Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2020 | Aug. 11, 2020 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Amendment Flag | false | |
Entity Registrant Name | VERU INC. | |
Entity Central Index Key | 0000863894 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Security 12b Title | Common Stock, $0.01 par value per share | |
Trading Symbol | VERU | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 69,863,681 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2020 | Sep. 30, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 15,394,423 | $ 6,295,152 |
Accounts receivable, net | 4,144,351 | 5,021,057 |
Inventory, net | 5,194,442 | 3,647,406 |
Prepaid expenses and other current assets | 2,125,730 | 1,843,297 |
Total current assets | 26,858,946 | 16,806,912 |
Plant and equipment, net | 315,456 | 351,895 |
Operating lease right-of-use assets | 1,012,951 | |
Deferred income taxes | 8,628,006 | 8,433,669 |
Intangible assets, net | 19,931,219 | 20,168,495 |
Goodwill | 6,878,932 | 6,878,932 |
Other assets | 1,562,126 | 988,867 |
Total assets | 65,187,636 | 53,628,770 |
Current liabilities: | ||
Accounts payable | 3,772,990 | 3,124,751 |
Accrued research and development costs | 2,277,491 | 2,475,490 |
Accrued compensation | 2,196,043 | 1,597,197 |
Accrued expenses and other current liabilities | 1,745,811 | 1,436,888 |
Credit agreement, short-term portion | 6,599,095 | 5,385,649 |
Residual royalty agreement liability, short-term portion | 356,346 | |
Operating lease liability, short-term portion | 425,136 | |
Total current liabilities | 17,372,912 | 14,019,975 |
Credit agreement, long-term portion | 2,886,382 | |
Residual royalty agreement, long-term portion | 5,407,007 | 3,845,518 |
Operating lease liability, long-term portion | 808,401 | |
Deferred income taxes | 292,740 | 296,605 |
Other liabilities | 27,469 | 247,154 |
Total liabilities | 23,908,529 | 21,295,634 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity: | ||
Preferred stock; no shares issued and outstanding at June 30, 2020 and September 30, 2019 | ||
Common stock, par value $0.01 per share; 154,000,000 shares authorized, 72,047,385 and 67,221,951 shares issued and 69,863,681 and 65,038,247 shares outstanding at June 30, 2020 and September 30, 2019, respectively | 720,474 | 672,220 |
Additional paid-in-capital | 126,306,764 | 110,268,057 |
Accumulated other comprehensive loss | (581,519) | (581,519) |
Accumulated deficit | (77,360,007) | (70,219,017) |
Treasury stock, 2,183,704 shares, at cost | (7,806,605) | (7,806,605) |
Total stockholders' equity | 41,279,107 | 32,333,136 |
Total liabilities and stockholders' equity | $ 65,187,636 | $ 53,628,770 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2020 | Sep. 30, 2019 |
CONDENSED CONSOLIDATED BALANCE SHEETS [Abstract] | ||
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common Stock, par value | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 154,000,000 | 154,000,000 |
Common Stock, shares issued | 72,047,385 | 67,221,951 |
Common Stock, shares outstanding | 69,863,681 | 65,038,247 |
Treasury stock, shares | 2,183,704 | 2,183,704 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ||||
Net revenues | $ 10,321,754 | $ 9,727,060 | $ 30,842,874 | $ 23,074,984 |
Cost of sales | 3,802,636 | 3,155,902 | 9,618,163 | 7,250,895 |
Gross profit | 6,519,118 | 6,571,158 | 21,224,711 | 15,824,089 |
Operating expenses: | ||||
Research and development | 4,436,496 | 4,866,114 | 13,666,730 | 10,138,524 |
Selling, general and administrative | 3,475,474 | 3,547,046 | 11,034,904 | 10,663,884 |
Total operating expenses | 7,911,970 | 8,413,160 | 24,701,634 | 20,802,408 |
Operating loss | (1,392,852) | (1,842,002) | (3,476,923) | (4,978,319) |
Non-operating (expenses) income: | ||||
Interest expense | (1,169,692) | (1,091,276) | (3,476,079) | (3,627,971) |
Change in fair value of derivative liabilities | (169,000) | 157,000 | (94,000) | (246,000) |
Other (expense) income, net | (53,334) | 1,744 | (63,369) | 12,588 |
Total non-operating expenses | (1,392,026) | (932,532) | (3,633,448) | (3,861,383) |
Loss before income taxes | (2,784,878) | (2,774,534) | (7,110,371) | (8,839,702) |
Income tax expense (benefit) | 240,502 | (458) | 30,619 | 117,207 |
Net loss | $ (3,025,380) | $ (2,774,076) | $ (7,140,990) | $ (8,956,909) |
Net loss per basic and diluted common share outstanding | $ (0.05) | $ (0.04) | $ (0.11) | $ (0.14) |
Basic and diluted weighted average common shares outstanding | 66,728,782 | 62,917,362 | 65,709,139 | 62,745,355 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | Treasury Stock, at Cost [Member] | Total |
Balance at Sep. 30, 2018 | $ 574,687 | $ 95,496,506 | $ (581,519) | $ (58,201,651) | $ (7,806,605) | $ 29,481,418 |
Balance (in Shares) at Sep. 30, 2018 | 57,468,660 | |||||
Share-based compensation | 417,256 | 417,256 | ||||
Shares issued in connection with public offering and common stock purchase agreement, net of fees and costs | $ 71,428 | 9,060,539 | 9,131,967 | |||
Shares issued in connection with public offering and common stock purchase agreement, net of fees and costs (in Shares) | 7,142,857 | |||||
Issuance of shares pursuant to share-based awards | $ 1,900 | (1,900) | ||||
Issuance of shares pursuant to share-based awards (in Shares) | 190,000 | |||||
Net loss | (2,148,798) | (2,148,798) | ||||
Balance at Dec. 31, 2018 | $ 648,015 | 104,972,401 | (581,519) | (60,350,449) | (7,806,605) | 36,881,843 |
Balance (in Shares) at Dec. 31, 2018 | 64,801,517 | |||||
Balance at Sep. 30, 2018 | $ 574,687 | 95,496,506 | (581,519) | (58,201,651) | (7,806,605) | 29,481,418 |
Balance (in Shares) at Sep. 30, 2018 | 57,468,660 | |||||
Net loss | (8,956,909) | |||||
Balance at Jun. 30, 2019 | $ 670,025 | 109,612,826 | (581,519) | (67,158,560) | (7,806,605) | 34,736,167 |
Balance (in Shares) at Jun. 30, 2019 | 67,002,483 | |||||
Balance at Dec. 31, 2018 | $ 648,015 | 104,972,401 | (581,519) | (60,350,449) | (7,806,605) | 36,881,843 |
Balance (in Shares) at Dec. 31, 2018 | 64,801,517 | |||||
Share-based compensation | 496,209 | 496,209 | ||||
Issuance of shares pursuant to share-based awards | $ 1,667 | 198,333 | 200,000 | |||
Issuance of shares pursuant to share-based awards (in Shares) | 166,667 | |||||
Net loss | (4,034,035) | (4,034,035) | ||||
Balance at Mar. 31, 2019 | $ 649,682 | 105,666,943 | (581,519) | (64,384,484) | (7,806,605) | 33,544,017 |
Balance (in Shares) at Mar. 31, 2019 | 64,968,184 | |||||
Share-based compensation | 468,207 | 468,207 | ||||
Shares issued in connection with public offering and common stock purchase agreement, net of fees and costs | $ 20,000 | 3,580,000 | 3,600,000 | |||
Shares issued in connection with public offering and common stock purchase agreement, net of fees and costs (in Shares) | 2,000,000 | |||||
Amortization of deferred costs | (101,981) | (101,981) | ||||
Issuance of shares pursuant to share-based awards | $ 343 | (343) | ||||
Issuance of shares pursuant to share-based awards (in Shares) | 34,299 | |||||
Net loss | (2,774,076) | (2,774,076) | ||||
Balance at Jun. 30, 2019 | $ 670,025 | 109,612,826 | (581,519) | (67,158,560) | (7,806,605) | 34,736,167 |
Balance (in Shares) at Jun. 30, 2019 | 67,002,483 | |||||
Balance at Sep. 30, 2019 | $ 672,220 | 110,268,057 | (581,519) | (70,219,017) | (7,806,605) | 32,333,136 |
Balance (in Shares) at Sep. 30, 2019 | 67,221,951 | |||||
Share-based compensation | 614,498 | 614,498 | ||||
Issuance of shares pursuant to share-based awards | $ 8 | (8) | ||||
Issuance of shares pursuant to share-based awards (in Shares) | 867 | |||||
Net loss | (3,305,101) | (3,305,101) | ||||
Balance at Dec. 31, 2019 | $ 672,228 | 110,882,547 | (581,519) | (73,524,118) | (7,806,605) | 29,642,533 |
Balance (in Shares) at Dec. 31, 2019 | 67,222,818 | |||||
Balance at Sep. 30, 2019 | $ 672,220 | 110,268,057 | (581,519) | (70,219,017) | (7,806,605) | 32,333,136 |
Balance (in Shares) at Sep. 30, 2019 | 67,221,951 | |||||
Shares issued in connection with public offering and common stock purchase agreement, net of fees and costs (in Shares) | 2,497,333 | |||||
Net loss | (7,140,990) | |||||
Balance at Jun. 30, 2020 | $ 720,474 | 126,306,764 | (581,519) | (77,360,007) | (7,806,605) | 41,279,107 |
Balance (in Shares) at Jun. 30, 2020 | 72,047,385 | |||||
Balance at Dec. 31, 2019 | $ 672,228 | 110,882,547 | (581,519) | (73,524,118) | (7,806,605) | 29,642,533 |
Balance (in Shares) at Dec. 31, 2019 | 67,222,818 | |||||
Share-based compensation | 681,680 | 681,680 | ||||
Shares issued in connection with public offering and common stock purchase agreement, net of fees and costs | $ 3,000 | 1,224,000 | 1,227,000 | |||
Shares issued in connection with public offering and common stock purchase agreement, net of fees and costs (in Shares) | 300,000 | |||||
Amortization of deferred costs | (34,759) | (34,759) | ||||
Issuance of shares pursuant to share-based awards | $ 3,564 | 405,068 | 408,632 | |||
Issuance of shares pursuant to share-based awards (in Shares) | 356,424 | |||||
Net loss | (810,509) | (810,509) | ||||
Balance at Mar. 31, 2020 | $ 678,792 | 113,158,536 | (581,519) | (74,334,627) | (7,806,605) | 31,114,577 |
Balance (in Shares) at Mar. 31, 2020 | 67,879,242 | |||||
Share-based compensation | 685,314 | 685,314 | ||||
Shares issued in connection with common stock purchase agreement | $ 2,121 | 678,816 | 680,937 | |||
Shares issued in connection with common stock purchase agreement (in Shares) | 212,130 | |||||
Shares issued in connection with public offering and common stock purchase agreement, net of fees and costs | $ 38,421 | 12,134,578 | 12,172,999 | |||
Shares issued in connection with public offering and common stock purchase agreement, net of fees and costs (in Shares) | 3,842,070 | |||||
Amortization of deferred costs | (356,172) | (356,172) | ||||
Issuance of shares pursuant to common stock purchase warrants | $ 1,092 | (1,092) | ||||
Issuance of shares pursuant to common stock purchase warrants (in Shares) | 109,143 | |||||
Issuance of shares pursuant to share-based awards | $ 48 | 6,784 | 6,832 | |||
Issuance of shares pursuant to share-based awards (in Shares) | 4,800 | |||||
Net loss | (3,025,380) | (3,025,380) | ||||
Balance at Jun. 30, 2020 | $ 720,474 | $ 126,306,764 | $ (581,519) | $ (77,360,007) | $ (7,806,605) | $ 41,279,107 |
Balance (in Shares) at Jun. 30, 2020 | 72,047,385 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
OPERATING ACTIVITIES | ||
Net loss | $ (7,140,990) | $ (8,956,909) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 109,883 | 126,084 |
Amortization of intangible assets | 237,276 | 231,926 |
Noncash change in right-of-use assets | 240,282 | |
Noncash interest expense | 3,476,079 | 3,627,971 |
Share-based compensation | 1,981,492 | 1,381,672 |
Deferred income taxes | (198,202) | 20,413 |
Provision for obsolete inventory | 227,982 | 112,498 |
Change in fair value of derivative liabilities | 94,000 | 246,000 |
Other | 7,500 | 148,674 |
Changes in current assets and liabilities: | ||
Decrease (increase) in accounts receivable | 194,471 | (791,272) |
Increase in inventory | (1,775,018) | (941,188) |
Increase in prepaid expenses and other assets | (4,794) | (68,578) |
Increase (decrease) in accounts payable | 648,239 | (46,894) |
Decrease in unearned revenue | (187,159) | |
Increase in accrued expenses and other current liabilities | 556,330 | 566,557 |
Decrease in operating lease liabilities | (243,514) | |
Net cash used in operating activities | (1,588,984) | (4,530,205) |
INVESTING ACTIVITIES | ||
Capital expenditures | (73,444) | (74,948) |
Net cash used in investing activities | (73,444) | (74,948) |
FINANCING ACTIVITIES | ||
Proceeds from sale of shares in public offering, net of fees | 9,400,000 | |
Payment of costs related to public offering | (268,033) | |
Proceeds from sale of shares under common stock purchase agreement | 13,399,999 | 3,600,000 |
Installment payments on SWK credit agreement | (3,325,180) | (4,047,207) |
Proceeds from stock option exercises | 415,464 | 200,000 |
Proceeds from premium finance agreement | 836,780 | |
Installment payments on premium finance agreement | (555,920) | |
Cash paid for debt portion of finance lease | (9,444) | |
Net cash provided by financing activities | 10,761,699 | 8,884,760 |
Net increase in cash | 9,099,271 | 4,279,607 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 6,295,152 | 3,759,509 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 15,394,423 | 8,039,116 |
Supplemental disclosure of noncash activities: | ||
Right-of-assets recorded in exchange for lease liabilities | 1,253,233 | |
Shares issued in connection with common stock purchase agreement | 680,937 | |
Increase in other assets from accrued expenses | 50,284 | |
Amortization of deferred costs related to common stock purchase agreement | $ 390,931 | $ 101,981 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Jun. 30, 2020 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note 1 – Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements for Veru Inc. (“we,” “our,” “us,” “Veru” or the “Company”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for reporting of interim financial information. Pursuant to these rules and regulations, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) have been condensed or omitted, although the Company believes that the disclosures made are adequate to make the information not misleading. Accordingly, these statements do not include all the disclosures normally required by U.S. GAAP for annual financial statements and should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this report and the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 201 9. The accompanying condensed consolidated balance sheet as of September 30, 201 9 has been derived from our audited financial statements. The unaudited condensed consolidated statements of operations for the three and nine months ended June 30 , 2020 and cash flows for the nine months ended June 30 , 2020 are not necessarily indicative of the results to be expected for any future period or for the fiscal year ending September 30, 20 20. The preparation of our unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments (consisting of only normally recurring adjustments) necessary to present fairly the financial position and results of operations as of the dates and for the periods presented. Principles of consolidation and nature of operations : Veru Inc. is referred to in these notes collectively with its subsidiaries as “we,” “our,” “us,” “Veru” or the “Company.” The consolidated financial statements include the accounts of Veru and its wholly owned subsidiaries, Aspen Park Pharmaceuticals, Inc. (APP) and The Female Health Company Limited, and The Female Health Company Limited’s wholly owned subsidiary, The Female Health Company (UK) plc (The Female Health Company Limited and The Female Health Company (UK) plc, collectively, the “U.K. subsidiary”), and The Female Health Company (UK) plc’s wholly owned subsidiary, The Female Health Company (M) SDN.BHD (the “Malaysia subsidiary”). All significant intercompany transactions and accounts have been eliminated in consolidation. Prior to the completion of the October 31, 2016 acquisition (the “APP Acquisition”) of APP through the merger of a wholly owned subsidiary of the Company into APP, the Company had been a single product company engaged in marketing, manufacturing and distributing a consumer healthcare product, the FC2 Female Condom/FC2 Internal Condom® (FC2) . The completion of the APP Acquisition transitioned the Company into a biopharmaceutical company focused on oncology and urology with multiple drug products under clinical development. Most of the Company’s net revenues during the three and nine months ended June 30 , 2020 and 2019 were derived from sales of FC2. Reclassifications : Certain prior period amounts on the accompanying unaudited interim condensed consolidated financial statements have been reclassified to conform with the current period presentation. These reclassifications had no effect on the results of operations or financial position for any period presented. Leases : Leases are classified as either operating or finance leases at inception. A right-of-use (ROU) asset and corresponding lease liability are established at an amount equal to the present value of fixed lease payments over the lease term at the commencement date. The ROU asset includes any initial direct costs incurred and lease payments made at or before the commencement date and is reduced by lease incentive payments. The Company has elected not to separate the lease and nonlease components for all classes of underlying assets. The Company uses its incremental borrowing rate as the discount rate to determine the present value of the lease payments for leases that do not have a readily determinable implicit discount rate. The incremental borrowing rate is the rate of interest that the Company would be charged to borrow on a collateralized basis over a similar term and amount in a similar economic environment. The Company determines the incremental borrowing rates for its leases by adjusting the risk-free interest rate with a credit risk premium corresponding to the Company’s credit rating. Operating lease costs are recognized for fixed lease payments on a straight-line basis over the term of the lease. Finance lease costs are a combination of the amortization expense for the ROU asset and interest expense for the outstanding lease liability using the applicable discount rate. Variable lease payments are recognized when incurred based on occurrence or usage. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for short-term leases on a straight-line basis over the lease term. Government grants : U.S. GAAP for profit-oriented entities does not define government grants nor is there specific guidance applicable to government grants. Under the Company’s accounting policy for government grants and consistent with non-authoritative guidance, government grants are recognized as a reduction of the related expense. Government grants are recognized when there is reasonable assurance that the Company has met the requirements of the grant and there is reasonable assurance that the grant will be received. Grants that compensate the Company for expenses incurred are recognized as a reduction of the related expenses in the same period in which the expenses are recognized. The Company has elected to treat forgivable loans from a government as a government grant when it is probable that the Company will meet the terms for forgiveness of the loan. Other comprehensive loss : Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net loss. Although certain changes in assets and liabilities, such as foreign currency translation adjustments, are reported as a separate component of the equity section of the accompanying unaudited condensed consolidated balance sheets, these items, along with net loss, are components of other comprehensive loss. For the three and nine months ended June 30 , 2020 and 2019, comprehensive loss is equivalent to the reported net loss. Recently Issued Accounting Pronouncements : In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016 ‑02, Leases (Topic 842) , which requires that lessees recognize an ROU asset and a lease liability for all leases with lease terms greater than twelve months in the balance sheet. ASU 2016-02 distinguishes leases as either a finance lease or an operating lease, which affects how the leases are measured and presented in the statement of operations and statement of cash flows, and requires disclosure of key information about leasing arrangements. A modified retrospective transition approach is required upon adoption. I n July 2018, the FASB issued ASU No. 2018 ‑10, Codification Improvements to Topic 842, Leases to clarify the implementation guidance and ASU No. 2018 ‑11, Leases (Topic 842) Targeted Improvements . This updated guidance provides an optional transition method, which allows for the initial application of the new accounting standard at the adoption date and the recognition of a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the period of adoption. I n December 2018, the FASB issued ASU 2018-20, Leases (Topic 842): Narrow-Scope Improvements for Lessors to address certain implementation issues facing lessors when adopting ASU 2016 ‑02. I n March 2019, the FASB issued ASU 2019 ‑01, Leases (Topic 842): Codification Improvements to address, among other things, certain transition disclosure requirements subsequent to the adoption of ASU 2016 ‑02. The Company adopted the new lease accounting standard using the modified retrospective approach on October 1, 2019 and elected certain practical expedients, including the optional transition method that allows for the application of the new standard at its adoption date with no restatement of prior period amounts . We elected the package of practical expedients permitted under the transition guidance, which allowed us to not reassess our prior conclusions about lease identification, lease classification, and initial direct costs. Adoption of the new standard resulted in the recording of ROU assets and lease liabilities of approximately $1.2 million and $1.5 million, respectively, and the derecognition of prepaid expenses and operating lease deferred rent liabilities of $23,000 and $247,000 , respectively, as of October 1, 2019 with zero cumulative-effect adjustment to retained earnings. The new standard did not materially impact our consolidated statement of operations or cash flows . In June 2018, the FASB issued ASU 2018 ‑07, Compensation - Stock Compensation (Topic 718) : Improvements to Nonemployee Share-Based Payment Accounting . The purpose of ASU 2018-07 is to expand the scope of Topic 718, Compensation—Stock Compensation (which previousl y only include d share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The Company has issued share-based payments to nonemployees in the past but is not able to predict the amount of future share-based payments to nonemployees, if any. We adopted ASU 2018-07 effective October 1, 2019. The adoption of ASU 2018 ‑07 did not have a material impact on our consolidated financial statements and related disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740). Simplifying the Accounting for Income Taxes . The new guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted. The adoption of ASU 2019-12 is not expected to have a material effect on our consolidated financial statements and related disclosures. |
Liquidity
Liquidity | 9 Months Ended |
Jun. 30, 2020 | |
Liquidity [Abstract] | |
Liquidity | Note 2 – Liquidity The Company has incurred quarterly operating losses since the fourth quarter of fiscal 2016 and anticipates that it will continue to consume cash and incur substantial net losses as it develops its drug candidates. Because of the numerous risks and uncertainties associated with the development of pharmaceutical products, the Company is unable to estimate the exact amounts of capital outlays and operating expenditures necessary to fund development of its drug candidates and obtain regulatory approvals. The Company’s future capital requirements will depend on many factors. The Company believes its current cash position, cash expected to be generated from sales of the Company’s commercial products, and its ability to secure equity financing or other financing alternatives are adequate to fund planned operations of the Company for the next 12 months. Such financing alternatives may include debt financing, common stock offerings, or financing involving convertible debt or other equity-linked securities and may include financings under the Company's current effective shelf registration statement on Form S-3 (File No. 333-239493). The Company intends to be opportunistic when pursuing equity or debt financing which could include selling common stock under its common stock purchase agreement with Aspire Capital Fund, LLC (see Note 9). |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Jun. 30, 2020 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Note 3 – Fair Value Measurements FASB Accounting Standards Codification (ASC) Topic 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: Level 1 – Quoted prices for identical instruments in active markets. Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3 – Instruments with primarily unobservable value drivers. We review the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels of certain securities within the fair value hierarchy. There were no transfers between Level 1 , Level 2 and Level 3 during the nine months ended June 30 , 2020 and 2019. As of June 30 , 2020 and September 30, 2019, the Company’s financial liabilities measured at fair value on a recurring basis, which consisted of embedded derivatives, were classified within Level 3 of the fair value hierarchy. The Company determines the fair value of hybrid instruments based on available market data using appropriate valuation models, considering all of the rights and obligations of each instrument. The Company estimates the fair value of hybrid instruments using various techniques (and combinations thereof) that are considered to be consistent with the objective of measuring fair value. In selecting the appropriate technique, the Company considers, among other factors, the nature of the instrument, the market risks that it embodies and the expected means of settlement. Estimating the fair value of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. Increases in fair value during a given financial quarter result in the recognition of non-cash derivative expense. Conversely, decreases in fair value during a given financial quarter would result in the recognition of non-cash derivative income. The following table provides a reconciliation of the beginning and ending liability balance associated with embedded derivatives measured at fair value using significant unobservable inputs (Level 3) as of June 30 , 2020 and 2019: Nine Months Ended June 30, 2020 2019 Beginning balance $ 3,625,000 $ 2,426,000 Change in fair value of derivative liabilities 94,000 246,000 Ending balance $ 3,719,000 $ 2,672,000 The expense associated with the change in fair value of the embedded derivatives is included as a separate line item on the accompanying unaudited condensed consolidated statements of operations. The liabilities associated with embedded derivatives represent the fair value of the change of control provisions in the Credit Agreement and Residual Royalty Agreement. See Note 8 for additional information. There is no current observable market for these types of derivatives. The Company determined the fair value of the embedded derivatives using a Monte Carlo simulation model to value the financial liabilities at inception and on subsequent valuation dates. This valuation model incorporates transaction details such as the contractual terms, expected cash outflows, expected repayment dates, probability of a change of control, expected volatility, and risk-free interest rates. A significant acceleration of the estimated repayment date or a significant decrease in the probability of a change of control event prior to repayment of the Credit Agreement, in isolation, would result in a significantly lower fair value measurement of the liabilities associated with the embedded derivatives. The following table presents quantitative information about the inputs and valuation methodologies used to determine the fair value of the embedded derivatives classified in Level 3 of the fair value hierarchy as of June 30 , 2020 and September 30, 2019: Weighted Average (range, if applicable) Valuation Methodology Significant Unobservable Input June 30, 2020 September 30, 2019 Monte Carlo Simulation Estimated change of control dates June 2021 to June 2022 September 2020 to December 2021 Discount rate 13.3% to 14.9% 14.4% to 16.8% Probability of change of control 10% to 90% 10% to 90% |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Jun. 30, 2020 | |
Revenue from Contracts with Customers [Abstract] | |
Revenue from Contracts with Customers | Note 4 – Revenue from Contracts with Customers The Company generates nearly all its revenue from direct product sales. Revenue from direct product sales is generally recognized when the customer obtains control of the product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract. Sales taxes and other similar taxes that the Company collects concurrent with revenue-producing activities are excluded from revenue. The amount of consideration the Company ultimately receives varies depending upon sales discounts, and other incentives that the Company may offer, which are accounted for as variable consideration when estimating the amount of revenue to recognize. The estimate of variable consideration requires significant judgment. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely upon an assessment of current contract sales terms and historical payment experience. Product returns are typically not significant because returns are generally not allowed unless the product is damaged at time of receipt. The Company’s revenue is from direct product sales of FC2 in the global public health sector, sales of FC2 in the U.S. prescription channel, and sales of PREBOOST® medicated wipes for prevention of premature ejaculation. The following table presents net revenues from these three categories: Three Months Ended Nine Months Ended June 30, June 30, 2020 2019 2020 2019 FC2 Public health sector $ 4,254,197 $ 4,905,874 $ 11,197,635 $ 13,039,878 U.S. prescription channel 5,391,523 4,377,862 18,395,280 9,412,177 Total FC2 9,645,720 9,283,736 29,592,915 22,452,055 PREBOOST® 676,034 443,324 1,249,959 622,929 Net revenues $ 10,321,754 $ 9,727,060 $ 30,842,874 $ 23,074,984 The following table presents net revenue by geographic area: Three Months Ended Nine Months Ended June 30, June 30, 2020 2019 2020 2019 United States $ 6,396,762 $ 5,548,987 $ 20,575,515 $ 11,234,870 South Africa 1,182,225 * * * Zimbabwe * * * 2,558,308 Other 2,742,767 4,178,073 10,267,359 9,281,806 Net revenues $ 10,321,754 $ 9,727,060 $ 30,842,874 $ 23,074,984 *Less than 10% of total net revenues The Company’s performance obligations consist mainly of transferring control of products identified in the contracts which occurs either when: i) the product is made available to the customer for shipment; ii) the product is shipped via common carrier; or iii) the product is delivered to the customer or distributor, in accordance with the terms of the agreement. Some of the Company’s contracts require the customer to make advanced payments prior to transferring control of the products. These advanced payments create a contract liability for the Company. The balances of the Company’s contract liability, included in accrued expenses and other current liabilities on the accompanying unaudited condensed consolidated balances sheets, was approximately $249,000 at June 30 , 2020 and September 30, 2019. The Company records an unearned revenue liability if a customer pays consideration for product that was shipped by the Company but revenue recognition criteria have not been met under the terms of a contract. Unearned revenue is recognized as revenue after control of the product is transferred to the customer and all revenue recognition criteria have been met. The Company had no unearned revenue at June 30 , 2020 or September 30, 2019. The Company recognized revenue of $804,000 and $723,000 during the nine months ended June 3 0 , 2020 and 2019, respectively, after satisfying its contract obligations and transferring control for previously recorded contract liabilities or unearned revenue. |
Accounts Receivable and Concent
Accounts Receivable and Concentration of Credit Risk | 9 Months Ended |
Jun. 30, 2020 | |
Accounts Receivable and Concentration of Credit Risk [Abstract] | |
Accounts Receivable and Concentration of Credit Risk | Note 5 – Accounts Receivable and Concentration of Credit Risk The Company's standard credit terms vary from 30 to 120 days, depending on the class of trade and customary terms within a territory, so accounts receivable is affected by the mix of purchasers within the period. As is typical in the Company's business, extended credit terms may occasionally be offered as a sales promotion or for certain sales. For sales to the Company’s distributor in Brazil, the Company has agreed to credit terms of up to 180 days subsequent to clearance of the product by the Ministry of Health in Brazil. The Company classified approximately $800,000 and $300,000 of trade receivables with its distributor in Brazil as long-term as of June 30 , 2020 and September 30, 2019, respectively, because payment was expected in greater than one year. The long-term portion of trade receivables is included in other assets on the accompanying unaudited condensed consolidated balance sheets. The components of accounts receivable consist of th e following at June 30 , 2020 and September 30, 2019 : June 30, September 30, 2020 2019 Trade receivables, gross $ 5,038,398 $ 5,410,165 Less: allowance for doubtful accounts (25,643) (33,143) Less: allowance for sales and payment term discounts (67,779) (49,623) Less: long-term trade receivables* (800,625) (306,342) Accounts receivable, net $ 4,144,351 $ 5,021,057 *Included in other assets on the accompanying unaudited condensed consolidated balance sheets At June 30, 2020 and at September 30, 2019, no customers had a current accounts receivable balance that represented greater than 10% of current assets. At June 30, 2020, three customers had an accounts receivable balance greater than 10% of net accounts receivable and long-term trade receivables, representing 76% of net accounts receivable and long-term trade receivables in the aggregate. At September 30, 2019, two customers had an accounts receivable balance greater than 10% of net accounts receivable and long-term trade receivables, representing 66% of net accounts receivable and long-term trade receivables in the aggregate. For the three months ended June 30, 2020, there were three customers whose individual net revenue to the Company exceeded 10% of the Company’s net revenues, representing 72% of the Company’s net revenues in the aggregate. For the three months ended June 30, 2019, there were three customers whose individual net revenue to the Company exceeded 10% of the Company’s net revenues, representing 63% of the Company’s net revenues in the aggregate. For the nine months ended June 30, 2020, there were three customers whose individual net revenue to the Company exceeded 10% of the Company’s net revenues, representing 74% of the Company’s net revenues in the aggregate. For the nine months ended June 30, 2019, there were three customers whose individual net revenue to the Company exceeded 10% of the Company’s net revenues, representing 64% of the Company’s net revenues in the aggregate. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments on accounts receivable. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Management also periodically evaluates individual customer receivables and considers a customer’s financial condition, credit history, and the current economic conditions. Accounts receivable are charged-off when deemed uncollectible. The table below summarizes the change in the allowance for doubtful accounts for the nine months ended June 30 , 2020 and 2019: Nine Months Ended June 30, 2020 2019 Beginning balance $ 33,143 $ 36,201 Charges to expense — — Charge-offs (7,500) (3,058) Ending balance $ 25,643 $ 33,143 Recoveries of accounts receivable previously charged off are recorded when received. The Company’s customers are primarily large global agencies, non-government organizations, ministries of health and other governmental agencies , which purchase and distribute FC2 for use in HIV/AIDS prevention and family planning programs. In the U.S., the Company’s customers include telemedicine providers who sell into the prescription channel. |
Balance Sheet Information
Balance Sheet Information | 9 Months Ended |
Jun. 30, 2020 | |
Balance Sheet Information [Abstract] | |
Balance Sheet Information | Note 6 – Balance Sheet Information Inventory Inventories are valued at the lower of cost or net realizable value. The cost is determined using the first-in, first-out (FIFO) method. Inventories are also written down for management’s estimates of product which will not sell prior to its expiration date. Write-downs of inventories establish a new cost basis which is not increased for future increases in the net realizable value of inventories or changes in estimated obsolescence. Inventory consisted of the following at June 30, 2020 and September 30, 201 9: June 30, September 30, 2020 2019 FC2: Raw material $ 750,688 $ 426,590 Work in process 127,693 187,970 Finished goods 4,268,944 3,157,952 FC2, gross 5,147,325 3,772,512 Less: inventory reserves (29,331) (125,106) FC2, net 5,117,994 3,647,406 PREBOOST® Finished goods 76,448 — Inventory, net $ 5,194,442 $ 3,647,406 Fixed Assets We record equipment, furniture and fixtures, and leasehold improvements at historical cost. Expenditures for maintenance and repairs are recorded to expense. Depreciation and amortization are primarily computed using the straight-line method. Depreciation and amortization are computed over the estimated useful lives of the respective assets. Leasehold improvements are depreciated on a straight-line basis over the lesser of the remaining lease term or the estimated useful lives of the improvements. Plant and equipment consisted of the following at June 30 , 2020 and September 30, 2019: Estimated June 30, September 30, Useful Life 2020 2019 Plant and equipment: Manufacturing equipment 5 - 8 years $ 2,766,179 $ 2,716,647 Office equipment, furniture and fixtures 3 - 10 years 819,140 795,228 Leasehold improvements 3 - 8 years 298,886 298,886 Total plant and equipment 3,884,205 3,810,761 Less: accumulated depreciation and amortization (3,568,749) (3,458,866) Plant and equipment, net $ 315,456 $ 351,895 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Jun. 30, 2020 | |
Intangible Assets and Goodwill [Abstract] | |
Intangible Assets and Goodwill | Note 7 – Intangible Assets and Goodwill Intangible Assets The gross carrying amounts and net book value of intangible assets are as follows at June 30 , 2020: Gross Carrying Accumulated Net Book Amount Amortization Value Intangible assets with finite lives: Developed technology - PREBOOST ® $ 2,400,000 $ 706,876 $ 1,693,124 Covenants not-to-compete 500,000 261,905 238,095 Total intangible assets with finite lives 2,900,000 968,781 1,931,219 Acquired in-process research and development assets 18,000,000 — 18,000,000 Total intangible assets $ 20,900,000 $ 968,781 $ 19,931,219 The gross carrying amounts and net book value of intangible assets are as follows at September 30, 201 9: Gross Carrying Accumulated Net Book Amount Amortization Value Intangible assets with finite lives: Developed technology - PREBOOST ® $ 2,400,000 $ 523,172 $ 1,876,828 Covenants not-to-compete 500,000 208,333 291,667 Total intangible assets with finite lives 2,900,000 731,505 2,168,495 Acquired in-process research and development assets 18,000,000 — 18,000,000 Total intangible assets $ 20,900,000 $ 731,505 $ 20,168,495 For the three months ended June 30 , 2020 and 2019, amortization expense was approximately $79,000 and $77,000 , respectively. For the nine months ended June 30 , 2020 and 2019, amortization expense was approximately $ 237, 000 and $ 232 ,000 , respectively. Goodwill The carrying amount of goodwill at June 3 0 , 2020 and September 30, 2019 was $ 6.9 million . There was no change in the balance during the nine months ended June 30 , 2020 and 2019. |
Debt
Debt | 9 Months Ended |
Jun. 30, 2020 | |
Debt [Abstract] | |
Debt | Note 8 – Debt SWK Credit Agreement On March 5, 2018, the Company entered into a Credit Agreement (as amended, the “Credit Agreement”) with the financial institutions party thereto from time to time (the “Lenders”) and SWK Funding LLC, as agent for the Lenders (the “Agent”), for a synthetic royalty financing transaction. On and subject to the terms of the Credit Agreement, the Lenders provided the Company with a term loan of $10.0 million, which was advanced to the Company on the date of the Credit Agreement. After payment by the Company of certain fees and expenses of the Agent and the Lenders as required in the Credit Agreement, the Company received net proceeds of approximately $9.9 million from the $10.0 million loan under the Credit Agreement. The Lenders will be entitled to receive quarterly payments on the term loan based on the Company’s product revenue from net sales of FC2 as provided in the Credit Agreement until the Company has paid 176.5% of the aggregate amount advanced to the Company under the Credit Agreement. I f product revenue from net sales of FC2 for the 12 -month period ended as of the last day of the respective quarterly payment period is less than $10.0 million, the quarterly payments will be 32.5% of product revenue from net sales of FC2 during the quarterly period. If product revenue from net sales of FC2 for the 12 -month period ended as of the last day of the respective quarterly payment period is equal to or greater than $10.0 million, the quarterly payments are calculated as follows: (i) as it relates to each quarter during the 2019 calendar year, the sum of 12.5% of product revenue from net sales of FC2 up to and including $12.5 million in the Elapsed Period (as defined in the Credit Agreement), plus 5% of product revenue from net sales of FC2 greater than $12.5 million in the Elapsed Period, (ii) as it relates to each quarter during the 2020 calendar year, the sum of 25% of product revenue from net sales of FC2 up to and including $12.5 million in the Elapsed Period, plus 10% of product revenue from net sales of FC2 greater than $12.5 million in the Elapsed Period, and (iii) as it relates to each quarter during the 2021 calendar year and thereafter, the sum of 30% of product revenue from net sales of FC2 up to and including $12.5 million in the Elapsed Period, plus 20% of product revenue from net sales of FC2 greater than $12.5 million in the Elapsed Period. U pon the Credit Agreement’s termination date of March 5, 2025, the Company must pay 176.5% of the aggregate amount advanced to the Company under the Credit Agreement less the amounts previously paid by the Company from product revenue. The payment requirements described above reflect an amendment to the Credit Agreement dated May 13, 2019 (the “Second Amendment”) which included a reduction to the percentages to be used to calculate the quarterly revenue-based payments due on product revenue from net sales of FC2 during calendar 2019, a return to the original percentages to calculate the quarterly revenue-based payments due on product revenue from net sales of FC2 during calendar 2020 and an increase to the percentages to be used to calculate the quarterly revenue-based payments due on product revenue from net sales of FC2 during calendar 2021 and thereafter until the loan has been repaid. Upon a change of control of the Company or sale of the FC2 business, the Company must pay off the loan by making a payment to the Lenders equal to (i) 176.5% of the aggregate amount advanced to the Company under the Credit Agreement less the amounts previously paid by the Company from product revenue, plus (ii) the greater of (A) $2.0 million or (B) the product of (x) 5% of the product revenue from net sales of FC2 for the most recently completed 12 -month period multiplied by (y) five . A “change of control” under the Credit Agreement includes (i) an acquisition by any person of direct or indirect ownership of more than 50% of the Company’s issued and outstanding voting equity, (ii) a change of control or similar event in the Company’s articles of incorporation or bylaws, (iii) certain Key Persons as defined in the Credit Agreement cease to serve in their current executive capacities unless replaced within 90 days by a person reasonably acceptable to the Agent, which acceptance not to be unreasonably withheld, or (iv) the sale of all or substantially all of the Company’s assets. The Credit Agreement contains customary representations and warranties in favor of the Agent and the Lenders and certain covenants, including financial covenants addressing minimum quarterly marketing and distribution expenses for FC2 and a requirement to maintain minimum unencumbered liquid assets of $1.0 million. The Credit Agreement also restricts the payment of dividends and share repurchases. The recourse of the Lenders and the Agent for obligations under the Credit Agreement is limited to assets relating to FC2. In connection with the Credit Agreement, the Company and the Agent also entered into a Residual Royalty Agreement, dated as of March 5, 2018 (as amended, the “Residual Royalty Agreement”), which provides for an ongoing royalty payment of 5% of product revenue from net sales of FC2 commencing after the Company would have paid 175% of the aggregate amount advanced to the Company under the Credit Agreement based on a calculation of revenue-based payments under the Credit Agreement without taking into account the amendments to the payment requirements under the Credit Agreement effected by the Second Amendment. The Residual Royalty Agreement will terminate upon (i) a change of control or sale of the FC2 business and the payment by the Company of the amount due in connection therewith pursuant to the Credit Agreement, or (ii) mutual agreement of the parties. If a change of control or sale of the FC2 business occurs prior to payment in full of the Credit Agreement, there will be no further payment due with respect to the Residual Royalty Agreement. If a change of control or sale of the FC2 business occurs after payment in full of the Credit Agreement, the Agent will receive a payment that is the greater of (A) $2.0 million or (B) the product of (x) 5% of the product revenue from net sales of FC2 for the most recently completed 12 -month period multiplied by (y) five . Pursuant to a Guarantee and Collateral Agreement dated as of March 5, 2018 (the “Collateral Agreement”) and an Intellectual Property Security Agreement dated as of March 5, 2018 (the “IP Security Agreement”), the Company’s obligations under the Credit Agreement are secured by a lien against substantially all of the assets of the Company that relate to or arise from FC2. In addition, pursuant to a Pledge Agreement dated as of March 5, 2018 (the “Pledge Agreement”), the Company’s obligations under the Credit Agreement are secured by a pledge of up to 65% of the outstanding shares of The Female Health Company Limited, a wholly owned U.K. subsidiary. For accounting purposes, the $10.0 million advance under the Credit Agreement was allocated between the Credit Agreement and the Residual Royalty Agreement on a relative fair value basis. A portion of the amount allocated to the Credit Agreement and a portion of the amount allocated to the Residual Royalty Agreement, in both cases equal to the fair value of the respective change of control provisions, was allocated to the embedded derivative liabilities. The derivative liabilities will be adjusted to fair market value at each subsequent reporting period . For financial statement presentation, the embedded derivative liabilities have been included with their respective host instruments as noted in the following tables. The debt discounts are being amortized to interest expense over the expected term of the loan using the effective interest method. Additionally, the Company recorded deferred loan issuance costs of approximately $267,000 for legal fees incurred in connection with the Credit Agreement. The deferred loan issuance costs are presented as a reduction in the Credit Agreement obligation and are being amortized to interest expense over the expected term of the loan using the effective interest method. The Second Amendment was accounted for as a debt modification, which resulted in prospective adjustment to the effective interest rate. At June 30 , 2020 and September 30, 2019, the Credit Agreement liability consisted of the following: June 30, September 30, 2020 2019 Aggregate repayment obligation $ 17,650,000 $ 17,650,000 Less: cumulative payments (8,903,265) (5,578,085) Remaining repayment obligation 8,746,735 12,071,915 Less: unamortized discounts (2,102,227) (4,590,974) Less: unamortized deferred issuance costs (49,413) (107,910) Credit agreement, excluding embedded derivative liability, net 6,595,095 7,373,031 Add: embedded derivative liability at fair value (see Note 3) 4,000 899,000 Credit agreement, net 6,599,095 8,272,031 Credit agreement, short-term portion (6,599,095) (5,385,649) Credit agreement, long-term portion $ — $ 2,886,382 The Company currently estimates the aggregate amount of quarterly revenue-based payments payable during the 12 ‑ month period subsequent to June 30, 2020 will be approximately $8.2 million under the Credit Agreement. At June 30 , 2020 and September 30, 2019, the Residual Royalty Agreement liability consisted of the following: June 30, September 30, 2020 2019 Residual royalty agreement liability, fair value at inception $ 346,000 $ 346,000 Add: accretion of liability using effective interest rate 1,702,353 773,518 Residual royalty agreement liability, excluding embedded derivative liability 2,048,353 1,119,518 Add: embedded derivative liability at fair value (see Note 3) 3,715,000 2,726,000 Total residual royalty agreement liability 5,763,353 3,845,518 Residual royalty agreement liability, short-term portion (356,346) — Residual royalty agreement liability, long-term portion $ 5,407,007 $ 3,845,518 The short-term portion of the Residual Royalty Agreement liability represents the aggregate of the estimated quarterly royalty payments payable during the 12-month period subsequent to June 30, 2020. Interest expense related to the Credit Agreement and the Residual Royalty Agreement consisted of amortization of the discounts, accretion of the liability for the Residual Royalty Agreement and amortization of the deferred issuance costs. For the three and nine months ended June 30 , 2020 and 2019, interest expense related to the Credit Agreement and Residual Royalty Agreement was as follows: Three Months Ended Nine Months Ended June 30, June 30, 2020 2019 2020 2019 Amortization of discounts $ 782,169 $ 922,144 $ 2,488,747 $ 3,187,972 Accretion of residual royalty agreement 369,138 147,223 928,835 363,520 Amortization of deferred issuance costs 18,385 21,909 58,497 76,479 Interest expense $ 1,169,692 $ 1,091,276 $ 3,476,079 $ 3,627,971 Premium Finance Agreement On November 1, 2019, the Company entered into a Premium Finance Agreement to finance $837,000 of its directors and officers liability insurance premium at an annual percentage rate of 4.18% . The financing is payable in three quarterly installments of principal and interest, which began on January 1, 2020. The balance of the insurance premium liability is $281,000 as of June 30 , 2020 and is included in accrued expenses and other current liabilities on the accompanying unaudited condensed consolidated balance sheet. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Jun. 30, 2020 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | Note 9 – Stockholders’ Equity Preferred Stock The Company has 5,000,000 shares designated as Class A Preferred Stock with a par value of $0.01 per share. There are 1,040,000 shares of Class A Preferred Stock – Series 1 authorized; 1,500,000 shares of Class A Preferred Stock – Series 2 authorized; 700,000 shares of Class A Preferred Stock – Series 3 authorized; and 548,000 shares of Class A Preferred Stock – Series 4 (the “Series 4 Preferred Stock”) authorized. There were no shares of Class A Preferred Stock of any series issued and outstanding at June 30, 2020 and September 30, 2019. The Company has 15,000 shares designated as Class B Preferred Stock with a par value of $0.50 per share. There were no shares of Class B Preferred Stock issued and outstanding at June 30, 2020 and September 30, 2019. Common Stock Offering On October 1, 2018, we completed an underwritten public offering of 7,142,857 shares of our common stock, at a public offering price of $1.40 per share. Net proceeds to the Company from this offering were $9.1 million after deducting underwriting discounts and commissions and costs paid by the Company. All of the shares sold in the offering were by the Company. The offering was made pursuant to the Company’s 2017 shelf registration statement on Form S-3 (File No. 333-221120) . Common Stock Purchase Warrants In connection with the closing of the APP Acquisition, the Company issued warrants to purchase up to 2,585,379 shares of the Company's common stock to Torreya Capital, the Company's financial advisor (the “Financial Advisor Warrants”). The Financial Advisor Warrants have a five -year term expiring October 31, 2021, a cashless exercise feature and a strike price equal to $1.93 per share. The Financial Advisor Warrants vested upon issuance. During the three months ended June 30, 2020, one of the Financial Advisor Warrants to purchase 258,538 shares of the Company’s common stock was exercised using the cashless exercise feature, resulting in the issuance of 109,143 shares of common stock. As of June 30, 2020, an aggregate of 2,326,841 shares of common stock remain available for purchase under the Financial Advisor Warrants. Aspire Capital Purchase Agreements On June 26, 2020, the Company entered into a common stock purchase agreement (the “2020 Purchase Agreement”) with Aspire Capital Fund, LLC (Aspire Capital) which provides that, upon the terms and subject to the conditions and limitations set forth therein, the Company has the right, from time to time in its sole discretion during the 36 -month term of the 2020 Purchase Agreement, to direct Aspire Capital to purchase up to $23.9 million of the Company’s common stock in the aggregate. Concurrently with entering into the 2020 Purchase Agreement, the Company also entered into a registration rights agreement with Aspire Capital (the “Registration Rights Agreement”), in which the Company agreed to prepare and file under the Securities Act of 1933 one or more prospectus supplement for the sale or potential sale of the shares of the Company’s common stock that have been and may be issued to Aspire Capital under the 2020 Purchase Agreement. Under the 2020 Purchase Agreement, on any trading day selected by the Company, the Company has the right, in its sole discretion, to present Aspire Capital with a purchase notice (each, a “Purchase Notice”), directing Aspire Capital (as principal) to purchase up to 200,000 shares of the Company’s common stock per business day at a per share price (the “Purchase Price”) equal to the lesser of the lowest sale price of the Company’s common stock on the purchase date or the average of the three lowest closing sale prices for the Company’s common stock during the ten consecutive trading days ending on the trading day immediately preceding the purchase date. In addition, on any date on which the Company submits a Purchase Notice to Aspire Capital in an amount equal to 200,000 shares and the closing sale price of our common stock is equal to or greater than $0.50 per share, the Company also has the right, in its sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a “VWAP Purchase Notice”) directing Aspire Capital to purchase an amount of common stock equal to up to 30% of the aggregate shares of the common stock traded on its principal market on the next trading day (the “VWAP Purchase Date”), subject to a maximum number of shares the Company may determine. The purchase price per share pursuant to such VWAP Purchase Notice is generally 97% of the volume-weighted average price for the Company’s common stock traded on its principal market on the VWAP Purchase Date. In consideration for entering into the 2020 Purchase Agreement, concurrently with the execution of the 2020 Purchase Agreement, the Company issued to Aspire Capital 212,130 shares of the Company’s common stock. The shares of common stock issued as consideration were valued at $ 681,000 , based on the closing price per share of the Company’s common stock on the date the shares were issued. This amount and related expenses of $50,000 , which total approximately $731,000 , were recorded as deferred costs. Upon execution of the 2020 Purchase Agreement, the Company issued and sold 1,644,737 shares of common stock to Aspire Capital under the 2020 Purchase Agreement, resulting in proceeds to the Company of $5 million. As a result of this sale, we recorded approximately $153,000 of deferred costs to additional paid-in capital. The unamortized amount of deferred costs related to the 2020 Purchase Agreement of $578,000 at June 30, 2020 is included in other assets on the accompanying unaudited condensed consolidated balance sheet. Effective June 26, 2020, upon the execution of the 2020 Purchase Agreement, the Company’s prior purchase agreement with Aspire Capital dated December 29, 2017 (the “2017 Purchase Agreement”) was terminated. Under the 2017 Purchase Agreement, the Company had the right, upon the terms and subject to the conditions and limitations set forth therein, from time to time in its sole discretion during the 36-month term of the 2017 Purchase Agreement, to direct Aspire Capital to purchase up to $15.0 million of the Company’s common stock in the aggregate. As of the date of termination of the 2017 Purchase Agreement, the Company had sold an aggregate of 6,214,343 shares of common stock to Aspire Capital resulting in proceeds to the Company of $15.0 million. During the nine months ended June 30, 2020, we sold 2,497,333 shares of common stock to Aspire Capital under the 2017 Purchase Agreement resulting in proceeds to the Company of $8.4 million. As a result of these sales, we recorded approximately $238,000 of deferred costs to additional paid-in capital. In consideration for entering into the 2017 Purchase Agreement, concurrently with the execution of the 2017 Purchase Agreement, the Company issued to Aspire Capital 304,457 shares of the Company’s common stock. The shares of common stock issued as consideration were valued at approximately $347,000 , based on the closing price per share of the Company's common stock on the date the shares were issued. This amount and related expenses of approximately $78,000 , which total approximately $425,000 , were recorded as deferred costs. All deferred costs related to the 2017 Purchase Agreement have been amortized to additional paid-in capital as of June 30, 2020. The unamortized amount of deferred costs related to the 2017 Purchase Agreement of $238,000 at September 30, 2019 is included in other assets on the accompanying unaudited condensed consolidated balance sheet. |
Share-based Compensation
Share-based Compensation | 9 Months Ended |
Jun. 30, 2020 | |
Share-based Compensation [Abstract] | |
Share-based Compensation | Note 10 – Share-based Compensation We allocate share-based compensation expense to cost of sales, selling, general and administrative expense, and research and development expense based on the award holder’s employment function. For the three and nine months ended June 30 , 2020 and 2019 , we recorded share-based compensation expenses as follows: Three Months Ended Nine Months Ended June 30, June 30, 2020 2019 2020 2019 Cost of sales $ 7,743 $ 9,998 $ 38,713 $ 25,728 Selling, general and administrative 490,647 347,165 1,442,970 1,081,600 Research and development 186,924 111,044 499,809 274,344 Share-based compensation $ 685,314 $ 468,207 $ 1,981,492 $ 1,381,672 Equity Plans In March 2018, the Company’s stockholders approved the Company's 2018 Equity Incentive Plan (the “2018 Plan”). On March 24, 2020, the Company’s stockholders approved an increase in the number of shares that may be issued under the 2018 Plan to 11.0 million. As of June 30 , 2020, 5,881,998 shares remain available for issuance under the 2018 Plan. In July 2017, the Company’s stockholders approved the Company's 2017 Equity Incentive Plan (the “2017 Plan”). A total of 4.7 million shares are authorized for issuance under the 2017 Plan. As of June 30 , 2020, 101,747 shares remain available for issuance under the 2017 Plan. The 2017 Plan replaced the Company's 2008 Stock Incentive Plan (the “2008 Plan”), and no further awards will be made under the 2008 Plan. Stock Options Each option grants the holder the right to purchase from us one share of our common stock at a specified price, which is generally the closing price per share of our common stock on the date the option is issued. Options generally vest on a pro-rata basis on each anniversary of the issuance date within three years of the date the option is issued. Options may be exercised after they have vested and prior to the specified expiry date provided applicable exercise conditions are met, if any. The expiry date can be for periods of up to ten years from the date the option is issued. The fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model based on the assumptions established at that time. The Company accounts for forfeitures as they occur and does not estimate forfeitures as of the option grant date. The following table outlines the weighted average assumptions for option s granted during the nine months ended June 30, 2020 and the three and nine months ended June 30 , 2019 . There were no options granted during the three months ended June 30, 2020 : Three Months Ended Nine Months Ended June 30, June 30, 2020 2019 2020 2019 Weighted Average Assumptions: Expected volatility — 65.29% 63.13% 65.91% Expected dividend yield — 0.00% 0.00% 0.00% Risk-free interest rate — 2.23% 1.63% 2.37% Expected term (in years) — 6.0 5.9 5.9 Fair value of options granted $ — $ 0.97 $ 1.14 $ 0.92 During the three and nine months ended June 30 , 2020 and 2019, the Company used historical volatility of our common stock over a period equal to the expected life of the options to estimate their fair value. The dividend yield assumption is based on the Company’s recent history and expectation of future dividend payouts on the common stock. The risk-free interest rate is based on the implied yield available on U.S. treasury zero-coupon issues with an equivalent remaining term. The following table summarizes the stock options outstanding and exercisable at June 30 , 2020: Weighted Average Remaining Aggregate Number of Exercise Price Contractual Term Intrinsic Shares Per Share (years) Value Outstanding at September 30, 2019 7,027,989 $ 1.58 Granted 2,228,827 $ 1.97 Exercised (441,548) $ 1.67 Forfeited and expired (195,434) $ 1.55 Outstanding at June 30, 2020 8,619,834 $ 1.68 8.01 $ 14,349,547 Exercisable at June 30, 2020 4,120,510 $ 1.53 7.17 $ 7,453,274 The aggregate intrinsic values in the table above are before income taxes and represent the number of in-the-money options outstanding or exercisable multiplied by the closing price per share of the Company’s common stock on the last trading day of the quarter ended June 30 , 2020 of $3.34 , less the respective weighted average exercise price per share at period end . The total intrinsic value of options exercised during the nine months ended June 30 , 2020 and 2019 was approximately $1.1 million and $105,000 , respectively. Cash received from options exercised during the nine months ended June 30 , 2020 and 2019 was approximately $415,000 and $200,000 , respectively. D uring the nine months ended June 30, 2020 and 2019, options to purchase 223,415 and 116,666 shares of common stock, respectively, were exercised using the cashless exercise feature available under the 2017 Plan and 2018 Plan, which resulted in the issuance of 143,958 and 34,299 shares of common stock , respectively . As of June 30 , 2020, the Company had unrecognized compensation expense of approximately $3.4 million related to unvested stock options. This expense is expected to be recognized over approximately three years. Stock Appreciation Rights In connection with the closing of the APP Acquisition, the Company issued stock appreciation rights based on 50,000 and 140,000 shares of the Company’s common stock to an employee and an outside director, respectively, that vested on October 31, 2018 . The stock appreciation rights have a ten -year term and an exercise price per share of $0.95 , which was the closing price per share of the Company’s common stock as quoted on NASDAQ on the trading day immediately preceding the date of the completion of the APP Acquisition. Upon exercise, the stock appreciation rights will be settled in common stock issued under the 2017 Plan. As of June 30 , 2020, vested stock appreciation rights based on 50,000 shares of common stock remain outstanding. |
Leases
Leases | 9 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Leases | Note 11 – Leases The Company has operating leases for its office, manufacturing and warehouse space, and office equipment. The Company has a finance lease for office equipment, furniture, and fixtures. The Company’s leases have remaining lease terms of less than one year to six years, which include the option to extend a lease when the Company is reasonably certain to exercise that option. The Company does not have any leases that have not yet commenced as of June 30 , 2020. Certain of our lease agreements include variable lease payments for common area maintenance, real estate taxes, and insurance or based on usage for certain equipment leases. For one of our office space leases, the Company entered into a sublease, for which it receives sublease income. Sublease income is recognized as a reduction to operating lease costs as the sublease is outside of the Company’s normal business operations. This is consistent with the Company’s recognition of sublease income prior to the adoption of FASB ASC Topic 842. The components of the Company’s lease cost were as follows for the three and nine months ended June 30 , 2020: Three Months Ended Nine Months Ended June 30, 2020 June 30, 2020 Finance lease cost: Amortization of right-of-use assets $ 2,178 $ 6,535 Interest on lease liabilities 1,238 4,097 Operating lease cost 124,326 378,006 Short-term lease cost 1,863 5,589 Variable lease cost 24,213 91,349 Sublease income (45,382) (135,071) Total lease cost $ 108,436 $ 350,505 The Company paid cash of $350,000 for amounts included in the measurement of operating lease liabilities during the nine months ended June 30 , 2020. The Company’s operating lease ROU assets and the related lease liabilities are presented as separate line items on the accompanying unaudited condensed consolidated balance sheet as of June 30 , 2020. The Company’s finance lease ROU asset was $36,000 as of June 30 , 2020 and is included in property and equipment, net on the accompanying unaudited condensed consolidated balance sheet. The current and long-term finance lease liabilities were $20,000 and $12,000 , respectively, and are included in accrued expenses and other current liabilities and other liabilities, respectively, on the accompanying unaudited condensed consolidated balance sheet as of June 30 , 2020. Other information related to the Company’s leases as of June 30 , 2020 was as follows: June 30, 2020 Operating Leases Weighted-average remaining lease term 4.0 Weighted-average discount rate 12.02% Finance Leases Weighted-average remaining lease term 1.7 Weighted average discount rate 13.86% The Company’s lease agreements do not provide a readily determinable implicit rate. Therefore, the Company estimates its incremental borrowing rate based on information available at lease commencement in order to discount lease payments to present value. As of June 30 , 2020, maturities of lease liabilities were as follows: Operating Finance Sublease Leases Leases Income Fiscal year ended September 30, 2020 $ 129,402 $ 5,432 $ 48,745 2021 431,061 22,199 198,668 2022 350,054 9,496 203,584 2023 295,258 — 190,749 2024 191,559 — — Thereafter 164,725 — — Total lease payments 1,562,059 37,127 $ 641,746 Less imputed interest (328,522) (4,261) Total lease liabilities $ 1,233,537 $ 32,866 Under FASB ASC 840, the lease accounting guidance prior to the Company’s adoption of FASB ASC 842, the Company had net capital lease assets of $43,000 included in property and equipment, net and a related capital lease obligation of $42,000 included in accrued expenses and other current liabilities and other liabilities on the accompanying unaudited condensed consolidated balance sheet as of September 30, 2019. Under FASB ASC 840, future minimum payments under operating leases consisted of the following as of September 30, 2019: Operating Sublease Leases Income Net Total Fiscal year ended September 30, 2020 $ 469,002 $ 193,753 $ 275,249 2021 433,751 198,668 235,083 2022 337,456 203,584 133,872 2023 114,493 190,749 (76,256) 2024 11,238 — 11,238 Total minimum lease payments $ 1,365,940 $ 786,754 $ 579,186 The minimum lease payments presented above do not include real estate taxes, common area maintenance charges or insurance charges payable under the Company’s operating leases for office and manufacturing facility space. These amounts are generally not fixed and can fluctuate from year to year. |
Contingent Liabilities
Contingent Liabilities | 9 Months Ended |
Jun. 30, 2020 | |
Contingent Liabilities [Abstract] | |
Contingent Liabilities | Note 12 – Contingent Liabilities The testing, manufacturing and marketing of consumer products by the Company and the clinical testing of our product candidates entail an inherent risk that product liability claims will be asserted against the Company. The Company maintains product liability insurance coverage for claims arising from the use of its products. The coverage amount is currently $10.0 million. Litigation From time to time we may be involved in litigation or other contingencies arising in the ordinary course of business. Based on the information presently available, management believes there are no contingencies, claims or actions, pending or threatened, the ultimate resolution of which will have a material adverse effect on our financial position, liquidity or results of operations. In accordance with FASB ASC 450, Contingencies, we accrue loss contingencies including costs of settlement, damages and defense related to litigation to the extent they are probable and reasonably estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range. License and Purchase Agreements From time to time, we license or purchase rights to technology or intellectual property from third parties. These licenses and purchase agreements require us to pay upfront payments as well as development or other payments upon successful completion of preclinical, clinical, regulatory or revenue milestones. In addition, these agreements may require us to pay royalties on sales of products arising from the licensed or acquired technology or intellectual property. Because the achievement of future milestones is not reasonably estimable, we have not recorded a liability on the accompanying unaudited condensed consolidated financial statements for any of these contingencies. |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 30, 2020 | |
Income Taxes [Abstract] | |
Income Taxes | Note 13 – Income Taxes The Company accounts for income taxes using the liability method, which requires the recognition of deferred tax assets or liabilities for the tax-effected temporary differences between the financial reporting and tax bases of its assets and liabilities, and for net operating loss and tax credit carryforwards. The Tax Cuts and Jobs Act of 2017 (the “Tax Act”) repealed the alternative minimum tax (AMT) for corporations. The law provides that AMT carryovers can be utilized to reduce or eliminate the tax liability in subsequent years or to obtain a tax refund. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) , which was enacted on March 27, 2020, accelerates the ability to claim a refund of the entire refundable credit to 2018 with an election when filing. The Tax Act previously allowed a 50% refundable credit for tax years beginning in 2018 through 2020, with a 100% credit refund in 2021. At June 30 , 2020, the Company has $0.5 million of AMT credit carryovers in prepaid expenses and other current assets due to the expectation, as a result of the CARES Act, that the AMT credits will be refundable over the next year. As of September 30, 2019, the Company had U.S. federal and state net operating loss carryforwards of $42.6 million and $25.8 million, respectively, for income tax purposes with $14.4 million and $19.9 million, respectively, expiring in years 2022 to 2038 and $28.2 million and $5.9 million, respectively, which can be carried forward indefinitely. The Company’s U.K. subsidiary has U.K. net operating loss carryforwards of $61.7 million as o f September 30, 2019, which can be carried forward indefinitely to be used to offset future U.K. taxable income. A reconciliation of income tax expense (benefit) a nd the amount computed by applying the statutory federal income tax rate of 21% to income before income taxes is as follows: Three Months Ended Nine Months Ended June 30, June 30, 2020 2019 2020 2019 Income tax benefit at U.S. federal statutory rates $ (584,825) $ (582,652) $ (1,493,179) $ (1,856,337) State income tax benefit, net of federal benefits (45,268) (138,089) (115,615) (439,952) Non-deductible expenses 332,230 2,269 335,869 7,052 Effect of foreign income tax rates (16,478) 43 49,908 (3,484) Effect of global intangible low taxed income 85,522 2,554 101,642 66,182 Change in valuation allowance 415,449 716,442 1,097,900 2,367,633 Other, net 53,872 (1,025) 54,094 (23,887) Income tax expense (benefit) $ 240,502 $ (458) $ 30,619 $ 117,207 Significant components of the Company’s deferred tax assets and liabilities are as follows: June 30, September 30, 2020 2019 Deferred tax assets: Federal net operating loss carryforwards $ 8,854,855 $ 8,971,569 State net operating loss carryforwards 1,686,902 1,689,536 Foreign net operating loss carryforwards – U.K. 10,600,648 10,486,476 Foreign capital allowance – U.K. 103,400 103,400 Share-based compensation 1,116,240 804,378 Interest expense 757,141 — Other, net – U.K. 50,781 50,781 Other, net – U.S. 592,237 434,764 Gross deferred tax assets 23,762,204 22,540,904 Valuation allowance for deferred tax assets (10,928,109) (9,830,209) Net deferred tax assets 12,834,095 12,710,695 Deferred tax liabilities: In-process research and development (4,072,740) (4,072,740) Developed technology (383,092) (424,657) Covenant not-to-compete (53,872) (65,993) Other, net – Malaysia 17,251 (3,865) Other, net – U.S. (6,376) (6,376) Net deferred tax liabilities (4,498,829) (4,573,631) Net deferred tax asset $ 8,335,266 $ 8,137,064 The deferred tax amounts have been classified on the accompanying unaudited condensed consolidated balance sheets as follows: June 30, September 30, 2020 2019 Deferred tax asset – U.K. $ 8,610,759 $ 8,433,669 Deferred tax asset – Malaysia 17,247 — Total deferred tax asset $ 8,628,006 $ 8,433,669 Deferred tax liability – U.S. $ (292,740) $ (292,740) Deferred tax liability – Malaysia — (3,865) Total deferred tax liability $ (292,740) $ (296,605) |
Paycheck Protection Program
Paycheck Protection Program | 9 Months Ended |
Jun. 30, 2020 | |
Paycheck Protection Program [Abstract] | |
Paycheck Protection Program | Note 14 – Paycheck Protection Program The CARES Act established the Paycheck Protection Program (PPP), which authorizes forgivable loans to small businesses. Pursuant to the CARES Act, the PPP loan will be fully forgiven if the funds are used for payroll costs, rent and utilities, subject to certain conditions, including maintaining employees and maintaining salary levels. In April 2020, the Company applied for a PPP loan and received funding of approximately $540,000 . During the three-month period ended June 30, 2020, the Company expended the funds received under the PPP in full on qualifying expenses, and maintained the conditions set forth by the CARES Act. The Company, given its use of the funds, believes it is probable that the PPP loan will be forgiven. As a result, the Company recorded a reduction to selling, general and administrative expenses of approximately $420,000 and a reduction to payroll-related research and development expenses of approximately $120,000 related to these funds within the unaudited condensed consolidated statement of operations for the three and nine months ended June 30, 2020. The Company does not anticipate taking any action that would cause any portion of the PPP loan to be ineligible for forgiveness. However, to the extent that any amount is deemed unforgivable, such amount is payable over two years at an interest rate of 1% per annum, with a deferral of payments for the first six months. |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Jun. 30, 2020 | |
Net Loss Per Share [Abstract] | |
Net Loss Per Share | Note 1 5 – Net Loss Per Share Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing net income by the weighted average number of common shares outstanding during the period after giving effect to all dilutive potential common shares that were outstanding during the period. Dilutive potential common shares consist of the incremental common shares issuable upon the exercise of stock options, stock appreciation rights and warrants, and the vesting of unvested restricted stock and restricted stock units. Due to our net loss for the periods presented, all potentially dilutive instruments were excluded because their inclusion would have been anti-dilutive. See Notes 9 and 10 for a discussion of our dilutive potential common shares. |
Industry Segments
Industry Segments | 9 Months Ended |
Jun. 30, 2020 | |
Industry Segments [Abstract] | |
Industry Segments | Note 1 6 – Industry Segments The Company currently operates in two reporting segments: Commercial and Research and Development . The Commercial segment consists of FC2 and PREBOOST®. The Research and Development segment consists of multiple drug products under clinical development for oncology and urology. There are no significant inter-segment sales. We evaluate the performance of each segment based on operating profit or loss. There is no inter-segment allocation of non-operating expenses and income taxes. Our chief operating decision-maker (CODM) is Mitchell S. Steiner, M.D., our Chairman, President and Chief Executive Officer. The Company's operating income (loss) by segment is as follows: Three Months Ended Nine Months Ended June 30, June 30, 2020 2019 2020 2019 Commercial $ 5,619,168 $ 5,263,796 $ 17,608,972 $ 11,424,718 Research and development (4,436,496) (4,853,344) (13,549,652) (10,103,528) Corporate (2,575,524) (2,252,454) (7,536,243) (6,299,509) Operating loss $ (1,392,852) $ (1,842,002) $ (3,476,923) $ (4,978,319) All of our net revenues, which are primarily derived from the sale of FC2, are attributed to our Commercial reporting segment. See Note 4 for additional information regarding our net revenues. Costs related to the office located in London, England are fully dedicated to FC2 and are presented as a component of the Commercial segment. Depreciation and amortization related to long-lived assets that are not utilized in the production of FC2 are not reported as part of the reporting segments or reviewed by the CODM. These amounts are included in Corporate in the reconciliations above. Total assets are not presented by reporting segment as they are not reviewed by the CODM when evaluating the reporting segments’ performance. |
Basis of Presentation (Policy)
Basis of Presentation (Policy) | 9 Months Ended |
Jun. 30, 2020 | |
Basis of Presentation [Abstract] | |
Basis of presentation | The accompanying unaudited interim condensed consolidated financial statements for Veru Inc. (“we,” “our,” “us,” “Veru” or the “Company”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for reporting of interim financial information. Pursuant to these rules and regulations, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) have been condensed or omitted, although the Company believes that the disclosures made are adequate to make the information not misleading. Accordingly, these statements do not include all the disclosures normally required by U.S. GAAP for annual financial statements and should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this report and the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 201 9. The accompanying condensed consolidated balance sheet as of September 30, 201 9 has been derived from our audited financial statements. The unaudited condensed consolidated statements of operations for the three and nine months ended June 30 , 2020 and cash flows for the nine months ended June 30 , 2020 are not necessarily indicative of the results to be expected for any future period or for the fiscal year ending September 30, 20 20. The preparation of our unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments (consisting of only normally recurring adjustments) necessary to present fairly the financial position and results of operations as of the dates and for the periods presented. |
Principles of consolidation and nature of operations | Principles of consolidation and nature of operations : Veru Inc. is referred to in these notes collectively with its subsidiaries as “we,” “our,” “us,” “Veru” or the “Company.” The consolidated financial statements include the accounts of Veru and its wholly owned subsidiaries, Aspen Park Pharmaceuticals, Inc. (APP) and The Female Health Company Limited, and The Female Health Company Limited’s wholly owned subsidiary, The Female Health Company (UK) plc (The Female Health Company Limited and The Female Health Company (UK) plc, collectively, the “U.K. subsidiary”), and The Female Health Company (UK) plc’s wholly owned subsidiary, The Female Health Company (M) SDN.BHD (the “Malaysia subsidiary”). All significant intercompany transactions and accounts have been eliminated in consolidation. Prior to the completion of the October 31, 2016 acquisition (the “APP Acquisition”) of APP through the merger of a wholly owned subsidiary of the Company into APP, the Company had been a single product company engaged in marketing, manufacturing and distributing a consumer healthcare product, the FC2 Female Condom/FC2 Internal Condom® (FC2) . The completion of the APP Acquisition transitioned the Company into a biopharmaceutical company focused on oncology and urology with multiple drug products under clinical development. Most of the Company’s net revenues during the three and nine months ended June 30 , 2020 and 2019 were derived from sales of FC2. |
Reclassifications | Reclassifications : Certain prior period amounts on the accompanying unaudited interim condensed consolidated financial statements have been reclassified to conform with the current period presentation. These reclassifications had no effect on the results of operations or financial position for any period presented. |
Leases | Leases : Leases are classified as either operating or finance leases at inception. A right-of-use (ROU) asset and corresponding lease liability are established at an amount equal to the present value of fixed lease payments over the lease term at the commencement date. The ROU asset includes any initial direct costs incurred and lease payments made at or before the commencement date and is reduced by lease incentive payments. The Company has elected not to separate the lease and nonlease components for all classes of underlying assets. The Company uses its incremental borrowing rate as the discount rate to determine the present value of the lease payments for leases that do not have a readily determinable implicit discount rate. The incremental borrowing rate is the rate of interest that the Company would be charged to borrow on a collateralized basis over a similar term and amount in a similar economic environment. The Company determines the incremental borrowing rates for its leases by adjusting the risk-free interest rate with a credit risk premium corresponding to the Company’s credit rating. Operating lease costs are recognized for fixed lease payments on a straight-line basis over the term of the lease. Finance lease costs are a combination of the amortization expense for the ROU asset and interest expense for the outstanding lease liability using the applicable discount rate. Variable lease payments are recognized when incurred based on occurrence or usage. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for short-term leases on a straight-line basis over the lease term. |
Government Grants | Government grants : U.S. GAAP for profit-oriented entities does not define government grants nor is there specific guidance applicable to government grants. Under the Company’s accounting policy for government grants and consistent with non-authoritative guidance, government grants are recognized as a reduction of the related expense. Government grants are recognized when there is reasonable assurance that the Company has met the requirements of the grant and there is reasonable assurance that the grant will be received. Grants that compensate the Company for expenses incurred are recognized as a reduction of the related expenses in the same period in which the expenses are recognized. The Company has elected to treat forgivable loans from a government as a government grant when it is probable that the Company will meet the terms for forgiveness of the loan. |
Other comprehensive loss | Other comprehensive loss : Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net loss. Although certain changes in assets and liabilities, such as foreign currency translation adjustments, are reported as a separate component of the equity section of the accompanying unaudited condensed consolidated balance sheets, these items, along with net loss, are components of other comprehensive loss. For the three and nine months ended June 30 , 2020 and 2019, comprehensive loss is equivalent to the reported net loss. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements : In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016 ‑02, Leases (Topic 842) , which requires that lessees recognize an ROU asset and a lease liability for all leases with lease terms greater than twelve months in the balance sheet. ASU 2016-02 distinguishes leases as either a finance lease or an operating lease, which affects how the leases are measured and presented in the statement of operations and statement of cash flows, and requires disclosure of key information about leasing arrangements. A modified retrospective transition approach is required upon adoption. I n July 2018, the FASB issued ASU No. 2018 ‑10, Codification Improvements to Topic 842, Leases to clarify the implementation guidance and ASU No. 2018 ‑11, Leases (Topic 842) Targeted Improvements . This updated guidance provides an optional transition method, which allows for the initial application of the new accounting standard at the adoption date and the recognition of a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the period of adoption. I n December 2018, the FASB issued ASU 2018-20, Leases (Topic 842): Narrow-Scope Improvements for Lessors to address certain implementation issues facing lessors when adopting ASU 2016 ‑02. I n March 2019, the FASB issued ASU 2019 ‑01, Leases (Topic 842): Codification Improvements to address, among other things, certain transition disclosure requirements subsequent to the adoption of ASU 2016 ‑02. The Company adopted the new lease accounting standard using the modified retrospective approach on October 1, 2019 and elected certain practical expedients, including the optional transition method that allows for the application of the new standard at its adoption date with no restatement of prior period amounts . We elected the package of practical expedients permitted under the transition guidance, which allowed us to not reassess our prior conclusions about lease identification, lease classification, and initial direct costs. Adoption of the new standard resulted in the recording of ROU assets and lease liabilities of approximately $1.2 million and $1.5 million, respectively, and the derecognition of prepaid expenses and operating lease deferred rent liabilities of $23,000 and $247,000 , respectively, as of October 1, 2019 with zero cumulative-effect adjustment to retained earnings. The new standard did not materially impact our consolidated statement of operations or cash flows . In June 2018, the FASB issued ASU 2018 ‑07, Compensation - Stock Compensation (Topic 718) : Improvements to Nonemployee Share-Based Payment Accounting . The purpose of ASU 2018-07 is to expand the scope of Topic 718, Compensation—Stock Compensation (which previousl y only include d share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The Company has issued share-based payments to nonemployees in the past but is not able to predict the amount of future share-based payments to nonemployees, if any. We adopted ASU 2018-07 effective October 1, 2019. The adoption of ASU 2018 ‑07 did not have a material impact on our consolidated financial statements and related disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740). Simplifying the Accounting for Income Taxes . The new guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted. The adoption of ASU 2019-12 is not expected to have a material effect on our consolidated financial statements and related disclosures. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Fair Value Measurements [Abstract] | |
Reconciliation of the Beginning and Ending Liability Balance | Nine Months Ended June 30, 2020 2019 Beginning balance $ 3,625,000 $ 2,426,000 Change in fair value of derivative liabilities 94,000 246,000 Ending balance $ 3,719,000 $ 2,672,000 |
Schedule of Qualitative Information | Weighted Average (range, if applicable) Valuation Methodology Significant Unobservable Input June 30, 2020 September 30, 2019 Monte Carlo Simulation Estimated change of control dates June 2021 to June 2022 September 2020 to December 2021 Discount rate 13.3% to 14.9% 14.4% to 16.8% Probability of change of control 10% to 90% 10% to 90% |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Revenue from Contracts with Customers [Abstract] | |
Revenue from Customers by Products | Three Months Ended Nine Months Ended June 30, June 30, 2020 2019 2020 2019 FC2 Public health sector $ 4,254,197 $ 4,905,874 $ 11,197,635 $ 13,039,878 U.S. prescription channel 5,391,523 4,377,862 18,395,280 9,412,177 Total FC2 9,645,720 9,283,736 29,592,915 22,452,055 PREBOOST® 676,034 443,324 1,249,959 622,929 Net revenues $ 10,321,754 $ 9,727,060 $ 30,842,874 $ 23,074,984 |
Revenue by Geographic Area | Three Months Ended Nine Months Ended June 30, June 30, 2020 2019 2020 2019 United States $ 6,396,762 $ 5,548,987 $ 20,575,515 $ 11,234,870 South Africa 1,182,225 * * * Zimbabwe * * * 2,558,308 Other 2,742,767 4,178,073 10,267,359 9,281,806 Net revenues $ 10,321,754 $ 9,727,060 $ 30,842,874 $ 23,074,984 *Less than 10% of total net revenues |
Accounts Receivable and Conce_2
Accounts Receivable and Concentration of Credit Risk (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Accounts Receivable and Concentration of Credit Risk [Abstract] | |
Components of Accounts Receivable | June 30, September 30, 2020 2019 Trade receivables, gross $ 5,038,398 $ 5,410,165 Less: allowance for doubtful accounts (25,643) (33,143) Less: allowance for sales and payment term discounts (67,779) (49,623) Less: long-term trade receivables* (800,625) (306,342) Accounts receivable, net $ 4,144,351 $ 5,021,057 *Included in other assets on the accompanying unaudited condensed consolidated balance sheets |
Summary of Components of Allowance for Doubtful Accounts | Nine Months Ended June 30, 2020 2019 Beginning balance $ 33,143 $ 36,201 Charges to expense — — Charge-offs (7,500) (3,058) Ending balance $ 25,643 $ 33,143 |
Balance Sheet Information (Tabl
Balance Sheet Information (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Balance Sheet Information [Abstract] | |
Components of Inventory | June 30, September 30, 2020 2019 FC2: Raw material $ 750,688 $ 426,590 Work in process 127,693 187,970 Finished goods 4,268,944 3,157,952 FC2, gross 5,147,325 3,772,512 Less: inventory reserves (29,331) (125,106) FC2, net 5,117,994 3,647,406 PREBOOST® Finished goods 76,448 — Inventory, net $ 5,194,442 $ 3,647,406 |
Summary of Property and Equipment | Estimated June 30, September 30, Useful Life 2020 2019 Plant and equipment: Manufacturing equipment 5 - 8 years $ 2,766,179 $ 2,716,647 Office equipment, furniture and fixtures 3 - 10 years 819,140 795,228 Leasehold improvements 3 - 8 years 298,886 298,886 Total plant and equipment 3,884,205 3,810,761 Less: accumulated depreciation and amortization (3,568,749) (3,458,866) Plant and equipment, net $ 315,456 $ 351,895 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Intangible Assets and Goodwill [Abstract] | |
Gross Carrying Amounts and Net Book Value of Intangible Assets | Gross Carrying Accumulated Net Book Amount Amortization Value Intangible assets with finite lives: Developed technology - PREBOOST ® $ 2,400,000 $ 706,876 $ 1,693,124 Covenants not-to-compete 500,000 261,905 238,095 Total intangible assets with finite lives 2,900,000 968,781 1,931,219 Acquired in-process research and development assets 18,000,000 — 18,000,000 Total intangible assets $ 20,900,000 $ 968,781 $ 19,931,219 The gross carrying amounts and net book value of intangible assets are as follows at September 30, 201 9: Gross Carrying Accumulated Net Book Amount Amortization Value Intangible assets with finite lives: Developed technology - PREBOOST ® $ 2,400,000 $ 523,172 $ 1,876,828 Covenants not-to-compete 500,000 208,333 291,667 Total intangible assets with finite lives 2,900,000 731,505 2,168,495 Acquired in-process research and development assets 18,000,000 — 18,000,000 Total intangible assets $ 20,900,000 $ 731,505 $ 20,168,495 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Debt [Abstract] | |
Credit Agreement | June 30, September 30, 2020 2019 Aggregate repayment obligation $ 17,650,000 $ 17,650,000 Less: cumulative payments (8,903,265) (5,578,085) Remaining repayment obligation 8,746,735 12,071,915 Less: unamortized discounts (2,102,227) (4,590,974) Less: unamortized deferred issuance costs (49,413) (107,910) Credit agreement, excluding embedded derivative liability, net 6,595,095 7,373,031 Add: embedded derivative liability at fair value (see Note 3) 4,000 899,000 Credit agreement, net 6,599,095 8,272,031 Credit agreement, short-term portion (6,599,095) (5,385,649) Credit agreement, long-term portion $ — $ 2,886,382 |
Residual Royalty Agreement Liability | June 30, September 30, 2020 2019 Residual royalty agreement liability, fair value at inception $ 346,000 $ 346,000 Add: accretion of liability using effective interest rate 1,702,353 773,518 Residual royalty agreement liability, excluding embedded derivative liability 2,048,353 1,119,518 Add: embedded derivative liability at fair value (see Note 3) 3,715,000 2,726,000 Total residual royalty agreement liability 5,763,353 3,845,518 Residual royalty agreement liability, short-term portion (356,346) — Residual royalty agreement liability, long-term portion $ 5,407,007 $ 3,845,518 |
Credit Agreement Interest Expense | Three Months Ended Nine Months Ended June 30, June 30, 2020 2019 2020 2019 Amortization of discounts $ 782,169 $ 922,144 $ 2,488,747 $ 3,187,972 Accretion of residual royalty agreement 369,138 147,223 928,835 363,520 Amortization of deferred issuance costs 18,385 21,909 58,497 76,479 Interest expense $ 1,169,692 $ 1,091,276 $ 3,476,079 $ 3,627,971 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Share-based Compensation [Abstract] | |
Recorded Share-Based Compensation Expenses | Three Months Ended Nine Months Ended June 30, June 30, 2020 2019 2020 2019 Cost of sales $ 7,743 $ 9,998 $ 38,713 $ 25,728 Selling, general and administrative 490,647 347,165 1,442,970 1,081,600 Research and development 186,924 111,044 499,809 274,344 Share-based compensation $ 685,314 $ 468,207 $ 1,981,492 $ 1,381,672 |
Weighted Average Assumptions for Options Granted | Three Months Ended Nine Months Ended June 30, June 30, 2020 2019 2020 2019 Weighted Average Assumptions: Expected volatility — 65.29% 63.13% 65.91% Expected dividend yield — 0.00% 0.00% 0.00% Risk-free interest rate — 2.23% 1.63% 2.37% Expected term (in years) — 6.0 5.9 5.9 Fair value of options granted $ — $ 0.97 $ 1.14 $ 0.92 |
Summary of Stock Options Outstanding and Exercisable | Weighted Average Remaining Aggregate Number of Exercise Price Contractual Term Intrinsic Shares Per Share (years) Value Outstanding at September 30, 2019 7,027,989 $ 1.58 Granted 2,228,827 $ 1.97 Exercised (441,548) $ 1.67 Forfeited and expired (195,434) $ 1.55 Outstanding at June 30, 2020 8,619,834 $ 1.68 8.01 $ 14,349,547 Exercisable at June 30, 2020 4,120,510 $ 1.53 7.17 $ 7,453,274 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Components of Lease Cost | Three Months Ended Nine Months Ended June 30, 2020 June 30, 2020 Finance lease cost: Amortization of right-of-use assets $ 2,178 $ 6,535 Interest on lease liabilities 1,238 4,097 Operating lease cost 124,326 378,006 Short-term lease cost 1,863 5,589 Variable lease cost 24,213 91,349 Sublease income (45,382) (135,071) Total lease cost $ 108,436 $ 350,505 |
Summary of Lease Information | June 30, 2020 Operating Leases Weighted-average remaining lease term 4.0 Weighted-average discount rate 12.02% Finance Leases Weighted-average remaining lease term 1.7 Weighted average discount rate 13.86% |
Schedule of Maturities of Lease Liabilities | Operating Finance Sublease Leases Leases Income Fiscal year ended September 30, 2020 $ 129,402 $ 5,432 $ 48,745 2021 431,061 22,199 198,668 2022 350,054 9,496 203,584 2023 295,258 — 190,749 2024 191,559 — — Thereafter 164,725 — — Total lease payments 1,562,059 37,127 $ 641,746 Less imputed interest (328,522) (4,261) Total lease liabilities $ 1,233,537 $ 32,866 |
Schedule of Future Minimum Payments Under Leases | Operating Sublease Leases Income Net Total Fiscal year ended September 30, 2020 $ 469,002 $ 193,753 $ 275,249 2021 433,751 198,668 235,083 2022 337,456 203,584 133,872 2023 114,493 190,749 (76,256) 2024 11,238 — 11,238 Total minimum lease payments $ 1,365,940 $ 786,754 $ 579,186 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Income Taxes [Abstract] | |
Reconciliation of Income Tax Expense (Benefit) | Three Months Ended Nine Months Ended June 30, June 30, 2020 2019 2020 2019 Income tax benefit at U.S. federal statutory rates $ (584,825) $ (582,652) $ (1,493,179) $ (1,856,337) State income tax benefit, net of federal benefits (45,268) (138,089) (115,615) (439,952) Non-deductible expenses 332,230 2,269 335,869 7,052 Effect of foreign income tax rates (16,478) 43 49,908 (3,484) Effect of global intangible low taxed income 85,522 2,554 101,642 66,182 Change in valuation allowance 415,449 716,442 1,097,900 2,367,633 Other, net 53,872 (1,025) 54,094 (23,887) Income tax expense (benefit) $ 240,502 $ (458) $ 30,619 $ 117,207 |
Significant Components of Deferred Tax Assets and Liabilities | June 30, September 30, 2020 2019 Deferred tax assets: Federal net operating loss carryforwards $ 8,854,855 $ 8,971,569 State net operating loss carryforwards 1,686,902 1,689,536 Foreign net operating loss carryforwards – U.K. 10,600,648 10,486,476 Foreign capital allowance – U.K. 103,400 103,400 Share-based compensation 1,116,240 804,378 Interest expense 757,141 — Other, net – U.K. 50,781 50,781 Other, net – U.S. 592,237 434,764 Gross deferred tax assets 23,762,204 22,540,904 Valuation allowance for deferred tax assets (10,928,109) (9,830,209) Net deferred tax assets 12,834,095 12,710,695 Deferred tax liabilities: In-process research and development (4,072,740) (4,072,740) Developed technology (383,092) (424,657) Covenant not-to-compete (53,872) (65,993) Other, net – Malaysia 17,251 (3,865) Other, net – U.S. (6,376) (6,376) Net deferred tax liabilities (4,498,829) (4,573,631) Net deferred tax asset $ 8,335,266 $ 8,137,064 |
Schedule of Deferred Tax Amounts Classified in Balance Sheets | June 30, September 30, 2020 2019 Deferred tax asset – U.K. $ 8,610,759 $ 8,433,669 Deferred tax asset – Malaysia 17,247 — Total deferred tax asset $ 8,628,006 $ 8,433,669 Deferred tax liability – U.S. $ (292,740) $ (292,740) Deferred tax liability – Malaysia — (3,865) Total deferred tax liability $ (292,740) $ (296,605) |
Industry Segments (Tables)
Industry Segments (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Industry Segments [Abstract] | |
Schedule of Segment Reporting Information | Three Months Ended Nine Months Ended June 30, June 30, 2020 2019 2020 2019 Commercial $ 5,619,168 $ 5,263,796 $ 17,608,972 $ 11,424,718 Research and development (4,436,496) (4,853,344) (13,549,652) (10,103,528) Corporate (2,575,524) (2,252,454) (7,536,243) (6,299,509) Operating loss $ (1,392,852) $ (1,842,002) $ (3,476,923) $ (4,978,319) |
Basis of Presentation (Narrativ
Basis of Presentation (Narrative) (Details) - USD ($) | Jun. 30, 2020 | Oct. 01, 2019 | Sep. 30, 2019 |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items] | |||
Right-of-use assets | $ 1,012,951 | ||
Lease liabilities | 1,233,537 | ||
Retained earnings | $ (77,360,007) | $ (70,219,017) | |
Accounting Standards Update 2016-02 [Member] | |||
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items] | |||
Right-of-use assets | $ 1,200,000 | ||
Lease liabilities | 1,500,000 | ||
Prepaid expenses | (23,000) | ||
Deferred rent | (247,000) | ||
Cumulative Effect, Period of Adoption, Adjustment [Member] | |||
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items] | |||
Retained earnings | $ 0 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) | 9 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Fair Value Measurements [Abstract] | ||
Transfers to level 1 | $ 0 | $ 0 |
Transfers to level 2 | 0 | 0 |
Transfers to Level 3 | $ 0 | $ 0 |
Fair Value Measurements (Reconc
Fair Value Measurements (Reconciliation of the Beginning and Ending Liability Balance) (Details) - USD ($) | 9 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Fair Value Measurements [Abstract] | ||
Beginning balance | $ 3,625,000 | $ 2,426,000 |
Change in fair value of derivative liabilities | 94,000 | 246,000 |
Ending balance | $ 3,719,000 | $ 2,672,000 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Qualitative Information) (Details) - item | 9 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Sep. 30, 2019 | |
Minimum [Member] | Estimated Change Of Control Dates [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Estimated change of control date | Jun. 1, 2021 | Sep. 1, 2020 |
Minimum [Member] | Discount Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable input | 13.3 | 14.4 |
Minimum [Member] | Probability Of Change Of Control [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable input | 10 | 10 |
Maximum [Member] | Estimated Change Of Control Dates [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Estimated change of control date | Jun. 1, 2022 | Dec. 1, 2021 |
Maximum [Member] | Discount Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable input | 14.9 | 16.8 |
Maximum [Member] | Probability Of Change Of Control [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Significant unobservable input | 90 | 90 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Narrative) (Details) - USD ($) | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | |
Revenue from Contracts with Customers [Abstract] | |||
Contract liability | $ 249,000 | $ 249,000 | |
Unearned revenue | 0 | $ 0 | |
Revenue recognized from previously recorded contract liabilities | $ 804,000 | $ 723,000 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers (Revenue from Customers by Products) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue, Major Customer [Line Items] | ||||
Revenues | $ 10,321,754 | $ 9,727,060 | $ 30,842,874 | $ 23,074,984 |
FC2 Segment [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Revenues | 9,645,720 | 9,283,736 | 29,592,915 | 22,452,055 |
PREBOOST Segment [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Revenues | 676,034 | 443,324 | 1,249,959 | 622,929 |
Public Sector [Member] | FC2 Segment [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Revenues | 4,254,197 | 4,905,874 | 11,197,635 | 13,039,878 |
U.S. Prescription Channel Segment [Member] | FC2 Segment [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Revenues | $ 5,391,523 | $ 4,377,862 | $ 18,395,280 | $ 9,412,177 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers (Revenue by Geographic Area) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | $ 10,321,754 | $ 9,727,060 | $ 30,842,874 | $ 23,074,984 |
United States [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | 6,396,762 | 5,548,987 | 20,575,515 | 11,234,870 |
South Africa [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | 1,182,225 | |||
Zimbabwe [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | 2,558,308 | |||
Other Countries [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | $ 2,742,767 | $ 4,178,073 | $ 10,267,359 | $ 9,281,806 |
Accounts Receivable and Conce_3
Accounts Receivable and Concentration of Credit Risk (Narrative) (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2020USD ($)customer | Jun. 30, 2019customer | Jun. 30, 2020USD ($)customer | Jun. 30, 2019customer | Sep. 30, 2019USD ($)customer | |
Minimum [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Credit terms | 30 days | ||||
Maximum [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Credit terms | 120 days | ||||
Assets, Current [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Number of Customers | 0 | 0 | |||
Accounts Receivable [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Concentration risk, percentage | 76.00% | 66.00% | |||
Number of Customers | 3 | 2 | |||
Total Revenue [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Concentration risk, percentage | 72.00% | 63.00% | 74.00% | 64.00% | |
Number of Customers | 3 | 3 | 3 | 3 | |
Brazil [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Credit terms | 180 days | ||||
Long term trade receivable | $ | $ 800,000 | $ 800,000 | $ 300,000 |
Accounts Receivable and Conce_4
Accounts Receivable and Concentration of Credit Risk (Components of Accounts Receivable) (Details) - USD ($) | Jun. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 |
Accounts Receivable and Concentration of Credit Risk [Abstract] | ||||
Trade receivables, gross | $ 5,038,398 | $ 5,410,165 | ||
Less: allowance for doubtful accounts | (25,643) | (33,143) | $ (33,143) | $ (36,201) |
Less: allowance for sales and payment term discounts | (67,779) | (49,623) | ||
Less: long-term trade receivables | (800,625) | (306,342) | ||
Accounts receivable, net | $ 4,144,351 | $ 5,021,057 |
Accounts Receivable and Conce_5
Accounts Receivable and Concentration of Credit Risk (Summary of Components of Allowance for Doubtful Accounts) (Details) - USD ($) | 9 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Accounts Receivable and Concentration of Credit Risk [Abstract] | ||
Beginning balance | $ 33,143 | $ 36,201 |
Charges to expense | ||
Charge-offs | (7,500) | (3,058) |
Ending balance | $ 25,643 | $ 33,143 |
Balance Sheet Information (Comp
Balance Sheet Information (Components Of Inventory) (Details) - USD ($) | Jun. 30, 2020 | Sep. 30, 2019 |
Inventory [Line Items] | ||
Inventory, net | $ 5,194,442 | $ 3,647,406 |
FC2 [Member] | ||
Inventory [Line Items] | ||
Raw material | 750,688 | 426,590 |
Work in process | 127,693 | 187,970 |
Finished goods | 4,268,944 | 3,157,952 |
Inventory, gross | 5,147,325 | 3,772,512 |
Less: inventory reserves | (29,331) | (125,106) |
Inventory, net | 5,117,994 | 3,647,406 |
PREBOOST [Member] | ||
Inventory [Line Items] | ||
Finished goods | 76,448 | |
Inventory, net | $ 5,194,442 | $ 3,647,406 |
Balance Sheet Information (Summ
Balance Sheet Information (Summary of Property and Equipment) (Details) - USD ($) | 9 Months Ended | |
Jun. 30, 2020 | Sep. 30, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Total plant and equipment | $ 3,884,205 | $ 3,810,761 |
Less: accumulated depreciation and amortization | (3,568,749) | (3,458,866) |
Plant and equipment, net | 315,456 | 351,895 |
Manufacturing Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total plant and equipment | $ 2,766,179 | 2,716,647 |
Manufacturing Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 5 years | |
Manufacturing Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 8 years | |
Office Equipment, Furniture And Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total plant and equipment | $ 819,140 | 795,228 |
Office Equipment, Furniture And Fixtures [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 3 years | |
Office Equipment, Furniture And Fixtures [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 10 years | |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total plant and equipment | $ 298,886 | $ 298,886 |
Leasehold Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 3 years | |
Leasehold Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 8 years |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | |
Intangible Assets and Goodwill [Abstract] | |||||
Amortization expense | $ 79,000 | $ 77,000 | $ 237,276 | $ 231,926 | |
Goodwill | $ 6,878,932 | 6,878,932 | $ 6,878,932 | ||
Change in goodwill | $ 0 | $ 0 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill (Gross Carrying Amounts and Net Book Value of Intangible Assets) (Details) - USD ($) | Jun. 30, 2020 | Sep. 30, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets with finite lives, Gross Carrying Amount | $ 2,900,000 | $ 2,900,000 |
Accumulated Amortization | 968,781 | 731,505 |
Intangible assets with finite lives, Net Book Value | 1,931,219 | 2,168,495 |
Total intangible assets, Gross Carrying Amount | 20,900,000 | 20,900,000 |
Total intangible assets, Net Book Value | 19,931,219 | 20,168,495 |
Acquired In-Process Research And Development Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets with Indefinite lives, Net Book Value | 18,000,000 | 18,000,000 |
Developed Technology - PREBOOST [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets with finite lives, Gross Carrying Amount | 2,400,000 | 2,400,000 |
Accumulated Amortization | 706,876 | 523,172 |
Intangible assets with finite lives, Net Book Value | 1,693,124 | 1,876,828 |
Covenants Not-To-Compete [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets with finite lives, Gross Carrying Amount | 500,000 | 500,000 |
Accumulated Amortization | 261,905 | 208,333 |
Intangible assets with finite lives, Net Book Value | $ 238,095 | $ 291,667 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) | Mar. 05, 2018USD ($) | Jun. 30, 2020USD ($)item | Jun. 30, 2021USD ($) | Nov. 01, 2019USD ($) | Sep. 30, 2019USD ($) |
Line of Credit Facility [Line Items] | |||||
Payments on notes payable | $ 555,920 | ||||
Change In Control Or Sale Of Business [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Payment terms, change in control or sale of business fee, percentage multiple | item | 5 | ||||
SWK Credit Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Loan amount | $ 10,000,000 | $ 17,650,000 | $ 17,650,000 | ||
Repayment percentage | 176.50% | ||||
Payment terms, product revenue threshold | $ 10,000,000 | ||||
Percentage of outstanding shares acquired which constitutes a change of control | 50.00% | ||||
Period to replace key persons | 90 days | ||||
Required minimum liquid assets | $ 1,000,000 | ||||
Pledge percentage | 65.00% | ||||
Net proceeds after fees and expenses | $ 9,900,000 | ||||
Deferred loan issuance costs | $ 267,000 | ||||
SWK Credit Agreement [Member] | Product Revenue Under $10 Million [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Payment terms, period of revenue calculation | 12 months | ||||
Payment terms, payment percentage | 32.50% | ||||
SWK Credit Agreement [Member] | Product Revenue Over $10 Million [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Payment terms, period of revenue calculation | 12 months | ||||
SWK Credit Agreement [Member] | Product Revenue Over $10 Million, 2019 [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Payment terms, payment percentage | 12.50% | ||||
Payment terms, percentage of product revenue after initial threshold | 5.00% | ||||
SWK Credit Agreement [Member] | Product Revenue Over $10 Million, 2020 [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Payment terms, payment percentage | 25.00% | ||||
Payment terms, elapsed period payment threshold | $ 12,500,000 | ||||
Payment terms, percentage of product revenue after initial threshold | 10.00% | ||||
SWK Credit Agreement [Member] | Product Revenue Over $10 Million, 2021 [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Payment terms, payment percentage | 30.00% | ||||
Payment terms, elapsed period payment threshold | $ 12,500,000 | ||||
Payment terms, percentage of product revenue after initial threshold | 20.00% | ||||
SWK Credit Agreement [Member] | Change In Control Or Sale Of Business [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Repayment percentage | 176.50% | ||||
Payment terms, period of revenue calculation | 12 months | ||||
Payment terms, payment percentage | 5.00% | ||||
Payment terms, change in control or sale of business fee, amount | $ 2,000,000 | ||||
SWK Credit Agreement [Member] | Scenario, Forecast [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Payments on notes payable | $ 8,200,000 | ||||
Residual Royalty Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Payment terms, period of revenue calculation | 12 months | ||||
Payment terms, payment percentage | 5.00% | ||||
Payment terms, percentage of advanced amount to be repaid before regular royalty payment | 175.00% | ||||
Payment terms, change in control or sale of business fee, amount | $ 2,000,000 | ||||
Payment terms, change in control or sale of business fee, percentage of product revenue | 5.00% | ||||
Payment terms, change in control or sale of business fee, percentage multiple | item | 5 | ||||
Premium Finance Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Loan amount | $ 837,000 | ||||
Interest rate | 4.18% | ||||
Number of installments | item | 3 | ||||
Loan payable | $ 281,000 | ||||
Maximum [Member] | SWK Credit Agreement [Member] | Product Revenue Over $10 Million, 2019 [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Payment terms, elapsed period payment threshold | $ 12,500,000 |
Debt (Credit Agreement) (Detail
Debt (Credit Agreement) (Details) - USD ($) | Jun. 30, 2020 | Sep. 30, 2019 | Mar. 05, 2018 |
Line of Credit Facility [Line Items] | |||
Credit agreement, short-term portion | $ (6,599,095) | $ (5,385,649) | |
Credit agreement, long-term portion | 2,886,382 | ||
SWK Credit Agreement [Member] | |||
Line of Credit Facility [Line Items] | |||
Aggregate repayment obligation | 17,650,000 | 17,650,000 | $ 10,000,000 |
Less: cumulative payments | (8,903,265) | (5,578,085) | |
Remaining repayment obligation | 8,746,735 | 12,071,915 | |
Less: unamortized discounts | (2,102,227) | (4,590,974) | |
Less: unamortized deferred issuance costs | (49,413) | (107,910) | |
Credit agreement, excluding embedded derivative liability, net | 6,595,095 | 7,373,031 | |
Add: embedded derivative liability at fair value (see Note 3) | 4,000 | 899,000 | |
Credit agreement, net | 6,599,095 | 8,272,031 | |
Credit agreement, short-term portion | $ (6,599,095) | (5,385,649) | |
Credit agreement, long-term portion | $ 2,886,382 |
Debt (Residual Royalty Agreemen
Debt (Residual Royalty Agreement Liability) (Details) - USD ($) | Jun. 30, 2020 | Sep. 30, 2019 |
Residual Royalty Agreement Disclosures [Line Items] | ||
Residual royalty agreement liability, short-term portion | $ (356,346) | |
Residual royalty agreement liability, long-term portion | 5,407,007 | $ 3,845,518 |
Residual Royalty Agreement [Member] | ||
Residual Royalty Agreement Disclosures [Line Items] | ||
Residual royalty agreement liability, fair value at inception | 346,000 | 346,000 |
Add: accretion of liability using effective interest rate | 1,702,353 | 773,518 |
Residual royalty agreement liability, excluding embedded derivative liability | 2,048,353 | 1,119,518 |
Add: embedded derivative liability at fair value (see Note 3) | 3,715,000 | 2,726,000 |
Total residual royalty agreement liability | 5,763,353 | 3,845,518 |
Residual royalty agreement liability, short-term portion | (356,346) | |
Residual royalty agreement liability, long-term portion | $ 5,407,007 | $ 3,845,518 |
Debt (Credit Agreement Interest
Debt (Credit Agreement Interest Expense) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Debt [Abstract] | ||||
Amortization of discounts | $ 782,169 | $ 922,144 | $ 2,488,747 | $ 3,187,972 |
Accretion of residual royalty agreement | 369,138 | 147,223 | 928,835 | 363,520 |
Amortization of deferred issuance costs | 18,385 | 21,909 | 58,497 | 76,479 |
Interest expense | $ 1,169,692 | $ 1,091,276 | $ 3,476,079 | $ 3,627,971 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) | Jun. 26, 2020 | Oct. 01, 2018 | Dec. 29, 2017 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 26, 2020 | Sep. 30, 2019 | Oct. 31, 2016 |
Class of Stock [Line Items] | ||||||||||||
Preferred stock, issued | 0 | 0 | 0 | 0 | ||||||||
Preferred stock, outstanding | 0 | 0 | 0 | |||||||||
Common Stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||
Common stock | $ 720,474 | $ 720,474 | $ 672,220 | |||||||||
Proceeds from sale of stock under purchase agreement | $ 13,399,999 | $ 3,600,000 | ||||||||||
Value of shares issued for services | $ 680,937 | |||||||||||
Aspire Capital [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Maximum purchase of shares per business day | 200,000 | 200,000 | ||||||||||
Common stock | $ 23,900,000 | $ 15,000,000 | $ 23,900,000 | |||||||||
Term of purchase agreement | 36 months | |||||||||||
Stock issuance price | $ 0.50 | $ 0.50 | ||||||||||
Maximum VWAP percentage | 30.00% | |||||||||||
General percentage of VWAP pursuant to notice | 97.00% | |||||||||||
Stock issued during period, shares, new issues | 1,644,737 | 6,214,343 | ||||||||||
Proceeds from sale of stock under purchase agreement | $ 5,000,000 | $ 15,000,000 | ||||||||||
Additional paid-in capital | 153,000 | |||||||||||
Related expenses | 50,000 | 78,000 | ||||||||||
Deferred assets | $ 731,000 | $ 425,000 | $ 731,000 | |||||||||
Unamortized deferred assets | $ 578,000 | $ 578,000 | $ 238,000 | |||||||||
Shares issued in connection with common stock purchase agreement (in Shares) | 212,130 | 304,457 | ||||||||||
Value of shares issued for services | $ 681,000 | $ 347,000 | ||||||||||
Financial Advisor Warrant [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Warrant to purchase common stock shares | 2,326,841 | 2,326,841 | 2,585,379 | |||||||||
Award expiration period | 5 years | |||||||||||
Warrants exercised | 258,538 | |||||||||||
Strike price per share | $ 1.93 | |||||||||||
Stock issued during period, shares, new issues | 109,143 | |||||||||||
Preferred Class A [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | |||||||||
Preferred stock, par or stated value per share (in Dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||
Preferred stock, issued | 0 | 0 | 0 | |||||||||
Preferred stock, outstanding | 0 | 0 | 0 | |||||||||
Preferred Class A Series 1 [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Preferred stock, shares authorized | 1,040,000 | 1,040,000 | 1,040,000 | |||||||||
Preferred Class A Series 2 [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Preferred stock, shares authorized | 1,500,000 | 1,500,000 | 1,500,000 | |||||||||
Preferred Class A Series 3 [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Preferred stock, shares authorized | 700,000 | 700,000 | 700,000 | |||||||||
Preferred Class A Series 4 [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Preferred stock, shares authorized | 548,000 | 548,000 | ||||||||||
Preferred Class B [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Preferred stock, shares authorized | 15,000 | 15,000 | 15,000 | |||||||||
Preferred stock, par or stated value per share (in Dollars per share) | $ 0.50 | $ 0.50 | $ 0.50 | |||||||||
Preferred stock, issued | 0 | 0 | 0 | |||||||||
Preferred stock, outstanding | 0 | 0 | 0 | |||||||||
Common Stock [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Stock issuance price | $ 1.40 | |||||||||||
Stock issued during period, shares, new issues | 7,142,857 | 3,842,070 | 300,000 | 2,000,000 | 7,142,857 | 2,497,333 | ||||||
Proceeds from sale of stock under purchase agreement | $ 9,100,000 | $ 8,400,000 | ||||||||||
Additional paid-in capital | $ 238,000 | |||||||||||
Shares issued in connection with common stock purchase agreement (in Shares) | 212,130 | |||||||||||
Value of shares issued for services | $ 2,121 |
Share-based Compensation (Narra
Share-based Compensation (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 24, 2020 | Jul. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Grants in period | 0 | |||||
Proceeds from stock option exercises | $ 415,000 | $ 415,464 | $ 200,000 | |||
Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting period | 3 years | |||||
Grants in period | 2,228,827 | |||||
Issuance of common stock upon cashless exercise of options | 143,958 | 34,299 | ||||
Cashless options, exercises in period | 223,415 | 116,666 | ||||
Options, exercises in period, intrinsic value | $ 1,100,000 | $ 105,000 | ||||
Shares exercised | 441,548 | |||||
Share price | $ 3.34 | $ 3.34 | ||||
Unrecognized compensation expense, stock options | $ 3,400,000 | $ 3,400,000 | ||||
Unrecognized compensation expense, period for recognition | 3 years | |||||
Stock Appreciation Rights (SARs) [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award expiration period | 10 years | |||||
Exercise price per share | $ 0.95 | $ 0.95 | ||||
Vested shares outstanding | 50,000 | 50,000 | ||||
Stock Appreciation Rights (SARs) [Member] | The APP Merger [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vest date | Oct. 31, 2018 | |||||
Stock Appreciation Rights (SARs) [Member] | Employee [Member] | The APP Merger [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares issued | 50,000 | |||||
Stock Appreciation Rights (SARs) [Member] | Outside Directors [Member] | The APP Merger [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares issued | 140,000 | |||||
Maximum [Member] | Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award expiration period | 10 years | |||||
2008 Stock Incentive Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized | 0 | 0 | ||||
2017 Equity Incentive Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized | 4,700,000 | |||||
Number of shares available | 101,747 | 101,747 | ||||
2018 Equity Incentive Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized | 11,000,000 | |||||
Number of shares available | 5,881,998 | 5,881,998 |
Share-based Compensation (Recor
Share-based Compensation (Recorded Share-Based Compensation Expenses) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share-based compensation | $ 685,314 | $ 468,207 | $ 1,981,492 | $ 1,381,672 |
Cost of Sales [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share-based compensation | 7,743 | 9,998 | 38,713 | 25,728 |
Selling, General and Administrative [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share-based compensation | 490,647 | 347,165 | 1,442,970 | 1,081,600 |
Research and development [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share-based compensation | $ 186,924 | $ 111,044 | $ 499,809 | $ 274,344 |
Share-based Compensation (Weigh
Share-based Compensation (Weighted Average Assumptions for Options Granted) (Details) - Stock Option [Member] - $ / shares | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 65.29% | 63.13% | 65.91% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 2.23% | 1.63% | 2.37% |
Expected term (in years) | 6 years | 5 years 10 months 24 days | 5 years 10 months 24 days |
Fair value of options granted | $ 0.97 | $ 1.14 | $ 0.92 |
Share-based Compensation (Summa
Share-based Compensation (Summary of Stock Options Outstanding and Exercisable) (Details) | 3 Months Ended | 9 Months Ended |
Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2020USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares Granted | 0 | |
Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares Outstanding at Beginning of Period | 7,027,989 | |
Number of Shares Granted | 2,228,827 | |
Number of Shares Exercised | (441,548) | |
Number of Shares Forfeited and Expired | (195,434) | |
Number of Shares Outstanding at End of Period | 8,619,834 | 8,619,834 |
Number of Shares Exercisable at End of Period | 4,120,510 | 4,120,510 |
Weighted Average Exercise Price Per Share, Outstanding at Beginning of Period | $ / shares | $ 1.58 | |
Weighted Average Exercise Price Per Share, Granted | $ / shares | 1.97 | |
Weighted Average Exercise Price Per Share, Exercised | $ / shares | 1.67 | |
Weighted Average Exercise Price Per Share, Forfeited and Expired | $ / shares | 1.55 | |
Weighted Average Exercise Price Per Share, Outstanding at End of Period | $ / shares | $ 1.68 | 1.68 |
Weighted Average Exercise Price Per Share, Exercisable at End of Period | $ / shares | $ 1.53 | $ 1.53 |
Weighted Average Remaining Contractual Term, Outstanding at End of Period | 8 years 4 days | |
Weighted Average Remaining Contractual Term, Exercisable at End of Period | 7 years 2 months 1 day | |
Aggregate Intrinsic Value, Outstanding at End of Period | $ | $ 14,349,547 | $ 14,349,547 |
Aggregate Intrinsic Value, Exercisable at End of Period | $ | $ 7,453,274 | $ 7,453,274 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) - USD ($) | 9 Months Ended | |
Jun. 30, 2020 | Sep. 30, 2019 | |
Payment of operating lease liabilities | $ 350,000 | |
Finance lease, ROU asset | 36,000 | |
Current finance lease liabilities | 20,000 | |
Noncurrent finance lease liabilities | $ 12,000 | |
Capital leased assets | $ 43,000 | |
Capital lease obligations | $ 42,000 | |
Minimum [Member] | ||
Remaining lease terms | 1 year | |
Maximum [Member] | ||
Remaining lease terms | 6 years |
Leases (Components of Lease Cos
Leases (Components of Lease Cost) (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
Leases [Abstract] | ||
Finance lease cost: Amortization of right-of-use assets | $ 2,178 | $ 6,535 |
Finance lease cost: Interest on lease liabilities | 1,238 | 4,097 |
Operating lease cost | 124,326 | 378,006 |
Short-term lease cost | 1,863 | 5,589 |
Variable lease cost | 24,213 | 91,349 |
Sublease income | (45,382) | (135,071) |
Total lease cost | $ 108,436 | $ 350,505 |
Leases (Summary of Lease Inform
Leases (Summary of Lease Information) (Details) | Jun. 30, 2020 |
Leases [Abstract] | |
Operating Leases, Weighted-average remaining lease term | 4 years |
Operating Leases, Weighted-average discount rate | 12.02% |
Finance Leases, Weighted-average remaining lease term | 1 year 8 months 12 days |
Finance Leases, Weighted-average discount rate | 13.86% |
Leases (Schedule of Maturities
Leases (Schedule of Maturities of Lease Liabilities) (Details) | Jun. 30, 2020USD ($) |
Leases [Abstract] | |
Operating Leases, 2020 | $ 129,402 |
Operating Leases, 2021 | 431,061 |
Operating Leases, 2022 | 350,054 |
Operating Leases, 2023 | 295,258 |
Operating Leases, 2024 | 191,559 |
Operating Leases, Thereafter | 164,725 |
Operating Leases, Total lease payments | 1,562,059 |
Operating Leases, Less imputed interest | (328,522) |
Operating Leases, Total lease liabilities | 1,233,537 |
Finance Leases, 2020 | 5,432 |
Finance Leases, 2021 | 22,199 |
Finance Leases, 2022 | 9,496 |
Finance Leases, Total lease payments | 37,127 |
Finance Leases, Less imputed interest | (4,261) |
Finance Leases, Total lease liabilities | 32,866 |
Sublease Income, 2020 | 48,745 |
Sublease Income, 2021 | 198,668 |
Sublease Income, 2022 | 203,584 |
Sublease Income, 2023 | 190,749 |
Sublease Income, Total lease payments | $ 641,746 |
Leases (Schedule of Future Mini
Leases (Schedule of Future Minimum Payments Under Leases) (Details) | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Operating Leases, 2020 | $ 469,002 |
Operating Leases, 2021 | 433,751 |
Operating Leases, 2022 | 337,456 |
Operating Leases, 2023 | 114,493 |
Operating Leases, 2024 | 11,238 |
Operating Leases, Total minimum lease payments | 1,365,940 |
Sublease Income, 2020 | 193,753 |
Sublease Income, 2021 | 198,668 |
Sublease Income, 2022 | 203,584 |
Sublease Income, 2022 | 190,749 |
Sublease Income, Total minimum lease payments | 786,754 |
Operating Leases, Net of Sublease Income, 2020 | 275,249 |
Operating Leases, Net of Sublease Income, 2021 | 235,083 |
Operating Leases, Net of Sublease Income, 2022 | 133,872 |
Operating Leases, Net of Sublease Income, 2023 | (76,256) |
Operating Leases, Net of Sublease Income, 2024 | 11,238 |
Operating Leases, Net of Sublease Income, Total minimum lease payments | $ 579,186 |
Contingent Liabilities (Narrati
Contingent Liabilities (Narrative) (Details) $ in Millions | Jun. 30, 2020USD ($) |
Contingent Liabilities [Abstract] | |
Product liability insurance, coverage amount | $ 10 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2020 | Sep. 30, 2019 | |
Income Tax Expense (Benefit) [Line Items] | ||
Corporate income tax rate | 21.00% | |
Alternative Minimum Tax [Member] | ||
Income Tax Expense (Benefit) [Line Items] | ||
Tax credit carryforward | $ 0.5 | |
Minimum [Member] | ||
Income Tax Expense (Benefit) [Line Items] | ||
Operating loss carryforwards, expiration date | Dec. 31, 2022 | |
Maximum [Member] | ||
Income Tax Expense (Benefit) [Line Items] | ||
Operating loss carryforwards, expiration date | Dec. 31, 2038 | |
Domestic [Member] | ||
Income Tax Expense (Benefit) [Line Items] | ||
Operating loss carryforwards | $ 42.6 | |
Domestic [Member] | 2022 to 2038 [Member] | ||
Income Tax Expense (Benefit) [Line Items] | ||
Operating loss carryforwards | 14.4 | |
Domestic [Member] | Indefinite [Member] | ||
Income Tax Expense (Benefit) [Line Items] | ||
Operating loss carryforwards | 28.2 | |
State [Member] | ||
Income Tax Expense (Benefit) [Line Items] | ||
Operating loss carryforwards | 25.8 | |
State [Member] | 2022 to 2038 [Member] | ||
Income Tax Expense (Benefit) [Line Items] | ||
Operating loss carryforwards | 19.9 | |
State [Member] | Indefinite [Member] | ||
Income Tax Expense (Benefit) [Line Items] | ||
Operating loss carryforwards | 5.9 | |
Foreign [Member] | Indefinite [Member] | ||
Income Tax Expense (Benefit) [Line Items] | ||
Operating loss carryforwards | $ 61.7 |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of Income Tax Expense (Benefit)) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Taxes [Abstract] | ||||
Income tax benefit at U.S. federal statutory rates | $ (584,825) | $ (582,652) | $ (1,493,179) | $ (1,856,337) |
State income tax benefit, net of federal benefits | (45,268) | (138,089) | (115,615) | (439,952) |
Non-deductible expenses | 332,230 | 2,269 | 335,869 | 7,052 |
Effect of foreign income tax rates | (16,478) | 43 | 49,908 | (3,484) |
Effect of global intangible low taxed income | 85,522 | 2,554 | 101,642 | 66,182 |
Change in valuation allowance | 415,449 | 716,442 | 1,097,900 | 2,367,633 |
Other, net | 53,872 | (1,025) | 54,094 | (23,887) |
Income tax expense (benefit) | $ 240,502 | $ (458) | $ 30,619 | $ 117,207 |
Income Taxes (Significant Compo
Income Taxes (Significant Components of Deferred Tax Assets and Liabilities) (Details) - USD ($) | Jun. 30, 2020 | Sep. 30, 2019 |
Components Of Deferred Tax Assets And Liabilities [Line Items] | ||
Federal net operating loss carryforwards | $ 8,854,855 | $ 8,971,569 |
State net operating loss carryforwards | 1,686,902 | 1,689,536 |
Foreign net operating loss carryforwards - U.K. | 10,600,648 | 10,486,476 |
Foreign capital allowance - U.K. | 103,400 | 103,400 |
Share-based compensation | 1,116,240 | 804,378 |
Interest expense | 757,141 | |
Gross deferred tax assets | 23,762,204 | 22,540,904 |
Valuation allowance for deferred tax assets | (10,928,109) | (9,830,209) |
Net deferred tax assets | 12,834,095 | 12,710,695 |
Deferred tax liabilities: | ||
In-process research and development | (4,072,740) | (4,072,740) |
Developed Technology | (383,092) | (424,657) |
Covenant not-to-compete | (53,872) | (65,993) |
Net deferred tax liabilities | (4,498,829) | (4,573,631) |
Net deferred tax asset | 8,335,266 | 8,137,064 |
Malaysia [Member] | ||
Deferred tax liabilities: | ||
Other, net | 17,251 | (3,865) |
United States [Member] | ||
Components Of Deferred Tax Assets And Liabilities [Line Items] | ||
Other, net | 592,237 | 434,764 |
Deferred tax liabilities: | ||
Other, net | (6,376) | (6,376) |
U.K. [Member] | ||
Components Of Deferred Tax Assets And Liabilities [Line Items] | ||
Other, net | $ 50,781 | $ 50,781 |
Income Taxes (Schedule of Defer
Income Taxes (Schedule of Deferred Tax Amounts Classified in Balance Sheets) (Details) - USD ($) | Jun. 30, 2020 | Sep. 30, 2019 |
Components Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax asset | $ 8,628,006 | $ 8,433,669 |
Deferred tax liability | (292,740) | (296,605) |
U.K. [Member] | ||
Components Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax asset | 8,610,759 | 8,433,669 |
United States [Member] | ||
Components Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax liability | (292,740) | (292,740) |
Malaysia [Member] | ||
Components Of Deferred Tax Assets And Liabilities [Line Items] | ||
Deferred tax asset | $ 17,247 | |
Deferred tax liability | $ (3,865) |
Paycheck Protection Program (Na
Paycheck Protection Program (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended |
Apr. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2020 | |
Paycheck Protection Program [Abstract] | ||||
Proceeds from PPP loan | $ 540,000 | |||
Reduction of selling general and administrative expense | $ 420,000 | $ 420,000 | ||
Reduction of research and development expense | $ 120,000 | $ 120,000 | ||
PPP loan, maturity period | 2 years | |||
PPP loan, interest rate | 1.00% |
Industry Segments (Narrative) (
Industry Segments (Narrative) (Details) | 9 Months Ended |
Jun. 30, 2020segment | |
Industry Segments [Abstract] | |
Number of reportable segments | 2 |
Industry Segments (Schedule of
Industry Segments (Schedule of Segment Reporting Information) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Operating loss | $ (1,392,852) | $ (1,842,002) | $ (3,476,923) | $ (4,978,319) |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating loss | (1,392,852) | (1,842,002) | (3,476,923) | (4,978,319) |
Commercial [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating loss | 5,619,168 | 5,263,796 | 17,608,972 | 11,424,718 |
Research and development [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating loss | (4,436,496) | (4,853,344) | (13,549,652) | (10,103,528) |
Corporate [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating loss | $ (2,575,524) | $ (2,252,454) | $ (7,536,243) | $ (6,299,509) |