vested Balance Ending (in shares) | 0 | 108,334 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Weighted Average Exercise Price, Non-vested Balance Beginning (in dollars per share) | $ 0 | $ 2.86 | $ 2.64 |
Shares granted - Weighted Average Exercise Price (in dollars per share) | 10.67 | 0 | |
Shares vested - Weighted Average Exercise Price (in dollars per share) | 4.66 | 2.46 | |
Weighted Average Exercise Price, Non-vested Balance Ending (in dollars per share) | $ 0 | $ 2.86 | |
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Number of Restricted Stock, Non-vested Balance Beginning (in shares) | 182,750 | 0 | |
Shares granted (in shares) | 58,068 | 230,250 | |
Shares vested (in shares) | (60,918) | (32,500) | |
Shares forfeited (in shares) | 0 | (15,000) | |
Number of Restricted Stock, Non-vested Balance Ending (in shares) | 179,900 | 182,750 | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Weighted Average Exercise Price, Non-vested Balance Beginning (in dollars per share) | $ 10.23 | $ 0 | |
Shares granted - Weighted Average Exercise Price (in dollars per share) | 7.50 | 10.32 | |
Shares vested - Weighted Average Exercise Price (in dollars per share) | 10.13 | 10.67 | |
Shares forfeited - Weighted Average Exercise Price (in dollars per share) | 0 | 10.67 | |
Weighted Average Exercise Price, Non-vested Balance Ending (in dollars per share) | $ 9.35 | $ 10.23 | $ 0 |
Stock-Based Compensation (Det70
Stock-Based Compensation (Details Textual) - USD ($) $ in Millions | May 25, 2016 | Apr. 12, 2010 | Dec. 30, 2013 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | May 29, 2010 |
Stock Based Compensation Details [Line Items] | ||||||||
Shares of common stock outstanding | 53,148,441 | 53,000,689 | ||||||
Intrinsic value of options outstanding | $ 11.5 | $ 17.4 | $ 17.1 | |||||
Intrinsic value of options exercisable | 11.3 | 16.3 | 12.7 | |||||
Intrinsic value of options exercised | 0.3 | 0.6 | 3.4 | |||||
Unrecognized compensation costs | 3.4 | |||||||
General and Administrative Expense | ||||||||
Stock Based Compensation Details [Line Items] | ||||||||
Stock option based expenses | $ 2.3 | $ 1.7 | $ 0.3 | |||||
Director Stock Option Plan - 1999 | ||||||||
Stock Based Compensation Details [Line Items] | ||||||||
Shares approved and authorized (in shares) | 1,975,000 | |||||||
Number of Options Granted (in shares) | 2,634,798 | |||||||
Number of Options Forfeited (in shares) | 807,782 | |||||||
Number of Options Outstanding (in shares) | 650,000 | |||||||
Shares available for grant | 147,984 | |||||||
Maximum term | 10 years | |||||||
Vesting period | 1 year | |||||||
Nineteen Ninety Nine Stock Incentive Plan | ||||||||
Stock Based Compensation Details [Line Items] | ||||||||
Shares approved and authorized (in shares) | 3,200,000 | |||||||
Number of Options Granted (in shares) | 2,892,500 | |||||||
Maximum term | 10 years | |||||||
Vesting period | 4 years | |||||||
Percent of FMV options granted | 100.00% | |||||||
Service period | 1 year | |||||||
Plan 2,009 | ||||||||
Stock Based Compensation Details [Line Items] | ||||||||
Shares approved and authorized (in shares) | 5,000,000 | |||||||
Number of Options Outstanding (in shares) | 3,216,369 | |||||||
Additional shares authorized (in shares) | 2,000,000 | |||||||
Maximum number of shares to any individual (in shares) | 1,000,000 | |||||||
Shares of common stock outstanding | 1,341,746 | |||||||
Options transferred | 92,883 | |||||||
Plan 2,016 | ||||||||
Stock Based Compensation Details [Line Items] | ||||||||
Shares approved and authorized (in shares) | 2,000,000 | |||||||
Shares available for grant | 1,981,867 | |||||||
Maximum number of shares to any individual (in shares) | 1,000,000 | |||||||
Shares of common stock outstanding | 20,000 | |||||||
Plan 2016, Plan 2009 And Director Plan | ||||||||
Stock Based Compensation Details [Line Items] | ||||||||
Number of Options Outstanding (in shares) | 4,105,369 | |||||||
Jason Grenfell-Gardner | ||||||||
Stock Based Compensation Details [Line Items] | ||||||||
Shares granted (in shares) | 325,000 | |||||||
Restricted Stock Units (RSUs) | ||||||||
Stock Based Compensation Details [Line Items] | ||||||||
RSUs outstanding | 179,900 | 182,750 | 0 | |||||
Shares granted (in shares) | 58,068 | 230,250 | ||||||
Restricted Stock Units (RSUs) | Plan 2009 | ||||||||
Stock Based Compensation Details [Line Items] | ||||||||
RSUs outstanding | 179,900 | |||||||
Restricted Stock | ||||||||
Stock Based Compensation Details [Line Items] | ||||||||
RSUs outstanding | 0 | 108,334 | 246,001 | |||||
Stock option based expenses | $ 0.8 | $ 0.6 | $ 0.5 | |||||
Unrecognized compensation costs | $ 1 | |||||||
Shares granted (in shares) | 32,500 | 0 | ||||||
Common Stock | Plan 2016 | ||||||||
Stock Based Compensation Details [Line Items] | ||||||||
Number of Options Outstanding (in shares) | 239,000 | |||||||
Minimum | Restricted Stock | ||||||||
Stock Based Compensation Details [Line Items] | ||||||||
Vesting period | 1 year | |||||||
Maximum | Restricted Stock | ||||||||
Stock Based Compensation Details [Line Items] | ||||||||
Vesting period | 3 years |
Stock Warrants (Details)
Stock Warrants (Details) - Warrant - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Securities Called by Warrants or Rights [Roll Forward] | |||
Beginning balance (in shares) | 0 | 84,000 | 354,546 |
Stock warrants granted (in shares) | 0 | 0 | 0 |
Stock warrants expired (in shares) | 0 | (16,364) | 0 |
Stock warrants exercised (in shares) | 0 | (67,636) | (270,546) |
Ending balance (in shares) | 0 | 0 | 84,000 |
Exercise Price of Warrants or Rights [Roll Forward] | |||
Beginning balance (in dollars per share) | $ 0 | $ 1.21 | $ 1.21 |
Stock warrants granted (in dollars per share) | 0 | 0 | 0 |
Stock warrants expired (in dollars per share) | 0 | 1.21 | 0 |
Stock warrants exercised (in dollars per share) | 0 | 1.21 | 1.21 |
Ending balance (in dollars per share) | $ 0 | $ 0 | $ 1.21 |
Stock Warrants (Details Textual
Stock Warrants (Details Textual) - $ / shares | Dec. 31, 2016 | Dec. 08, 2010 |
Stock Warrants [Line Items] | ||
Warrants outstanding | 0 | |
First Placement Agent | ||
Stock Warrants [Line Items] | ||
Stock warrants (in shares) | 338,182 | |
Second Placement Agent | ||
Stock Warrants [Line Items] | ||
Stock warrants (in shares) | 16,364 | |
Warrant Issued in Connection with Private Placement Offering | ||
Stock Warrants [Line Items] | ||
Stock warrants, exercise price (in dollars per share) | $ 1.21 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
U.S. operations | $ (9,514) | $ 6,911 | $ 5,424 |
Foreign operations | (2,184) | (208) | 0 |
Income (loss) before income tax expense (benefit) | $ (11,698) | $ 6,703 | $ 5,424 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current tax expense (benefit): | |||
Federal | $ 26 | $ 0 | $ 97 |
State and local | 35 | 19 | 76 |
Foreign | 272 | 28 | |
Total current tax expense | 333 | 47 | 173 |
Deferred tax expense: | |||
Federal | 0 | 0 | 0 |
State and local | 0 | 0 | 0 |
Foreign | (46) | (12) | |
Total deferred tax expense | (46) | (12) | 0 |
Total income tax expense | $ 287 | $ 35 | $ 173 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Expected Statutory expense (benefit) | $ (3,977) | $ 2,244 | $ 1,844 |
Gain on derivative and amortization of debt discount | 2,584 | (5,597) | (693) |
Other non-deductible expenses | 63 | 7 | 3 |
Change in valuation allowance | 590 | 3,254 | (1,031) |
Rate differential - foreign vs. US | 822 | 114 | 0 |
State income taxes, net of federal benefit | 23 | 13 | 50 |
Federal tax impact of state tax benefit, net | 154 | 0 | 0 |
Exchange gain | 28 | 0 | 0 |
Total income tax expense | $ 287 | $ 35 | $ 173 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Allowance for doubtful accounts | $ 118 | $ 6 |
Inventory reserve | 467 | 157 |
Accrued expenses | 831 | 1,005 |
Total current assets | 1,416 | 1,168 |
Long Term Assets (Liabilities): | ||
Property, plant and equipment | 317 | 348 |
Intangible assets | (205) | (256) |
Tax operating loss carry forwards | 10,962 | 11,283 |
Tax credit carry forwards | 254 | 291 |
Non-employee stock options | 2,302 | 1,238 |
Other | (1) | (7) |
Total Long Term Assets (Liabilities) | 13,629 | 12,897 |
Gross Deferred Tax Asset (Liability) | 15,045 | 14,065 |
Less Valuation Allowance | (15,250) | (14,309) |
Deferred taxes, net | $ (205) | $ (244) |
Income Taxes (Details 4)
Income Taxes (Details 4) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | $ 31,336 | $ 32,870 |
Research tax credits (expiring through 2025) | 168 | 168 |
Alternative minimum tax credits (available without expiration) | 86 | 70 |
State | Tennessee (expiring in 2030) | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | 529 | 568 |
State | New Jersey (expiring in 2035) | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | 1,764 | 822 |
State | Illinois (expiring in 2035) | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | 222 | 255 |
Foreign | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | $ 232 | $ 10 |
Income Taxes (Details 5)
Income Taxes (Details 5) $ in Thousands | Dec. 31, 2016USD ($) |
Income Tax Disclosure [Line Items] | |
Net Operating Loss | $ 31,336 |
2017 - 2021 | |
Income Tax Disclosure [Line Items] | |
Net Operating Loss | 7,187 |
2022 - 2026 | |
Income Tax Disclosure [Line Items] | |
Net Operating Loss | 2,268 |
2027 - 2031 | |
Income Tax Disclosure [Line Items] | |
Net Operating Loss | 11,373 |
2032 and thereafter | |
Income Tax Disclosure [Line Items] | |
Net Operating Loss | $ 10,508 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Examination [Line Items] | |||
Income tax expense | $ 287 | $ 35 | $ 173 |
Federal tax rate | 34.00% | ||
Deferred tax assets valuation allowance | $ 15,250 | $ 14,309 | |
Valuation allowance increase (decrease) | $ 1,000 | ||
Change in ownership percentage (more than) | 50.00% | ||
Stockholder ownership (or greater) | 5.00% | ||
Windfall tax benefits in additional paid in capital | $ 122 | ||
Accounted for Additional Paid-in Capital | |||
Income Tax Examination [Line Items] | |||
Net operating losses | 3,300 | ||
Not Subject to Limitations | |||
Income Tax Examination [Line Items] | |||
Proceeds from sale of operating loss carryforward | 15,300 | ||
Subject to Limitations | Minimum | |||
Income Tax Examination [Line Items] | |||
Net operating losses | 1,000 | ||
Subject to Limitations | Maximum | |||
Income Tax Examination [Line Items] | |||
Net operating losses | $ 2,300 |
Lease Commitments (Details)
Lease Commitments (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Years Ending December 31, | |
2,017 | $ 548 |
2,018 | 458 |
2,019 | 421 |
2,020 | 426 |
2,021 | 392 |
Thereafter | 742 |
Total | $ 2,987 |
Lease Commitments (Details Text
Lease Commitments (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Leases [Abstract] | |||
Rent expense | $ 934,400 | $ 360,000 | $ 216,200 |
Legal and U.S. Regulatory Pro82
Legal and U.S. Regulatory Proceedings (Details Textual) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jan. 26, 2017lawsuit | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Legal and U.S. Regulatory Proceedings Details [Line Items] | |||
Accrued costs for clean-up and remediation | $ 122 | ||
Restricted cash included in other assets | $ 122 | $ 124 | |
Settlement terms | On December 4, 2015, Galderma Laboratories, L.P. and Galderma S.A. (collectively, “Galderma”) filed a complaint in the United States District Court for the Northern District of Texas against the Company alleging infringement of United States Patent No. 6,106,848 based upon the Company’s submission to the FDA of an ANDA seeking FDA approval to market clobetasol propionate lotion 0.05% before the expiration patent asserted in the complaint. | ||
Estimated Clean Up Costs | |||
Legal and U.S. Regulatory Proceedings Details [Line Items] | |||
Cost for clean-up and remediation | $ 889 | ||
Subsequent Event | |||
Legal and U.S. Regulatory Proceedings Details [Line Items] | |||
Number of punitive class action antitrust lawsuits | lawsuit | 8 |
Employee Benefits (Details Text
Employee Benefits (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, maximum annual contribution per employee, percent | 100.00% | ||
Defined contribution plan, minimum annual contribution per employee, percent | 1.00% | ||
Defined contribution plan, maximum annual contribution per employee | $ 18,000 | $ 18,000 | $ 17,500 |
Defined contribution plan, cost recognized | 228,619 | 172,965 | 126,600 |
Catchup Contribution Max | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, maximum annual contribution per employee | $ 6,000 | $ 6,000 | $ 5,500 |
Tranche one | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, employer matching contribution, percent of match | 100.00% | ||
Defined contribution plan, percentage of participant contribution | 3.00% | ||
Tranche two | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, employer matching contribution, percent of match | 50.00% | ||
Defined contribution plan, percentage of participant contribution | 2.00% |
Asset Purchase Agreements (Deta
Asset Purchase Agreements (Details Textual) $ in Thousands | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($)medical_device | Oct. 05, 2015USD ($)product | Mar. 27, 2015USD ($) | Sep. 30, 2014USD ($)agreementproduct | Sep. 24, 2014product | Dec. 31, 2016USD ($) | Nov. 13, 2015agreement | Nov. 18, 2014USD ($) |
Business Acquisition [Line Items] | |||||||||
Number of asset purchase agreements | agreement | 2 | ||||||||
Sebela | |||||||||
Business Acquisition [Line Items] | |||||||||
Asset Purchase Agreement, Number of Medical Devices Associated | medical_device | 2 | ||||||||
Amortization of product acquisition costs | $ 330 | ||||||||
Useful life of acquired products | 15 years | ||||||||
Payments to acquire productive assets | $ 69 | ||||||||
Concordia | |||||||||
Business Acquisition [Line Items] | |||||||||
Amortization of product acquisition costs | $ 10,100 | ||||||||
Useful life of acquired products | 15 years | ||||||||
Payments to acquire productive assets | $ 1,200 | ||||||||
Products associated | product | 3 | ||||||||
AstraZeneca | |||||||||
Business Acquisition [Line Items] | |||||||||
Amortization of product acquisition costs | $ 9,900 | ||||||||
Useful life of acquired products | 15 years | ||||||||
Products associated | product | 18 | ||||||||
Contingent consideration for asset purchase agreements | $ 3,000 | ||||||||
AstraZeneca | Royalty Obligations | |||||||||
Business Acquisition [Line Items] | |||||||||
Payments to acquire productive assets | $ 6,900 | ||||||||
Valeant | |||||||||
Business Acquisition [Line Items] | |||||||||
Amortization of product acquisition costs | $ 3,565 | ||||||||
Useful life of acquired products | 15 years | 15 years | |||||||
Number of asset purchase agreements | agreement | 2 | ||||||||
Payments to acquire productive assets | $ 3,500 | ||||||||
Products associated | product | 2 | ||||||||
Payments to acquire other productive assets | $ 1,500 | ||||||||
Additional products | product | 3 | ||||||||
Valeant | Option Exercised for Each of Two Additional Products | |||||||||
Business Acquisition [Line Items] | |||||||||
Contingent consideration for asset purchase agreements | $ 1,500 | $ 750 | |||||||
Valeant | Option Exercised for One Additional Products | |||||||||
Business Acquisition [Line Items] | |||||||||
Contingent consideration for asset purchase agreements | 500 | $ 500 | |||||||
Valeant | Option Exercised for Total Aggregate Additional Products | |||||||||
Business Acquisition [Line Items] | |||||||||
Contingent consideration for asset purchase agreements | $ 2,000 |
Quarterly Results (Unaudited)85
Quarterly Results (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenues, net | $ 17,935 | $ 16,151 | $ 17,138 | $ 15,657 | $ 13,071 | $ 11,615 | $ 8,893 | $ 10,671 | $ 66,881 | $ 44,250 | $ 33,740 |
Gross profit | 9,162 | 8,014 | 9,556 | 7,955 | 5,944 | 6,077 | 3,666 | 5,628 | 34,687 | 21,315 | |
Operating income (loss) | 326 | 303 | 1,076 | 837 | (2,769) | 391 | (1,911) | 1,098 | 2,542 | (3,192) | 3,906 |
Net income (loss) | (5,431) | (2,703) | (2,901) | (950) | (6,375) | (2,888) | 9,376 | 6,555 | (11,985) | 6,668 | 5,251 |
Net income (loss) attributable to common stockholders | $ (5,431) | $ (2,703) | $ (2,901) | $ (950) | $ (6,375) | $ (2,888) | $ 9,376 | $ 6,555 | $ (11,985) | $ 6,668 | $ 5,251 |
Basic net income (loss) per share (in dollars per share) | $ (0.11) | $ (0.05) | $ (0.05) | $ (0.02) | $ (0.12) | $ (0.05) | $ 0.18 | $ 0.12 | $ (0.23) | $ 0.13 | $ 0.11 |
Diluted net income (loss) per share (in dollars per share) | $ (0.11) | $ (0.05) | $ (0.05) | $ (0.02) | $ (0.12) | $ (0.05) | $ (0.03) | $ 0.01 | $ (0.23) | $ (0.07) | $ 0.09 |
SCHEDULE II-VALUATION AND QUA86
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Valuation allowances and reserves balance, beginning of year | $ 14,266 | $ 5,587 | $ 1,960 |
Deductions | 141,493 | 61,033 | 29,240 |
Valuation allowances and reserves balance, end of year | 41,911 | 14,266 | 5,587 |
Change in Tax Valuation Allowance | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Valuation allowances and reserves balance, beginning of year | 14,309 | 10,970 | 12,062 |
Charged to Costs and Expenses | 0 | 0 | 0 |
Charged other Accounts | 941 | 3,339 | 0 |
Deductions | 0 | 0 | 1,092 |
Valuation allowances and reserves balance, end of year | 15,250 | 14,309 | 10,970 |
Allowance for Doubtful Accounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Valuation allowances and reserves balance, beginning of year | 90 | 16 | 16 |
Charged to Costs and Expenses | 347 | 74 | 0 |
Charged other Accounts | 0 | 0 | |
Deductions | 20 | 0 | 0 |
Valuation allowances and reserves balance, end of year | 417 | 90 | 16 |
Reserve for Inventory Obsolescence | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Valuation allowances and reserves balance, beginning of year | 121 | 212 | 166 |
Charged to Costs and Expenses | 777 | 51 | 228 |
Charged other Accounts | 0 | (8) | (12) |
Deductions | 583 | 134 | 170 |
Valuation allowances and reserves balance, end of year | $ 315 | $ 121 | $ 212 |