Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Jul. 31, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | EMMAUS LIFE SCIENCES, INC. | |
Entity Central Index Key | 0000822370 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-35527 | |
Entity Tax Identification Number | 87-0419387 | |
Entity Incorporation State Country Code | DE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Address, Address Line One | 21250 Hawthorne Boulevard | |
Entity Address, Address Line Two | Suite 800 | |
Entity Address, City or Town | Torrance | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90503 | |
City Area Code | 310 | |
Local Phone Number | 214-0065 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Common Stock, Shares Outstanding | 49,311,864 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 2,213 | $ 1,769 |
Accounts receivable, net | 1,900 | 2,150 |
Inventories, net | 8,255 | 7,971 |
Investment in marketable securities | 34,768 | 27,929 |
Prepaid expenses and other current assets | 1,102 | 1,402 |
Total current assets | 48,238 | 41,221 |
Property and equipment, net | 142 | 151 |
Equity method investment | 12,980 | 13,325 |
Right of use assets | 4,344 | 4,474 |
Deposits and other assets | 288 | 285 |
Total assets | 65,992 | 59,456 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 13,209 | 11,498 |
Operating lease liabilities, current portion | 1,079 | 991 |
Other current liabilities | 1,113 | 5,748 |
Revolving line of credit to related parties | 600 | 600 |
Warrant derivative liabilities | 13 | 38 |
Notes payable | 3,954 | 3,749 |
Notes payable to related parties | 34 | 193 |
Convertible debentures, net of discount, current portion | 5,908 | 7,015 |
Convertible note payable, net of discount | 3,150 | 2,995 |
Total current liabilities | 29,060 | 32,827 |
Operating lease liabilities, less current portion | 3,810 | 3,932 |
Other long-term liabilities | 36,968 | 33,750 |
Convertible debentures, net of discount, less current portion | 886 | |
Total liabilities | 70,724 | 70,509 |
STOCKHOLDERS’ DEFICIT | ||
Preferred stock — par value $0.001 per share, 15,000,000 shares authorized, none issued or outstanding | ||
Common stock — par value $0.001 per share, 250,000,000 shares authorized, 48,987,189 shares and 48,471,446 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 49 | 48 |
Additional paid-in capital | 216,157 | 215,207 |
Accumulated other comprehensive loss | (18) | (79) |
Accumulated deficit | (220,920) | (226,229) |
Total stockholders’ deficit | (4,732) | (11,053) |
Total liabilities & stockholders’ deficit | $ 65,992 | $ 59,456 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Statement Of Financial Position [Abstract] | |||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 15,000,000 | 15,000,000 | 20,000,000 |
Preferred stock, issued | 0 | 0 | 0 |
Preferred stock, outstanding | 0 | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, authorized | 250,000,000 | 250,000,000 | 250,000,000 |
Common stock, issued | 48,987,189 | 48,471,446 | 37,750,424 |
Common stock, outstanding | 48,987,189 | 48,471,446 | 37,750,424 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
REVENUES, NET | $ 6,954,000 | $ 4,707,000 |
COST OF GOODS SOLD | 478,000 | 259,000 |
GROSS PROFIT | 6,476,000 | 4,448,000 |
OPERATING EXPENSES | ||
Research and development | 617,000 | 513,000 |
Selling | 1,068,000 | 1,479,000 |
General and administrative | 3,657,000 | 3,737,000 |
Total operating expenses | 5,342,000 | 5,729,000 |
INCOME (LOSS) FROM OPERATIONS | 1,134,000 | (1,281,000) |
OTHER INCOME (EXPENSE) | ||
Change in fair value of warrant derivative liabilities | 25,000 | (938,000) |
Change in fair value of embedded conversion option | (29,000) | |
Net gains (losses) on investment in marketable securities | 6,839,000 | (6,457,000) |
Gain (loss) on equity method investment | (407,000) | 9,000 |
Interest and other income (loss) | 33,000 | (77,000) |
Interest expense | (1,800,000) | (8,612,000) |
Total other income (expense) | 4,661,000 | (16,075,000) |
INCOME (LOSS) BEFORE INCOME TAXES | 5,795,000 | (17,356,000) |
INCOME TAXES | 286,000 | 52,000 |
NET INCOME (LOSS) | 5,509,000 | (17,408,000) |
COMPONENTS OF OTHER COMPREHENSIVE INCOME | ||
Foreign currency translation adjustments | 61,000 | 7,000 |
Other comprehensive income | 61,000 | 7,000 |
COMPREHENSIVE INCOME (LOSS) | $ 5,570,000 | $ (17,401,000) |
EARNINGS (NET LOSS) PER COMMON SHARE - BASIC AND DILUTED | $ 0.11 | $ (0.46) |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING | 48,624,469 | 37,473,431 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT (Unaudited) - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] | Accumulated Deficit [Member]Cumulative Effect, Period of Adoption, Adjustment [Member] |
Balance, beginning at Dec. 31, 2018 | $ (21,708) | $ 37 | $ 149,682 | $ (69) | $ (171,358) | ||
Balance, beginning (ASU 2016-02 [Member]) at Dec. 31, 2018 | $ (29) | $ (29) | |||||
Balance, beginning (in shares) at Dec. 31, 2018 | 37,341,393 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beneficial conversion feature relating to convertible notes | 3,374 | 3,374 | |||||
Exercise of warrants | 5 | 5 | |||||
Exercise of warrants (in shares) | 525 | ||||||
Common stock issued for cash (net of issuance cost) | 2,530 | $ 1 | 2,529 | ||||
Common stock issued for cash (net of issuance cost) (in shares) | 322,920 | ||||||
Conversion of notes payable to common stock | 329 | 329 | |||||
Conversion of notes payable to common stock (in shares) | 85,411 | ||||||
Share-based compensation | 588 | 588 | |||||
Exercise of stock options | 1 | 1 | |||||
Exercise of stock options (in shares) | 175 | ||||||
Foreign currency translation effect | 7 | 7 | |||||
Net income (loss) | (17,408) | (17,408) | |||||
Balance, ending at Mar. 31, 2019 | (32,311) | $ 38 | 156,508 | (62) | (188,795) | ||
Balance, ending (in shares) at Mar. 31, 2019 | 37,750,424 | ||||||
Balance, beginning at Dec. 31, 2018 | (21,708) | $ 37 | 149,682 | (69) | (171,358) | ||
Balance, beginning (ASU 2016-02 [Member]) at Dec. 31, 2018 | $ (29) | $ (29) | |||||
Balance, beginning (in shares) at Dec. 31, 2018 | 37,341,393 | ||||||
Balance, ending at Dec. 31, 2019 | (11,053) | $ 48 | 215,207 | (79) | (226,229) | ||
Balance, ending (in shares) at Dec. 31, 2019 | 48,471,446 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock issued for cash (net of issuance cost) | 142 | $ 1 | 141 | ||||
Common stock issued for cash (net of issuance cost) (in shares) | 515,743 | ||||||
Fair value of warrants including down-round protection adjustments | 400 | 600 | (200) | ||||
Share-based compensation | 209 | 209 | |||||
Foreign currency translation effect | 61 | 61 | |||||
Net income (loss) | 5,509 | 5,509 | |||||
Balance, ending at Mar. 31, 2020 | $ (4,732) | $ 49 | $ 216,157 | $ (18) | $ (220,920) | ||
Balance, ending (in shares) at Mar. 31, 2020 | 48,987,189 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Income (loss) | $ 5,509 | $ (17,408) |
Adjustments to reconcile net loss to net cash flows from operating activities | ||
Depreciation and amortization | 15 | 17 |
Amortization of discount of notes payable and convertible notes payable | 1,302 | 7,288 |
Foreign exchange adjustments | (50) | 89 |
Net (gain) loss on investment in marketable securities | (6,839) | 6,457 |
Loss (gain) on equity method investment | 407 | (9) |
Share-based compensation | 209 | 588 |
Change in fair value of warrant derivative liabilities | (25) | 938 |
Change in fair value of embedded conversion option | 29 | |
Net changes in operating assets and liabilities | ||
Accounts receivable | 249 | (143) |
Inventories | (285) | (1,091) |
Prepaid expenses and other current assets | 260 | (115) |
Other non-current assets | 133 | (2,813) |
Income tax receivable and payable | 286 | 52 |
Accounts payable and accrued expenses | 2,449 | 2,725 |
Deferred revenue | 500 | |
Deferred rent | (287) | |
Other current liabilities | (5,025) | 36 |
Other long-term liabilities | 3,184 | 1,997 |
Net cash flows provided by (used in) operating activities | 1,808 | (1,179) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (3) | (16) |
Net cash flows used in investing activities | (3) | (16) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Payments of convertible notes | (1,500) | (3,048) |
Proceeds from exercise of warrants | 5 | |
Proceeds from issuance of common stock | 142 | 2,530 |
Proceeds from conversion of notes payable to common stock | 21 | |
Net cash flows used in financing activities | (1,358) | (492) |
Effect of exchange rate changes on cash | (3) | 22 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 444 | (1,665) |
Cash, cash equivalents and restricted cash, beginning of period | 1,769 | 3,905 |
Cash, cash equivalents and restricted cash, end of period | 2,213 | 2,240 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITIES | ||
Interest paid | 312 | 385 |
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Warrants issued | $ 400 | |
Beneficial conversion feature relating to convertible notes | 3,374 | |
Initial recognition of right to use assets | 2,922 | |
Conversion of notes payable to common stock | $ 329 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | NOTE 1 — BASIS OF PRESENTATION The accompanying unaudited condensed consolidated interim financial statements of Emmaus Life Sciences, Inc., (formerly, “MYnd Analytics, Inc.”) and its direct and indirect consolidated subsidiaries (collectively, “we,” “our,” “us,” the “Company” or “Emmaus”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) on the basis that the Company will continue as a going concern. All significant intercompany transactions have been eliminated. The Company’s unaudited condensed consolidated interim financial statements contain adjustments, including normal recurring accruals necessary to fairly state the Company’s consolidated financial position, results of operations and cash flows. The condensed consolidated interim financial statements should be read in conjunction with the Annual Report on Form 10-K/A for the year ended December 31, 2020 (the “Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on August 10, 2021. The accompanying condensed consolidated balance sheet at December 31, 2019 has been derived from the audited consolidated balance sheet at December 31, 2019 contained in the From 10-K/A. The results of operations for the three months ended March 31, 2020, are not necessarily indicative of the results to be expected for the full year or any future interim period. Organization and Nature of Operations The Company is a commercial-stage biopharmaceutical company engaged in the discovery, development, marketing and sales of innovative treatments and therapies primarily for rare and orphan diseases. On July 17, 2019, we completed a merger transaction with EMI Holding, Inc., formerly known as Emmaus Life Sciences, Inc. (“EMI”), into a subsidiary of the Company (the “Merger”), with EMI surviving the Merger as a wholly owned subsidiary. Immediately after completion of the Merger, we changed our name to “Emmaus Life Sciences, Inc.” The Merger was treated as a reverse recapitalization under the acquisition method of accounting in accordance with accounting principles generally accepted in the U.S. For accounting purposed, EMI was considered to have acquired us. The Merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes. In connection with and prior to the Merger, we contributed and transferred to Telemynd, Inc. (“Telemynd”), a newly formed, wholly owned subsidiary of the Company, all or substantially all our historical business, assets and liabilities and our board of directors declared a stock dividend of one share of the Telemynd common stock held by the Company for each outstanding share of our common stock after giving effect to a 1-for-6 reverse stock split of our outstanding shares of common stock. As a result of the spin-off and the Merger, our ongoing business became EMI’s business, which is that of a commercial-stage biopharmaceutical company focused on the development, marketing and sale of innovative treatments and therapies, including those in the rare and orphan disease categories. Principles of consolidation —The consolidated financial statements include the accounts of the Company, EMI and EMI’s wholly‑owned subsidiary, Emmaus Medical, Inc., and Emmaus Medical, Inc.’s wholly‑owned subsidiaries. All significant intercompany transactions have been eliminated. The preparation of the consolidated financial statements requires the use of management estimates that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses for the reported period. Actual results could differ materially from those estimates. Restatement of Prior Period Amounts — In connection with the preparation of our December 31, 2019 consolidated financial statements, we identified the following material errors in our condensed consolidated financial statements as of and for the three months ended March 31, 2019. 1. The misclassification as equity of warrants issued by EMI in October of 2018, which warrants should have been accounted for as liabilities based upon fair value; and 2. The erroneous consolidation as a variable interest entity, or VIE, of EMI’s interest in EJ Holdings, Inc., which should have been accounted for based upon the equity method. 3. The mistreatment of the fair value of cashless exercise warrants originally recorded in the Consolidated Statements of Operations and Comprehensive Loss, which fair value should have been recorded in additional paid-in capital in the Consolidated Balance Sheets. 4. In addition to the errors described above, the restated financial statements also include adjustments to correct certain immaterial errors identified during the audit of the Company’s financial statements for the year ended December 31, 2019. EMMAUS LIFE SCIENCES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) (Unaudited) As of March 31, 2019 Previously Reported Adjustment Restated ASSETS CURRENT ASSETS Cash and cash equivalents $ 15,310 $ (13,070 ) (a) $ 2,240 Accounts receivable, net 1,760 301 (c) 2,061 Inventories, net 5,795 — 5,795 Investment in marketable securities 42,873 — 42,873 Marketable securities, pledged to creditor 251 — 251 Prepaid expenses and other current assets 818 (215 ) (a), (c) 603 Total current assets 66,807 (12,984 ) 53,823 Property and equipment, net 153 — 153 Long-term investment at cost 527 — 527 Equity method investment — 13,470 (a) 13,470 Right of use assets 2,838 — 2,838 Deposits and other assets 410 — 410 Total assets $ 70,735 $ 486 $ 71,221 LIABILITIES AND STOCKHOLDERS’ DEFICIT CURRENT LIABILITIES Accounts payable and accrued expenses $ 11,068 $ (371 ) (a), (c) $ 10,697 Operating lease liabilities, current portion 682 — 682 Other current liabilities 5,217 75 (c) 5,292 Warrant derivative liabilities — 9,877 (b), (c) 9,877 Notes payable, net of discount 7,000 806 (b) 7,806 Notes payable to related parties 470 — 470 Convertible notes payable, net of discount 15,157 — 15,157 Convertible notes payable to related parties, net of discount 13,896 — 13,896 Total current liabilities 53,490 10,387 63,877 Operating lease liabilities, less current portion 2,478 — 2,478 Other long-term liabilities 35,637 — 35,637 Warrant derivative liabilities 1,447 (1,447 ) (c) — Notes payable, net of discount, less current portion 1,922 (771 ) (b) 1,151 Convertible debentures, net of discount, less current portion 389 — 389 Total liabilities 95,363 8,169 103,532 STOCKHOLDERS’ DEFICIT Preferred stock — par value $0.001 per share, 20,000,000 shares authorized, none issued or outstanding — — — Common stock — par value $0.001 per share, 250,000,000 shares authorized, 37,750,424 shares were issued and outstanding at March 31, 2019 36 2 (d) 38 Additional paid-in capital 146,344 10,164 (b), (e) 156,508 Accumulated other comprehensive income (loss) (62 ) — (62 ) Accumulated deficit (170,864 ) (17,931 ) (e) (188,795 ) Total stockholders’ deficit (24,546 ) (7,765 ) (32,311 ) Noncontrolling interest (82 ) 82 (a) — Total liabilities & stockholders’ deficit $ 70,735 $ 486 $ 71,221 (a) EJ Holdings adjustments: the correction of this misstatement resulted in increases of $13.5 million in equity method investment, $114,000 in accounts payable and accrued expenses, and $82,000 in non-controlling interest and decreases of $13.1 million in cash and cash equivalent and $205,000 in prepaid expenses and other current assets. (b) Warrant adjustments: the correction of this misstatement resulted in increases of $8.5 million in warrant derivative current liabilities and $806,000 in short-term note payable and decreases of $771,000 in long-term notes payable and $9.7 million in additional paid-in capital. (c) Corrections of other misstatement: period adjustment and reclassification of variable consideration resulted in an increase of $301,000 in accounts receivable and a decrease of $486,000 in accounts payable and accrued expenses, a decrease of $10,000 in income tax receivable and an increase of $23,000 in income tax payable; a correction of accounting treatment for convertible notes resulted in an increase of $1.3 million in additional paid-in capital; a reclassification of GPB warrants resulted an increase of short-term warrant liabilities and a decrease of long-term warrant liabilities of $1.4 million; and a correction of tax provision resulted in an increase of $52,000 in income tax payable. (d) Retrospective adjustments made to common stock resulted from recapitalization transaction in July 2019. (e) Balance includes carryforward impact on 2018 restatement adjustments, including cashless warrant adjustments which resulted in an increase in additional paid-in capital and a decrease in retained earnings of $18.3 million. EMMAUS LIFE SCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (In thousands, except share and per share amounts) (Unaudited) Three months ended March 31, 2019 Previously Reported Adjustment Restated REVENUES, NET $ 5,307 $ (600 ) (c) $ 4,707 COST OF GOODS SOLD 200 59 (c) 259 GROSS PROFIT $ 5,107 $ (659 ) 4,448 OPERATING EXPENSES Research and development 513 — 513 Selling 1,485 (6 ) (c) 1,479 General and administrative 3,681 56 (a), (c) 3,737 Total operating expenses 5,679 50 5,729 LOSS FROM OPERATIONS (572 ) (709 ) (1,281 ) OTHER INCOME (EXPENSE) Change in fair value of warrant derivative liabilities (48 ) (890 ) (b) (938 ) Net gains (losses) on equity investment in marketable securities (6,457 ) — (6,457 ) Gain on equity method investment — 9 (a) 9 Interest and other income (loss) (111 ) 34 (a) (77 ) Interest expense (6,965 ) (1,647 ) (b), (c) (8,612 ) Total other income (expenses) (13,581 ) (2,494 ) (16,075 ) LOSS BEFORE INCOME TAXES (14,153 ) (3,203 ) (17,356 ) INCOME TAXES — 52 (c) 52 NET LOSS INCLUDING NONCONTROLLING INTERESTS (14,153 ) (3,255 ) (17,408 ) Net (income) loss attributable to noncontrolling interest (14 ) 14 (a) — NET LOSS ATTRIBUTABLE TO THE COMPANY (14,167 ) (3,241 ) (17,408 ) COMPONENTS OF OTHER COMPREHENSIVE INCOME (LOSS) Foreign currency translation adjustments 8 (1 ) (a) 7 Other comprehensive income (loss) 8 (1 ) 7 COMPREHENSIVE INCOME (LOSS) (14,145 ) (3,256 ) (17,401 ) Amounts attributable to noncontrolling interest: Net (income) loss attributable to noncontrolling interest (14 ) 14 (a) — Foreign currency translation adjustments (1 ) 1 (a) — Comprehensive (income) loss attributable to noncontrolling interest (15 ) 15 — COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY $ (14,160 ) $ (3,241 ) $ (17,401 ) NET LOSS PER COMMON SHARE - BASIC AND DILUTED $ (0.38 ) $ (0.09 ) $ (0.46 ) WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING 37,473,431 — 37,473,431 (a) EJ Holdings adjustments: the correction of this misstatement resulted in increases of $55,000 in general and administrative expenses, $9,000 in loss on equity method investment and $34,000 in interest income and decreases of $14,000 in net income attributable to noncontrolling interest and $1,000 in foreign currency translation adjustments. (b) Warrant adjustments: the correction of this misstatement resulted in an increase of $312,000 in interest expense and a decrease of $890,000 in change in fair value of warrant derivative liabilities. (c) Corrections of other misstatements: period adjustment of variable consideration resulted in a decrease of $600,000 in revenues, net; reclassification of shipping cost and royalty expense to cost of sales resulted in an increase of $59,000 in cost of sales and decreases of $6,000 and $53,000 in selling expense and general and administrative expense, respectively; correction of stock modification accounting resulted in a decrease of $52,000 in general and administrative expense; correction of accounting treatment for convertible notes resulted in an increase of $1.3 million in interest expense; a correction of tax provision resulted in an increase of $52,000 in tax provision EMMAUS LIFE SCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Three months ended March 31,2019 Previously Reported Adjustment Restated CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (14,153 ) $ (3,255 ) $ (17,408 ) Adjustments to reconcile net loss to net cash flows from operating activities Depreciation and amortization 17 — 17 Amortization of discount of convertible notes 5,641 1,647 (b), (c) 7,288 Foreign exchange adjustments (19 ) 108 89 Net losses (gains) on equity investment in marketable securities 6,457 — 6,457 Gain on equity method investment — (9 ) (a) (9 ) Share-based compensation 536 52 (c) 588 Change in fair value of warrant derivative liabilities 48 890 (a) 938 Net changes in operating assets and liabilities Accounts receivable (409 ) 266 (143 ) Inventories (1,091 ) — (1,091 ) Prepaid expenses and other current assets (83 ) (32 ) (115 ) Other non-current assets (2,813 ) — (2,813 ) Income tax — 52 52 Accounts payable and accrued expenses 2,339 386 2,725 Deferred revenue 500 — 500 Deferred rent (287 ) — (287 ) Other current liabilities 36 — 36 Other long-term liabilities 1,997 — 1,997 Net cash flows (used in) provided by operating activities (1,284 ) 105 (1,179 ) CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (16 ) — (16 ) Net cash flows used in investing activities (16 ) — (16 ) CASH FLOWS FROM FINANCING ACTIVITIES Payments of convertible notes (3,048 ) — (3,048 ) Proceeds from exercise of warrants 5 — 5 Proceeds from issuance of common stock 2,530 — 2,530 Proceeds from conversion of notes payable to common stock 21 — 21 Net cash flows used in financing activities (492 ) — (492 ) Effect of exchange rate changes on cash 22 — 22 Net increase (decrease) in cash, cash equivalents and restricted cash (1,770 ) 105 (1,665 ) Cash and cash equivalents, beginning of period 17,080 (13,175 ) 3,905 Cash and cash equivalents, end of period $ 15,310 $ (13,070 ) $ 2,240 SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITIES Interest paid $ 385 $ — $ 385 NON-CASH INVESTING AND FINANCING ACTIVITIES Exercised of warrants and options on cashless basis $ 3,374 $ — $ 3,374 Conversion of notes payable to common stock $ 329 $ — $ 329 Initial recognition of right-of-use lease asset $ 2,922 $ — $ 2,922 Refer to the descriptions of the adjustments in the Condensed Consolidated Balance Sheets and Statements of Comprehensive Loss and their impact on net loss above. In addition, a cash flow classification adjustment related to EJ Holdings resulted in a net decrease to cash flows used by operating activities of $105,000. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company’s significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies,” in the Company’s Annual Report on Form 10K/A for the year ended December 31, 2020. There have been no material changes in these policies or their application. Management has considered all recent accounting pronouncements issued since the last audit of the Company’s consolidated financial statements and believes that these recent pronouncements will not have a material effect on the Company’s condensed consolidated financial statements. Net loss per share — In accordance with ASC 260, “Earnings per Share, ” the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding. Dilutive loss per share is computed in a manner similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. As of March 31, 2020 and March 31, 2019, the Company had outstanding potentially dilutive securities exercisable for or convertible into 16,698,829 shares and 17,995,514 shares, respectively, of the Company’s common stock. No potentially dilutive securities were included in the calculation of diluted net income per share since the potential dilutive securities were out of the money for the period ended March 31, 2020 and were anti-dilutive for period ended March 31, 2019. |
REVENUES
REVENUES | 3 Months Ended |
Mar. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
REVENUES | NOTE 3 — REVENUES Revenues disaggregated by category were as follows (in thousands): Three Months Ended March 31, 2020 2019 Restated Endari® $ 6,714 $ 4,602 Other 240 105 Revenues, net $ 6,954 $ 4,707 The following table summarizes the revenue allowance and accrual activities for the three months ended March 31, 2020 and 2019 (in thousands): Trade Discounts, Allowances and Chargebacks Government Rebates and Other Incentives Returns Total Balance as of December 31, 2019 $ 228 $ 1,354 $ 315 $ 1,897 Provision related to sales in the current year 942 1,122 71 2,135 Adjustments related prior period sales 16 (44 ) (22 ) (50 ) Credit and payments made (794 ) (709 ) — (1,503 ) Balance as of March 31, 2020 $ 392 $ 1,723 $ 364 $ 2,479 Balance as of December 31, 2018 $ 84 $ 798 $ 99 $ 981 Provision related to sales in the current year 292 729 54 1,075 Credit and payments made (316 ) (581 ) — (897 ) Balance as of March 31, 2019, as restated $ 60 $ 946 $ 153 $ 1,159 The following table summarizes revenues attributable to each of our customers that accounted for 10% or more of our total revenues (as a percentage of total revenues): Three Months Ended March 31, 2020 2019 Restated Customer A 54 % 65 % Customer B 27 % 19 % |
SELECTED FINANCIAL STATEMENT CA
SELECTED FINANCIAL STATEMENT CAPTIONS - ASSETS | 3 Months Ended |
Mar. 31, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
SELECTED FINANCIAL STATEMENT CAPTIONS - ASSETS | NOTE 4 — SELECTED FINANCIAL STATEMENT CAPTIONS - ASSETS Inventories consisted of the following (in thousands): March 31, 2020 December 31, 2019 Raw materials and components $ 1,409 $ 1,187 Work-in-process 1,851 1,629 Finished goods 5,109 5,204 Inventory reserve (114 ) (49 ) Total $ 8,255 $ 7,971 Prepaid expenses and other current assets consisted of the following (in thousands): March 31, 2020 December 31, 2019 Prepaid insurance $ 453 $ 735 Other prepaid expenses and current assets 649 667 $ 1,102 $ 1,402 Property and equipment consisted of the following (in thousands): March 31, 2020 December 31, 2019 Equipment $ 338 $ 335 Leasehold improvements 39 77 Furniture and fixtures 95 95 Total property and equipment 472 507 Less: accumulated depreciation (330 ) (356 ) Property and Equipment, net $ 142 $ 151 During the three months ended March 31, 2020 and 2019, depreciation expense was approximately $12,000 and $14,000, respectively. |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Mar. 31, 2020 | |
Investments [Abstract] | |
INVESTMENTS | NOTE 5 — INVESTMENTS Equity securities— As of March 31, 2020 and December 31, 2019, the Company held 6,643,559 shares of capital stock of Telcon RF Pharmaceutical, Inc., a Korean corporation (formerly, Telcon Inc. and herein “Telcon”), which were acquired in July 2017 for approximately $31.8 million. As of March 31, 2020, and December 31, 2019, the closing prices per Telecon share on the Korean Securities Dealers Automated Quotations (“KOSDAQ”) were approximately $5.23 and $4.20, respectively. Prior to December 2019, all shares of Telcon common stock were pledged to secure the Company’s obligation under the revised API agreement with Telcon. In December 2019, the API agreement was amended to permit the release of the Telcon shares from the pledge and to permit the Company to sell the shares in exchange for a portion of the net sale proceeds to be used to purchase a 10-year convertible bond of Telcon in the principal amount of approximately $31.8 million to be substituted for the Telcon shares pledged to Telcon to secure the Company’s obligations under the revised API agreement between the Company and Telcon. Refer to Note 6, 11 and 13 for more information regarding this arrangement. The Company measures all equity investments that do not result in consolidation and are not accounted for under the equity method, at fair value and recognizes any changes in such fair value in earnings. The Company uses quoted market prices to determine the fair value of equity securities with readily determinable fair values. For equity securities without readily determinable fair values, the Company has elected the measurement alternative under which the Company measures these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Management assesses each of these investments on an individual basis. Additionally, on a quarterly basis, management is required to make a qualitative assessment of whether the investment is impaired; however, the Company is not required to determine the fair value of these investments unless impairment indicators existed. When impairment indicators exist, the Company generally uses discounted cash flow analyses to determine the fair value. For the three months ended March 31, 2020 and March 31, 2019, respectively, no impairment loss was recognized. For the year ended December 31, 2019, the Company recognized approximately $515,000 in impairment loss on equity securities without readily determinable fair values attributable to an investment in KPS Co., Ltd. As of March 31, 2020 and December 31, 2019, the carrying values of equity securities were included in the following line items in our consolidated balance sheets (in thousands): March 31, 2020 December 31, 2019 Fair Value with Changes Recognized in Income Fair Value with Changes Recognized in Income Marketable securities $ 34,768 $ 27,929 Total equity securities $ 34,768 $ 27,929 Net unrealized gain on marketable securities available-for-sale at March 31, 2020 was approximately $ 6.8 million and net unrealized loss on marketable securities available-for-sale at March 31, 2019 was approximately $6.5 million. Equity method investment – During 2018, the Company and Japan Industrial Partners, Inc., or JIP, formed EJ Holdings to acquire, own and operate an amino acids manufacturing facility in Ube, Japan. As part of the formation, the Company invested approximately $32,000 in exchange for 40% of EJ Holdings voting shares. JIP owns 60% of EJ Holdings voting shares. In October 2018, the Company entered into a loan agreement with EJ Holdings under which the Company made an unsecured loan to EJ Holdings in the amount of $13.6 million. The loan was valued at $13.9 million and $13.8 million as of March 31, 2020 and December 31, 2019, respectively. The loan proceeds were used by EJ Holdings to purchase the Ube facility in December 2019 and pay related taxes. The loan matures on September 30, 2028 and bears interest at the rate of 1% per annum payable annually. The parties also contemplated that the Ube facility will eventually supply the Company with the facility’s output of amino acids, that the operation of the facility will be principally for our benefit and, as such, that major decisions affecting EJ Holdings and the Ube facility will be made by EJ Holdings’ board of directors, a majority of which are representatives of JIP, in consultation with the Company. EJ Holdings is engaged in reestablishing operations at the Ube facility, including obtaining regulatory approvals for the manufacture of prescription grade L-glutamine (“PGLG”) in accordance with cGMP. EJ Holdings has had no significant revenues since its inception, has depended on loans from the Company to acquire the Ube facility and fund its operations and will continue to be dependent on loans from us or other financing unless and until the Ube facility is activated and EJ Holdings can secure customers for its products. The Company has determined that EJ Holdings is a variable interest entity, or VIE, based upon the facts that the Company provided the loan financing to acquire the Ube facility and the EJ Holdings activities at the facility are principally for the Company’s benefit. JIP, however, owns 60% of EJ Holdings and is entitled to designate a majority of EJ Holdings’ board of directors and its Chief Executive Officer and outside auditors, and, as such, controls the management, business, and operations of EJ Holdings. Accordingly, the Company accounts for its variable interest in EJ Holdings under the equity method. The Company’s share of the losses reported by EJ Holdings are classified as net losses from equity method investment. The investment is evaluated for impairment annually and if facts and circumstances indicate that the carrying value may not be recoverable, an impairment charge would be recorded. The following table sets forth certain financial information of EJ Holdings for the three months ended March 31, 2020 and 2019 (in thousands): Three months ended March 31, 2020 2019 (Unaudited) (Unaudited) REVENUES, NET $ 84 $ 57 GROSS PROFIT 84 57 NET INCOME (LOSS) $ (1,021 ) $ 23 |
SELECTED FINANCIAL STATEMENT _2
SELECTED FINANCIAL STATEMENT CAPTIONS - LIABILITIES | 3 Months Ended |
Mar. 31, 2020 | |
Payables And Accruals [Abstract] | |
SELECTED FINANCIAL STATEMENT CAPTIONS - LIABILITIES | NOTE 6 — SELECTED FINANCIAL STATEMENT CAPTIONS - LIABILITIES Accounts payable and accrued expenses consisted of the following at March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Accounts payable: Clinical and regulatory expenses $ 279 $ 232 Professional fees 1,347 1,183 Selling expenses 1,068 1,303 Manufacturing costs 6,369 4,541 Other vendors 264 18 Total accounts payable 9,327 7,277 Accrued interest payable, related parties 173 42 Accrued interest payable 462 991 Accrued expenses: Payroll expenses 868 891 Government rebates and other rebates 1,723 1,355 Due to EJ Holdings 347 238 Other accrued expenses 309 704 Total accrued expenses 3,247 3,188 Total accounts payable and accrued expenses $ 13,209 11,498 Other long-term liabilities consisted of the following at March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Trade discount $ 26,422 $ 23,242 Unearned revenue 10,536 10,500 Other long-term liabilities 10 8 Total other long-term liabilities $ 36,968 $ 33,750 On June 12, 2017, the Company entered into an API Supply Agreement, as subsequently amended (as so amended, the “API agreement”), with Telcon pursuant to which Telcon advanced to the Company approximately $31.8 million as an advance trade discount in consideration of the Company’s agreement to purchase from Telcon the Company’s requirements for bulk containers of PGLG. The Company purchased $2.0 million and $1.8 million of PGLG from Telcon in the three months ended March 31, 2020 and March 31, 2019, respectively. As of March 31, 2020, and December 31, 2019, respectively, accounts payable to Telcon were $5.8 million and $3.7 million. |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 7 — NOTES PAYABLE Notes payable consisted of the following at March 31, 2020 and December 31, 2019 (in thousands): Year Issued Interest Rate Range Term of Notes Conversion Price Principal Outstanding March 31, 2020 Discount Amount March 31, 2020 Carrying Amount March 31, 2020 Shares Underlying March 31, 2020 Notes payable 2013 10% Due on demand — $ 925 $ — $ 925 — 2019 11% Due on demand - 6 months — 2,835 — 2,835 — 2020 11% Due on demand — 194 — 194 — $ 3,954 $ — $ 3,954 $ — Current $ 3,954 $ — $ 3,954 — Notes payable - related parties 2016 10% Due on demand — $ 20 $ — $ 20 — 2019 10% Due on demand — 14 — 14 — $ 34 $ — $ 34 — Current $ 34 $ — $ 34 — Convertible debentures 2019 10% 18 months $2.00-$9.52 (a) $ 9,200 $ 2,406 $ 6,794 4,638,333 $ 9,200 $ 2,406 $ 6,794 4,638,333 Current $ 8,000 $ 2,092 $ 5,908 4,033,333 Non-current $ 1,200 $ 314 $ 886 605,000 Convertible note payable 2020 12% 3 years $ 10.00 (b) $ 3,150 $ — $ 3,150 316,467 $ 3,150 $ — $ 3,150 316,467 Current $ 3,150 $ — $ 3,150 316,467 Total $ 16,338 $ 2,406 $ 13,932 4,954,800 Year Issued Interest Rate Range Term of Notes Conversion Price Principal Outstanding December 31, 2019 Discount Amount December 31, 2019 Carrying Amount December 31, 2019 Shares Underlying Notes December 31, 2019 Notes payable 2013 10% Due on demand — $ 920 $ — $ 920 — 2019 11% Due on demand - 6 months — 2,829 — 2,829 — $ 3,749 $ — $ 3,749 $ — Current $ 3,749 $ — $ 3,749 — Notes payable - related parties 2016 10% Due on demand — $ 20 $ — $ 20 — 2018 11% Due on demand — 159 — 159 — 2019 10% Due on demand — 14 — 14 — $ 193 $ — $ 193 — Current $ 193 $ — $ 193 — Convertible debentures 2019 10% 18 months $2.00-$9.52 (a) $ 10,200 $ 3,185 7,015 1,080,415 $ 10,200 $ 3,185 $ 7,015 1,080,415 Current $ 10,200 $ 3,185 $ 7,015 1,080,415 Convertible note payable 2018 10% 2 years $ 10.00 (b) $ 3,000 $ 5 $ 2,995 363,876 $ 3,000 $ 5 $ 2,995 363,876 Current $ 3,000 $ 5 $ 2,995 363,876 Total $ 17,142 $ 3,190 $ 13,952 1,444,291 (a) The notes are convertible to Emmaus Life Sciences, Inc. shares . (b) The notes are convertible to EMI Holding, Inc. shares . The weighted-average stated interest rate of notes payable was 10% as of March 31, 2020 and December 31, 2019. The average effective annual interest rate of notes payable as of March 31, 2020 and December 31, 2019 was 58% and 66%, respectively, after giving effect to discounts relating to conversion feature, warrants and deferred financing cost in connection with these notes. As of March 31, 2020, future contractual principal payments due on notes payable were as follows: Year Ending 2020 (nine months) $ 12,138 2021 4,200 Total $ 16,338 Immediately prior to the completion of the Merger, all but one of the convertible notes payable were converted into shares of EMI common stock at their respective conversion prices. Upon completion of the Merger, the conversion shares were exchanged for shares of the Company common stock in the same manner as other outstanding shares of common stock of EMI based on the Merger “exchange ratio.” The unconverted convertible note payable is convertible into shares of common stock of EMI at conversion price of $10.00 per share and included in convertible notes payable The Company estimates the total fair value of any beneficial conversion feature and any accompanying warrants in allocating the proceeds from the sale of convertible notes payable. The proceeds allocated to the beneficial conversion feature were determined by taking the estimated fair value of shares underlying the convertible notes less the fair value of the number of shares that would be issued if the conversion rate equaled the fair value of common stock as of the date of issuance. In situations where the notes included both a beneficial conversion feature and a warrant, the proceeds are allocated to the beneficial conversion feature and the warrants based on their relative fair values. The 10% Senior Secured Debentures of EMI were amended and restated immediately prior to the Merger to, among other things, make them convertible into shares of common stock of EMI and to provide for adjustments in the conversion shares issuable upon conversion of the Debentures and the conversion price in the event of a merger, reorganization and similar events. Accordingly, upon completion of the Merger the Amended and Restated 10% Senior Secured Convertible Debentures became convertible into shares of common stock of the Company and included in convertible notes payable. The conversion feature of the Amended and Restated 10% Senior Secured Convertible Debentures was separately accounted for at fair value as derivative liabilities under guidance in ASC 815 that is remeasured at fair value on a recurring basis using Level 3 inputs, with any changes in the fair value of the conversion feature liabilities recorded in earnings. The following table sets forth the fair value of the conversion feature liabilities as of March 31, 2020 and December 31, 2019 (in thousands): Three Months Ended Year ended Conversion feature liabilities — Amended and Restated 10% Senior Secured Convertible Debentures March 31, 2020 December 31, 2019 Balance, beginning of period $ 1 $ — Fair value at issuance date — 132 Fair value at debt modification date 118 — Change in fair value included in the statement of comprehensive (income) loss 29 (131 ) Balance, end of period $ 148 $ 1 The value and any change in fair value of conversion feature liabilities are determined using a binomial lattice model. The model produces an estimated fair value based on changes in the price of the underlying common stock over successive periods of time. The fair values as of March 31, 2020, the February 21, 2020 modification date and December 31, 2019 were based upon following assumptions: March 31, 2020 February 21, 2020 (Modification date) December 31, 2019 Stock price $ 1.20 $ 1.89 $ 1.97 Conversion price $ 2.00 $ 3.00 $ 9.52 Selected yield 21.09 % 19.12 % 16.77 % Expected volatility (peer group) 90 % 65 % 50 % Expected life (in years) 1.06 1.16 0.81 Expected dividend yield — — — Risk‑free rate Term structure Term structure Term structure See Note 13 for information regarding the prepayment of the Amended and Restated 10% Senior Secured Convertible Debentures. The Company is party to a revolving line of credit agreement with Dr. Niihara, the Company’s Chairman and Chief Executive Officer. Under the agreement, at the Company’s request from time to time, Dr. Niihara may, but is not obligated to, loan or re-loan to the Company up to $1,000,000. Outstanding amounts under the agreement are due and payable upon demand and bear interest, payable monthly, at a variable annual rate equal to the Prime Rate in effect from time to time plus 3%. In addition to the payment of interest, the Company is obligated to pay Dr. Niihara a “tax gross-up” intended to make him whole for federal and state income taxes payable by him with respect to interest paid to him in the previous year. The outstanding balances under the revolving line of credit agreement of $600,000 as of March 31, 2020 and December 31, 2019 were reflected in revolving line of credit, related party on the Consolidated Balance Sheet. With the tax-gross up, the effective annual interest rate on the outstanding balance as of March 31, 2020 was 10.4%. The revolving line of credit agreement will expire on November 22, 2022. Refer to Note 12 for more information regarding this arrangement. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders Equity Note [Abstract] | |
STOCKHOLDERS' DEFICIT | NOTE 8 — STOCKHOLDERS’ DEFICIT Purchase Agreement with GPB —On December 29, 2017, the Company entered into the Purchase Agreement with GPB Debt Holdings II, LLC (“GPB”), pursuant to which the Company issued to GPB a $13 million senior secured convertible promissory note (the “GPB Note”) for an aggregate purchase price of $12.5 million, reflecting a 4.0% original issue discount. In connection with the issuance of GPB Note, the Company issued to GPB a warrant (the “GPB Warrant”) to purchase up to 240,764 of common stock at an exercise price of $10.80 per share, with customary adjustments for stock splits, stock dividends and other recapitalization events. The GPB Warrant became exercisable six months after issuance and has a term of five years from the initial exercise date. The Company determined that under ASC 815-40, GPB Warrant should be separately recognized at fair value as a liability. The warrant liability is remeasured at fair value on a recurring basis using Level 3 inputs and any change in the fair value of the liability is recorded in earnings. The following table presents the change in fair value of the GPB Warrant as of March 31, 2020 and December 31, 2019 (in thousands): Three Months Ended Year Ended Warrant Liability—GPB March 31, 2020 December 31, 2019 Balance, beginning of period $ 38 $ 1,399 Change in fair value included in the statement of comprehensive loss (25 ) (1,361 ) Balance, end of period $ 13 $ 38 The fair value of the warrant derivative liability was determined using the Black-Scholes option pricing model. The value as of the dates set forth in the table above was based on upon following assumptions: March 31, 2020 December 31, 2019 Stock price $ 1.20 $ 1.97 Risk‑free interest rate 0.30 % 1.64 % Expected volatility (peer group) 65.00 % 60.00 % Expected life (in years) 3.25 3.50 Expected dividend yield 0.00 % 0.00 % Number outstanding 252,802 252,802 Purchase Agreement with Holders of 10% Senior Secured Debentures As described in Note 7 above, the Debentures were amended and restated in their entirety in conjunction with the Merger. The common stock purchase warrants issued in conjunction with the original Debentures also were amended and restated in their entirety in conjunction with the Merger. The Amended and Restated 10% Senior Secured Convertible Debentures issued in conjunction with the Merger were convertible at the option of each holder into shares of EMI common stock immediately prior to the Merger at a conversion price of $10.00 a share, subject to adjustment for stock splits, merger reorganizations and other customary events. The related amended and restated warrants were exercisable immediately prior to the Merger for an aggregate of 1,460,000 shares of EMI common stock at an initial exercise price of $10.00 per share. The exercise price of the warrants was subject to reduction in connection with a “going public event” such as the Merger based upon the “VWAP” (i.e., volume-weighted average trading price) of the Company common stock at the time of the Merger. Upon completion of the Merger, the amended and restated warrants became exercisable for shares of the Company common stock and Pursuant to the terms of a securities amendment agreement entered into on February 21, 2020, the Amended and Restated were once again amended and restated in their entirety to extend their maturity date to April 21, 2021 and reduce the conversion price thereof to $3.00 per share from $9.52 per share. The related amended and restate common stock purchase warrants also were amended and restated again to reduce the exercise price thereof to $3.00 per share from $5.87 per share. The newly Amended and Restated and related newly amended and restated warrants provide for so-called full-ratchet anti-dilution adjustments in the event we sell or issue shares of common stock or common stock equivalents at an effective price per share less than the conversion price of the debentures or the exercise price of the warrants, subject to certain exceptions. The conversion price of the Amended and Restated Debentures and the exercise price of the related amended and restated warrants were reduced to $2.00 a share as a result of the Company’s sale of 100,000 shares of common stock at a price of $2.00 a share under the Purchase Agreement with Lincoln Park Capital LLC described below and were subsequently reduced again as described in Note 13. The Company evaluated the common stock purchase warrants issued in connection with the original issuance of the 10% Senior Secured Debentures in October 2018 under ASC 815-40 and concluded that the warrants should be separately recognized at fair value as a liability. The liability is remeasured at fair value on a recurring basis using Level 3 input and any changes in fair value is recorded in earnings. In 2019, the Debentures were amended and restated to be convertible into common stock of EMI immediately prior to completion of the Merger, which resulted in the related warrants being reclassified to equity. The warrants also were amended and restated in their entirety in connection with the Merger. The exercise price of the amended and restated warrants was reduced to $2.00 per share in February 2020 pursuant to the anti-dilution adjustment provisions of the warrants and were valued using Black-Scholes-Merton model. The fair values as of agreement date and the anti-dilution adjustments date were based upon following assumptions: February 28, 2020 (Anti-dilution adjustment date) February 21, 2020 (Amendment date) Exercise price $ 2.00 $ 3.00 Common stock fair value $ 1.60 $ 1.89 Volatility 93.00 % 92.00 % Risk-free rate 0.86 % 1.29 % Expected life (in years) 3.54 3.56 A summary of outstanding warrants as of March 31, 2020 and December 31, 2019 is presented below: March 31, 2020 December 31, 2019 Warrants outstanding, beginning of period 4,931,099 3,436,431 Assumed as part of Merger — 1,044,939 Granted — 500,729 Exercised — (51,000 ) Cancelled, forfeited or expired (115,953 ) — Warrants outstanding, end of period 4,815,146 4,931,099 A summary of outstanding warrants by year issued and exercise price as of March 31, 2020 is presented below: Outstanding Exercisable Year issued and Exercise Price Number of Warrants Issued Weighted-Average Remaining Contractual Life (Years) Weighted-Average Exercise Price Total Weighted-Average Exercise Price Prior to January 1, 2019 $2.00-$10.76 3,439,007 2.38 $ 4.38 3,439,007 $ 4.38 Prior to Jan 1, 2019 Total 3,439,007 3,439,007 At December 31, 2019 $ 6.12 32,391 4.16 $ 6.12 32,391 $ 6.12 $ 12.00 76,575 3.48 $ 12.00 76,575 $ 12.00 $ 14.04 174,999 2.99 $ 14.04 174,999 $ 14.04 $ 31.50 737,975 2.32 $ 31.50 737,975 $ 31.50 $ 36.24 22,333 2.32 $ 36.24 22,333 $ 36.24 $ 60.00 666 0.75 $ 60.00 666 $ 60.00 $ 2.00 256,200 3.56 $ 2.00 256,200 $ 2.00 $ 7.68 75,000 4.30 $ 7.68 75,000 $ 7.68 2019 Total 1,376,139 1,376,139 At March 31, 2020 Total 4,815,146 4,815,146 Summary of Plans – Upon completion of the Merger, the EMI Amended and Restated 2011 Stock Incentive Plan was assumed by the Company. The 2011 Stock Incentive Plan permits grants of incentive stock options to employees, including executive officers, and other share-based awards such as stock appreciation rights, restricted stock, stock units, stock bonus and unrestricted stock awards to employees, directors, and consultants for up to 9,000,000 shares of common stock . Options granted under the 2011 Stock Incentive Plan expire ten years after grant. Options granted to directors vest in equal quarterly installments and all other option grants vest over a minimum period of three years, in each case, subject to the optionee’s all based on continuous service with the Company. Each stock option outstanding under the 2011 Stock Incentive Plan at the effective time of the Merger was automatically converted into a stock option to purchase a number of shares of the Company’s common stock and at an exercise price calculated based on the exchange ratio in the Merger. The Company also has an Amended and Restated 2012 Omnibus Incentive Compensation Plan under which the Company may grant stock options and other stock awards to selected employees including officers, and to non-employee consultants and non-employee directors. All outstanding stock award under the 2012 Omnibus Incentive Compensation Plan were fully vested prior to the Merger and the Company intends not to make any further awards under thereunder. Stock options —During the three months ended March 31, 2020, the Company did not issue any stock options. During the year ended December 31, 2019, the Company granted stock options to purchase 50,000 shares of Company common stock. All the options are exercisable for ten years from the date of grant and will vest and become exercisable with respect to the underlying shares as follows: as to one‑third two‑thirds . A summary of outstanding stock options as of March 31, 2020 and December 31, 2019 is presented below. March 31, 2020 December 31, 2019 Number of Options Weighted‑ Average Exercise Price Number of Options Weighted‑ Average Exercise Price Options outstanding, beginning of period 7,245,350 $ 4.68 6,642,200 $ 4.40 Granted or deemed granted — $ — 636,683 (a) $ 10.10 Exercised — $ — (167 ) $ 5.00 Cancelled, forfeited and expired — $ — (33,366 ) $ 11.29 Options outstanding, end of period 7,245,350 $ 4.68 7,245,350 $ 4.68 Options exercisable, end of period 7,039,339 $ 4.51 7,001,680 $ 4.47 Options available for future grant 2,167,150 2,167,150 (a) Upon the Merger, the exercise prices of outstanding EMI options and number of shares of the Company common stock underlying the options were adjusted based upon the exchange ratio in the Merger. During the three months ended March 31, 2020 and March 31, 2019, the Company recognized approximately $0.2 million and $0.6. million, respectively, of share-based compensation expense. As of March 31, 2020, there was approximately $1.9 million of total unrecognized compensation expense related to unvested share-based compensation which is expected to be recognized over the weighted-average remaining vesting period of 1.5 years. Purchase Agreement with Lincoln Park Capital Fund, LLC On February 28, 2020, the Company entered into a Purchase Agreement with Lincoln Park Capital Fund, LLC (“LPC”), pursuant to which the Company may elect to sell to LPC from time to time up to $25,000,000 in shares of its common stock, subject to certain limitations and conditions set forth in the Purchase Agreement, including 100,000 initial shares that the Company sold to LPC at a price of $2.00 per share. Pursuant to the Purchase Agreement, on any business day over the 36-month term of the Purchase Agreement the Company has the right at its discretion and subject to certain conditions to direct LPC to purchase up to 20,000 shares of common stock, which amount is subject to increase under certain circumstances based upon increases in the market price of its common stock. The purchase price of the common stock will be based upon the prevailing market price of common stock at the time of the purchase without any fixed discount. In addition, the Company may direct LPC to purchase additional amounts as accelerated purchases and additional accelerated purchases under certain circumstances. Apart from the initial sale of shares described above, the Company is not obliged to sell any shares of common stock pursuant to the Purchase Agreement, and the Company will control the timing and amount of any such sales, but in no event will LPC be required to purchase more than $1,000,000 of common stock in any single regular purchase (excluding accelerated or additional accelerated purchases). Concurrently with the execution of the Purchase Agreement on February 28, 2020, the Company entered into a Registration Rights Agreement pursuant to which the Company agreed to file a prospectus supplement pursuant to Rule 424(b) relating to the sale shares of common stock to be issued and sold to LPC under the Purchase Agreement under our effective shelf registration statement or a new registration statement and to use our reasonable best efforts to keep such registration statement effective during the term of the Purchase Agreement. The Purchase Agreement contains customary representations, warranties, indemnification rights and other obligations and agreements of the company and LPC. There are no limitations and conditions to completing future transactions other than a prohibition against entering into a “Variable Rate Transaction” as defined in the Purchase Agreement. There is no upper limit on the price per share that LPC could be obligated to pay for common stock, but shares will only be sold to LPC on a day the Company’s closing price is less than the floor price as set forth in the Purchase Agreement and if the sale of the shares would not result in LPC and its affiliates having beneficial ownership of more than 4.99 % of the Company’s total outstanding shares of common stock. The Company has the right to terminate the Purchase Agreement at any time, at no cost or penalty. As consideration for LPC’s commitments under the Purchase Agreement, the Company issued to LPC 415,743 shares of common stock , which valued at $ 750,000 , recorded as an addition to equity for common stock and reduction for cost of capital raised . As of the date of filing of this Quarterly Report, the Company was out of compliance with certain terms and conditions of the Purchase Agreement and unable to utilize the Purchase Agreement. The Company may seek to bring itself into compliance or seek an appropriate waiver from LPC to regain the ability to utilize the Purchase Agreement, but there can be no assurance when or whether the Company may be able to do so. If the Company is able to utilize the Purchase Agreement, whether or to what extent the Company sells shares of common stock to LPC under the Purchase Agreement will depend on a variety of factors to be determined by the Company from time to time, including, among others, its net revenue and other results of operations, its working capital and other funding needs, the prevailing market prices of the Company’s common stock and the availability of other sources of funding. |
INCOME TAX
INCOME TAX | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | NOTE 9 — INCOME TAX The quarterly provision for or benefit from income taxes is computed at an estimated annual effective tax rate to the year-to-date pre-tax income (loss). For the three months ended March 31, 2020, the Company recorded a provision for income tax of $0.3 million. For the three months ended March 31, 2019, the Company recorded a provision for income tax of $52,000. The provisions for income taxes for the three months ended March 31, 2020, and 2019 were primarily related to state tax. The Company did not record a provision for federal income tax due to its net operating loss carryforwards. The Company established a full valuation allowance against its federal and state deferred tax asset and there was no unrecognized tax benefit as of March 31 2020 or 2019. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
LEASES | NOTE 10 — LEASES Operating leases — The Company leases its office space under operating leases with unrelated entities. The Company leased 21,293 square feet of office space for our headquarters in Torrance, California, at a base rental of $78,543 per month, which lease will expire on September 30, 2026. The Company also leased an additional 1,850 square feet office space in New York, New York, at a base rent of $8,479, which leases will expire on January 31, 2023. In addition, the Company leased 1,322 square feet of office space in Tokyo, Japan, which the lease will expire on September 30, 2020. The rent expense during the three months ended March 31, 2020 and 2019 amounted to approximately $311,000 and $201,000, respectively. Future minimum lease payments under the lease agreements were as follows as of March 31, 2020 (in thousands): Amount 2020 (nine months) $ 811 2021 1,080 2022 1,110 2023 1,043 2024 and thereafter 2,983 Total lease payments 7,027 Less: Interest 2,138 Present value of lease liabilities $ 4,889 The Company adopted Accounting Standard Update (“ASU”) 2016-02 – Lease (“Topic 842”) using a modified retrospective approach and elected the transition method and the practical expedients permitted under the transition guidance, which allowed to carryforward the historical lease classification and our assessment on whether a contract is or contains a lease. The Company also elected to combine lease and non-lease components, such as common area maintenance charges, as single lease and elected to use the short-term lease exception permitted by the standard As a result of the adoption of Topic 842 on January 1, 2019, the Company recorded a $3.0 million in operating right-of-use asset and $3.3 million in lease liability and derecognized $287,000 of deferred rent as of the adoption date. These were calculated using the present value of the Company’s remaining lease payments using an estimated incremental borrowing rate. The Company also recorded a $ 29,000 cumulative effect increase on our accumulated deficit as of January 1, 2019. As of March 31, 20 20 , the Company had an operating lease right-of-use asset of $ million and lease liability of $ 4.9 million in the balance sheet. The weighted average remaining term of the Company’s leases as of March 31, 20 20 was 6.3 years and the weighted-average discount rate was %. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11 — COMMITMENTS AND CONTINGENCIES API Supply Agreement — On June 12, 2017, the Company entered into an API Supply Agreement with Telcon pursuant to which Telcon paid the Company approximately $31.8 million in consideration of the right to supply 25% of the Company’s requirements for bulk containers of PGLG for a fifteen-year (the “revised API agreement”) . The revised API agreement is effective for a term of five years and will renew automatically for 10 successive one-year renewal periods, except as either party may determine. In the revised API agreement, the Company has agreed to purchase a total of 940,000 kilograms of PGLG at $50 per kilogram, or a total of $47.0 million, over the term of the agreement. In September 2018, the Company entered into an agreement with Ajinomoto Health and Nutrition North America, Inc. (“Ajinomoto”), the producer of the PGLG, and Telcon to facilitate Telcon’s purchase of PGLG from Ajinomoto for resale to the Company under the revised API agreement. On June 16, 2019, the Company entered into an agreement with Telcon to adjust the price payable to Telcon under the revised API agreement from $50 per kilogram of PGLG purchased from Telcon is recorded in inventory at net realizable value and the excess purchase price is recorded against deferred trade discount. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 12 — RELATED PARTY TRANSACTIONS The following table sets forth information relating to our loans from related persons outstanding as of March 31, 2020 and interest paid during the three months ended March 31, 2020 (in thousands): Class Lender Interest Rate Date of Loan Term of Loan Principal Amount Outstanding at March 31, 2020 Amount of Interest Paid Current, Promissory note payable to related parties: Lan T. Tran (2) 10% 4/29/2016 Due on Demand $ 20 $ — Lan T. Tran (2) 11% 2/10/2018 Due on Demand — 35 Lan T. Tran (2) 10% 2/9/2019 Due on Demand 14 — Subtotal 34 35 Revolving line of credit agreement Yutaka Niihara (2) 5.25% 12/27/2019 Due on Demand 600 10 Subtotal 600 10 Total $ 634 $ 45 The following table sets forth information relating to our loans from related persons outstanding at any time during the year ended December 31, 2019: Class Lender Interest Rate Date of Loan Term of Loan Principal Amount Outstanding at December 31, 2019 Highest Principal Outstanding Amount of Principal Repaid or Converted into Stock Amount of Interest Paid Conversion Rate Current, Promissory note payable to related parties: Lan T. Tran (2) 10% 4/29/2016 Due on Demand $ 20 $ 20 $ — $ — — Hope International Hospice, Inc. (1) 10% 6/3/2016 Due on Demand — 250 250 78 — Lan T. Tran (2) 10% 2/9/2017 Due on Demand — 12 — 2 — Yutaka Niihara (2)(3) 10% 9/14/2017 Due on Demand — 904 27 2 — Lan T. Tran (2) 11% 2/10/2018 Due on Demand 159 159 — — — Lan T. Tran (2) 10% 2/9/2019 Due on Demand 14 14 — — — Subtotal 193 1,359 277 82 Current, Convertible notes payable to related parties: Yasushi Nagasaki (2) 10% 6/29/2012 Due on Demand — 200 200 56 $ 3.30 Yutaka & Soomi Niihara (2)(3) 10% 11/16/2015 2 years — 200 200 73 $ 4.50 Wei Peu Zen (3) 10% 11/6/2017 2 years — 5,000 5,000 597 $ 10.00 Profit Preview International Group, Ltd. (4) 10% 2/1/2018 2 years — 4,037 4,037 385 $ 10.00 Profit Preview International Group, Ltd. (4) 10% 3/21/2018 2 years — 5,363 5,363 442 $ 10.00 Subtotal — 14,800 14,800 1,553 Revolving line of credit agreement Yutaka Niihara (2) 5% 12/27/2019 Due on Demand 600 600 — — Subtotal 600 600 — — Total $ 793 $ 16,759 $ 15,077 $ 1,635 (1) Dr. Niihara, a Director and the Chairman, and Chief Executive Officer of the Company, is also a director and the Chief Executive Officer of Hope International Hospice, Inc. (2) Officer (3) Director ( 4 ) Mr. Zen, a Director of the Company, is the sole owner of Profit Preview International Group, Ltd. See Notes 6, 11 and 13 for a discussion of the Company’s distribution and supply agreements with Telcon, which holds 4,147,491 shares of the Company common stock, or approximately 8.6% of the common stock outstanding as of March 31, 2020. As of March 31, 2020, the Company held |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13 — SUBSEQUENT EVENTS On May 8, 2020, the Company received a loan in the amount of $797,840 under the Small Business Administration Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loan, which was in the form of a Promissory Note dated April 29, 2020, matures on April 29, 2022 and bears interest at a rate of 1% per annum, payable monthly commencing on December 8, 2020 unless the PPP loan forgiveness process has commenced or is forgiven prior to the date of the first monthly payment. The Note may be prepaid by the Company at any time prior to maturity with no prepayment penalties. The loan and accrued interest are forgivable after a specific period as long as the Company uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness would be reduced if the Company were to terminate employees or reduce salaries during such period. The Company believes it has used the entire loan amount for purposes consistent with the PPP and has applied for forgiveness of the loan on October 30, 2020. here is no assurance that the loan will be forgiven. On June 15, 2020, the holder of a convertible promissory note in the principal amount of $3,150,000 agreed to an extension of the maturity date to June 15, 2023. The interest for the note was increased from 11% to 12%. In conjunction with this amendment, the Company issued to the holder of note five-year common stock purchase warrants to purchase a total of up to 1,250,000 shares of the Company common stock at an exercise price of $2.05 a share. On September 22, 2020, the Company and EMI entered into a securities amendment agreement (the “September 2020 Amendment”) with the holders of our outstanding 10% Senior Secured Convertible Debentures described above. The September 2020 Amendment amended in certain respects the securities purchase agreement among EMI and the Debenture holders originally entered into on September 8, 2018, as amended by the February 2020 Amendment, and provides that the Debentures are to be amended in certain respects as set forth in the form of Allonge Amendment No. 1 to the debentures included in the September 2020 Agreement (the “Allonge”). Pursuant to the Allonge, the aggregate monthly redemption payments under the Debentures were reduced to $500,000 from $1,000,000 in principal amount and the maturity date of the Debentures was extended from April 21, 2021 to August 31, 2021. The monthly redemption payments resumed in September 2020 and will continue on the first day of each month thereafter commencing October 1, 2020. The remaining principal balance of the Debentures will be due and payable upon maturity, subject to mandatory prepayment in connection with certain “Capital Events” as defined. In consideration of the Debenture holder’s financial accommodations to the Company, the Company issued to the holders, pro rata based upon the relative principal amounts of their Debentures, five-year In October 2018, the Company granted to T.R. Winston and its affiliates for services relating to the September 2020 Amendment common stock purchase warrants to purchase up to 75,000 shares of the Company common stock at an exercise price of $2.10 a share and otherwise on terms identical to the warrants issued to the debenture holders described above. In March 2021, the conversion price of the Debentures, which have since been retired and the exercise price of the these and the other warrants related to the Debentures was reduced to $1.54 in connection with our issuance of shares of common stock to Kainos Medicine, Inc. referred to below in this Note 13. On September 28, 2020, the Company entered into a convertible bond purchase agreement with Telcon pursuant to which it purchased The Telcon convertible bond matures on October 16, 2030 and bears interest at the rate of 2.1% a year, payable quarterly. Beginning on October 16, 2021, the holder of the convertible bond will be entitled on a quarterly basis to call for early redemption of all or any portion of the principal amount of the convertible bond. To the extent not previously redeemed, the principal amount of the bond will be due upon maturity. The convertible bond is convertible at the holder’s option at any time and from time to time into common shares of Telcon at an initial conversion price of approximately $ 8.00 per share. The conversion price is subject to antidilution adjustments in the event of the issuance of Telcon shares or share equivalents at a price below the market price of Telcon shares, a merger or similar reorganization of Telcon or a stock split, reverse stock split, stock dividend or similar event. In connection with the purchase of the convertible bond, the Company entered into a call option agreement dated September 28, 2020 with Telcon pursuant to which Telcon or its designee is entitled to repurchase, at par, up to 50% in principal amount of the convertible bond commencing October 16, 2021 and prior to maturity. If the Company transfers the convertible bond, it will be obliged under the call option agreement to see to it that the transferee is bound by such call option. On October 28, 2020, the Company entered into a loan agreement with EJ Holdings pursuant to which it agreed to loan to EJ Holdings a total of approximately $6.5 million, in monthly installments through March 2021, including approximately $4.0 million, loaned through December 31, 2020. The loans will be unsecured general obligations of EJ Holdings, will bear interest at a nominal annual rate payable on September 30 of each year beginning in 2021 and will be due and payable in a lump sum at maturity on September 30, 2028. The proceeds of the loans will be used by EJ Holdings to fund its activities and operations at its Ube facility as described under “Equity method investment” in Note 5 above. On February 9, 2021, the Company entered into a securities purchase agreement with an effective date of February 8, 2021 pursuant to which the Company agreed to sell and issue to the purchasers thereunder in a private placement pursuant to Rule 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D thereunder a total of up to $17 million in principal amount of convertible promissory notes of the Company for a purchase price equal to the principal amount thereof. As of April 5, 2021, the Company had sold approximately $14.5 million of the convertible promissory notes. Of the net proceeds from the sale of the convertible promissory notes, $6.2 million was used to prepay the outstanding 10% Senior Secured Convertible Debentures as described above. Commencing one year from the original issue date, the convertible promissory notes will be convertible at the option of the holder into shares of the Company common stock at an initial conversion price of $1.48 per share, which equaled the “Average VWAP” (as defined) of our common stock on the effective date. The initial conversion price will be adjusted as of the end of each three-month period following the original issue date, commencing May 31, 2021, to equal the Average VWAP as of the end of such three-month period if such Average VWAP is less than the then-conversion price. The conversion price will be subject to further adjustment in the event of a stock split, reverse stock split or certain other events specified in the convertible promissory notes. The convertible promissory notes will bear interest at the rate of 2% per annum payable semi-annually on the last business day of August and January of each year and will mature on the 3rd anniversary of the original issue date. The convertible promissory notes will become prepayable in whole or in part at the election of the holders on or after February 28, 2022 if our common shall not have been approved for listing on the NYSE American, the Nasdaq Capital Market or other “Trading Market” (as defined). The Company will be entitled to prepay up to 50% of the principal amount of the convertible promissory notes at any time after the first anniversary and on or before the second anniversary of the original issue date for a prepayment amount equal to the principal amount being prepaid, accrued and unpaid interest thereon and a prepayment premium equal to 50% of such principal amount. The convertible promissory notes are general, unsecured obligations of the Company. Effective February 22, 2021, the Company’s subsidiary, Emmaus Medical, Inc., or Emmaus Medical, entered into a purchase and sale agreement with Prestige Capital Finance, LLC, or Prestige Capital, pursuant to which Emmaus Medical may offer and sell to Prestige Capital from time to time eligible accounts receivable in exchange for Prestige Capital’s down payment, or advance, to Emmaus Medical of 70% (subject to increase to 75%) of the face amount of the accounts receivable, subject to a $7,500,000 cap on advances at any time. The balance of the face amount of the accounts receivable will be reserved by Prestige Capital and paid to Emmaus Medical, less discount fees of Prestige Capital ranging from 2.25% to 7.25% of the face amount, as and when Prestige Capital collects the entire face amount of the accounts receivable. Emmaus Medical’s obligations to Prestige Capital under the purchase and sale agreement are secured by a security interest in the accounts receivable and all or substantially all other assets of Emmaus Medical. In connection with the purchase and sale agreement, the Company agreed to guarantee Emmaus Medical’s obligations under the purchase and sale agreement. The Company’s obligations under the guarantee are unsecured. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Organization and Nature of Operations | Organization and Nature of Operations The Company is a commercial-stage biopharmaceutical company engaged in the discovery, development, marketing and sales of innovative treatments and therapies primarily for rare and orphan diseases. On July 17, 2019, we completed a merger transaction with EMI Holding, Inc., formerly known as Emmaus Life Sciences, Inc. (“EMI”), into a subsidiary of the Company (the “Merger”), with EMI surviving the Merger as a wholly owned subsidiary. Immediately after completion of the Merger, we changed our name to “Emmaus Life Sciences, Inc.” The Merger was treated as a reverse recapitalization under the acquisition method of accounting in accordance with accounting principles generally accepted in the U.S. For accounting purposed, EMI was considered to have acquired us. The Merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes. In connection with and prior to the Merger, we contributed and transferred to Telemynd, Inc. (“Telemynd”), a newly formed, wholly owned subsidiary of the Company, all or substantially all our historical business, assets and liabilities and our board of directors declared a stock dividend of one share of the Telemynd common stock held by the Company for each outstanding share of our common stock after giving effect to a 1-for-6 reverse stock split of our outstanding shares of common stock. As a result of the spin-off and the Merger, our ongoing business became EMI’s business, which is that of a commercial-stage biopharmaceutical company focused on the development, marketing and sale of innovative treatments and therapies, including those in the rare and orphan disease categories. |
Principles of consolidation | Principles of consolidation —The consolidated financial statements include the accounts of the Company, EMI and EMI’s wholly‑owned subsidiary, Emmaus Medical, Inc., and Emmaus Medical, Inc.’s wholly‑owned subsidiaries. All significant intercompany transactions have been eliminated. The preparation of the consolidated financial statements requires the use of management estimates that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses for the reported period. Actual results could differ materially from those estimates. |
Restatement of Prior Period Amounts | Restatement of Prior Period Amounts — In connection with the preparation of our December 31, 2019 consolidated financial statements, we identified the following material errors in our condensed consolidated financial statements as of and for the three months ended March 31, 2019. 1. The misclassification as equity of warrants issued by EMI in October of 2018, which warrants should have been accounted for as liabilities based upon fair value; and 2. The erroneous consolidation as a variable interest entity, or VIE, of EMI’s interest in EJ Holdings, Inc., which should have been accounted for based upon the equity method. 3. The mistreatment of the fair value of cashless exercise warrants originally recorded in the Consolidated Statements of Operations and Comprehensive Loss, which fair value should have been recorded in additional paid-in capital in the Consolidated Balance Sheets. 4. In addition to the errors described above, the restated financial statements also include adjustments to correct certain immaterial errors identified during the audit of the Company’s financial statements for the year ended December 31, 2019. EMMAUS LIFE SCIENCES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) (Unaudited) As of March 31, 2019 Previously Reported Adjustment Restated ASSETS CURRENT ASSETS Cash and cash equivalents $ 15,310 $ (13,070 ) (a) $ 2,240 Accounts receivable, net 1,760 301 (c) 2,061 Inventories, net 5,795 — 5,795 Investment in marketable securities 42,873 — 42,873 Marketable securities, pledged to creditor 251 — 251 Prepaid expenses and other current assets 818 (215 ) (a), (c) 603 Total current assets 66,807 (12,984 ) 53,823 Property and equipment, net 153 — 153 Long-term investment at cost 527 — 527 Equity method investment — 13,470 (a) 13,470 Right of use assets 2,838 — 2,838 Deposits and other assets 410 — 410 Total assets $ 70,735 $ 486 $ 71,221 LIABILITIES AND STOCKHOLDERS’ DEFICIT CURRENT LIABILITIES Accounts payable and accrued expenses $ 11,068 $ (371 ) (a), (c) $ 10,697 Operating lease liabilities, current portion 682 — 682 Other current liabilities 5,217 75 (c) 5,292 Warrant derivative liabilities — 9,877 (b), (c) 9,877 Notes payable, net of discount 7,000 806 (b) 7,806 Notes payable to related parties 470 — 470 Convertible notes payable, net of discount 15,157 — 15,157 Convertible notes payable to related parties, net of discount 13,896 — 13,896 Total current liabilities 53,490 10,387 63,877 Operating lease liabilities, less current portion 2,478 — 2,478 Other long-term liabilities 35,637 — 35,637 Warrant derivative liabilities 1,447 (1,447 ) (c) — Notes payable, net of discount, less current portion 1,922 (771 ) (b) 1,151 Convertible debentures, net of discount, less current portion 389 — 389 Total liabilities 95,363 8,169 103,532 STOCKHOLDERS’ DEFICIT Preferred stock — par value $0.001 per share, 20,000,000 shares authorized, none issued or outstanding — — — Common stock — par value $0.001 per share, 250,000,000 shares authorized, 37,750,424 shares were issued and outstanding at March 31, 2019 36 2 (d) 38 Additional paid-in capital 146,344 10,164 (b), (e) 156,508 Accumulated other comprehensive income (loss) (62 ) — (62 ) Accumulated deficit (170,864 ) (17,931 ) (e) (188,795 ) Total stockholders’ deficit (24,546 ) (7,765 ) (32,311 ) Noncontrolling interest (82 ) 82 (a) — Total liabilities & stockholders’ deficit $ 70,735 $ 486 $ 71,221 (a) EJ Holdings adjustments: the correction of this misstatement resulted in increases of $13.5 million in equity method investment, $114,000 in accounts payable and accrued expenses, and $82,000 in non-controlling interest and decreases of $13.1 million in cash and cash equivalent and $205,000 in prepaid expenses and other current assets. (b) Warrant adjustments: the correction of this misstatement resulted in increases of $8.5 million in warrant derivative current liabilities and $806,000 in short-term note payable and decreases of $771,000 in long-term notes payable and $9.7 million in additional paid-in capital. (c) Corrections of other misstatement: period adjustment and reclassification of variable consideration resulted in an increase of $301,000 in accounts receivable and a decrease of $486,000 in accounts payable and accrued expenses, a decrease of $10,000 in income tax receivable and an increase of $23,000 in income tax payable; a correction of accounting treatment for convertible notes resulted in an increase of $1.3 million in additional paid-in capital; a reclassification of GPB warrants resulted an increase of short-term warrant liabilities and a decrease of long-term warrant liabilities of $1.4 million; and a correction of tax provision resulted in an increase of $52,000 in income tax payable. (d) Retrospective adjustments made to common stock resulted from recapitalization transaction in July 2019. (e) Balance includes carryforward impact on 2018 restatement adjustments, including cashless warrant adjustments which resulted in an increase in additional paid-in capital and a decrease in retained earnings of $18.3 million. EMMAUS LIFE SCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (In thousands, except share and per share amounts) (Unaudited) Three months ended March 31, 2019 Previously Reported Adjustment Restated REVENUES, NET $ 5,307 $ (600 ) (c) $ 4,707 COST OF GOODS SOLD 200 59 (c) 259 GROSS PROFIT $ 5,107 $ (659 ) 4,448 OPERATING EXPENSES Research and development 513 — 513 Selling 1,485 (6 ) (c) 1,479 General and administrative 3,681 56 (a), (c) 3,737 Total operating expenses 5,679 50 5,729 LOSS FROM OPERATIONS (572 ) (709 ) (1,281 ) OTHER INCOME (EXPENSE) Change in fair value of warrant derivative liabilities (48 ) (890 ) (b) (938 ) Net gains (losses) on equity investment in marketable securities (6,457 ) — (6,457 ) Gain on equity method investment — 9 (a) 9 Interest and other income (loss) (111 ) 34 (a) (77 ) Interest expense (6,965 ) (1,647 ) (b), (c) (8,612 ) Total other income (expenses) (13,581 ) (2,494 ) (16,075 ) LOSS BEFORE INCOME TAXES (14,153 ) (3,203 ) (17,356 ) INCOME TAXES — 52 (c) 52 NET LOSS INCLUDING NONCONTROLLING INTERESTS (14,153 ) (3,255 ) (17,408 ) Net (income) loss attributable to noncontrolling interest (14 ) 14 (a) — NET LOSS ATTRIBUTABLE TO THE COMPANY (14,167 ) (3,241 ) (17,408 ) COMPONENTS OF OTHER COMPREHENSIVE INCOME (LOSS) Foreign currency translation adjustments 8 (1 ) (a) 7 Other comprehensive income (loss) 8 (1 ) 7 COMPREHENSIVE INCOME (LOSS) (14,145 ) (3,256 ) (17,401 ) Amounts attributable to noncontrolling interest: Net (income) loss attributable to noncontrolling interest (14 ) 14 (a) — Foreign currency translation adjustments (1 ) 1 (a) — Comprehensive (income) loss attributable to noncontrolling interest (15 ) 15 — COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY $ (14,160 ) $ (3,241 ) $ (17,401 ) NET LOSS PER COMMON SHARE - BASIC AND DILUTED $ (0.38 ) $ (0.09 ) $ (0.46 ) WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING 37,473,431 — 37,473,431 (a) EJ Holdings adjustments: the correction of this misstatement resulted in increases of $55,000 in general and administrative expenses, $9,000 in loss on equity method investment and $34,000 in interest income and decreases of $14,000 in net income attributable to noncontrolling interest and $1,000 in foreign currency translation adjustments. (b) Warrant adjustments: the correction of this misstatement resulted in an increase of $312,000 in interest expense and a decrease of $890,000 in change in fair value of warrant derivative liabilities. (c) Corrections of other misstatements: period adjustment of variable consideration resulted in a decrease of $600,000 in revenues, net; reclassification of shipping cost and royalty expense to cost of sales resulted in an increase of $59,000 in cost of sales and decreases of $6,000 and $53,000 in selling expense and general and administrative expense, respectively; correction of stock modification accounting resulted in a decrease of $52,000 in general and administrative expense; correction of accounting treatment for convertible notes resulted in an increase of $1.3 million in interest expense; a correction of tax provision resulted in an increase of $52,000 in tax provision EMMAUS LIFE SCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Three months ended March 31,2019 Previously Reported Adjustment Restated CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (14,153 ) $ (3,255 ) $ (17,408 ) Adjustments to reconcile net loss to net cash flows from operating activities Depreciation and amortization 17 — 17 Amortization of discount of convertible notes 5,641 1,647 (b), (c) 7,288 Foreign exchange adjustments (19 ) 108 89 Net losses (gains) on equity investment in marketable securities 6,457 — 6,457 Gain on equity method investment — (9 ) (a) (9 ) Share-based compensation 536 52 (c) 588 Change in fair value of warrant derivative liabilities 48 890 (a) 938 Net changes in operating assets and liabilities Accounts receivable (409 ) 266 (143 ) Inventories (1,091 ) — (1,091 ) Prepaid expenses and other current assets (83 ) (32 ) (115 ) Other non-current assets (2,813 ) — (2,813 ) Income tax — 52 52 Accounts payable and accrued expenses 2,339 386 2,725 Deferred revenue 500 — 500 Deferred rent (287 ) — (287 ) Other current liabilities 36 — 36 Other long-term liabilities 1,997 — 1,997 Net cash flows (used in) provided by operating activities (1,284 ) 105 (1,179 ) CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (16 ) — (16 ) Net cash flows used in investing activities (16 ) — (16 ) CASH FLOWS FROM FINANCING ACTIVITIES Payments of convertible notes (3,048 ) — (3,048 ) Proceeds from exercise of warrants 5 — 5 Proceeds from issuance of common stock 2,530 — 2,530 Proceeds from conversion of notes payable to common stock 21 — 21 Net cash flows used in financing activities (492 ) — (492 ) Effect of exchange rate changes on cash 22 — 22 Net increase (decrease) in cash, cash equivalents and restricted cash (1,770 ) 105 (1,665 ) Cash and cash equivalents, beginning of period 17,080 (13,175 ) 3,905 Cash and cash equivalents, end of period $ 15,310 $ (13,070 ) $ 2,240 SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITIES Interest paid $ 385 $ — $ 385 NON-CASH INVESTING AND FINANCING ACTIVITIES Exercised of warrants and options on cashless basis $ 3,374 $ — $ 3,374 Conversion of notes payable to common stock $ 329 $ — $ 329 Initial recognition of right-of-use lease asset $ 2,922 $ — $ 2,922 Refer to the descriptions of the adjustments in the Condensed Consolidated Balance Sheets and Statements of Comprehensive Loss and their impact on net loss above. In addition, a cash flow classification adjustment related to EJ Holdings resulted in a net decrease to cash flows used by operating activities of $105,000. |
Net loss per share | Net loss per share — In accordance with ASC 260, “Earnings per Share, ” the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding. Dilutive loss per share is computed in a manner similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. As of March 31, 2020 and March 31, 2019, the Company had outstanding potentially dilutive securities exercisable for or convertible into 16,698,829 shares and 17,995,514 shares, respectively, of the Company’s common stock. No potentially dilutive securities were included in the calculation of diluted net income per share since the potential dilutive securities were out of the money for the period ended March 31, 2020 and were anti-dilutive for period ended March 31, 2019. |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | EMMAUS LIFE SCIENCES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) (Unaudited) As of March 31, 2019 Previously Reported Adjustment Restated ASSETS CURRENT ASSETS Cash and cash equivalents $ 15,310 $ (13,070 ) (a) $ 2,240 Accounts receivable, net 1,760 301 (c) 2,061 Inventories, net 5,795 — 5,795 Investment in marketable securities 42,873 — 42,873 Marketable securities, pledged to creditor 251 — 251 Prepaid expenses and other current assets 818 (215 ) (a), (c) 603 Total current assets 66,807 (12,984 ) 53,823 Property and equipment, net 153 — 153 Long-term investment at cost 527 — 527 Equity method investment — 13,470 (a) 13,470 Right of use assets 2,838 — 2,838 Deposits and other assets 410 — 410 Total assets $ 70,735 $ 486 $ 71,221 LIABILITIES AND STOCKHOLDERS’ DEFICIT CURRENT LIABILITIES Accounts payable and accrued expenses $ 11,068 $ (371 ) (a), (c) $ 10,697 Operating lease liabilities, current portion 682 — 682 Other current liabilities 5,217 75 (c) 5,292 Warrant derivative liabilities — 9,877 (b), (c) 9,877 Notes payable, net of discount 7,000 806 (b) 7,806 Notes payable to related parties 470 — 470 Convertible notes payable, net of discount 15,157 — 15,157 Convertible notes payable to related parties, net of discount 13,896 — 13,896 Total current liabilities 53,490 10,387 63,877 Operating lease liabilities, less current portion 2,478 — 2,478 Other long-term liabilities 35,637 — 35,637 Warrant derivative liabilities 1,447 (1,447 ) (c) — Notes payable, net of discount, less current portion 1,922 (771 ) (b) 1,151 Convertible debentures, net of discount, less current portion 389 — 389 Total liabilities 95,363 8,169 103,532 STOCKHOLDERS’ DEFICIT Preferred stock — par value $0.001 per share, 20,000,000 shares authorized, none issued or outstanding — — — Common stock — par value $0.001 per share, 250,000,000 shares authorized, 37,750,424 shares were issued and outstanding at March 31, 2019 36 2 (d) 38 Additional paid-in capital 146,344 10,164 (b), (e) 156,508 Accumulated other comprehensive income (loss) (62 ) — (62 ) Accumulated deficit (170,864 ) (17,931 ) (e) (188,795 ) Total stockholders’ deficit (24,546 ) (7,765 ) (32,311 ) Noncontrolling interest (82 ) 82 (a) — Total liabilities & stockholders’ deficit $ 70,735 $ 486 $ 71,221 (a) EJ Holdings adjustments: the correction of this misstatement resulted in increases of $13.5 million in equity method investment, $114,000 in accounts payable and accrued expenses, and $82,000 in non-controlling interest and decreases of $13.1 million in cash and cash equivalent and $205,000 in prepaid expenses and other current assets. (b) Warrant adjustments: the correction of this misstatement resulted in increases of $8.5 million in warrant derivative current liabilities and $806,000 in short-term note payable and decreases of $771,000 in long-term notes payable and $9.7 million in additional paid-in capital. (c) Corrections of other misstatement: period adjustment and reclassification of variable consideration resulted in an increase of $301,000 in accounts receivable and a decrease of $486,000 in accounts payable and accrued expenses, a decrease of $10,000 in income tax receivable and an increase of $23,000 in income tax payable; a correction of accounting treatment for convertible notes resulted in an increase of $1.3 million in additional paid-in capital; a reclassification of GPB warrants resulted an increase of short-term warrant liabilities and a decrease of long-term warrant liabilities of $1.4 million; and a correction of tax provision resulted in an increase of $52,000 in income tax payable. (d) Retrospective adjustments made to common stock resulted from recapitalization transaction in July 2019. (e) Balance includes carryforward impact on 2018 restatement adjustments, including cashless warrant adjustments which resulted in an increase in additional paid-in capital and a decrease in retained earnings of $18.3 million. EMMAUS LIFE SCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (In thousands, except share and per share amounts) (Unaudited) Three months ended March 31, 2019 Previously Reported Adjustment Restated REVENUES, NET $ 5,307 $ (600 ) (c) $ 4,707 COST OF GOODS SOLD 200 59 (c) 259 GROSS PROFIT $ 5,107 $ (659 ) 4,448 OPERATING EXPENSES Research and development 513 — 513 Selling 1,485 (6 ) (c) 1,479 General and administrative 3,681 56 (a), (c) 3,737 Total operating expenses 5,679 50 5,729 LOSS FROM OPERATIONS (572 ) (709 ) (1,281 ) OTHER INCOME (EXPENSE) Change in fair value of warrant derivative liabilities (48 ) (890 ) (b) (938 ) Net gains (losses) on equity investment in marketable securities (6,457 ) — (6,457 ) Gain on equity method investment — 9 (a) 9 Interest and other income (loss) (111 ) 34 (a) (77 ) Interest expense (6,965 ) (1,647 ) (b), (c) (8,612 ) Total other income (expenses) (13,581 ) (2,494 ) (16,075 ) LOSS BEFORE INCOME TAXES (14,153 ) (3,203 ) (17,356 ) INCOME TAXES — 52 (c) 52 NET LOSS INCLUDING NONCONTROLLING INTERESTS (14,153 ) (3,255 ) (17,408 ) Net (income) loss attributable to noncontrolling interest (14 ) 14 (a) — NET LOSS ATTRIBUTABLE TO THE COMPANY (14,167 ) (3,241 ) (17,408 ) COMPONENTS OF OTHER COMPREHENSIVE INCOME (LOSS) Foreign currency translation adjustments 8 (1 ) (a) 7 Other comprehensive income (loss) 8 (1 ) 7 COMPREHENSIVE INCOME (LOSS) (14,145 ) (3,256 ) (17,401 ) Amounts attributable to noncontrolling interest: Net (income) loss attributable to noncontrolling interest (14 ) 14 (a) — Foreign currency translation adjustments (1 ) 1 (a) — Comprehensive (income) loss attributable to noncontrolling interest (15 ) 15 — COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY $ (14,160 ) $ (3,241 ) $ (17,401 ) NET LOSS PER COMMON SHARE - BASIC AND DILUTED $ (0.38 ) $ (0.09 ) $ (0.46 ) WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING 37,473,431 — 37,473,431 (a) EJ Holdings adjustments: the correction of this misstatement resulted in increases of $55,000 in general and administrative expenses, $9,000 in loss on equity method investment and $34,000 in interest income and decreases of $14,000 in net income attributable to noncontrolling interest and $1,000 in foreign currency translation adjustments. (b) Warrant adjustments: the correction of this misstatement resulted in an increase of $312,000 in interest expense and a decrease of $890,000 in change in fair value of warrant derivative liabilities. (c) Corrections of other misstatements: period adjustment of variable consideration resulted in a decrease of $600,000 in revenues, net; reclassification of shipping cost and royalty expense to cost of sales resulted in an increase of $59,000 in cost of sales and decreases of $6,000 and $53,000 in selling expense and general and administrative expense, respectively; correction of stock modification accounting resulted in a decrease of $52,000 in general and administrative expense; correction of accounting treatment for convertible notes resulted in an increase of $1.3 million in interest expense; a correction of tax provision resulted in an increase of $52,000 in tax provision EMMAUS LIFE SCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Three months ended March 31,2019 Previously Reported Adjustment Restated CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (14,153 ) $ (3,255 ) $ (17,408 ) Adjustments to reconcile net loss to net cash flows from operating activities Depreciation and amortization 17 — 17 Amortization of discount of convertible notes 5,641 1,647 (b), (c) 7,288 Foreign exchange adjustments (19 ) 108 89 Net losses (gains) on equity investment in marketable securities 6,457 — 6,457 Gain on equity method investment — (9 ) (a) (9 ) Share-based compensation 536 52 (c) 588 Change in fair value of warrant derivative liabilities 48 890 (a) 938 Net changes in operating assets and liabilities Accounts receivable (409 ) 266 (143 ) Inventories (1,091 ) — (1,091 ) Prepaid expenses and other current assets (83 ) (32 ) (115 ) Other non-current assets (2,813 ) — (2,813 ) Income tax — 52 52 Accounts payable and accrued expenses 2,339 386 2,725 Deferred revenue 500 — 500 Deferred rent (287 ) — (287 ) Other current liabilities 36 — 36 Other long-term liabilities 1,997 — 1,997 Net cash flows (used in) provided by operating activities (1,284 ) 105 (1,179 ) CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (16 ) — (16 ) Net cash flows used in investing activities (16 ) — (16 ) CASH FLOWS FROM FINANCING ACTIVITIES Payments of convertible notes (3,048 ) — (3,048 ) Proceeds from exercise of warrants 5 — 5 Proceeds from issuance of common stock 2,530 — 2,530 Proceeds from conversion of notes payable to common stock 21 — 21 Net cash flows used in financing activities (492 ) — (492 ) Effect of exchange rate changes on cash 22 — 22 Net increase (decrease) in cash, cash equivalents and restricted cash (1,770 ) 105 (1,665 ) Cash and cash equivalents, beginning of period 17,080 (13,175 ) 3,905 Cash and cash equivalents, end of period $ 15,310 $ (13,070 ) $ 2,240 SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITIES Interest paid $ 385 $ — $ 385 NON-CASH INVESTING AND FINANCING ACTIVITIES Exercised of warrants and options on cashless basis $ 3,374 $ — $ 3,374 Conversion of notes payable to common stock $ 329 $ — $ 329 Initial recognition of right-of-use lease asset $ 2,922 $ — $ 2,922 Refer to the descriptions of the adjustments in the Condensed Consolidated Balance Sheets and Statements of Comprehensive Loss and their impact on net loss above. In addition, a cash flow classification adjustment related to EJ Holdings resulted in a net decrease to cash flows used by operating activities of $105,000. |
REVENUES (Tables)
REVENUES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Summary of revenues disaggregated by category | Revenues disaggregated by category were as follows (in thousands): Three Months Ended March 31, 2020 2019 Restated Endari® $ 6,714 $ 4,602 Other 240 105 Revenues, net $ 6,954 $ 4,707 |
Revenue Allowance and Accrual Activities | The following table summarizes the revenue allowance and accrual activities for the three months ended March 31, 2020 and 2019 (in thousands): Trade Discounts, Allowances and Chargebacks Government Rebates and Other Incentives Returns Total Balance as of December 31, 2019 $ 228 $ 1,354 $ 315 $ 1,897 Provision related to sales in the current year 942 1,122 71 2,135 Adjustments related prior period sales 16 (44 ) (22 ) (50 ) Credit and payments made (794 ) (709 ) — (1,503 ) Balance as of March 31, 2020 $ 392 $ 1,723 $ 364 $ 2,479 Balance as of December 31, 2018 $ 84 $ 798 $ 99 $ 981 Provision related to sales in the current year 292 729 54 1,075 Credit and payments made (316 ) (581 ) — (897 ) Balance as of March 31, 2019, as restated $ 60 $ 946 $ 153 $ 1,159 |
Summarizes revenues from each of our customers accounted for 10% or more of total revenues | The following table summarizes revenues attributable to each of our customers that accounted for 10% or more of our total revenues (as a percentage of total revenues): Three Months Ended March 31, 2020 2019 Restated Customer A 54 % 65 % Customer B 27 % 19 % |
SELECTED FINANCIAL STATEMENT _3
SELECTED FINANCIAL STATEMENT CAPTIONS - ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of inventory | Inventories consisted of the following (in thousands): March 31, 2020 December 31, 2019 Raw materials and components $ 1,409 $ 1,187 Work-in-process 1,851 1,629 Finished goods 5,109 5,204 Inventory reserve (114 ) (49 ) Total $ 8,255 $ 7,971 |
Schedule of prepaid expenses and other current assets | Prepaid expenses and other current assets consisted of the following (in thousands): March 31, 2020 December 31, 2019 Prepaid insurance $ 453 $ 735 Other prepaid expenses and current assets 649 667 $ 1,102 $ 1,402 |
Schedule of property and equipment | Property and equipment consisted of the following (in thousands): March 31, 2020 December 31, 2019 Equipment $ 338 $ 335 Leasehold improvements 39 77 Furniture and fixtures 95 95 Total property and equipment 472 507 Less: accumulated depreciation (330 ) (356 ) Property and Equipment, net $ 142 $ 151 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Investments [Abstract] | |
Schedule of carrying values of equity securities | As of March 31, 2020 and December 31, 2019, the carrying values of equity securities were included in the following line items in our consolidated balance sheets (in thousands): March 31, 2020 December 31, 2019 Fair Value with Changes Recognized in Income Fair Value with Changes Recognized in Income Marketable securities $ 34,768 $ 27,929 Total equity securities $ 34,768 $ 27,929 |
Schedule of Certain Financial Information of EJ Holdings | The following table sets forth certain financial information of EJ Holdings for the three months ended March 31, 2020 and 2019 (in thousands): Three months ended March 31, 2020 2019 (Unaudited) (Unaudited) REVENUES, NET $ 84 $ 57 GROSS PROFIT 84 57 NET INCOME (LOSS) $ (1,021 ) $ 23 |
SELECTED FINANCIAL STATEMENT _4
SELECTED FINANCIAL STATEMENT CAPTIONS - LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Payables And Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | Accounts payable and accrued expenses consisted of the following at March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Accounts payable: Clinical and regulatory expenses $ 279 $ 232 Professional fees 1,347 1,183 Selling expenses 1,068 1,303 Manufacturing costs 6,369 4,541 Other vendors 264 18 Total accounts payable 9,327 7,277 Accrued interest payable, related parties 173 42 Accrued interest payable 462 991 Accrued expenses: Payroll expenses 868 891 Government rebates and other rebates 1,723 1,355 Due to EJ Holdings 347 238 Other accrued expenses 309 704 Total accrued expenses 3,247 3,188 Total accounts payable and accrued expenses $ 13,209 11,498 |
Schedule of other long-term liabilities | Other long-term liabilities consisted of the following at March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Trade discount $ 26,422 $ 23,242 Unearned revenue 10,536 10,500 Other long-term liabilities 10 8 Total other long-term liabilities $ 36,968 $ 33,750 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Schedule of notes payable | Notes payable consisted of the following at March 31, 2020 and December 31, 2019 (in thousands): Year Issued Interest Rate Range Term of Notes Conversion Price Principal Outstanding March 31, 2020 Discount Amount March 31, 2020 Carrying Amount March 31, 2020 Shares Underlying March 31, 2020 Notes payable 2013 10% Due on demand — $ 925 $ — $ 925 — 2019 11% Due on demand - 6 months — 2,835 — 2,835 — 2020 11% Due on demand — 194 — 194 — $ 3,954 $ — $ 3,954 $ — Current $ 3,954 $ — $ 3,954 — Notes payable - related parties 2016 10% Due on demand — $ 20 $ — $ 20 — 2019 10% Due on demand — 14 — 14 — $ 34 $ — $ 34 — Current $ 34 $ — $ 34 — Convertible debentures 2019 10% 18 months $2.00-$9.52 (a) $ 9,200 $ 2,406 $ 6,794 4,638,333 $ 9,200 $ 2,406 $ 6,794 4,638,333 Current $ 8,000 $ 2,092 $ 5,908 4,033,333 Non-current $ 1,200 $ 314 $ 886 605,000 Convertible note payable 2020 12% 3 years $ 10.00 (b) $ 3,150 $ — $ 3,150 316,467 $ 3,150 $ — $ 3,150 316,467 Current $ 3,150 $ — $ 3,150 316,467 Total $ 16,338 $ 2,406 $ 13,932 4,954,800 Year Issued Interest Rate Range Term of Notes Conversion Price Principal Outstanding December 31, 2019 Discount Amount December 31, 2019 Carrying Amount December 31, 2019 Shares Underlying Notes December 31, 2019 Notes payable 2013 10% Due on demand — $ 920 $ — $ 920 — 2019 11% Due on demand - 6 months — 2,829 — 2,829 — $ 3,749 $ — $ 3,749 $ — Current $ 3,749 $ — $ 3,749 — Notes payable - related parties 2016 10% Due on demand — $ 20 $ — $ 20 — 2018 11% Due on demand — 159 — 159 — 2019 10% Due on demand — 14 — 14 — $ 193 $ — $ 193 — Current $ 193 $ — $ 193 — Convertible debentures 2019 10% 18 months $2.00-$9.52 (a) $ 10,200 $ 3,185 7,015 1,080,415 $ 10,200 $ 3,185 $ 7,015 1,080,415 Current $ 10,200 $ 3,185 $ 7,015 1,080,415 Convertible note payable 2018 10% 2 years $ 10.00 (b) $ 3,000 $ 5 $ 2,995 363,876 $ 3,000 $ 5 $ 2,995 363,876 Current $ 3,000 $ 5 $ 2,995 363,876 Total $ 17,142 $ 3,190 $ 13,952 1,444,291 (a) The notes are convertible to Emmaus Life Sciences, Inc. shares . (b) The notes are convertible to EMI Holding, Inc. shares . |
Schedule of future contractual principal payments of notes payable | As of March 31, 2020, future contractual principal payments due on notes payable were as follows: Year Ending 2020 (nine months) $ 12,138 2021 4,200 Total $ 16,338 |
Senior Secured Convertible Debentures [Member] | |
Schedule of fair value based upon assumptions | The fair values as of agreement date and the anti-dilution adjustments date were based upon following assumptions: February 28, 2020 (Anti-dilution adjustment date) February 21, 2020 (Amendment date) Exercise price $ 2.00 $ 3.00 Common stock fair value $ 1.60 $ 1.89 Volatility 93.00 % 92.00 % Risk-free rate 0.86 % 1.29 % Expected life (in years) 3.54 3.56 |
Senior Secured Convertible Debentures [Member] | Conversion Feature Liabilities [Member] | |
Schedule of fair value of conversion feature liabilities | The following table sets forth the fair value of the conversion feature liabilities as of March 31, 2020 and December 31, 2019 (in thousands): Three Months Ended Year ended Conversion feature liabilities — Amended and Restated 10% Senior Secured Convertible Debentures March 31, 2020 December 31, 2019 Balance, beginning of period $ 1 $ — Fair value at issuance date — 132 Fair value at debt modification date 118 — Change in fair value included in the statement of comprehensive (income) loss 29 (131 ) Balance, end of period $ 148 $ 1 |
Schedule of fair value based upon assumptions | The fair values as of March 31, 2020, the February 21, 2020 modification date and December 31, 2019 were based upon following assumptions: March 31, 2020 February 21, 2020 (Modification date) December 31, 2019 Stock price $ 1.20 $ 1.89 $ 1.97 Conversion price $ 2.00 $ 3.00 $ 9.52 Selected yield 21.09 % 19.12 % 16.77 % Expected volatility (peer group) 90 % 65 % 50 % Expected life (in years) 1.06 1.16 0.81 Expected dividend yield — — — Risk‑free rate Term structure Term structure Term structure |
STOCKHOLDERS' DEFICIT (Tables)
STOCKHOLDERS' DEFICIT (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Schedule of outstanding warrants | A summary of outstanding warrants as of March 31, 2020 and December 31, 2019 is presented below: March 31, 2020 December 31, 2019 Warrants outstanding, beginning of period 4,931,099 3,436,431 Assumed as part of Merger — 1,044,939 Granted — 500,729 Exercised — (51,000 ) Cancelled, forfeited or expired (115,953 ) — Warrants outstanding, end of period 4,815,146 4,931,099 A summary of outstanding warrants by year issued and exercise price as of March 31, 2020 is presented below: Outstanding Exercisable Year issued and Exercise Price Number of Warrants Issued Weighted-Average Remaining Contractual Life (Years) Weighted-Average Exercise Price Total Weighted-Average Exercise Price Prior to January 1, 2019 $2.00-$10.76 3,439,007 2.38 $ 4.38 3,439,007 $ 4.38 Prior to Jan 1, 2019 Total 3,439,007 3,439,007 At December 31, 2019 $ 6.12 32,391 4.16 $ 6.12 32,391 $ 6.12 $ 12.00 76,575 3.48 $ 12.00 76,575 $ 12.00 $ 14.04 174,999 2.99 $ 14.04 174,999 $ 14.04 $ 31.50 737,975 2.32 $ 31.50 737,975 $ 31.50 $ 36.24 22,333 2.32 $ 36.24 22,333 $ 36.24 $ 60.00 666 0.75 $ 60.00 666 $ 60.00 $ 2.00 256,200 3.56 $ 2.00 256,200 $ 2.00 $ 7.68 75,000 4.30 $ 7.68 75,000 $ 7.68 2019 Total 1,376,139 1,376,139 At March 31, 2020 Total 4,815,146 4,815,146 |
Schedule of stock option activity | A summary of outstanding stock options as of March 31, 2020 and December 31, 2019 is presented below. March 31, 2020 December 31, 2019 Number of Options Weighted‑ Average Exercise Price Number of Options Weighted‑ Average Exercise Price Options outstanding, beginning of period 7,245,350 $ 4.68 6,642,200 $ 4.40 Granted or deemed granted — $ — 636,683 (a) $ 10.10 Exercised — $ — (167 ) $ 5.00 Cancelled, forfeited and expired — $ — (33,366 ) $ 11.29 Options outstanding, end of period 7,245,350 $ 4.68 7,245,350 $ 4.68 Options exercisable, end of period 7,039,339 $ 4.51 7,001,680 $ 4.47 Options available for future grant 2,167,150 2,167,150 (a) Upon the Merger, the exercise prices of outstanding EMI options and number of shares of the Company common stock underlying the options were adjusted based upon the exchange ratio in the Merger. |
Senior Secured Convertible Debentures [Member] | |
Schedule of fair value based upon assumptions | The fair values as of agreement date and the anti-dilution adjustments date were based upon following assumptions: February 28, 2020 (Anti-dilution adjustment date) February 21, 2020 (Amendment date) Exercise price $ 2.00 $ 3.00 Common stock fair value $ 1.60 $ 1.89 Volatility 93.00 % 92.00 % Risk-free rate 0.86 % 1.29 % Expected life (in years) 3.54 3.56 |
GPB Debt Holdings II, LLC [Member] | |
Schedule of change in fair value of warrant | The following table presents the change in fair value of the GPB Warrant as of March 31, 2020 and December 31, 2019 (in thousands): Three Months Ended Year Ended Warrant Liability—GPB March 31, 2020 December 31, 2019 Balance, beginning of period $ 38 $ 1,399 Change in fair value included in the statement of comprehensive loss (25 ) (1,361 ) Balance, end of period $ 13 $ 38 |
Schedule of fair value based upon assumptions | The value as of the dates set forth in the table above was based on upon following assumptions: March 31, 2020 December 31, 2019 Stock price $ 1.20 $ 1.97 Risk‑free interest rate 0.30 % 1.64 % Expected volatility (peer group) 65.00 % 60.00 % Expected life (in years) 3.25 3.50 Expected dividend yield 0.00 % 0.00 % Number outstanding 252,802 252,802 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of future minimum lease payments | Future minimum lease payments under the lease agreements were as follows as of March 31, 2020 (in thousands): Amount 2020 (nine months) $ 811 2021 1,080 2022 1,110 2023 1,043 2024 and thereafter 2,983 Total lease payments 7,027 Less: Interest 2,138 Present value of lease liabilities $ 4,889 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of outstanding loans from related parties | The following table sets forth information relating to our loans from related persons outstanding as of March 31, 2020 and interest paid during the three months ended March 31, 2020 (in thousands): Class Lender Interest Rate Date of Loan Term of Loan Principal Amount Outstanding at March 31, 2020 Amount of Interest Paid Current, Promissory note payable to related parties: Lan T. Tran (2) 10% 4/29/2016 Due on Demand $ 20 $ — Lan T. Tran (2) 11% 2/10/2018 Due on Demand — 35 Lan T. Tran (2) 10% 2/9/2019 Due on Demand 14 — Subtotal 34 35 Revolving line of credit agreement Yutaka Niihara (2) 5.25% 12/27/2019 Due on Demand 600 10 Subtotal 600 10 Total $ 634 $ 45 The following table sets forth information relating to our loans from related persons outstanding at any time during the year ended December 31, 2019: Class Lender Interest Rate Date of Loan Term of Loan Principal Amount Outstanding at December 31, 2019 Highest Principal Outstanding Amount of Principal Repaid or Converted into Stock Amount of Interest Paid Conversion Rate Current, Promissory note payable to related parties: Lan T. Tran (2) 10% 4/29/2016 Due on Demand $ 20 $ 20 $ — $ — — Hope International Hospice, Inc. (1) 10% 6/3/2016 Due on Demand — 250 250 78 — Lan T. Tran (2) 10% 2/9/2017 Due on Demand — 12 — 2 — Yutaka Niihara (2)(3) 10% 9/14/2017 Due on Demand — 904 27 2 — Lan T. Tran (2) 11% 2/10/2018 Due on Demand 159 159 — — — Lan T. Tran (2) 10% 2/9/2019 Due on Demand 14 14 — — — Subtotal 193 1,359 277 82 Current, Convertible notes payable to related parties: Yasushi Nagasaki (2) 10% 6/29/2012 Due on Demand — 200 200 56 $ 3.30 Yutaka & Soomi Niihara (2)(3) 10% 11/16/2015 2 years — 200 200 73 $ 4.50 Wei Peu Zen (3) 10% 11/6/2017 2 years — 5,000 5,000 597 $ 10.00 Profit Preview International Group, Ltd. (4) 10% 2/1/2018 2 years — 4,037 4,037 385 $ 10.00 Profit Preview International Group, Ltd. (4) 10% 3/21/2018 2 years — 5,363 5,363 442 $ 10.00 Subtotal — 14,800 14,800 1,553 Revolving line of credit agreement Yutaka Niihara (2) 5% 12/27/2019 Due on Demand 600 600 — — Subtotal 600 600 — — Total $ 793 $ 16,759 $ 15,077 $ 1,635 (1) Dr. Niihara, a Director and the Chairman, and Chief Executive Officer of the Company, is also a director and the Chief Executive Officer of Hope International Hospice, Inc. (2) Officer (3) Director ( 4 ) Mr. Zen, a Director of the Company, is the sole owner of Profit Preview International Group, Ltd. |
BASIS OF PRESENTATION (Details
BASIS OF PRESENTATION (Details Narrative) | Jul. 17, 2019shares | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) |
Variable Interest Entity [Line Items] | |||
Net decrease to cash flow used by operating activities | $ 1,808,000 | $ (1,179,000) | |
Restatement Adjustment [Member] | |||
Variable Interest Entity [Line Items] | |||
Net decrease to cash flow used by operating activities | 105,000 | ||
Restatement Adjustment [Member] | EJ Holding, Inc. [Member] | |||
Variable Interest Entity [Line Items] | |||
Net decrease to cash flow used by operating activities | $ (105,000) | ||
Emmaus Life Sciences, Inc. [Member] | |||
Variable Interest Entity [Line Items] | |||
Reverse stock split | 1-for-6 | ||
Reverse stock split, conversion ratio | 0.167 | ||
Telemynd [Member] | |||
Variable Interest Entity [Line Items] | |||
Common stock shares, Stock split ratio | shares | 1 |
BASIS OF PRESENTATION (Detail_2
BASIS OF PRESENTATION (Details 1) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
CURRENT ASSETS | |||||
Cash and cash equivalents | $ 2,213 | $ 1,769 | $ 2,240 | ||
Accounts receivable, net | 1,900 | 2,150 | 2,061 | ||
Inventories, net | 8,255 | 7,971 | 5,795 | ||
Investment in marketable securities | 34,768 | 27,929 | 42,873 | ||
Marketable securities, pledged to creditor | 251 | ||||
Prepaid expenses and other current assets | 1,102 | 1,402 | 603 | ||
Total current assets | 48,238 | 41,221 | 53,823 | ||
Property and equipment, net | 142 | 151 | 153 | ||
Long-term investment at cost | 527 | ||||
Equity method investment | 13,470 | ||||
Right of use assets | 4,344 | 4,474 | 2,838 | ||
Deposits and other assets | 288 | 285 | 410 | ||
Total assets | 65,992 | 59,456 | 71,221 | ||
CURRENT LIABILITIES | |||||
Accounts payable and accrued expenses | 13,209 | 11,498 | 10,697 | ||
Operating lease liabilities, current portion | 1,079 | 991 | 682 | ||
Other current liabilities | 1,113 | 5,748 | 5,292 | ||
Warrant derivative liabilities | 13 | 38 | 9,877 | ||
Notes payable, net of discount | 3,954 | 3,749 | 7,806 | ||
Notes payable to related parties | 34 | 193 | 470 | ||
Convertible notes payable, net of discount | 3,150 | 2,995 | 15,157 | ||
Convertible notes payable to related parties, net of discount | 13,896 | ||||
Total current liabilities | 29,060 | 32,827 | 63,877 | ||
Operating lease liabilities, less current portion | 3,810 | 3,932 | 2,478 | ||
Other long-term liabilities | 36,968 | 33,750 | 35,637 | ||
Notes payable, net of discount, less current portion | 1,151 | ||||
Convertible debentures, net of discount, less current portion | 886 | 389 | |||
Total liabilities | 70,724 | 70,509 | 103,532 | ||
STOCKHOLDERS’ DEFICIT | |||||
Preferred stock — par value $0.001 per share, 15,000,000 shares authorized, none issued or outstanding | |||||
Common stock — par value $0.001 per share, 250,000,000 shares authorized, 37,750,424 shares were issued and outstanding at March 31, 2019 | 49 | 48 | 38 | ||
Additional paid-in capital | 216,157 | 215,207 | 156,508 | ||
Accumulated other comprehensive income (loss) | (18) | (79) | (62) | ||
Accumulated deficit | (220,920) | (226,229) | (188,795) | ||
Total stockholders’ deficit | (4,732) | (11,053) | (32,311) | $ (21,708) | |
Total liabilities & stockholders’ deficit | $ 65,992 | $ 59,456 | 71,221 | ||
Previously Reported [Member] | |||||
CURRENT ASSETS | |||||
Cash and cash equivalents | 15,310 | ||||
Accounts receivable, net | 1,760 | ||||
Inventories, net | 5,795 | ||||
Investment in marketable securities | 42,873 | ||||
Marketable securities, pledged to creditor | 251 | ||||
Prepaid expenses and other current assets | 818 | ||||
Total current assets | 66,807 | ||||
Property and equipment, net | 153 | ||||
Long-term investment at cost | 527 | ||||
Right of use assets | 2,838 | ||||
Deposits and other assets | 410 | ||||
Total assets | 70,735 | ||||
CURRENT LIABILITIES | |||||
Accounts payable and accrued expenses | 11,068 | ||||
Operating lease liabilities, current portion | 682 | ||||
Other current liabilities | 5,217 | ||||
Notes payable, net of discount | 7,000 | ||||
Notes payable to related parties | 470 | ||||
Convertible notes payable, net of discount | 15,157 | ||||
Convertible notes payable to related parties, net of discount | 13,896 | ||||
Total current liabilities | 53,490 | ||||
Operating lease liabilities, less current portion | 2,478 | ||||
Other long-term liabilities | 35,637 | ||||
Warrant derivative liabilities | 1,447 | ||||
Notes payable, net of discount, less current portion | 1,922 | ||||
Convertible debentures, net of discount, less current portion | 389 | ||||
Total liabilities | 95,363 | ||||
STOCKHOLDERS’ DEFICIT | |||||
Preferred stock — par value $0.001 per share, 15,000,000 shares authorized, none issued or outstanding | |||||
Common stock — par value $0.001 per share, 250,000,000 shares authorized, 37,750,424 shares were issued and outstanding at March 31, 2019 | 36 | ||||
Additional paid-in capital | 146,344 | ||||
Accumulated other comprehensive income (loss) | (62) | ||||
Accumulated deficit | (170,864) | ||||
Total stockholders’ deficit | (24,546) | ||||
Noncontrolling interest | (82) | ||||
Total liabilities & stockholders’ deficit | 70,735 | ||||
Adjustments [Member] | |||||
CURRENT ASSETS | |||||
Cash and cash equivalents | [1] | (13,070) | |||
Accounts receivable, net | [2] | 301 | |||
Prepaid expenses and other current assets | [1],[2] | (215) | |||
Total current assets | (12,984) | ||||
Equity method investment | [1] | 13,470 | |||
Total assets | 486 | ||||
CURRENT LIABILITIES | |||||
Accounts payable and accrued expenses | [1],[2] | (371) | |||
Other current liabilities | [2] | 75 | |||
Warrant derivative liabilities | [2],[3] | 9,877 | |||
Notes payable, net of discount | [3] | 806 | |||
Total current liabilities | 10,387 | ||||
Warrant derivative liabilities | [2] | (1,447) | |||
Notes payable, net of discount, less current portion | [3] | (771) | |||
Total liabilities | 8,169 | ||||
STOCKHOLDERS’ DEFICIT | |||||
Preferred stock — par value $0.001 per share, 15,000,000 shares authorized, none issued or outstanding | |||||
Common stock — par value $0.001 per share, 250,000,000 shares authorized, 37,750,424 shares were issued and outstanding at March 31, 2019 | [4] | 2 | |||
Additional paid-in capital | [3],[5] | 10,164 | |||
Accumulated deficit | [5] | (17,931) | |||
Total stockholders’ deficit | (7,765) | ||||
Noncontrolling interest | [1] | 82 | |||
Total liabilities & stockholders’ deficit | $ 486 | ||||
[1] | EJ Holdings adjustments: the correction of this misstatement resulted in increases of $13.5 million in equity method investment, $114,000 in accounts payable and accrued expenses, and $82,000 in non-controlling interest and decreases of $13.1 million in cash and cash equivalent and $205,000 in prepaid expenses and other current assets. | ||||
[2] | Corrections of other misstatement: period adjustment and reclassification of variable consideration resulted in an increase of $301,000 in accounts receivable and a decrease of $486,000 in accounts payable and accrued expenses, a decrease of $10,000 in income tax receivable and an increase of $23,000 in income tax payable; a correction of accounting treatment for convertible notes resulted in an increase of $1.3 million in additional paid-in capital; a reclassification of GPB warrants resulted an increase of short-term warrant liabilities and a decrease of long-term warrant liabilities of $1.4 million; and a correction of tax provision resulted in an increase of $52,000 in income tax payable. | ||||
[3] | Warrant adjustments: the correction of this misstatement resulted in increases of $8.5 million in warrant derivative current liabilities and $806,000 in short-term note payable and decreases of $771,000 in long-term notes payable and $9.7 million in additional paid-in capital. | ||||
[4] | Retrospective adjustments made to common stock resulted from recapitalization transaction in July 2019. | ||||
[5] | Balance includes carryforward impact on 2018 restatement adjustments, including cashless warrant adjustments which resulted in an increase in additional paid-in capital and a decrease in retained earnings of $18.3 million. |
BASIS OF PRESENTATION (Parenthe
BASIS OF PRESENTATION (Parenthetical) (Details 1) - USD ($) | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | ||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | ||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |
Preferred stock, authorized | 15,000,000 | 20,000,000 | 15,000,000 | |
Preferred stock, issued | 0 | 0 | 0 | |
Preferred stock, outstanding | 0 | 0 | 0 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |
Common stock, authorized | 250,000,000 | 250,000,000 | 250,000,000 | |
Common stock, issued | 48,987,189 | 37,750,424 | 48,471,446 | |
Common stock, outstanding | 48,987,189 | 37,750,424 | 48,471,446 | |
Increase in equity method investment | $ 13,470,000 | |||
Increase (decrease) in accounts payable and accrued expenses | $ 13,209,000 | 10,697,000 | $ 11,498,000 | |
Increase (decrease) in cash and cash equivalent | 444,000 | (1,665,000) | ||
Decrease in prepaid expenses and other current assets | 1,102,000 | 603,000 | 1,402,000 | |
Increase in warrant derivative current liabilities | 13,000 | 9,877,000 | 38,000 | |
Increase in short-term notes payable | 3,954,000 | 7,806,000 | 3,749,000 | |
Decrease in long-term notes payable | 1,151,000 | |||
Increase (decrease) in additional paid-in capital | 216,157,000 | 156,508,000 | 215,207,000 | |
Increase in accounts receivable | 1,900,000 | 2,061,000 | 2,150,000 | |
Increase in income tax payable | 52,000 | |||
Increase (decrease) in retained earnings | $ (220,920,000) | (188,795,000) | $ (226,229,000) | |
Adjustments [Member] | ||||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | ||||
Increase in equity method investment | [1] | 13,470,000 | ||
Increase (decrease) in accounts payable and accrued expenses | [1],[2] | (371,000) | ||
Increase in noncontrolling interest | [1] | 82,000 | ||
Increase (decrease) in cash and cash equivalent | 105,000 | |||
Decrease in prepaid expenses and other current assets | [1],[2] | (215,000) | ||
Increase in warrant derivative current liabilities | [2],[3] | 9,877,000 | ||
Increase in short-term notes payable | [3] | 806,000 | ||
Decrease in long-term notes payable | [3] | (771,000) | ||
Increase (decrease) in additional paid-in capital | [3],[4] | 10,164,000 | ||
Increase in accounts receivable | [2] | 301,000 | ||
Increase in income tax payable | 52,000 | |||
Increase in short-term warrant liabilities | 1,400,000 | |||
Decrease in long-term warrant liabilities | [2] | (1,447,000) | ||
Increase in tax provision of income tax payable | 52,000 | |||
Increase (decrease) in retained earnings | [4] | (17,931,000) | ||
Adjustments [Member] | Warrant Adjustments [Member] | ||||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | ||||
Increase in warrant derivative current liabilities | 8,500,000 | |||
Increase in short-term notes payable | 806,000 | |||
Decrease in long-term notes payable | (771,000) | |||
Increase (decrease) in additional paid-in capital | (9,700,000) | |||
Adjustments [Member] | Variable Consideration [Member] | ||||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | ||||
Increase (decrease) in accounts payable and accrued expenses | (486,000) | |||
Increase in accounts receivable | 301,000 | |||
Decrease in income tax receivable | (10,000) | |||
Increase in income tax payable | 23,000 | |||
Adjustments [Member] | Accounting Treatment for Convertible Notes [Member] | ||||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | ||||
Increase (decrease) in additional paid-in capital | 1,300,000 | |||
Adjustments [Member] | Cashless Warrants Adjustments [Member] | ||||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | ||||
Increase (decrease) in additional paid-in capital | 18,300,000 | |||
Increase (decrease) in retained earnings | (18,300,000) | |||
Adjustments [Member] | EJ Holding, Inc. [Member] | ||||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | ||||
Increase in equity method investment | 13,500,000 | |||
Increase (decrease) in accounts payable and accrued expenses | 114,000 | |||
Increase in noncontrolling interest | 82,000 | |||
Increase (decrease) in cash and cash equivalent | (13,100,000) | |||
Decrease in prepaid expenses and other current assets | $ (205,000) | |||
[1] | EJ Holdings adjustments: the correction of this misstatement resulted in increases of $13.5 million in equity method investment, $114,000 in accounts payable and accrued expenses, and $82,000 in non-controlling interest and decreases of $13.1 million in cash and cash equivalent and $205,000 in prepaid expenses and other current assets. | |||
[2] | Corrections of other misstatement: period adjustment and reclassification of variable consideration resulted in an increase of $301,000 in accounts receivable and a decrease of $486,000 in accounts payable and accrued expenses, a decrease of $10,000 in income tax receivable and an increase of $23,000 in income tax payable; a correction of accounting treatment for convertible notes resulted in an increase of $1.3 million in additional paid-in capital; a reclassification of GPB warrants resulted an increase of short-term warrant liabilities and a decrease of long-term warrant liabilities of $1.4 million; and a correction of tax provision resulted in an increase of $52,000 in income tax payable. | |||
[3] | Warrant adjustments: the correction of this misstatement resulted in increases of $8.5 million in warrant derivative current liabilities and $806,000 in short-term note payable and decreases of $771,000 in long-term notes payable and $9.7 million in additional paid-in capital. | |||
[4] | Balance includes carryforward impact on 2018 restatement adjustments, including cashless warrant adjustments which resulted in an increase in additional paid-in capital and a decrease in retained earnings of $18.3 million. |
BASIS OF PRESENTATION (Detail_3
BASIS OF PRESENTATION (Details 2) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
REVENUES, NET | $ 6,954,000 | $ 4,707,000 | |
COST OF GOODS SOLD | 478,000 | 259,000 | |
GROSS PROFIT | 6,476,000 | 4,448,000 | |
OPERATING EXPENSES | |||
Research and development | 617,000 | 513,000 | |
Selling | 1,068,000 | 1,479,000 | |
General and administrative | 3,657,000 | 3,737,000 | |
Total operating expenses | 5,342,000 | 5,729,000 | |
LOSS FROM OPERATIONS | 1,134,000 | (1,281,000) | |
OTHER INCOME (EXPENSE) | |||
Change in fair value of warrant derivative liabilities | 25,000 | (938,000) | |
Net gains (losses) on equity investment in marketable securities | 6,839,000 | (6,457,000) | |
Gain on equity method investment | (407,000) | 9,000 | |
Interest and other income (loss) | 33,000 | (77,000) | |
Interest expense | (1,800,000) | (8,612,000) | |
Total other income (expense) | 4,661,000 | (16,075,000) | |
LOSS BEFORE INCOME TAXES | 5,795,000 | (17,356,000) | |
INCOME TAXES | 286,000 | 52,000 | |
NET LOSS INCLUDING NONCONTROLLING INTERESTS | 5,509,000 | (17,408,000) | |
NET INCOME (LOSS) | 5,509,000 | (17,408,000) | |
COMPONENTS OF OTHER COMPREHENSIVE INCOME (LOSS) | |||
Foreign currency translation adjustments | 61,000 | 7,000 | |
Other comprehensive income | 61,000 | 7,000 | |
COMPREHENSIVE INCOME (LOSS) | (17,401,000) | ||
Amounts attributable to noncontrolling interest: | |||
COMPREHENSIVE INCOME (LOSS) | $ 5,570,000 | $ (17,401,000) | |
NET LOSS PER COMMON SHARE - BASIC AND DILUTED | $ 0.11 | $ (0.46) | |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING | 48,624,469 | 37,473,431 | |
Previously Reported [Member] | |||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
REVENUES, NET | $ 5,307,000 | ||
COST OF GOODS SOLD | 200,000 | ||
GROSS PROFIT | 5,107,000 | ||
OPERATING EXPENSES | |||
Research and development | 513,000 | ||
Selling | 1,485,000 | ||
General and administrative | 3,681,000 | ||
Total operating expenses | 5,679,000 | ||
LOSS FROM OPERATIONS | (572,000) | ||
OTHER INCOME (EXPENSE) | |||
Change in fair value of warrant derivative liabilities | (48,000) | ||
Net gains (losses) on equity investment in marketable securities | (6,457,000) | ||
Interest and other income (loss) | (111,000) | ||
Interest expense | (6,965,000) | ||
Total other income (expense) | (13,581,000) | ||
LOSS BEFORE INCOME TAXES | (14,153,000) | ||
NET LOSS INCLUDING NONCONTROLLING INTERESTS | (14,153,000) | ||
Net (income) loss attributable to noncontrolling interest | (14,000) | ||
NET INCOME (LOSS) | (14,167,000) | ||
COMPONENTS OF OTHER COMPREHENSIVE INCOME (LOSS) | |||
Foreign currency translation adjustments | 8,000 | ||
Other comprehensive income | 8,000 | ||
COMPREHENSIVE INCOME (LOSS) | (14,145,000) | ||
Amounts attributable to noncontrolling interest: | |||
Net (income) loss attributable to noncontrolling interest | (14,000) | ||
Foreign currency translation adjustments | (1,000) | ||
Comprehensive (income) loss attributable to noncontrolling interest | (15,000) | ||
COMPREHENSIVE INCOME (LOSS) | $ (14,160,000) | ||
NET LOSS PER COMMON SHARE - BASIC AND DILUTED | $ (0.38) | ||
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING | 37,473,431 | ||
Adjustments [Member] | |||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
REVENUES, NET | [1] | $ (600,000) | |
COST OF GOODS SOLD | [1] | 59,000 | |
GROSS PROFIT | (659,000) | ||
OPERATING EXPENSES | |||
Selling | [1] | (6,000) | |
General and administrative | [1],[2] | 56,000 | |
Total operating expenses | 50,000 | ||
LOSS FROM OPERATIONS | (709,000) | ||
OTHER INCOME (EXPENSE) | |||
Change in fair value of warrant derivative liabilities | [2],[3] | (890,000) | |
Gain on equity method investment | [2] | 9,000 | |
Interest and other income (loss) | [2] | 34,000 | |
Interest expense | [1],[3] | (1,647,000) | |
Total other income (expense) | (2,494,000) | ||
LOSS BEFORE INCOME TAXES | (3,203,000) | ||
INCOME TAXES | 52,000 | ||
NET LOSS INCLUDING NONCONTROLLING INTERESTS | (3,255,000) | ||
Net (income) loss attributable to noncontrolling interest | [2] | 14,000 | |
NET INCOME (LOSS) | (3,241,000) | ||
COMPONENTS OF OTHER COMPREHENSIVE INCOME (LOSS) | |||
Foreign currency translation adjustments | [2] | (1,000) | |
Other comprehensive income | (1,000) | ||
COMPREHENSIVE INCOME (LOSS) | (3,256,000) | ||
Amounts attributable to noncontrolling interest: | |||
Net (income) loss attributable to noncontrolling interest | [2] | 14,000 | |
Foreign currency translation adjustments | [2] | 1,000 | |
Comprehensive (income) loss attributable to noncontrolling interest | 15,000 | ||
COMPREHENSIVE INCOME (LOSS) | $ (3,241,000) | ||
NET LOSS PER COMMON SHARE - BASIC AND DILUTED | $ (0.09) | ||
[1] | Corrections of other misstatements: period adjustment of variable consideration resulted in a decrease of $600,000 in revenues, net; reclassification of shipping cost and royalty expense to cost of sales resulted in an increase of $59,000 in cost of sales and decreases of $6,000 and $53,000 in selling expense and general and administrative expense, respectively; correction of stock modification accounting resulted in a decrease of $52,000 in general and administrative expense; correction of accounting treatment for convertible notes resulted in an increase of $1.3 million in interest expense; a correction of tax provision resulted in an increase of $52,000 in tax provision | ||
[2] | EJ Holdings adjustments: the correction of this misstatement resulted in increases of $55,000 in general and administrative expenses, $9,000 in loss on equity method investment and $34,000 in interest income and decreases of $14,000 in net income attributable to noncontrolling interest and $1,000 in foreign currency translation adjustments. | ||
[3] | Warrant adjustments: the correction of this misstatement resulted in an increase of $312,000 in interest expense and a decrease of $890,000 in change in fair value of warrant derivative liabilities. |
BASIS OF PRESENTATION (Parent_2
BASIS OF PRESENTATION (Parenthetical) (Details 2) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
Increase (decrease) in general and administrative expense | $ 3,657,000 | $ 3,737,000 | |
Loss on equity method investment | (407,000) | 9,000 | |
Increase (decrease) in interest expense | 1,800,000 | 8,612,000 | |
Increase (decrease) in change in fair value of warrant derivative liabilities | 25,000 | (938,000) | |
Increase (decrease) in revenues, net | 6,954,000 | 4,707,000 | |
Decrease in selling expense | 1,068,000 | 1,479,000 | |
INCOME TAXES | $ 286,000 | 52,000 | |
Adjustments [Member] | |||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
Increase (decrease) in general and administrative expense | [1],[2] | 56,000 | |
Loss on equity method investment | [2] | 9,000 | |
Decreases in net income attributable to noncontrolling interest | [2] | (14,000) | |
Decrease in foreign currency translation adjustments | [2] | (1,000) | |
Increase (decrease) in interest expense | [1],[3] | 1,647,000 | |
Increase (decrease) in change in fair value of warrant derivative liabilities | [2],[3] | (890,000) | |
Increase (decrease) in revenues, net | [1] | (600,000) | |
Decrease in selling expense | [1] | (6,000) | |
INCOME TAXES | 52,000 | ||
Adjustments [Member] | Warrant Adjustments [Member] | |||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
Increase (decrease) in interest expense | 312,000 | ||
Increase (decrease) in change in fair value of warrant derivative liabilities | (890,000) | ||
Adjustments [Member] | Variable Consideration [Member] | |||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
Increase (decrease) in revenues, net | (600,000) | ||
Adjustments [Member] | Reclassification of Shipping Cost and Royalty Expense [Member] | |||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
Increase (decrease) in general and administrative expense | (53,000) | ||
Increase in cost of sales | 59,000 | ||
Decrease in selling expense | (6,000) | ||
Adjustments [Member] | Stock Modification Accounting [Member] | |||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
Increase (decrease) in general and administrative expense | (52,000) | ||
Adjustments [Member] | Accounting Treatment for Convertible Notes [Member] | |||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
Increase (decrease) in interest expense | 1,300,000 | ||
Adjustments [Member] | EJ Holding, Inc. [Member] | |||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
Increase (decrease) in general and administrative expense | 55,000 | ||
Loss on equity method investment | (9,000) | ||
Increase in interest income | 34,000 | ||
Decreases in net income attributable to noncontrolling interest | (14,000) | ||
Decrease in foreign currency translation adjustments | $ (1,000) | ||
[1] | Corrections of other misstatements: period adjustment of variable consideration resulted in a decrease of $600,000 in revenues, net; reclassification of shipping cost and royalty expense to cost of sales resulted in an increase of $59,000 in cost of sales and decreases of $6,000 and $53,000 in selling expense and general and administrative expense, respectively; correction of stock modification accounting resulted in a decrease of $52,000 in general and administrative expense; correction of accounting treatment for convertible notes resulted in an increase of $1.3 million in interest expense; a correction of tax provision resulted in an increase of $52,000 in tax provision | ||
[2] | EJ Holdings adjustments: the correction of this misstatement resulted in increases of $55,000 in general and administrative expenses, $9,000 in loss on equity method investment and $34,000 in interest income and decreases of $14,000 in net income attributable to noncontrolling interest and $1,000 in foreign currency translation adjustments. | ||
[3] | Warrant adjustments: the correction of this misstatement resulted in an increase of $312,000 in interest expense and a decrease of $890,000 in change in fair value of warrant derivative liabilities. |
BASIS OF PRESENTATION (Detail_4
BASIS OF PRESENTATION (Details 3) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net loss | $ 5,509 | $ (17,408) | |
Adjustments to reconcile net loss to net cash flows from operating activities | |||
Depreciation and amortization | 15 | 17 | |
Amortization of discount of convertible notes | 1,302 | 7,288 | |
Foreign exchange adjustments | (50) | 89 | |
Net losses (gains) on equity investment in marketable securities | (6,839) | 6,457 | |
Loss (gain) on equity method investment | 407 | (9) | |
Share-based compensation | 209 | 588 | |
Change in fair value of warrant derivative liabilities | (25) | 938 | |
Net changes in operating assets and liabilities | |||
Accounts receivable | 249 | (143) | |
Inventories | (285) | (1,091) | |
Prepaid expenses and other current assets | 260 | (115) | |
Other non-current assets | 133 | (2,813) | |
Income tax | 52 | ||
Accounts payable and accrued expenses | 2,449 | 2,725 | |
Deferred revenue | 500 | ||
Deferred rent | (287) | ||
Other current liabilities | (5,025) | 36 | |
Other long-term liabilities | 3,184 | 1,997 | |
Net cash flows provided by (used in) operating activities | 1,808 | (1,179) | |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchases of property and equipment | (3) | (16) | |
Net cash flows used in investing activities | (3) | (16) | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Payments of convertible notes | (1,500) | (3,048) | |
Proceeds from exercise of warrants | 5 | ||
Proceeds from issuance of common stock | 142 | 2,530 | |
Proceeds from conversion of notes payable to common stock | 21 | ||
Net cash flows used in financing activities | (1,358) | (492) | |
Effect of exchange rate changes on cash | (3) | 22 | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 444 | (1,665) | |
Cash, cash equivalents and restricted cash, beginning of period | 1,769 | 3,905 | |
Cash, cash equivalents and restricted cash, end of period | 2,213 | 2,240 | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITIES | |||
Interest paid | $ 312 | 385 | |
NON-CASH INVESTING AND FINANCING ACTIVITIES | |||
Exercised of warrants and options on cashless basis | 3,374 | ||
Conversion of notes payable to common stock | 329 | ||
Initial recognition of right to use assets | 2,922 | ||
Previously Reported [Member] | |||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net loss | (14,153) | ||
Adjustments to reconcile net loss to net cash flows from operating activities | |||
Depreciation and amortization | 17 | ||
Amortization of discount of convertible notes | 5,641 | ||
Foreign exchange adjustments | (19) | ||
Net losses (gains) on equity investment in marketable securities | 6,457 | ||
Share-based compensation | 536 | ||
Change in fair value of warrant derivative liabilities | 48 | ||
Net changes in operating assets and liabilities | |||
Accounts receivable | (409) | ||
Inventories | (1,091) | ||
Prepaid expenses and other current assets | (83) | ||
Other non-current assets | (2,813) | ||
Accounts payable and accrued expenses | 2,339 | ||
Deferred revenue | 500 | ||
Deferred rent | (287) | ||
Other current liabilities | 36 | ||
Other long-term liabilities | 1,997 | ||
Net cash flows provided by (used in) operating activities | (1,284) | ||
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchases of property and equipment | (16) | ||
Net cash flows used in investing activities | (16) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Payments of convertible notes | (3,048) | ||
Proceeds from exercise of warrants | 5 | ||
Proceeds from issuance of common stock | 2,530 | ||
Proceeds from conversion of notes payable to common stock | 21 | ||
Net cash flows used in financing activities | (492) | ||
Effect of exchange rate changes on cash | 22 | ||
Net increase (decrease) in cash, cash equivalents and restricted cash | (1,770) | ||
Cash, cash equivalents and restricted cash, beginning of period | 17,080 | ||
Cash, cash equivalents and restricted cash, end of period | 15,310 | ||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITIES | |||
Interest paid | 385 | ||
NON-CASH INVESTING AND FINANCING ACTIVITIES | |||
Exercised of warrants and options on cashless basis | 3,374 | ||
Conversion of notes payable to common stock | 329 | ||
Initial recognition of right to use assets | 2,922 | ||
Adjustments [Member] | |||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net loss | (3,255) | ||
Adjustments to reconcile net loss to net cash flows from operating activities | |||
Amortization of discount of convertible notes | [1],[2] | 1,647 | |
Foreign exchange adjustments | 108 | ||
Loss (gain) on equity method investment | [3] | (9) | |
Share-based compensation | [1] | 52 | |
Change in fair value of warrant derivative liabilities | [2],[3] | 890 | |
Net changes in operating assets and liabilities | |||
Accounts receivable | 266 | ||
Prepaid expenses and other current assets | (32) | ||
Income tax | 52 | ||
Accounts payable and accrued expenses | 386 | ||
Net cash flows provided by (used in) operating activities | 105 | ||
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Net increase (decrease) in cash, cash equivalents and restricted cash | 105 | ||
Cash, cash equivalents and restricted cash, beginning of period | (13,175) | ||
Cash, cash equivalents and restricted cash, end of period | $ (13,070) | ||
[1] | Corrections of other misstatements: period adjustment of variable consideration resulted in a decrease of $600,000 in revenues, net; reclassification of shipping cost and royalty expense to cost of sales resulted in an increase of $59,000 in cost of sales and decreases of $6,000 and $53,000 in selling expense and general and administrative expense, respectively; correction of stock modification accounting resulted in a decrease of $52,000 in general and administrative expense; correction of accounting treatment for convertible notes resulted in an increase of $1.3 million in interest expense; a correction of tax provision resulted in an increase of $52,000 in tax provision | ||
[2] | Warrant adjustments: the correction of this misstatement resulted in an increase of $312,000 in interest expense and a decrease of $890,000 in change in fair value of warrant derivative liabilities. | ||
[3] | EJ Holdings adjustments: the correction of this misstatement resulted in increases of $55,000 in general and administrative expenses, $9,000 in loss on equity method investment and $34,000 in interest income and decreases of $14,000 in net income attributable to noncontrolling interest and $1,000 in foreign currency translation adjustments. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accounting Policies [Abstract] | ||
Potentially dilutive securities outstanding | 16,698,829 | 17,995,514 |
REVENUES (Details)
REVENUES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | ||
Revenues, net | $ 6,954 | $ 4,707 |
Endari [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues, net | 6,714 | 4,602 |
Other [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues, net | $ 240 | $ 105 |
REVENUES (Details 1)
REVENUES (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | ||
Beginning balance | $ 1,897 | $ 981 |
Provision related to sales in the current year | 2,135 | 1,075 |
Adjustments related prior period sales | (50) | |
Credit and payments made | (1,503) | (897) |
Ending balance | 2,479 | 1,159 |
Trade Discounts, Allowances and Chargebacks [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Beginning balance | 228 | 84 |
Provision related to sales in the current year | 942 | 292 |
Adjustments related prior period sales | 16 | |
Credit and payments made | (794) | (316) |
Ending balance | 392 | 60 |
Government Rebates and Other Incentives [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Beginning balance | 1,354 | 798 |
Provision related to sales in the current year | 1,122 | 729 |
Adjustments related prior period sales | (44) | |
Credit and payments made | (709) | (581) |
Ending balance | 1,723 | 946 |
Returns [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Beginning balance | 315 | 99 |
Provision related to sales in the current year | 71 | 54 |
Adjustments related prior period sales | (22) | |
Ending balance | $ 364 | $ 153 |
REVENUES (Details 2)
REVENUES (Details 2) - Sales Revenue, Net [Member] - Customer Concentration Risk [Member] | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Customer A [Member] | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Concentration risk, percentage | 54.00% | 65.00% |
Customer B [Member] | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Concentration risk, percentage | 27.00% | 19.00% |
SELECTED FINANCIAL STATEMENT _5
SELECTED FINANCIAL STATEMENT CAPTIONS - ASSETS (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Inventory Net [Abstract] | |||
Raw materials and components | $ 1,409 | $ 1,187 | |
Work-in-process | 1,851 | 1,629 | |
Finished goods | 5,109 | 5,204 | |
Inventory reserve | (114) | (49) | |
Total | $ 8,255 | $ 7,971 | $ 5,795 |
SELECTED FINANCIAL STATEMENT _6
SELECTED FINANCIAL STATEMENT CAPTIONS - ASSETS (Details 1) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Prepaid Expense And Other Assets Current [Abstract] | |||
Prepaid insurance | $ 453 | $ 735 | |
Other prepaid expenses and current assets | 649 | 667 | |
Prepaid expenses and other current assets | $ 1,102 | $ 1,402 | $ 603 |
SELECTED FINANCIAL STATEMENT _7
SELECTED FINANCIAL STATEMENT CAPTIONS - ASSETS (Details 2) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Property and equipment | |||
Property and equipment, gross | $ 472 | $ 507 | |
Less: accumulated depreciation | (330) | (356) | |
Property and Equipment, net | 142 | 151 | $ 153 |
Equipment [Member] | |||
Property and equipment | |||
Property and equipment, gross | 338 | 335 | |
Leasehold Improvements [Member] | |||
Property and equipment | |||
Property and equipment, gross | 39 | 77 | |
Furniture and Fixtures [Member] | |||
Property and equipment | |||
Property and equipment, gross | $ 95 | $ 95 |
SELECTED FINANCIAL STATEMENT _8
SELECTED FINANCIAL STATEMENT CAPTIONS - ASSETS (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property Plant And Equipment [Abstract] | ||
Depreciation expense | $ 12,000 | $ 14,000 |
INVESTMENTS (Details Narrative)
INVESTMENTS (Details Narrative) - USD ($) | Feb. 21, 2020 | Oct. 31, 2018 | Jul. 31, 2017 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule Of Investments [Line Items] | |||||||
Shares held as marketable securities | 6,643,559 | ||||||
Impairment loss on equity securities | $ 0 | $ 0 | $ 515,000 | ||||
Net unrealized gain (loss) on marketable securities available-for-sale | 6,800,000 | $ (6,500,000) | |||||
Debt instrument, maturity date | Apr. 21, 2021 | ||||||
EJ Holding, Inc. [Member] | |||||||
Schedule Of Investments [Line Items] | |||||||
Investment amount | $ 32,000 | ||||||
Percentage of voting interest | 40.00% | ||||||
Unsecured debt | $ 13,600,000 | $ 13,900,000 | $ 13,800,000 | ||||
Debt instrument, maturity date | Sep. 30, 2028 | ||||||
Debt instrument annual interest | 1.00% | ||||||
Telcon, Inc. ("Telcon") [Member] | |||||||
Schedule Of Investments [Line Items] | |||||||
Shares held as marketable securities | 6,643,559 | 6,643,559 | |||||
Investment | $ 31,800,000 | ||||||
Investment, closing price | $ 5.23 | $ 4.20 | |||||
Telcon, Inc. ("Telcon") [Member] | API Supply Agreement [Member] | 10-year Convertible Bond [Member] | |||||||
Schedule Of Investments [Line Items] | |||||||
Convertible notes payable, carrying amount | $ 31,800,000 | ||||||
Japan Industrial Partners [Member] | EJ Holding, Inc. [Member] | |||||||
Schedule Of Investments [Line Items] | |||||||
Equity interest | 60.00% |
INVESTMENTS (Details 1)
INVESTMENTS (Details 1) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule Of Investments [Line Items] | ||
Fair Value with Changes Recognized in Income | $ 34,768 | $ 27,929 |
Marketable Equity Securities [Member] | ||
Schedule Of Investments [Line Items] | ||
Fair Value with Changes Recognized in Income | $ 34,768 | $ 27,929 |
INVESTMENTS (Details 2)
INVESTMENTS (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Schedule Of Investments [Line Items] | ||
REVENUES, NET | $ 6,954 | $ 4,707 |
GROSS PROFIT | 6,476 | 4,448 |
Net Income (loss) | 5,509 | (17,408) |
EJ Holding, Inc. [Member] | ||
Schedule Of Investments [Line Items] | ||
REVENUES, NET | 84 | 57 |
GROSS PROFIT | 84 | 57 |
Net Income (loss) | $ (1,021) | $ 23 |
SELECTED FINANCIAL STATEMENT _9
SELECTED FINANCIAL STATEMENT CAPTIONS - LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Accounts payable: | |||
Clinical and regulatory expenses | $ 279 | $ 232 | |
Professional fees | 1,347 | 1,183 | |
Selling expenses | 1,068 | 1,303 | |
Manufacturing costs | 6,369 | 4,541 | |
Other vendors | 264 | 18 | |
Total accounts payable | 9,327 | 7,277 | |
Accrued interest payable, related parties | 173 | 42 | |
Accrued interest payable | 462 | 991 | |
Accrued expenses: | |||
Payroll expenses | 868 | 891 | |
Government rebates and other rebates | 1,723 | 1,355 | |
Due to EJ Holdings | 347 | 238 | |
Other accrued expenses | 309 | 704 | |
Total accrued expenses | 3,247 | 3,188 | |
Total accounts payable and accrued expenses | $ 13,209 | $ 11,498 | $ 10,697 |
SELECTED FINANCIAL STATEMENT_10
SELECTED FINANCIAL STATEMENT CAPTIONS - LIABILITIES (Details 1) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Other Long Term Liabilities [Line Items] | |||
Other long-term liabilities | $ 36,968 | $ 33,750 | $ 35,637 |
Other Long-Term Liabilities [Member] | |||
Other Long Term Liabilities [Line Items] | |||
Other long-term liabilities | 10 | 8 | |
Unearned Revenue [Member] | |||
Other Long Term Liabilities [Line Items] | |||
Other long-term liabilities | 10,536 | 10,500 | |
Trade Discount [Member] | |||
Other Long Term Liabilities [Line Items] | |||
Other long-term liabilities | $ 26,422 | $ 23,242 |
SELECTED FINANCIAL STATEMENT_11
SELECTED FINANCIAL STATEMENT CAPTIONS - LIABILITIES (Details Narrative) - USD ($) $ in Thousands | Jun. 12, 2017 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Summary of Significant Accounting Policy [Line Items] | ||||
Convertible notes payable to related parties, net of discount | $ 13,896 | |||
API Supply Agreement [Member] | Telcon, Inc. ("Telcon") [Member] | ||||
Summary of Significant Accounting Policy [Line Items] | ||||
Proceeds from supply agreement | $ 31,800 | |||
API Supply Agreement [Member] | Telcon, Inc. ("Telcon") [Member] | Pharmaceutical Grade L-glutamine [Member] | ||||
Summary of Significant Accounting Policy [Line Items] | ||||
PGLG, purchase price | $ 2,000 | $ 1,800 | ||
Convertible notes payable to related parties, net of discount | $ 5,800 | $ 3,700 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020USD ($)Equity_Instrument$ / shares | Dec. 31, 2019USD ($)Equity_Instrument | |
Debt Instrument [Line Items] | ||
Conversion Price | $ / shares | $ 10 | |
Principal Outstanding | $ 16,338 | $ 17,142 |
Discount Amount | 2,406 | 3,190 |
Carrying Amount | $ 13,932 | $ 13,952 |
Shares Underlying Notes | Equity_Instrument | 4,954,800 | 1,444,291 |
2013 Notes payable [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 10.00% | 10.00% |
Term of Notes | Due on demand | |
Principal Outstanding | $ 925 | $ 920 |
Carrying Amount | $ 925 | $ 920 |
2019 Notes payable [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 11.00% | 11.00% |
Principal Outstanding | $ 2,835 | $ 2,829 |
Carrying Amount | $ 2,835 | 2,829 |
2019 Notes payable [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Term of Notes | Due on demand | |
2019 Notes payable [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Term of Notes | 6 months | |
2020 Notes payable [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 11.00% | |
Term of Notes | Due on demand | |
Principal Outstanding | $ 194 | |
Carrying Amount | 194 | |
Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 3,954 | 3,749 |
Carrying Amount | 3,954 | 3,749 |
Principal Outstanding, Current | 3,954 | 3,749 |
Notes payable, current | $ 3,954 | $ 3,749 |
2016 Notes payable - related parties [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 10.00% | 10.00% |
Term of Notes | Due on demand | |
Principal Outstanding | $ 20 | $ 20 |
Carrying Amount | $ 20 | $ 20 |
2018 Notes payable - related parties [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 11.00% | |
Term of Notes | Due on demand | |
Principal Outstanding | $ 159 | |
Carrying Amount | $ 159 | |
2019 Notes payable - related parties [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 10.00% | 10.00% |
Term of Notes | Due on demand | |
Principal Outstanding | $ 14 | $ 14 |
Carrying Amount | 14 | 14 |
Notes payable - related parties [Member] | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 34 | 193 |
Carrying Amount | 34 | 193 |
Principal Outstanding, Current | 34 | 193 |
Notes payable, current | $ 34 | $ 193 |
NOTES PAYABLE (Details 1)
NOTES PAYABLE (Details 1) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020USD ($)Equity_Instrument$ / shares | Dec. 31, 2019USD ($)Equity_Instrument$ / shares | ||
Debt Instrument [Line Items] | |||
Conversion Price | $ / shares | $ 10 | ||
Principal Outstanding | $ 16,338 | $ 17,142 | |
Discount Amount | 2,406 | 3,190 | |
Carrying Amount | $ 13,932 | $ 13,952 | |
Shares Underlying Notes | Equity_Instrument | 4,954,800 | 1,444,291 | |
2019 Convertible Debentures [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 10.00% | 10.00% | |
Term of Notes | 18 months | 18 months | |
Principal Outstanding | $ 9,200 | $ 10,200 | |
Discount Amount | 2,406 | 3,185 | |
Carrying Amount | $ 6,794 | $ 7,015 | |
Shares Underlying Notes | Equity_Instrument | 4,638,333 | 1,080,415 | |
2019 Convertible Debentures [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Conversion Price | $ / shares | $ 2 | $ 2 | [1] |
2019 Convertible Debentures [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Conversion Price | $ / shares | $ 9.52 | $ 9.52 | [1] |
Convertible Debentures [Member] | |||
Debt Instrument [Line Items] | |||
Principal Outstanding | $ 9,200 | $ 10,200 | |
Discount Amount | 2,406 | 3,185 | |
Carrying Amount | $ 6,794 | $ 7,015 | |
Shares Underlying Notes | Equity_Instrument | 4,638,333 | 1,080,415 | |
Principal Outstanding, Current | $ 8,000 | $ 10,200 | |
Discount Amount, Current | 2,092 | 3,185 | |
Convertible Debentures, Current | $ 5,908 | $ 7,015 | |
Shares Underlying Notes, Current | Equity_Instrument | 4,033,333 | 1,080,415 | |
Principal Outstanding, Non Current | $ 1,200 | ||
Discount Amount, Non Current | 314 | ||
Convertible Debentures, Non Current | $ 886 | ||
Shares Underlying Notes, Non Current | Equity_Instrument | 605,000 | ||
[1] | The notes are convertible to Emmaus Life Sciences, Inc. shares . |
NOTES PAYABLE (Details 2)
NOTES PAYABLE (Details 2) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020USD ($)Equity_Instrument$ / shares | Dec. 31, 2019USD ($)Equity_Instrument$ / shares | Mar. 31, 2019USD ($) | ||
Debt Instrument [Line Items] | ||||
Conversion Price | $ / shares | $ 10 | |||
Principal Outstanding | $ 16,338 | $ 17,142 | ||
Discount Amount | 2,406 | 3,190 | ||
Carrying Amount | $ 13,932 | $ 13,952 | ||
Shares Underlying Notes | Equity_Instrument | 4,954,800 | 1,444,291 | ||
Convertible notes payable, Current | $ 3,150 | $ 2,995 | $ 15,157 | |
2020 Convertible Notes Payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 12.00% | |||
Term of Notes | 3 years | |||
Conversion Price | $ / shares | $ 10 | |||
Principal Outstanding | $ 3,150 | |||
Carrying Amount | $ 3,150 | |||
Shares Underlying Notes | Equity_Instrument | 316,467 | |||
Convertible Notes Payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | $ 3,150 | 3,000 | ||
Discount Amount | 5 | |||
Carrying Amount | $ 3,150 | $ 2,995 | ||
Shares Underlying Notes | Equity_Instrument | 316,467 | 363,876 | ||
Principal Outstanding, Current | $ 3,150 | $ 3,000 | ||
Discount Amount, Current | 5 | |||
Convertible notes payable, Current | $ 3,150 | $ 2,995 | ||
Shares Underlying Notes, Current | Equity_Instrument | 316,467 | 363,876 | ||
2018 Convertible Notes Payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 10.00% | |||
Term of Notes | 2 years | |||
Conversion Price | $ / shares | [1] | $ 10 | ||
Principal Outstanding | $ 3,000 | |||
Discount Amount | 5 | |||
Carrying Amount | $ 2,995 | |||
Shares Underlying Notes | Equity_Instrument | 363,876 | |||
[1] | The notes are convertible to EMI Holding, Inc. shares . |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Weighted-average stated interest rate | 10.00% | 10.00% |
Average effective annual interest rate | 58.00% | 66.00% |
Conversion Price | $ 10 | |
Revolving Line of Credit Facility [Member] | Prime Rate [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument variable annual rate | 3.00% | |
Revolving Line of Credit Facility [Member] | Dr. Yutaka Niihara [Member] | ||
Debt Instrument [Line Items] | ||
Line of credit maximum borrowing capacity | $ 1,000,000 | |
Line of credit outstanding balances | $ 600,000 | $ 600,000 |
Line of credit effective annual interest rate | 10.40% | |
Line of credit expiration date | Nov. 22, 2022 | |
10% of Senior Secured Debentures [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 10.00% |
NOTES PAYABLE (Details 3)
NOTES PAYABLE (Details 3) $ in Thousands | Mar. 31, 2020USD ($) |
Long Term Debt By Maturity [Abstract] | |
2020 (nine months) | $ 12,138 |
2021 | 4,200 |
Total | $ 16,338 |
NOTES PAYABLE (Details 4)
NOTES PAYABLE (Details 4) - Amended and Restated 10% Senior Secured Convertible Debentures [Member] - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation Calculation Roll Forward | ||
Balance, beginning of period | $ 1 | |
Fair value at issuance date | $ 132 | |
Fair value at debt modification date | 118 | |
Change in fair value included in the statement of comprehensive (income) loss | 29 | (131) |
Balance, end of period | $ 148 | $ 1 |
NOTES PAYABLE (Details 5)
NOTES PAYABLE (Details 5) | Feb. 21, 2020$ / shares | Mar. 31, 2020$ / shares | Dec. 31, 2019$ / shares |
Debt Instrument [Line Items] | |||
Conversion Price | $ 10 | ||
Binomial Lattice Model [Member] | |||
Debt Instrument [Line Items] | |||
Stock price | $ 1.89 | 1.20 | $ 1.97 |
Conversion Price | $ 3 | $ 2 | $ 9.52 |
Binomial Lattice Model [Member] | Measurement Input, Selected Yield [Member] | |||
Debt Instrument [Line Items] | |||
Embedded derivative liability measurement input | 19.12 | 21.09 | 16.77 |
Binomial Lattice Model [Member] | Measurement Input, Expected Volatility (Peer Group) [Member] | |||
Debt Instrument [Line Items] | |||
Embedded derivative liability measurement input | 65 | 90 | 50 |
Binomial Lattice Model [Member] | Measurement Input, Expected Life (in Years) [Member] | |||
Debt Instrument [Line Items] | |||
Expected life (in years) | 1 year 1 month 28 days | 1 year 21 days | 9 months 21 days |
Binomial Lattice Model [Member] | Measurement Input, Risk Free Rate [Member] | |||
Debt Instrument [Line Items] | |||
Risk‑free rate | Term structure | Term structure | Term structure |
STOCKHOLDERS' DEFICIT (Details
STOCKHOLDERS' DEFICIT (Details Narrative) - USD ($) | Feb. 28, 2020 | Feb. 21, 2020 | Dec. 29, 2017 | Oct. 31, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Apr. 05, 2021 | Feb. 29, 2020 | Jan. 31, 2020 | Jul. 17, 2019 | Jul. 16, 2019 | Dec. 31, 2018 |
Class Of Warrant Or Right [Line Items] | |||||||||||||
Convertible notes | $ 13,932,000 | $ 13,952,000 | |||||||||||
Debt instrument exercise price | $ 3 | $ 5.87 | |||||||||||
Conversion Price | $ 10 | ||||||||||||
Maturity date | Apr. 21, 2021 | ||||||||||||
Conversion debentures price | $ 3 | $ 9.52 | |||||||||||
Share-based compensation | $ 209,000 | $ 588,000 | |||||||||||
Period remaining for recognition of unrecognized compensation cost | 1 year 6 months | ||||||||||||
Common stock issued for cash (net of issuance cost) | $ 142,000 | $ 2,530,000 | |||||||||||
Common Stock [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Common stock issued for cash (net of issuance cost) (in shares) | 515,743 | 322,920 | |||||||||||
Common stock issued for cash (net of issuance cost) | $ 1,000 | $ 1,000 | |||||||||||
2011 Stock Incentive Option Plan [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Total unrecognized compensation cost | $ 1,900,000 | ||||||||||||
2011 Stock Incentive Option Plan [Member] | Adjustment of Merger Exchange Ratio [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Exercisable term | 10 years | ||||||||||||
2011 Stock Incentive Option Plan [Member] | Adjustment of Merger Exchange Ratio [Member] | Common Stock [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Stock options granted to purchase common stock | 0 | 50,000 | |||||||||||
2011 Stock Incentive Option Plan [Member] | Adjustment of Merger Exchange Ratio [Member] | Share Based Compensation Award, Tranche One [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Vesting period | 1 year | ||||||||||||
Vesting percentage | 33.33% | ||||||||||||
2011 Stock Incentive Option Plan [Member] | Adjustment of Merger Exchange Ratio [Member] | Share Based Compensation Award, Tranche Two [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Vesting period | 2 years | ||||||||||||
Vesting percentage | 66.67% | ||||||||||||
2011 Stock Incentive Option Plan [Member] | Stock Options [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Number of shares authorized under the plan | 9,000,000 | ||||||||||||
Expiration period | 10 years | ||||||||||||
Vesting period | 3 years | ||||||||||||
Share-based compensation | $ 200,000 | $ 600,000 | |||||||||||
Amended and Restated Warrants [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Debt instrument exercise price | $ 5.87 | ||||||||||||
Amended and Restated Debentures [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Debt instrument exercise price | 2 | $ 2 | |||||||||||
Conversion debentures price | $ 2 | ||||||||||||
Initial shares under purchase agreement | 100,000 | ||||||||||||
Stock price | $ 2 | ||||||||||||
Senior Secured Convertible Debentures [Member] | Securities Purchase Agreement [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Percentage of monthly payments interest rate | 10.00% | ||||||||||||
Senior Secured Convertible Debentures [Member] | Amended and Restated Debentures [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Percentage of monthly payments interest rate | 10.00% | ||||||||||||
GPB Debt Holdings II, LLC [Member] | Amended and Restated Warrants [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Debt instrument exercise price | $ 10 | ||||||||||||
GPB Debt Holdings II, LLC [Member] | Maximum [Member] | Amended and Restated Warrants [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Debt face amount percentage | 1,460,000 | ||||||||||||
GPB Debt Holdings II, LLC [Member] | Senior Secured Convertible Promissory Note [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Debt face amount percentage | 240,764 | ||||||||||||
Debt instrument exercise price | $ 10.80 | ||||||||||||
Initial warrants exercisable period after issuance | 5 years | ||||||||||||
GPB Debt Holdings II, LLC [Member] | Purchase Agreement With 10% Senior Secured Debentures [Member] | Securities Purchase Agreement [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Percentage of monthly payments interest rate | 10.00% | ||||||||||||
Principal amount of debentures and warrants issued | $ 12,200,000 | ||||||||||||
Debenture and warrants issued to original loan | $ 13,200,000 | ||||||||||||
GPB Debt Holdings II, LLC [Member] | Purchase Agreement With 10% Senior Secured Debentures [Member] | Maximum [Member] | Securities Purchase Agreement [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Number of common stock to be purchased | 1,220,000 | ||||||||||||
GPB Debt Holdings II, LLC [Member] | Amended and Restated Debentures [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Conversion Price | $ 10 | ||||||||||||
GPB Debt Holdings II, LLC [Member] | Convertible Debt [Member] | Senior Secured Convertible Promissory Note [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Convertible notes | $ 13,000,000 | ||||||||||||
Convertible notes aggregate purchase price | $ 12,500,000 | ||||||||||||
Original issue discount percentage | 4.00% | ||||||||||||
Lincoln Park Capital Fund, LLC [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Initial shares under purchase agreement | 100,000 | ||||||||||||
Stock price | $ 2 | ||||||||||||
Maximum number of common shares elect to sell | 25,000,000 | ||||||||||||
Maximum purchase shares of common stock | 20,000 | ||||||||||||
Maximum purchase of common stock in single regular purchase | $ 1,000,000 | ||||||||||||
Common stock issued for cash (net of issuance cost) (in shares) | 415,743 | ||||||||||||
Common stock issued for cash (net of issuance cost) | $ 750,000 | ||||||||||||
Lincoln Park Capital Fund, LLC [Member] | Minimum [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Affiliates beneficial ownership percentage | 4.99% |
STOCKHOLDERS' DEFICIT (Details)
STOCKHOLDERS' DEFICIT (Details) - GPB Debt Holdings II, LLC [Member] - Liability Instrument - Warrants [Member] - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation Calculation Roll Forward | ||
Balance, beginning of period | $ 38 | $ 1,399 |
Change in fair value included in the statement of comprehensive loss | (25) | (1,361) |
Balance, end of period | $ 13 | $ 38 |
STOCKHOLDERS' DEFICIT (Detail_2
STOCKHOLDERS' DEFICIT (Details 1) | Mar. 31, 2020$ / sharesshares | Feb. 28, 2020 | Feb. 21, 2020 | Dec. 31, 2019$ / sharesshares |
Measurement Input, Risk Free Rate [Member] | ||||
Class Of Warrant Or Right [Line Items] | ||||
Warrants and rights outstanding, measurement input | 0.86 | 1.29 | ||
Measurement Input, Expected Volatility (Peer Group) [Member] | ||||
Class Of Warrant Or Right [Line Items] | ||||
Warrants and rights outstanding, measurement input | 93 | 92 | ||
Measurement Input, Expected Life (in Years) [Member] | ||||
Class Of Warrant Or Right [Line Items] | ||||
Expected life (in years) | 3 years 6 months 14 days | 3 years 6 months 21 days | ||
GPB Debt Holdings II, LLC [Member] | ||||
Class Of Warrant Or Right [Line Items] | ||||
Stock price | $ / shares | $ 1.20 | $ 1.97 | ||
Number outstanding | shares | 252,802 | 252,802 | ||
GPB Debt Holdings II, LLC [Member] | Measurement Input, Risk Free Rate [Member] | ||||
Class Of Warrant Or Right [Line Items] | ||||
Warrants and rights outstanding, measurement input | 0.30 | 1.64 | ||
GPB Debt Holdings II, LLC [Member] | Measurement Input, Expected Volatility (Peer Group) [Member] | ||||
Class Of Warrant Or Right [Line Items] | ||||
Warrants and rights outstanding, measurement input | 65 | 60 | ||
GPB Debt Holdings II, LLC [Member] | Measurement Input, Expected Life (in Years) [Member] | ||||
Class Of Warrant Or Right [Line Items] | ||||
Expected life (in years) | 3 years 3 months | 3 years 6 months | ||
GPB Debt Holdings II, LLC [Member] | Measurement Input, Expected Dividend Yield [Member] | ||||
Class Of Warrant Or Right [Line Items] | ||||
Warrants and rights outstanding, measurement input | 0 | 0 |
STOCKHOLDERS' DEFICIT (Detail_3
STOCKHOLDERS' DEFICIT (Details 2) | Feb. 28, 2020$ / shares | Feb. 21, 2020$ / shares | Jan. 31, 2020$ / shares |
Class Of Warrant Or Right [Line Items] | |||
Exercise price | $ 3 | $ 5.87 | |
Common stock fair value | $ 1.60 | 1.89 | |
Measurement Input, Exercise Price [Member] | |||
Class Of Warrant Or Right [Line Items] | |||
Exercise price | $ 2 | $ 3 | |
Measurement Input, Expected Volatility | |||
Class Of Warrant Or Right [Line Items] | |||
Warrants and rights outstanding, measurement input | 93 | 92 | |
Measurement Input, Risk Free Rate [Member] | |||
Class Of Warrant Or Right [Line Items] | |||
Warrants and rights outstanding, measurement input | 0.86 | 1.29 | |
Measurement Input, Expected Life (in Years) [Member] | |||
Class Of Warrant Or Right [Line Items] | |||
Expected life (in years) | 3 years 6 months 14 days | 3 years 6 months 21 days |
STOCKHOLDERS' DEFICIT (Detail_4
STOCKHOLDERS' DEFICIT (Details 3) - shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Class Of Warrant Or Right [Line Items] | ||
Warrants outstanding, ending | 4,815,146 | |
Warrant [Member] | ||
Class Of Warrant Or Right [Line Items] | ||
Warrants outstanding, beginning | 4,931,099 | 3,436,431 |
Assumed as part of Merger | 1,044,939 | |
Granted | 500,729 | |
Exercised | (51,000) | |
Cancelled, forfeited or expired | (115,953) | |
Warrants outstanding, ending | 4,815,146 | 4,931,099 |
STOCKHOLDERS' DEFICIT (Detail_5
STOCKHOLDERS' DEFICIT (Details 4) | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 4,815,146 |
Total, Exercisable | 4,815,146 |
Warrants Issued Prior to January 1, 2019 - Exercise Price $2.00-$10.76 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 3,439,007 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 2 years 4 months 17 days |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 4.38 |
Total, Exercisable | 3,439,007 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 4.38 |
Warrants Issued Prior to January 1, 2019 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 3,439,007 |
Total, Exercisable | 3,439,007 |
Warrants Issued in 2019 - Exercise Price $ 6.12 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 32,391 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 4 years 1 month 28 days |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 6.12 |
Total, Exercisable | 32,391 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 6.12 |
Warrants Issued in 2019 - Exercise Price $12.00 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 76,575 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 3 years 5 months 23 days |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 12 |
Total, Exercisable | 76,575 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 12 |
Warrants Issued in 2019 - Exercise Price $14.04 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 174,999 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 2 years 11 months 26 days |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 14.04 |
Total, Exercisable | 174,999 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 14.04 |
Warrants Issued in 2019 - Exercise Price $ 31.50 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 737,975 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 2 years 3 months 25 days |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 31.50 |
Total, Exercisable | 737,975 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 31.50 |
Warrants Issued in 2019 - Exercise Price $ 36.24 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 22,333 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 2 years 3 months 25 days |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 36.24 |
Total, Exercisable | 22,333 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 36.24 |
Warrants Issued in 2019 - Exercise Price $ 60.00 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 666 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 9 months |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 60 |
Total, Exercisable | 666 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 60 |
Warrants Issued in 2019 - Exercise Price $ 2.00 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 256,200 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 3 years 6 months 21 days |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 2 |
Total, Exercisable | 256,200 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 2 |
Warrants Issued in 2019 - Exercise Price $ 7.68 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 75,000 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 4 years 3 months 18 days |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 7.68 |
Total, Exercisable | 75,000 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 7.68 |
Warrants Issued in 2019 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 1,376,139 |
Total, Exercisable | 1,376,139 |
STOCKHOLDERS' DEFICIT (Detail_6
STOCKHOLDERS' DEFICIT (Details 5) - 2011 Stock Incentive Option Plan [Member] - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | ||
Class Of Warrant Or Right [Line Items] | |||
Number of Options outstanding, beginning | 7,245,350 | 6,642,200 | |
Number of Options, Granted or deemed granted | 0 | 636,683 | [1] |
Number of Options, Exercised | 0 | (167) | |
Number of Options, Cancelled, forfeited and expired | 0 | (33,366) | |
Number of Options outstanding, end | 7,245,350 | 7,245,350 | |
Number of Options, Options exercisable | 7,039,339 | 7,001,680 | |
Number of Options, Options available for future grant | 2,167,150 | 2,167,150 | |
Weighted-Average Exercise Price, Options outstanding, beginning | $ 4.68 | $ 4.40 | |
Weighted-Average Exercise Price, Granted or deemed granted | 0 | 10.10 | |
Weighted-Average Exercise Price, Exercised | 0 | 5 | |
Weighted-Average Exercise Price, Cancelled, forfeited and expired | 0 | 11.29 | |
Weighted-Average Exercise Price, Options outstanding, end | 4.68 | 4.68 | |
Weighted-Average Exercise Price, Options exercisable | $ 4.51 | $ 4.47 | |
[1] | Upon the Merger, the exercise prices of outstanding EMI options and number of shares of the Company common stock underlying the options were adjusted based upon the exchange ratio in the Merger. |
INCOME TAX (Details Narrative)
INCOME TAX (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Provision for income tax | $ 286,000 | $ 52,000 |
Unrecognized tax benefits | $ 0 | $ 0 |
LEASES (Details Narrative)
LEASES (Details Narrative) | Jan. 01, 2019USD ($) | Mar. 31, 2020USD ($)ft² | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) |
Leases [Line Items] | ||||
Rent expense | $ 311,000 | $ 201,000 | ||
Right of use assets | 4,344,000 | 2,838,000 | $ 4,474,000 | |
Operating lease liabilities | 4,889,000 | |||
Deferred rent | (287,000) | |||
Cumulative-effect increase on our accumulated deficit | $ 220,920,000 | $ 188,795,000 | $ 226,229,000 | |
Weighted average remaining term of leases | 6 years 3 months 18 days | |||
Weighted average discount rate | 12.80% | |||
ASC 842 [Member] | ||||
Leases [Line Items] | ||||
Right of use assets | $ 3,000,000 | |||
Operating lease liabilities | 3,300,000 | |||
Deferred rent | (287,000) | |||
ASC 842 [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||||
Leases [Line Items] | ||||
Cumulative-effect increase on our accumulated deficit | $ 29,000 | |||
Torrance, California [Member] | ||||
Leases [Line Items] | ||||
Operating lease, leased space | ft² | 21,293 | |||
Operating lease, base rental per month | $ 78,543 | |||
Operating lease, expiration date | Sep. 30, 2026 | |||
New York [Member] | ||||
Leases [Line Items] | ||||
Operating lease, expiration date | Jan. 31, 2023 | |||
Operating lease, additional space for rent | ft² | 1,850 | |||
Operating lease, additional base rent per month | $ 8,479 | |||
Tokyo, Japan [Member] | ||||
Leases [Line Items] | ||||
Operating lease, leased space | ft² | 1,322 | |||
Operating lease, expiration date | Sep. 30, 2020 |
LEASES (Details)
LEASES (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Leases [Abstract] | |
2020 (nine months) | $ 811 |
2021 | 1,080 |
2022 | 1,110 |
2023 | 1,043 |
2024 and thereafter | 2,983 |
Total lease payments | 7,027 |
Less: Interest | 2,138 |
Present value of lease liabilities | $ 4,889 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - Telcon RF Pharmaceuticals, Inc. (?Telcon?) [Member] $ in Millions | Jul. 12, 2017USD ($)Numberkg$ / kg | Jun. 12, 2017USD ($) | Jun. 30, 2020$ / kg |
API Supply Agreement [Member] | |||
Proceeds from supply agreement | $ 31.8 | ||
API Supply Agreement [Member] | Pharmaceutical Grade L-glutamine [Member] | |||
Percentage of right to supply | 25.00% | ||
Agreement term | 15 years | ||
Revised API Agreement [Member] | |||
Agreement term | 5 years | ||
Number of renewals | Number | 10 | ||
Purchase quantity | kg | 940,000 | ||
Unit price of grade L-glutamine | $ / kg | 50 | 100 | |
Purchase amount | $ 47 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | |||
Short-term Debt [Line Items] | ||||
Principal Amount Outstanding | $ 13,932 | $ 13,952 | ||
Conversion Rate (in dollars per share) | $ 10 | |||
Yutaka Niihara [Member] | ||||
Short-term Debt [Line Items] | ||||
Interest Rate | 5.25% | 5.00% | ||
Date of Loan | Dec. 27, 2019 | Dec. 27, 2019 | ||
Term of Loan | Due on Demand | Due on Demand | ||
Principal Amount Outstanding | $ 600 | $ 600 | ||
Amount of Interest Paid | 10 | |||
Highest Principal Outstanding | 600 | |||
Revolving Line of Credit Facility [Member] | ||||
Short-term Debt [Line Items] | ||||
Principal Amount Outstanding | 600 | 600 | ||
Amount of Interest Paid | $ 10 | |||
Highest Principal Outstanding | $ 600 | |||
Lan T. Tran [Member] | ||||
Short-term Debt [Line Items] | ||||
Interest Rate | [1] | 10.00% | 10.00% | |
Date of Loan | [1] | Apr. 29, 2016 | Apr. 29, 2016 | |
Term of Loan | [1] | Due on Demand | Due on Demand | |
Principal Amount Outstanding | [1] | $ 20 | $ 20 | |
Highest Principal Outstanding | [1] | $ 20 | ||
Lan T. Tran [Member] | ||||
Short-term Debt [Line Items] | ||||
Interest Rate | [1] | 11.00% | 11.00% | |
Date of Loan | [1] | Feb. 10, 2018 | Feb. 10, 2018 | |
Term of Loan | [1] | Due on Demand | Due on Demand | |
Principal Amount Outstanding | [1] | $ 159 | ||
Amount of Interest Paid | [1] | $ 35 | ||
Highest Principal Outstanding | [1] | $ 159 | ||
Lan T. Tran [Member] | ||||
Short-term Debt [Line Items] | ||||
Interest Rate | [1] | 10.00% | 10.00% | |
Date of Loan | [1] | Feb. 9, 2019 | Feb. 9, 2019 | |
Term of Loan | [1] | Due on Demand | Due on Demand | |
Principal Amount Outstanding | [1] | $ 14 | $ 14 | |
Highest Principal Outstanding | [1] | 14 | ||
Promissory note payable to related parties [Member] | ||||
Short-term Debt [Line Items] | ||||
Principal Amount Outstanding | 34 | [1] | 193 | |
Amount of Interest Paid | 35 | [1] | 82 | |
Highest Principal Outstanding | 1,359 | |||
Amount of Principal Repaid | $ 277 | |||
Promissory note payable and Revolving line of credit [Member] | ||||
Short-term Debt [Line Items] | ||||
Principal Amount Outstanding | 634 | |||
Amount of Interest Paid | $ 45 | |||
Hope International Hospice, Inc. [Member] | ||||
Short-term Debt [Line Items] | ||||
Interest Rate | [2] | 10.00% | ||
Date of Loan | [2] | Jun. 3, 2016 | ||
Term of Loan | [2] | Due on Demand | ||
Amount of Interest Paid | [2] | $ 78 | ||
Highest Principal Outstanding | [2] | 250 | ||
Amount of Principal Repaid | [2] | $ 250 | ||
Lan T. Tran [Member] | ||||
Short-term Debt [Line Items] | ||||
Interest Rate | [1] | 10.00% | ||
Date of Loan | [1] | Feb. 9, 2017 | ||
Term of Loan | [1] | Due on Demand | ||
Amount of Interest Paid | [1] | $ 2 | ||
Highest Principal Outstanding | [1] | $ 12 | ||
Yutaka Niihara [Member] | ||||
Short-term Debt [Line Items] | ||||
Interest Rate | [1],[3] | 10.00% | ||
Date of Loan | [1],[3] | Sep. 14, 2017 | ||
Term of Loan | [1],[3] | Due on Demand | ||
Amount of Interest Paid | [1],[3] | $ 2 | ||
Highest Principal Outstanding | [1],[3] | 904 | ||
Amount of Principal Repaid | [1],[3] | $ 27 | ||
Yasushi Nagasaki [Member] | ||||
Short-term Debt [Line Items] | ||||
Interest Rate | [1] | 10.00% | ||
Date of Loan | [1] | Jun. 29, 2012 | ||
Term of Loan | [1] | Due on Demand | ||
Amount of Interest Paid | [1] | $ 56 | ||
Highest Principal Outstanding | [1] | 200 | ||
Amount of Principal Repaid | [1] | $ 200 | ||
Conversion Rate (in dollars per share) | [1] | $ 3.30 | ||
Yutaka & Soomi Niihara [Member] | ||||
Short-term Debt [Line Items] | ||||
Interest Rate | [1],[3] | 10.00% | ||
Date of Loan | [1],[3] | Nov. 16, 2015 | ||
Term of Loan | [1],[3] | 2 years | ||
Amount of Interest Paid | [1],[3] | $ 73 | ||
Highest Principal Outstanding | [1],[3] | 200 | ||
Amount of Principal Repaid | [1],[3] | $ 200 | ||
Conversion Rate (in dollars per share) | [1],[3] | $ 4.50 | ||
Wei Peu Zen [Member] | ||||
Short-term Debt [Line Items] | ||||
Interest Rate | [3] | 10.00% | ||
Date of Loan | [3] | Nov. 6, 2017 | ||
Term of Loan | [3] | 2 years | ||
Amount of Interest Paid | [3] | $ 597 | ||
Highest Principal Outstanding | [3] | 5,000 | ||
Amount of Principal Repaid | [3] | $ 5,000 | ||
Conversion Rate (in dollars per share) | [3] | $ 10 | ||
Profit Preview International Group, Ltd. [Member] | ||||
Short-term Debt [Line Items] | ||||
Interest Rate | [4] | 10.00% | ||
Date of Loan | [4] | Feb. 1, 2018 | ||
Term of Loan | [4] | 2 years | ||
Amount of Interest Paid | [4] | $ 385 | ||
Highest Principal Outstanding | [4] | 4,037 | ||
Amount of Principal Repaid | [4] | $ 4,037 | ||
Conversion Rate (in dollars per share) | [4] | $ 10 | ||
Profit Preview International Group, Ltd. [Member] | ||||
Short-term Debt [Line Items] | ||||
Interest Rate | [4] | 10.00% | ||
Date of Loan | [4] | Mar. 21, 2018 | ||
Term of Loan | [4] | 2 years | ||
Amount of Interest Paid | [4] | $ 442 | ||
Highest Principal Outstanding | [4] | 5,363 | ||
Amount of Principal Repaid | [4] | $ 5,363 | ||
Conversion Rate (in dollars per share) | [4] | $ 10 | ||
Convertible notes payable - related party non-current [Member] | ||||
Short-term Debt [Line Items] | ||||
Amount of Interest Paid | $ 1,553 | |||
Highest Principal Outstanding | 14,800 | |||
Amount of Principal Repaid | 14,800 | |||
Promissory note payable, Convertible notes payable and Revolving line of credit - related party [Member] | ||||
Short-term Debt [Line Items] | ||||
Principal Amount Outstanding | 793 | |||
Amount of Interest Paid | 1,635 | |||
Highest Principal Outstanding | 16,759 | |||
Amount of Principal Repaid | $ 15,077 | |||
[1] | Officer | |||
[2] | Dr. Niihara, a Director and the Chairman, and Chief Executive Officer of the Company, is also a director and the Chief Executive Officer of Hope International Hospice, Inc. | |||
[3] | Director | |||
[4] | Mr. Zen, a Director of the Company, is the sole owner of Profit Preview International Group, Ltd. |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details Narrative) | Mar. 31, 2020shares |
Related Party Transactions [Abstract] | |
Marketable securities common stock outstanding | 4,147,491 |
Percentage of marketable securities common stock outstanding | 8.60% |
Shares held as marketable securities | 6,643,559 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Apr. 05, 2021 | Feb. 22, 2021 | Feb. 09, 2021 | Sep. 28, 2020 | Sep. 22, 2020 | Jun. 15, 2020 | May 08, 2020 | Feb. 21, 2020 | Mar. 31, 2021 | Jul. 31, 2020 | Dec. 31, 2018 | Oct. 31, 2020 | Oct. 28, 2020 | Mar. 31, 2020 | Jan. 31, 2020 | Dec. 31, 2019 |
Subsequent Event [Line Items] | ||||||||||||||||
Debt instrument, maturity date | Apr. 21, 2021 | |||||||||||||||
Convertible notes principal amount | $ 13,932,000 | $ 13,952,000 | ||||||||||||||
Exercise price | $ 3 | $ 5.87 | ||||||||||||||
Conversion debentures price | $ 3 | $ 9.52 | ||||||||||||||
Conversion Price | $ 10 | |||||||||||||||
Securities Amendment Agreement [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Monthly redemptions description | Pursuant to the Allonge, the aggregate monthly redemption payments under the Debentures were reduced to $500,000 from $1,000,000 in principal amount and the maturity date of the Debentures was extended from April 21, 2021 to August 31, 2021. The monthly redemption payments resumed in September 2020 and will continue on the first day of each month thereafter commencing October 1, 2020. The remaining principal balance of the Debentures will be due and payable upon maturity, subject to mandatory prepayment in connection with certain “Capital Events” as defined. | |||||||||||||||
Convertible Bond Purchase Agreement [Member] | T.R. Winston & Company, LLC [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Exercise price | $ 2.10 | |||||||||||||||
Convertible Promissory Note [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Net proceeds from the sale of the convertible promissory notes | $ 14,500,000 | |||||||||||||||
10% of Senior Secured Debentures [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Debt instrument annual interest | 10.00% | |||||||||||||||
Maximum [Member] | Convertible Bond Purchase Agreement [Member] | T.R. Winston & Company, LLC [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Number of common stock to be purchased | 75,000 | |||||||||||||||
Senior Secured Convertible Debentures [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Debt instrument annual interest | 10.00% | |||||||||||||||
Convertible promissory notes amount used to prepay outstanding | $ 6,200,000 | |||||||||||||||
Scenario Forecast [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Debt instrument annual interest | 2.10% | |||||||||||||||
Exercise price | $ 2 | |||||||||||||||
Common stock purchase period | 5 years | |||||||||||||||
Convertible bond maturity date | Oct. 16, 2030 | |||||||||||||||
Convertible bond initial conversion price | $ 8 | |||||||||||||||
Call option agreement date | Sep. 28, 2020 | |||||||||||||||
Scenario Forecast [Member] | EJ Holding, Inc. [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Unsecured long-term debt | $ 4,000,000 | $ 6,500,000 | ||||||||||||||
Scenario Forecast [Member] | Securities Amendment Agreement [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Debt instrument, maturity date | Aug. 31, 2021 | Apr. 21, 2021 | ||||||||||||||
Monthly redemption payment on principal amount | $ 500,000,000 | $ 1,000,000,000 | ||||||||||||||
Scenario Forecast [Member] | Convertible Bond Purchase Agreement [Member] | T.R. Winston & Company, LLC [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Convertible notes payable, carrying amount | $ 26,100,000 | |||||||||||||||
Scenario Forecast [Member] | Convertible Bond Purchase Agreement [Member] | Kainos Medicine, Inc [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Conversion debentures price | $ 1.54 | |||||||||||||||
Scenario Forecast [Member] | Convertible Promissory Note [Member] | Purchase and Sale Agreement [Member] | Prestige Capital Finance, LLC [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Percentage of face amount of applicable at time of sale accounts receivable | 70.00% | |||||||||||||||
Percentage of face amount of applicable subject to increase at time of sale accounts receivable | 75.00% | |||||||||||||||
Accounts receivable face amount | $ 7,500,000 | |||||||||||||||
Face amount of accounts receivable discount rate | 2.25% | |||||||||||||||
Scenario Forecast [Member] | 10% of Senior Secured Debentures [Member] | Securities Amendment Agreement [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Debt instrument annual interest | 10.00% | |||||||||||||||
Scenario Forecast [Member] | Maximum [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Number of common stock to be purchased | 1,840,000 | |||||||||||||||
Percentage of principal amount of convertible bond to be repurchased | 50.00% | |||||||||||||||
Scenario Forecast [Member] | Maximum [Member] | Convertible Promissory Note [Member] | Purchase and Sale Agreement [Member] | Prestige Capital Finance, LLC [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Face amount of accounts receivable discount rate | 7.25% | |||||||||||||||
Scenario Forecast [Member] | Convertible Debt [Member] | Convertible Promissory Note [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Debt instrument, maturity date | Jun. 15, 2023 | |||||||||||||||
Convertible notes principal amount | $ 3,150,000 | |||||||||||||||
Exercise price | $ 2.05 | |||||||||||||||
Scenario Forecast [Member] | Convertible Debt [Member] | Minimum [Member] | Convertible Promissory Note [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Interest rate | 11.00% | |||||||||||||||
Scenario Forecast [Member] | Convertible Debt [Member] | Maximum [Member] | Convertible Promissory Note [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Interest rate | 12.00% | |||||||||||||||
Number of common stock to be purchased | 1,250,000 | |||||||||||||||
Subsequent Event [Member] | Convertible Promissory Note [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Date of Loan | Feb. 8, 2021 | |||||||||||||||
Debt instrument annual interest | 2.00% | |||||||||||||||
Conversion Price | $ 1.48 | |||||||||||||||
Debt instrument, frequency of periodic payment | The convertible promissory notes will bear interest at the rate of 2% per annum payable semi-annually on the last business day of August and January of each year and will mature on the 3rd anniversary of the original issue date. | |||||||||||||||
Debt instrument percentage of accrued and unpaid interest on prepayment of principal amount | 50.00% | |||||||||||||||
Subsequent Event [Member] | Maximum [Member] | Convertible Promissory Note [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Principal amount | $ 17,000,000 | |||||||||||||||
Debt instrument prepayment percentage on principle amount | 50.00% | |||||||||||||||
Subsequent Event [Member] | Paycheck Protection Program [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Principal amount | $ 797,840 | |||||||||||||||
Debt instrument, maturity date | Apr. 29, 2022 | |||||||||||||||
Date of Loan | Apr. 29, 2020 | |||||||||||||||
Debt instrument annual interest | 1.00% | |||||||||||||||
Debt prepayment description | The Note may be prepaid by the Company at any time prior to maturity with no prepayment penalties. | |||||||||||||||
Debt instrument, forgiveness description | The loan and accrued interest are forgivable after a specific period as long as the Company uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness would be reduced if the Company were to terminate employees or reduce salaries during such period. |