QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||||||||
Large accelerated filer ☐ | Accelerated filer | ☐ | ||||||
Smaller reporting company | ||||||||
Emerging growth company |
June 30, 2024 | December 31, 2023 | ||||||||||
(unaudited) | |||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net | |||||||||||
Inventory | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and stockholders' deficit | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued expenses and other current liabilities | |||||||||||
Short term debt, net | |||||||||||
Total current liabilities | |||||||||||
Long term debt, net | |||||||||||
Warrant liability | |||||||||||
Other liabilities | |||||||||||
Total liabilities | |||||||||||
Stockholders' deficit | |||||||||||
Preferred stock, no par value; | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total stockholders' deficit | ( | ( | |||||||||
Total liabilities and stockholders' deficit | $ | $ | |||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
$ | $ | $ | $ | ||||||||||||||||||||
Total revenues | |||||||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of product sales | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
Total costs and expenses | |||||||||||||||||||||||
Loss from operations | ( | ( | ( | ( | |||||||||||||||||||
Other (income) expense: | |||||||||||||||||||||||
Unrealized gain on fair value of warrants | ( | ( | ( | ( | |||||||||||||||||||
Interest income | ( | ( | ( | ( | |||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Foreign currency (gain) loss | ( | ||||||||||||||||||||||
Net (loss) income | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Less: undistributed earnings to participating shareholders | ( | ||||||||||||||||||||||
Net (loss) income - basic | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Net (loss) income per share of common stock, basic | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Weighted average common shares outstanding, basic | |||||||||||||||||||||||
Net (loss) income - basic | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Add: Unrealized gain on fair value of warrants | ( | ( | |||||||||||||||||||||
Net (loss) income - diluted | $ | ( | $ | $ | ( | — | $ | ( | |||||||||||||||
Net income (loss) per share of common stock - diluted | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Weighted average common shares outstanding - diluted |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
(Net loss) income | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Foreign currency translation adjustment | |||||||||||||||||||||||
Comprehensive loss | $ | ( | $ | $ | ( | $ | ( |
Six months ended June 30, 2024 | ||||||||||||||||||||||||||||||||||||||
Stockholders' Equity (Deficit) | ||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders' Equity (Deficit) | ||||||||||||||||||||||||||||||||||
# of Shares | Par Amount $ | |||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Stock compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Vesting of restricted stock units | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock purchase plan | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||
Balance at March 31, 2024 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Issuance of stock per amended debt agreement | $ | — | $ | — | ||||||||||||||||||||||||||||||||||
Proceeds from sales of common stock and warrants, net | $ | — | $ | — | ||||||||||||||||||||||||||||||||||
Stock compensation expense | — | $ | — | |||||||||||||||||||||||||||||||||||
Vesting of restricted stock units | — | — | — | — | 0 | |||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock purchase plan | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance at June 30, 2024 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Six Months Ended June 30, 2023 | ||||||||||||||||||||||||||||||||||||||
Stockholders' Equity (Deficit) | ||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders' Equity (Deficit) | ||||||||||||||||||||||||||||||||||
Shares | Par Amount $ | |||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Stock compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Vesting of restricted stock units | — | |||||||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock purchase plan | — | — | — | |||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Stock compensation expense | — | — | — | |||||||||||||||||||||||||||||||||||
Vesting of restricted stock units | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock purchase plan | — | — | — | — | ||||||||||||||||||||||||||||||||||
Net income | — | |||||||||||||||||||||||||||||||||||||
Balance at June 30, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Six Months Ended June 30, | |||||||||||
2024 | 2023 | ||||||||||
Operating activities: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to cash used in operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation | |||||||||||
Change in fair value of warrant liability | ( | ( | |||||||||
Amortization of debt discount and issuance costs | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ||||||||||
Prepaid expenses and other assets | ( | ||||||||||
Inventory | ( | ||||||||||
Accounts payable | ( | ||||||||||
Accrued expenses and other liabilities | ( | ( | |||||||||
Cash used in operating activities | ( | ( | |||||||||
Investing activities: | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Cash used in investing activities | ( | ( | |||||||||
Financing activities: | |||||||||||
Proceeds from sale of common stock and warrants | |||||||||||
Proceeds from issuance of common stock under employee stock purchase plan | |||||||||||
Cash paid for financing costs | ( | ( | |||||||||
Cash provided by financing activities | |||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | ( | ||||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ | |||||||||
Supplemental disclosure of cash flow information: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Supplemental disclosure of noncash activities: | |||||||||||
Recognition of right-of-use assets and lease liabilities | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Basic net income (loss) per common share calculation: | |||||||||||||||||||||||
Net income (loss) | $ | ( | $ | ( | $ | ( | |||||||||||||||||
Less: undistributed earnings to participating shareholders | ( | ||||||||||||||||||||||
Net income (loss) – basic | ( | ( | ( | ||||||||||||||||||||
Weighted-average shares of common stock outstanding – basic | |||||||||||||||||||||||
Net income (loss) per share of common stock - basic | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Diluted net income (loss) per common share calculation: | |||||||||||||||||||||||
Net income (loss) – basic | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Add: Unrealized gain on fair value of warrants | ( | ( | |||||||||||||||||||||
Net (loss) income - diluted | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Weighted average shares of common stock outstanding - diluted | |||||||||||||||||||||||
Net income (loss) per share of common stock - diluted | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Computation of basic and diluted shares: | |||||||||||||||||||||||
Weighted average shares of common stock outstanding - basic | |||||||||||||||||||||||
Potential common shares: | |||||||||||||||||||||||
Stock options | |||||||||||||||||||||||
Restricted stock units | |||||||||||||||||||||||
Employee stock purchase plan | |||||||||||||||||||||||
Dilutive warrants | |||||||||||||||||||||||
Weighted average shares of common stock outstanding - diluted | |||||||||||||||||||||||
June 30, | |||||||||||
2024 | 2023 | ||||||||||
Stock options | |||||||||||
Restricted stock units | |||||||||||
Common stock warrants | |||||||||||
Total | |||||||||||
June 30, 2024 | |||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Warrant Liability | $ | $ | $ | $ | |||||||||||||||||||
Total Liabilities | $ | $ | $ | $ | |||||||||||||||||||
December 31, 2023 | |||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Warrant Liability | $ | $ | $ | $ | |||||||||||||||||||
Total Liabilities | $ | $ | $ | $ |
Warrant Liability | |||||
Balance, December 31, 2023 | $ | ||||
Warrants issued | |||||
( | |||||
Balance, June 30, 2024 | $ |
June 30, 2024 | December 31, 2023 | ||||||||||
Stock price | $ | $ | |||||||||
Strike price | $ | $ | |||||||||
Expected volatility | % | % | |||||||||
Risk-free interest rate | % | % | |||||||||
Expected dividend yield | % | % | |||||||||
Expected life (years) | |||||||||||
Fair value per warrant | $ | $ |
June 30, 2024 | December 31, 2023 | ||||||||||
Raw materials | $ | $ | |||||||||
Work-in-process | |||||||||||
Finished goods | |||||||||||
Total inventory | $ | $ |
June 30, 2024 | December 31, 2023 | ||||||||||
Computer equipment and software | $ | $ | |||||||||
Furniture and fixtures | |||||||||||
Machinery and equipment | |||||||||||
Leasehold improvements | |||||||||||
Construction in process | |||||||||||
Less: accumulated depreciation | ( | ( | |||||||||
$ | $ |
June 30, 2024 | December 31, 2023 | ||||||||||
Accrued expenses: | |||||||||||
Product revenue allowances | $ | $ | |||||||||
Selling, general and administrative expenses | |||||||||||
Research and development expenses | |||||||||||
Payroll expenses | |||||||||||
Accrued interest | |||||||||||
Other | |||||||||||
Total accrued expenses | $ | $ | |||||||||
Other current liabilities: | |||||||||||
Lease liability | $ | $ | |||||||||
Total other current liabilities | |||||||||||
Total accrued expenses and other current liabilities | $ | $ |
Trailing Twelve-Months Ending | As Revised Pursuant to Second Amendment | ||||
March 31, 2024 | $ | ||||
June 30, 2024 | $ | ||||
September 30, 2024 | $ | ||||
December 31, 2024 | $ | ||||
March 31, 2025 | $ | ||||
June 30, 2025 | $ | ||||
September 30, 2025 | $ | ||||
December 31, 2025 | $ | ||||
March 31, 2026 | $ | ||||
June 30, 2026 | $ | ||||
September 30, 2026 | $ | ||||
December 31, 2026 | $ | ||||
March 31, 2027 | $ | ||||
June 30, 2027 | $ |
June 30, 2024 | December 31, 2023 | ||||||||||
Face amount | $ | $ | |||||||||
Front end fees | ( | ( | |||||||||
Debt issuance costs | ( | ( | |||||||||
Back end fees | |||||||||||
Debt, net | $ | $ | |||||||||
Number of warrants | Classification | Exercise Price Per Share | Expiration Date | |||||||||||||||||
Equity | $ | November 18, 2026 | ||||||||||||||||||
Liability | $ | November 23, 2027 | ||||||||||||||||||
Equity | $ | No Expiration |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||
Cost of product sales | $ | $ | $ | $ | ||||||||||||||||||||||
Research and development | ||||||||||||||||||||||||||
General and administrative | ||||||||||||||||||||||||||
$ | $ | $ | $ |
Shares | Weighted average exercise price per share | Weighted average remaining contractual life | |||||||||||||||
Outstanding at December 31, 2023 | $ | ||||||||||||||||
Granted | |||||||||||||||||
Exercised | |||||||||||||||||
Expired | ( | ||||||||||||||||
Forfeited | ( | ||||||||||||||||
Outstanding at June 30, 2024 | $ | ||||||||||||||||
Exercisable at June 30, 2024 | $ | ||||||||||||||||
Six Months Ended June 30, | ||||||||
2024 | 2023 | |||||||
Risk free interest rate | % | % | ||||||
Expected term (in years) | ||||||||
Expected volatility | % | % | ||||||
Annual dividend yield | % | % | ||||||
Shares | |||||
Balance at December 31, 2023 | |||||
Granted | |||||
Vested and settled | ( | ||||
Expired/forfeited/canceled | ( | ||||
Balance at June 30, 2024 | |||||
Expected to vest at June 30, 2024 |
Six Months Ended June 30, | ||||||||
2024 | 2023 | |||||||
Risk free interest rate | % | % | ||||||
Expected term (in years) | ||||||||
Expected volatility | % | % | ||||||
Annual dividend yield | % | % | ||||||
Three Months Ended June 30, | |||||||||||
2024 | 2023 | ||||||||||
Revenues: | |||||||||||
Net product revenues | $ | 20,490 | $ | 19,454 | |||||||
Total revenues | 20,490 | 19,454 | |||||||||
Costs and expenses: | |||||||||||
Cost of product sales | 1,981 | 2,571 | |||||||||
Research and development | 928 | 951 | |||||||||
Selling, general and administrative | 24,129 | 20,104 | |||||||||
Total operating expenses | 27,038 | 23,626 | |||||||||
Loss from operations | (6,548) | (4,172) | |||||||||
Other (income) expense: | |||||||||||
Interest (income) expense, net | 4,138 | 4,099 | |||||||||
Other income | (3,105) | (10,897) | |||||||||
Total other expense (income) | 1,033 | (6,798) | |||||||||
Net loss | $ | (7,581) | $ | 2,626 |
Six Months Ended June 30, | |||||||||||
2024 | 2023 | ||||||||||
Revenues: | |||||||||||
Net product revenues | $ | 35,370 | $ | 31,299 | |||||||
Total revenues | 35,370 | 31,299 | |||||||||
Costs and expenses: | |||||||||||
Cost of product sales | 3,212 | 4,277 | |||||||||
Research and development | 2,134 | 2,736 | |||||||||
Selling, general and administrative | 44,647 | 42,828 | |||||||||
Total operating expenses | 49,993 | 49,841 | |||||||||
Loss from operations | (14,623) | (18,542) | |||||||||
Other (income) expense: | |||||||||||
Interest (income) expense, net | 8,813 | 8,066 | |||||||||
Other income | (1,787) | (10,384) | |||||||||
Total other expense | 7,026 | (2,318) | |||||||||
Net loss | $ | (21,649) | $ | (16,224) |
Six Months Ended June 30, | ||||||||||||||
2024 | 2023 | |||||||||||||
Net cash used in operating activities | $ | (37,719) | $ | (23,016) | ||||||||||
Net cash used in investing activities | (51) | (79) | ||||||||||||
Net cash provided by financing activities | 55,443 | 161 | ||||||||||||
Net decrease in cash, cash equivalents and restricted cash | $ | 17,673 | $ | (22,934) |
Exhibit Number | Exhibit Description | ||||||||||||||||
3.1 | |||||||||||||||||
3.2 | |||||||||||||||||
3.3 | |||||||||||||||||
4.1 | |||||||||||||||||
10.1 | |||||||||||||||||
10.2 | |||||||||||||||||
10.3 | |||||||||||||||||
10.4 | *† | ||||||||||||||||
31.1 | * | ||||||||||||||||
31.2 | * | ||||||||||||||||
32.1 | ** | ||||||||||||||||
32.2 | ** | ||||||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | ||||||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | ||||||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||||||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | ||||||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||||||||||||||||
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
OPTINOSE, INC. | |||||||||||||||||||||||
Date: | August 8, 2024 | By: | /s/ ANTHONY J. KRICK | ||||||||||||||||||||
Name: | Anthony J. Krick | ||||||||||||||||||||||
Title: | Vice President, Finance & Chief Accounting Officer | ||||||||||||||||||||||
(Principal Financial and Accounting Officer) |
HIKMA PHARMACEUTICALS USA INC. | OPTINOSE US, INC. | |||||||
By: /s/ Hafrun Fridriksdottir | By: /s/ Ramy Mahmoud | |||||||
Name: Hafrun Fridriksdottir | Name: Ramy Mahmoud | |||||||
Title: President | Title: Chief Executive Officer |
Date: | August 8, 2024 | /s/ Ramy A. Mahmoud Ramy A. Mahmoud Chief Executive Officer (Principal Executive Officer) |
Date: | August 8, 2024 | /s/ Anthony J. Krick Anthony J. Krick Chief Accounting Officer (Principal Financial and Accounting Officer) |
1. | the Quarterly Report on Form 10-Q of the Company for the period ending June 30, 2024 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein. |
Date: | August 8, 2024 | /s/ Ramy A. Mahmoud Ramy A. Mahmoud Chief Executive Officer (Principal Executive Officer) |
1. | the Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2024 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein. |
Date: | August 8, 2024 | /s/ Anthony J. Krick Anthony J. Krick Chief Accounting Officer (Principal Financial and Accounting Officer) |
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Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized ( in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued ( in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 350,000,000 | 350,000,000 |
Common stock, shares issued (in shares) | 149,678,410 | 112,399,495 |
Common stock, shares outstanding (in shares) | 149,678,410 | 112,399,495 |
Consolidated Statements of Operations - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Total revenues | $ 20,490 | $ 19,454 | $ 35,370 | $ 31,299 |
Costs and expenses: | ||||
Cost of product sales | 1,981 | 2,571 | 3,212 | 4,277 |
Research and development | 928 | 951 | 2,134 | 2,736 |
Selling, general and administrative | 24,129 | 20,104 | 44,647 | 42,828 |
Total costs and expenses | 27,038 | 23,626 | 49,993 | 49,841 |
Loss from operations | (6,548) | (4,172) | (14,623) | (18,542) |
Other (income) expense: | ||||
Unrealized gain on fair value of warrants | (3,100) | (10,900) | (1,800) | (10,390) |
Interest income | (809) | (725) | (1,105) | (1,429) |
Interest expense | 4,947 | 4,824 | 9,918 | 9,496 |
Foreign currency (gain) loss | (5) | 3 | 13 | 5 |
Net (loss) income | (7,581) | 2,626 | (21,649) | (16,224) |
Less: undistributed earnings to participating shareholders | 0 | (53) | 0 | 0 |
Net (loss) income - basic | $ (7,581) | $ 2,573 | $ (21,649) | $ (16,224) |
Net (loss) income per share of common stock, basic (in dollars per share) | $ (0.05) | $ 0.02 | $ (0.17) | $ (0.15) |
Weighted average common shares outstanding, basic (in shares) | 147,455,374 | 111,979,778 | 130,025,113 | 111,877,669 |
Add: Unrealized gain on fair value of warrants | $ (3,100) | $ 0 | $ (1,800) | $ 0 |
Net (loss) income - diluted | $ (10,681) | $ 2,573 | $ (23,449) | $ (16,224) |
Net income (loss) per share of common stock, diluted (in dollars per share) | $ (0.07) | $ 0.02 | $ (0.17) | $ (0.15) |
Weighted average common shares outstanding, diluted (in shares) | 150,698,374 | 112,042,097 | 136,918,539 | 111,877,669 |
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | Net product revenues | Net product revenues | Net product revenues | Net product revenues |
Net product revenues | ||||
Total revenues | $ 20,490 | $ 19,454 | $ 35,370 | $ 31,299 |
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
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Statement of Comprehensive Income [Abstract] | ||||
(Net loss) income | $ (7,581) | $ 2,626 | $ (21,649) | $ (16,224) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | 0 | 0 | 0 | |
Comprehensive loss | $ (7,581) | $ 2,626 | $ (21,649) | $ (16,224) |
Organization and Description of Business |
6 Months Ended |
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Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business OptiNose, Inc. (the Company) was incorporated in Delaware in May 2010 (inception) and has facilities in Yardley, Pennsylvania and Ewing, New Jersey. The Company's predecessor entity, OptiNose AS, was formed under the laws of Norway in September 2000. In 2010, OptiNose AS became a wholly-owned subsidiary of the Company as part of an internal reorganization. Optinose AS was liquidated in October 2023. During 2022, the Company's board of directors also approved the liquidation of Optinose UK, in order to simplify the corporate structure. Optinose UK was liquidated in July 2024. The Company is a specialty pharmaceutical company focused on the development and commercialization of products for patients treated by ear, nose and throat (ENT) and allergy specialists. The Company's first commercial product, XHANCE® (fluticasone propionate) nasal spray, 93 microgram (mcg), is a therapeutic utilizing the Company's proprietary Exhalation Delivery System™ (EDS®) that delivers a topically-acting corticosteroid for the treatment of chronic rhinosinusitis with and without nasal polyps.
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Liquidity |
6 Months Ended |
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Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity | Liquidity Since inception, the Company's operations have focused on organization and staffing, business planning, raising capital, establishing an intellectual property portfolio, conducting preclinical studies and clinical trials, pursuing regulatory approvals and commercializing XHANCE in the US. As of June 30, 2024, the Company had cash and cash equivalents of $91,358 and working capital of $96,230. On May 10, 2024, the Company completed a registered direct offering pursuant to which it issued an aggregate of 31,800,000 shares of common stock at a purchase price of $1.00 per share and, in lieu of shares of common stock to certain investors, pre-funded warrants to purchase an aggregate of 23,700,000 shares of common stock at a price of $0.999 per pre-funded warrant, which represents the per share offering price for common stock less the $0.0001 per share exercise price for each such pre-funded warrant. The net proceeds from the offering were $55.3 million. The Company’s continuation as a going concern is dependent on its ability to maintain compliance with the covenants under the A&R Note Purchase Agreement (Note 8) and its ability to generate sufficient cash flows from operations or other sources to meet its obligations as they come due. The Company follows the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 205-40, Presentation of Financial Statements—Going Concern, which requires management to assess the Company’s ability to continue as a going concern within one year after the date the financial statements are issued. At December 31, 2023, Management identified conditions and events that raised substantial doubt about the Company’s ability to continue as a going concern as management believed it was unlikely, without additional capital, that the Company would maintain compliance with certain covenants in the A&R Note Purchase Agreement in which case the lender could accelerate all amounts due under the agreement. The Company believes that its cash and cash equivalents on hand as of June 30, 2024 will be sufficient to fund it operations and debt service obligations and maintain compliance with the liquidity covenant under the A&R Note Purchase Agreement for at least next twelve months from the issuance of these financial statements. The Company will likely require additional capital in the future secured through equity or debt financings, partnerships, collaborations, or other sources in order to meet its debt service obligations, including repayment, under the Company's outstanding senior secured notes, and to carry out the Company's planned development and commercial activities. The terms of the outstanding senior secured notes, including applicable covenants, are described in Note 8. If additional capital is not obtained when required, the Company may need to delay or curtail its operations until additional funding is received. The Company is subject to a number of risks similar to other life sciences companies, including, but not limited to, successful discovery, development and commercialization of its products and product candidates, raising additional capital, the development by its competitors of new technological innovations, protection of proprietary technology and market acceptance of the Company’s products.
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Basis of Presentation and Summary of Significant Accounting Policies |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies The accompanying unaudited interim consolidated financial statements have been prepared in conformity with US generally accepted accounting principles (GAAP). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB). In the opinion of management, the accompanying unaudited interim financial statements include all normal and recurring adjustments (which consist primarily of accruals and estimates that impact the financial statements) considered necessary to present fairly the Company's financial position as of June 30, 2024 and its results of operations for the three and six months ended June 30, 2024 and 2023 and cash flows for the six months ended June 30, 2024 and 2023. Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. The unaudited interim financial statements, presented herein, do not contain the required disclosures under GAAP for annual financial statements. The accompanying unaudited interim financial statements should be read in conjunction with the annual audited financial statements and related notes as of and for the year ended December 31, 2023 contained in the Company’s annual report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 7, 2024. Use of estimates The preparation of the unaudited interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim consolidated financial statements and reported amounts of expenses during the reporting period. Due to the uncertainty of factors surrounding the estimates or judgments used in the preparation of the unaudited interim consolidated financial statements, actual results may materially vary from these estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the unaudited interim consolidated financial statements in the period they are determined to be necessary. Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and accounts receivable. The Company generally invests its cash in deposits with high credit quality financial institutions. Additionally, the Company performs periodic evaluations of the relative credit standing of these financial institutions. Customer and supplier concentration The Company has exposure to credit risk in accounts receivable from sales of product. XHANCE is sold to wholesale pharmaceutical distributors and preferred pharmacy network (PPN) partners, who, in turn, sell XHANCE to pharmacies, hospitals and other customers. Five customers represented approximately 89% and 64% of the Company's accounts receivable at June 30, 2024 and 2023, respectively. Five customers represented approximately 80% and 42% of the Company's net product sales for the three months ended June 30, 2024 and 2023, respectively. Five customers represented approximately 72% and 34% of the Company's net product sales for the six months ended June 30, 2024 and 2023, respectively. The Company purchases XHANCE and its components from several third-party suppliers and manufacturing partners, certain of which are only available through a single source. Although the Company could obtain each of these components from alternative third-party suppliers, it would need to qualify and obtain FDA approval for another supplier as a source for each such component. Fair value of financial instruments The Company measures certain assets and liabilities at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability (the exit price) in an orderly transaction between market participants at the measurement date. The FASB accounting guidance outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value, the Company uses quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. The fair value hierarchy is broken down into three levels based on the source of the inputs as follows: •Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. •Level 2 — Valuations based on observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. •Level 3 — Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement. At June 30, 2024 and December 31, 2023, the Company's financial instruments included cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and certain liability classified warrants. The carrying amounts reported in the Company's financial statements for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximates their respective fair values because of the short-term nature of these instruments. In addition, at June 30, 2024, the Company believed the carrying value of debt approximates fair value as the interest rates were reflective of the rate the Company could obtain on debt with similar terms and conditions. At June 30, 2024, there were no financial assets or liabilities measured at fair value on a recurring basis other than the liability classified warrants. In November 2022, the Company issued warrants in connection with a public offering. Pursuant to the terms of the warrant agreement, the Company could be required to settle the warrants in cash in the event of an acquisition of the Company and, as a result, the warrants are required to be measured at fair value and reported as liability in the consolidated balance sheet. The Company recorded the fair value of the warrants upon issuance using a Monte Carlo simulation and is required to revalue the warrants at each reporting date with any changes in fair value recorded on our statement of operations. The valuation of the warrants is considered under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable. The change in the fair value of the Level 3 warrants liabilities is reflected in the statement of operations. Net product revenues The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (ASC 606). The Company recognizes revenue from XHANCE sales at the point customers obtain control of the product, which generally occurs upon delivery. The transaction price that is recognized as revenue for products includes an estimate of variable consideration. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of its anticipated performance and all information (historical, current and forecasted) that is reasonably available. The components of the Company’s variable consideration include the following: Provider Chargebacks and Discounts. Chargebacks for fees and discounts to providers represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices charged to customers who directly purchase the product from the Company. Customers charge the Company for the difference between what they pay for the product and the ultimate selling price to the qualified healthcare providers. These components of variable consideration are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and accounts receivable. Trade Discounts and Allowances. The Company generally provides customers with discounts that include incentive fees which are explicitly stated in the Company’s contracts. These discounts are recorded as a reduction of revenue and accounts receivable in the period in which the related product revenue is recognized. Product Returns. Consistent with industry practice, the Company has a product returns policy that provides customers a right of return for product purchased within a specified period prior to and subsequent to the product’s expiration date. The Company estimates the amount of its product that may be returned and presents this amount as a reduction of revenue in the period the related product revenue is recognized, in addition to establishing a liability. The Company considers several factors in the estimation process, including expiration dates of product shipped to customers, inventory levels within the distribution channel, product shelf life, prescription trends and other relevant factors. Government Rebates. The Company is subject to discount obligations under state Medicaid programs and Medicare. Reserves related to these discount obligations are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. The Company’s liability for these rebates consists of estimates of claims for the current quarter and estimated future claims that will be made for product that has been recognized as revenue but remains in the distribution channel inventories at the end of the reporting period. Payor Rebates. The Company contracts with certain third-party payors, primarily health insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of its products. These rebates are based on contractual percentages applied to the amount of product prescribed to patients who are covered by the plan or the organization with which it contracts. The Company estimates these rebates and records such estimates in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. Patient Assistance. Other programs that the Company offers include voluntary co-pay patient assistance programs intended to provide financial assistance to eligible patients with prescription drug co-payments required by payors and coupon programs for cash payors. The calculation of the current liability for this assistance is based on an estimate of claims and the cost per claim that the Company expects to receive associated with product that has been recognized as revenue but remains in the distribution channel inventories at the end of each reporting period. Distribution and Other Fees. The Company pays distribution and other fees to certain customers in connection with the sales of its products. The Company records distribution and other fees paid to its customers as a reduction of revenue, unless the payment is for a distinct good or service from the customer and the Company can reasonably estimate the fair value of the goods or services received. If both conditions are met, the Company records the consideration paid to the customer as an operating expense. These costs are typically known at the time of sale, resulting in minimal adjustments subsequent to the period of sale. Net income (loss) per common share Basic and diluted net income (loss) per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities, which include restricted stock units. Under the two-class method, net income (loss) is allocated to common stock and each restricted stock unit to the extent that each restricted stock unit may share in earnings as if all of the earnings for the period had been distributed. The two-class method is not applicable during periods with a net loss, as is the case in the quarter ended, June 30, 2024, and the six month periods ended June 30, 2023 and 2024. Basic net income (loss) per share of common stock, (Basic), is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during each period. In the 2024 periods presented, the Basic weighted average share calculation also includes the weighted average of the pre-funded warrants to purchase shares of common stock at $0.0001 per share that were issued in the registered direct offering on May 10, 2024. Diluted income (loss) per common share, (Diluted), also includes the weighted average of common stock equivalents, if the inclusion of such common stock equivalents would be dilutive. Dilutive common stock equivalents potentially include warrants, stock options and non-vested restricted stock awards using the treasury stock method. As occurred in the three and six month periods ended June 30, 2024 the Diluted calculation was further adjusted by the unrealized gains on the liability classified warrants under the assumption that the gains would not have been recorded if the warrants had been exercised. The following table sets forth the computation of basic and diluted income (loss) for the periods presented:
Diluted net loss per share for these periods presented on the statement of operations do not reflect the potential common shares noted below as their effect would be antidilutive.
Income taxes In accordance with ASC 270, Interim Reporting, and ASC 740, Income Taxes, the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. For the six months ended June 30, 2024 and 2023, the Company recorded no tax expense or benefit due to the expected current year loss and its historical losses. As of June 30, 2024 and December 31, 2023, the Company concluded that a full valuation allowance would be necessary for all of its net deferred tax assets. The Company had no amounts recorded for uncertain tax positions, interest or penalties in the accompanying consolidated financial statements. Recent accounting pronouncements In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. FASB is issuing the amendments in this Update to enhance the transparency and decision usefulness of income tax disclosures. Investors, lenders, creditors, and other allocators of capital (collectively, “investors”) indicated that the existing income tax disclosures should be enhanced to provide information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. Investors currently rely on the rate reconciliation table and other disclosures, including total income taxes paid, to evaluate income tax risks and opportunities. While investors find these disclosures helpful, they suggested possible enhancements to better (1) understand an entity’s exposure to potential changes in jurisdictional tax legislation and the ensuing risks and opportunities, (2) assess income tax information that affects cash flow forecasts and capital allocation decisions, and (3) identify potential opportunities to increase future cash flows. The amendments in this Update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This Update also includes certain other amendments to improve the effectiveness of income tax disclosures. The new standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating ASU No. 2023-09 and its impact on results of operations, financial position and cash flows and related disclosures.
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Fair Value Measurements |
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Fair Value Measurements | Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company applies the guidance in ASC 820, Fair Value Measurements, to account for financial assets and liabilities measured on a recurring basis. Fair value is measured as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. The Company uses a fair value hierarchy, which distinguishes between assumptions based on market data (observable inputs) and an entity's own assumptions (unobservable inputs). The guidance requires that fair value measurements be classified and disclosed in one of the following 3 categories: Level l: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each reporting period. There were no transfers between Level I, 2 and 3 during the three months ended June 30, 2024. The table below presents the liabilities (in thousands) measured and recorded in the financial statements at fair value on a recurring basis at June 30, 2024 categorized by the level of inputs used in the valuation of each liability.
Changes in Level 3 Liabilities Measured at Fair Value on a Recurring Basis Warrant Liability The reconciliation of the Company's warrant liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows (in thousands):
Assumptions Used in Determining Fair Value of Liability-Classified Warrants The Company issued warrants to purchase 30,268,000 shares of Common Stock at a public offering price of $0.01 per warrant (the Warrants). Each Warrant has an exercise price of $1.00 per share of common stock and is exercisable until the expiration date, which is the fifth anniversary of the date of issuance (November 23, 2027). After such date, any unexercised Warrants will expire and have no further value. If the Company issues or sells, or is deemed pursuant to the terms of the Warrants to have issued or sold, any shares of common stock (which includes, among other things, options and securities convertible into shares of common stock), subject to certain exceptions and excluding certain issuances defined in the Warrants as "excluded issuances", for a price per share less than the exercise price of the Warrants in effect immediately prior to such issuance or sale or deemed issuance or sale (such event, a "dilutive issuance"), then immediately after such dilutive issuance the exercise price then in effect of the Warrants shall be reduced to the price of the shares of common stock issued or sold or deemed to be issued or sold in the dilutive issuance in the manner set forth in the Warrant. A holder of Warrants will not have the right to exercise any portion of a Warrant if the holder (together with its affiliates) would beneficially own in excess of 4.99% (or on election of such holder, prior to the issuance of any Warrants, 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants; provided, however, such holder may increase or decrease such percentage to any other percentage not in excess of 19.99%, provided that any increase in such percentage shall not be effective until 61 days after such notice is delivered to the Company. Pursuant to the terms of the Warrant, the Company could be required to settle the Warrants in cash in the event of a "fundamental transaction" as defined in the Warrant (which includes, among other things, an acquisition of the Company) and, as a result, the Warrants are required to be measured at fair value and reported as liability in the consolidated balance sheet. The Company utilizes a Monte Carlo simulation valuation model which incorporates assumptions as to the stock price volatility, the expected life of the warrants, a risk-free interest rate, as well as timing and probability of equity financing. The Company values the warrant liability at each reporting period, with changes in fair value recognized in the consolidated statements of operations. The estimated fair value of the warrant liability is determined using Level 3 inputs. The inputs and values were as follows:
On May 10, 2024, the Company completed a registered direct offering which resulted in the exercise price of the Warrants being reduced from $2.565 to $1.00 (which was the offering price of each share sold in the registered direct offering) pursuant to the anti-dilution price protection provisions of such Warrants. All other terms of the Warrants remain unchanged.
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Inventory |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | Inventory Inventory consisted of the following: Inventories are stated at the lower of cost or net realizable value, as determined on a first-in, first-out, basis.
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Property and Equipment |
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Property and Equipment | Property and Equipment Property and equipment, net, consisted of the following: Depreciation expense was $83 and $72 for the three months ended June 30, 2024 and 2023, respectively. Depreciation expense was $152 and $178 for the six months ended June 30, 2024 and 2023, respectively.
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Accrued Expenses and Other Current Liabilities |
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Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of:
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt On September 12, 2019 (the Closing Date), the Company entered into a Note Purchase Agreement with funds managed by Pharmakon Advisors, LP (Pharmakon), the investment manager of BioPharma Credit Funds (BioPharma). The Note Purchase Agreement provided the Company with $130,000 in debt financing, of which $80,000 of senior secured notes (the Pharmakon Senior Secured Notes) was issued on the Closing Date, $30,000 was issued on February 13, 2020 and $20,000 was issued on December 1, 2020. On November 23, 2022, the Company amended and restated the Note Purchase Agreement, initially entered into on September 12, 2019 and amended through November 9, 2022, among the Company, its subsidiaries, OptiNose US, Inc., OptiNose AS and OptiNose UK, Ltd., and BioPharma Credit PLC, as collateral agent, and the purchasers party thereto from time to time (the A&R Note Purchase Agreement). Pursuant to the A&R Note Purchase Agreement, certain modifications to the affirmative and negative covenants, events of default and other provisions were made, including, without limitation, (i) the requirement for the Company to deliver quarterly and annual financial statements that, commencing with the Company's consolidated financial statements for the year ending December 31, 2023 and subject to certain exceptions, are not subject to a “going concern” statement (the Going Concern Covenant) and (ii) the removal of certain exceptions to the negative covenants which previously permitted the Company to enter into certain transactions without the consent of the holders of the Pharmakon Senior Secured Notes, including permitted acquisitions, swap contracts, convertible bonds and revolving credit facilities. The financial covenants requiring the Company to achieve minimum trailing twelve-month consolidated XHANCE net product sales and royalties were amended to be pushed back to March 31, 2024. The A&R Note Purchase Agreement extended the maturity date of the Pharmakon Senior Secured Notes from September 12, 2024 to June 30, 2027 (New Maturity Date), extended the interest-only period from September 2023 to September 2025, after which principal repayments will commence starting on September 30, 2025 and will be made in eight equal quarterly installments of principal and interest through the New Maturity Date. As part of the A&R Note Purchase Agreement the Pharmakon Senior Secured Notes now bear an amended interest rate through the New Maturity Date equal to the 3-month Secured Overnight Financing Rate (subject to a 2.50% floor), determined as of the date that is two business days prior to the commencement of each quarter, plus 8.50% per annum, which interest rate shall be increased by an additional 3.00% per annum upon the occurrence and during the continuation of any event of default. The effective interest rate as of June 30, 2024 is 14.53%. As an inducement for the holders of the Pharmakon Senior Secured Notes to enter into the A&R Note Purchase Agreement, the Company was required to pay the holders of the Pharmakon Senior Secured Notes an amendment fee of $3,900 (representing 3.00% of the then outstanding principal balance of such notes) due on the New Maturity Date or the earlier repayment of the Pharmakon Senior Secured Notes, which amendment fee shall be reduced to $2,600 in the event that the Company repays the Pharmakon Senior Secured Notes in full on or after the one-year anniversary of the date of the A&R Note Purchase Agreement and prior to second anniversary of the date of the A&R Note Purchase Agreement. Additionally, the $1,300 fee payable under the Fourth Amendment to the Note Purchase Agreement that the Company entered into on November 9, 2022 will be credited against the amendment fee payable in connection with the A&R Note Purchase Agreement. On March 5, 2024, the Company entered into a first amendment and waiver (the First Amendment) to the A&R note Purchase Agreement. The First Amendment provided for a waiver of Going Concern Covenant for the audited financial statements for the year ended December 31, 2023 and unaudited quarterly financial statements for the quarter ending March 31, 2024. On March 8, 2024, the Company entered into a second amendment (the Second Amendment) to the A&R Note Purchase Agreement. Pursuant to the Second Amendment, the financial covenants requiring the Company to achieve minimum trailing twelve-month consolidated XHANCE net product sales and royalties was modified as follows (amounts in thousands):
In addition, the "make-whole" premium payment due in connection with any principal prepayments (whether mandatory or voluntary) was modified as part of the Second Amendment to provide that the Company will be required to pay a make-whole premium in the amount of (i) for any prepayment occurring up to and including November 21, 2024 (which represents the 24th-month anniversary of the effective date of the A&R Note Purchase Agreement), the sum of all interest that would have accrued on the principal amount of the notes prepaid or required to be prepaid from the date of such prepayment through and including the 18th-month anniversary of such prepayment date; and (b) for any prepayment occurring after November 21, 2024 (which represents the 24th-month anniversary of the effective date of the A&R Note Purchase Agreement) but prior to May 21, 2026 (which represents the 42nd-month anniversary of the effective date of the A&R Note Purchase Agreement), the sum of all interest that would have accrued on the principal amount of the notes prepaid or required to be prepaid from the date of such prepayment through and including May 21, 2026 (which represents the 42nd-month anniversary of the effective date of the A&R Note Purchase Agreement); provided, however, that in no event shall all make-whole amounts payable by the Company exceed $24,000 in the aggregate. On May 8, 2024, the Company entered into a third amendment (the Third Amendment) to the A&R Note Purchase Agreement. The Third Amendment provided for a further waiver of the Going Concern Covenant for the Company’s quarterly and annual financial statements through the fiscal quarter ending September 30, 2025. The Going Concern Covenant will continue to apply to the Company’s financial statements for the fiscal year ending December 31, 2025 and each fiscal quarter and fiscal year thereafter. In addition, pursuant to the Third Amendment the minimum amount of cash and cash equivalents that the Company is required to maintain at all times under the A&R Note Purchase Agreement (the Liquidity Covenant) will be reduced from $30,000 to $20,000 following the date of the first quarterly payment of principal due on September 30, 2025. As part of the Third Amendment, the Company issued an aggregate of 4,680,000 shares of common stock to the holders of the Pharmakon Senior Secured Notes in satisfaction of $4,680 of outstanding amendment and waiver fees owed under the A&R Note Purchase Agreement for prior amendments and waivers, which shares were calculated based on the offering price of each share of common stock sold in the registered direct offering completed on May 10, 2024. Additionally, the common stock warrants, dated November 18, 2021, issued to the holders of the Pharmakon Senior Secured Notes for the purchase of an aggregate of 2,500,000 shares of Company common stock (the Pharmakon Warrants) were amended to (i) reduce the exercise price of the Pharmakon Warrants from $1.60 per share to $1.00, which is the offering price of each share of common stock sold in the registered direct offering completed by the Company on May 10, 2024, and (ii) extend the expiration date of the Pharmakon Warrants from November 18, 2024 to November 18, 2026. The Pharmakon Senior Secured Notes are secured by a pledge of substantially all of the assets of the Company and the Guarantors and the A&R Note Purchase Agreement contains affirmative and negative covenants customary for financings of this type, including limitations on the Company’s and its subsidiaries’ ability, among other things, to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, repay junior indebtedness, incur a material adverse change and enter into affiliate transactions, in each case, subject to certain exceptions. In addition, the A&R Note Purchase Agreement contains financial covenants requiring the Company to maintain certain minimum trailing twelve-month consolidated XHANCE net sales and royalties, tested on a quarterly basis, and to maintain compliance with the Liquidity Covenant. As of June 30, 2024, the Company was in compliance with the covenants. The A&R Note Purchase Agreement also includes events of default customary for financings of this type, in certain cases subject to customary periods to cure, following which the holders of the Pharmakon Senior Secured Notes may accelerate all amounts outstanding under such notes. The Company recorded interest expense of $4,947 and $4,824 during the three months ended June 30, 2024 and 2023, respectively. The Company recorded interest expense of $9,918 and $9,496 during the six months ended June 30, 2024 and 2023, respectively. Interest expense included total coupon interest and the amortization of debt issuance costs. The Pharmakon debt balance is comprised of the following: The Company classified the Pharmakon debt as a current liability at December 31, 2023 as it believed that, without additional capital, it was unlikely to comply with certain covenants in the A&R Note Purchase Agreement. The Pharmakon debt has been classified as long-term at June 30, 2024 as principal payments do not commence until the third quarter of 2025 and with the additional capital received from the May 10, 2024 registered direct offering (Note 2), the Company now expects to be in compliance with the Pharmakon debt covenants for at least the next 12 months.
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Commitments and Contingencies |
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Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesThe Company is a party to a manufacture and supply agreement pursuant to which it has agreed to make minimum purchases of finished XHANCE units of $2.0 million in 2024, and $2.4 million in both 2025 and 2026. If the Company fails to achieve the minimum purchase commitments, the Company must pay the supplier 50% of the amount of any shortfall and must reimburse the supplier for certain non-cancellable costs and expenses. The Company's minimum purchase commitments are subject to certain exceptions and reductions. The Company has made $0.8 million in purchases during the six months ended June 30, 2024 under the Supply Agreement. |
Employee Benefit Plans |
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Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans For US employees, the Company maintains a defined contribution 401(k) retirement plan. As of June 30, 2024 and 2023, $82 and $83 respectively, were recorded in accrued liabilities related to the Company match. The Company's contributions are made in cash. The Company also maintains a severance benefit plan for employees that is governed by the Employee Retirement Income Security Act of 1974. The severance benefit plan provides severance benefits to eligible employees who are involuntarily terminated from their jobs for reasons other than cause, disability, or death.
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Stockholders' Equity |
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Stockholders' Equity | Stockholders' Equity As of June 30, 2024, the Company had the following warrants outstanding to purchase shares of Common Stock:
On May 10, 2024, the Company completed a registered direct offering pursuant to which it issued an aggregate of 31,800,000 shares of common stock at a purchase price of $1.00 per share and, in lieu of shares of common stock to certain investors, pre-funded warrants to purchase an aggregate of 23,700,000 shares of common stock at a price of $0.999 per pre-funded warrant, which represents the per share offering price for common stock less the $0.0001 per share exercise price for each such pre-funded warrant. Upon the completion of the registered direct offering on May 10, 2024, the exercise price of the 30,268,000 liability classified warrants was reduced from $2.565 to $1.00 (which was the offering price of each share sold in the registered direct offering) pursuant to the anti-dilution price protection provisions of such warrants. All other terms of the liability classified warrants remained unchanged. Additionally, on May 10, 2024, pursuant to the Third Amendment to the A&R Note Purchase Agreement, the 2,500,000 equity classified common stock warrants listed above were amended to reduce the exercise price from $1.60 per share to $1.00 per share, and to extend the expiration date from November 18, 2024 to November 18. 2026.
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Stock-based Compensation |
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Stock-based Compensation | Stock-based Compensation The Company recorded total stock-based compensation expense related to stock options, restricted stock units and it's employee stock purchase plan awarded under the Company's 2010 Stock Incentive Plan, as amended and restated effective as of October 12, 20217 (the 2010 Plan), 2017 Employee Stock Purchase Plan (2017 Plan) and grants made pursuant to the Nasdaq inducement grant exception in accordance with Nasdaq Listing Rule 5635(c)(4) (the "Nasdaq Inducement Grant Exception") in the following expense categories in the accompanying consolidated statements of operations as follows:
Stock Options The Company issues stock-based awards pursuant to the 2010 Plan and the Nasdaq Inducement Grant Exception. The Company has issued service-based, performance-based, and market-based stock options that generally have a contractual life of up to 10 years and may be exercisable in cash or as otherwise determined by the Company's board of directors or committee thereof. Vesting generally occurs over a period of not greater than four years. Performance-based options may vest upon the achievement of certain milestones. As of June 30, 2024, all of the performance conditions related to performance-based stock options issued by the Company had been achieved. Market-based options may vest upon the achievement of certain market-based objectives relating to the trading price of the Company's common stock. The following table summarizes the activity related to stock option grants to employees and non-employees for the six months ended June 30, 2024:
During the six months ended June 30, 2024, service-based stock options to purchase 1,685,601 shares of common stock were granted to employees and generally vest over four years. The stock options had an estimated weighted average grant date fair value of $1.06. The grant date fair value of each service-based and performance-based option grant was estimated at the time of grant using the Black-Scholes option-pricing model. The grant date fair value of each market-based stock option grant was estimated at the time of grant using a Monte Carlo simulation. The aggregate intrinsic value of stock options outstanding and stock options exercisable, other than market-based stock options, as of June 30, 2024 was $0 and $0, respectively. At June 30, 2024, the unrecognized compensation cost related to unvested stock options, other than market-based stock options, expected to vest was $4,209. This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 2.6 years. Included in the table above are 569,345 market-based options outstanding granted in 2022. These options generally become eligible to vest over four years, subject to the achievement of certain market-based objectives relating to the trading price of the common stock. Stock-based compensation for these awards is recognized over the derived service period of approximately 2 years. The grant date fair value of each stock option grant, as well as the derived service period for these awards, was estimated at the time of grant using a Monte Carlo simulation. During the six months ended June 30, 2024, no market-based options vested upon the achievement of certain market-based objectives relating to the trading price of the Company's common stock. Included in the table above are 711,500 options outstanding granted outside the 2010 Plan. The grants were made pursuant to the Nasdaq Inducement Grant Exception. The Company calculated the fair value of the stock option grants using the following weighted average assumptions:
Restricted Stock Units The Company has issued service-based and performance-based restricted stock units (RSUs). Vesting generally occurs over a period not greater than four years. Vesting of the performance-based RSUs is subject to the achievement of certain milestones in connection with the Company's development programs. The following table summarizes the activity related to RSUs granted to employees for the six months ended June 30, 2024:
During the six months ended June 30, 2024, the Company granted 3,574,200 RSUs at a weighted-average grant date fair value of $1.82, all of which were service-based RSUs, provided, that, in the event certain financial metrics are achieved any then unvested RSUs shall become fully-vested subject to the recipients continued service through such date. No performance-based RSUs were granted in the six months ended June 30, 2024. As of December 31, 2023, the milestone associated with the previously granted performance based-RSUs was achieved. At June 30, 2024, the unrecognized compensation cost related to unvested service-based RSUs expected to vest was $6,612, to be recognized over an estimated weighted-average amortization period of 3.33 years. Included in the table above are 41,250 RSUs granted outside the 2010 Plan. The grants were made pursuant to the Nasdaq Inducement Grant Exception. 2017 Employee Stock Purchase Plan Under the 2017 Plan, shares of Common Stock may be purchased by eligible employees who elect to participate in the 2017 Plan at 85% of the lower of the fair market value of Common Stock on the first or last day of designated offering periods. During the six months ended June 30, 2024, the Company issued 160,711 shares of Common Stock to employees. The Company calculated the fair value of each grant under the 2017 Employee Stock Purchase Plan using the following weighted average assumptions:
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
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Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
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Pay vs Performance Disclosure | ||||||
Net income (loss) | $ (7,581) | $ (14,067) | $ 2,626 | $ (18,847) | $ (21,649) | $ (16,224) |
Insider Trading Arrangements |
3 Months Ended |
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Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of estimates | Use of estimates The preparation of the unaudited interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim consolidated financial statements and reported amounts of expenses during the reporting period. Due to the uncertainty of factors surrounding the estimates or judgments used in the preparation of the unaudited interim consolidated financial statements, actual results may materially vary from these estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the unaudited interim consolidated financial statements in the period they are determined to be necessary.
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Concentration of credit risk and customer and supplier concentration | Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and accounts receivable. The Company generally invests its cash in deposits with high credit quality financial institutions. Additionally, the Company performs periodic evaluations of the relative credit standing of these financial institutions. Customer and supplier concentration The Company has exposure to credit risk in accounts receivable from sales of product. XHANCE is sold to wholesale pharmaceutical distributors and preferred pharmacy network (PPN) partners, who, in turn, sell XHANCE to pharmacies, hospitals and other customers.
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Fair value of financial instruments | Fair value of financial instruments The Company measures certain assets and liabilities at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability (the exit price) in an orderly transaction between market participants at the measurement date. The FASB accounting guidance outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value, the Company uses quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. The fair value hierarchy is broken down into three levels based on the source of the inputs as follows: •Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. •Level 2 — Valuations based on observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. •Level 3 — Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement. At June 30, 2024 and December 31, 2023, the Company's financial instruments included cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and certain liability classified warrants. The carrying amounts reported in the Company's financial statements for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximates their respective fair values because of the short-term nature of these instruments. In addition, at June 30, 2024, the Company believed the carrying value of debt approximates fair value as the interest rates were reflective of the rate the Company could obtain on debt with similar terms and conditions. At June 30, 2024, there were no financial assets or liabilities measured at fair value on a recurring basis other than the liability classified warrants. In November 2022, the Company issued warrants in connection with a public offering. Pursuant to the terms of the warrant agreement, the Company could be required to settle the warrants in cash in the event of an acquisition of the Company and, as a result, the warrants are required to be measured at fair value and reported as liability in the consolidated balance sheet. The Company recorded the fair value of the warrants upon issuance using a Monte Carlo simulation and is required to revalue the warrants at each reporting date with any changes in fair value recorded on our statement of operations. The valuation of the warrants is considered under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable. The change in the fair value of the Level 3 warrants liabilities is reflected in the statement of operations.
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Net product revenues | Net product revenues The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (ASC 606). The Company recognizes revenue from XHANCE sales at the point customers obtain control of the product, which generally occurs upon delivery. The transaction price that is recognized as revenue for products includes an estimate of variable consideration. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of its anticipated performance and all information (historical, current and forecasted) that is reasonably available. The components of the Company’s variable consideration include the following: Provider Chargebacks and Discounts. Chargebacks for fees and discounts to providers represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices charged to customers who directly purchase the product from the Company. Customers charge the Company for the difference between what they pay for the product and the ultimate selling price to the qualified healthcare providers. These components of variable consideration are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and accounts receivable. Trade Discounts and Allowances. The Company generally provides customers with discounts that include incentive fees which are explicitly stated in the Company’s contracts. These discounts are recorded as a reduction of revenue and accounts receivable in the period in which the related product revenue is recognized. Product Returns. Consistent with industry practice, the Company has a product returns policy that provides customers a right of return for product purchased within a specified period prior to and subsequent to the product’s expiration date. The Company estimates the amount of its product that may be returned and presents this amount as a reduction of revenue in the period the related product revenue is recognized, in addition to establishing a liability. The Company considers several factors in the estimation process, including expiration dates of product shipped to customers, inventory levels within the distribution channel, product shelf life, prescription trends and other relevant factors. Government Rebates. The Company is subject to discount obligations under state Medicaid programs and Medicare. Reserves related to these discount obligations are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. The Company’s liability for these rebates consists of estimates of claims for the current quarter and estimated future claims that will be made for product that has been recognized as revenue but remains in the distribution channel inventories at the end of the reporting period. Payor Rebates. The Company contracts with certain third-party payors, primarily health insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of its products. These rebates are based on contractual percentages applied to the amount of product prescribed to patients who are covered by the plan or the organization with which it contracts. The Company estimates these rebates and records such estimates in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. Patient Assistance. Other programs that the Company offers include voluntary co-pay patient assistance programs intended to provide financial assistance to eligible patients with prescription drug co-payments required by payors and coupon programs for cash payors. The calculation of the current liability for this assistance is based on an estimate of claims and the cost per claim that the Company expects to receive associated with product that has been recognized as revenue but remains in the distribution channel inventories at the end of each reporting period. Distribution and Other Fees. The Company pays distribution and other fees to certain customers in connection with the sales of its products. The Company records distribution and other fees paid to its customers as a reduction of revenue, unless the payment is for a distinct good or service from the customer and the Company can reasonably estimate the fair value of the goods or services received. If both conditions are met, the Company records the consideration paid to the customer as an operating expense. These costs are typically known at the time of sale, resulting in minimal adjustments subsequent to the period of sale.
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Net income (loss) per common share | Net income (loss) per common share Basic and diluted net income (loss) per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities, which include restricted stock units. Under the two-class method, net income (loss) is allocated to common stock and each restricted stock unit to the extent that each restricted stock unit may share in earnings as if all of the earnings for the period had been distributed. The two-class method is not applicable during periods with a net loss, as is the case in the quarter ended, June 30, 2024, and the six month periods ended June 30, 2023 and 2024. Basic net income (loss) per share of common stock, (Basic), is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during each period. In the 2024 periods presented, the Basic weighted average share calculation also includes the weighted average of the pre-funded warrants to purchase shares of common stock at $0.0001 per share that were issued in the registered direct offering on May 10, 2024. Diluted income (loss) per common share, (Diluted), also includes the weighted average of common stock equivalents, if the inclusion of such common stock equivalents would be dilutive. Dilutive common stock equivalents potentially include warrants, stock options and non-vested restricted stock awards using the treasury stock method. As occurred in the three and six month periods ended June 30, 2024 the Diluted calculation was further adjusted by the unrealized gains on the liability classified warrants under the assumption that the gains would not have been recorded if the warrants had been exercised.
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Income taxes | Income taxes In accordance with ASC 270, Interim Reporting, and ASC 740, Income Taxes, the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. For the six months ended June 30, 2024 and 2023, the Company recorded no tax expense or benefit due to the expected current year loss and its historical losses. As of June 30, 2024 and December 31, 2023, the Company concluded that a full valuation allowance would be necessary for all of its net deferred tax assets. The Company had no amounts recorded for uncertain tax positions, interest or penalties in the accompanying consolidated financial statements.
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Recent accounting pronouncements | Recent accounting pronouncements In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. FASB is issuing the amendments in this Update to enhance the transparency and decision usefulness of income tax disclosures. Investors, lenders, creditors, and other allocators of capital (collectively, “investors”) indicated that the existing income tax disclosures should be enhanced to provide information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. Investors currently rely on the rate reconciliation table and other disclosures, including total income taxes paid, to evaluate income tax risks and opportunities. While investors find these disclosures helpful, they suggested possible enhancements to better (1) understand an entity’s exposure to potential changes in jurisdictional tax legislation and the ensuing risks and opportunities, (2) assess income tax information that affects cash flow forecasts and capital allocation decisions, and (3) identify potential opportunities to increase future cash flows. The amendments in this Update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This Update also includes certain other amendments to improve the effectiveness of income tax disclosures. The new standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating ASU No. 2023-09 and its impact on results of operations, financial position and cash flows and related disclosures.
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Fair Value Measurements | Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company applies the guidance in ASC 820, Fair Value Measurements, to account for financial assets and liabilities measured on a recurring basis. Fair value is measured as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. The Company uses a fair value hierarchy, which distinguishes between assumptions based on market data (observable inputs) and an entity's own assumptions (unobservable inputs). The guidance requires that fair value measurements be classified and disclosed in one of the following 3 categories: Level l: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each reporting period. There were no transfers between Level I, 2 and 3 during the three months ended June 30, 2024.
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Basis of Presentation and Summary of Significant Accounting Policies (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of Basic and Diluted Net Income (Loss) | The following table sets forth the computation of basic and diluted income (loss) for the periods presented:
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Schedule of Antidilutive Shares Excluded From Computation of Net Loss Per Common Share | Diluted net loss per share for these periods presented on the statement of operations do not reflect the potential common shares noted below as their effect would be antidilutive.
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets Measured on Recurring Basis | The table below presents the liabilities (in thousands) measured and recorded in the financial statements at fair value on a recurring basis at June 30, 2024 categorized by the level of inputs used in the valuation of each liability.
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Schedule of Fair Value, Liabilities Measured on Recurring Basis | The table below presents the liabilities (in thousands) measured and recorded in the financial statements at fair value on a recurring basis at June 30, 2024 categorized by the level of inputs used in the valuation of each liability.
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Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Inputs Reconciliation | The reconciliation of the Company's warrant liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows (in thousands):
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Schedule of Significant Unobservable Inputs in Valuation of Warrants | The estimated fair value of the warrant liability is determined using Level 3 inputs. The inputs and values were as follows:
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Inventory (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | Inventory consisted of the following:
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Property and Equipment (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment | Property and equipment, net, consisted of the following:
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Accrued Expenses and Other Current Liabilities (Tables) |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of:
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Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of A&R Note Purchase Agreement and Long Term Balance | Pursuant to the Second Amendment, the financial covenants requiring the Company to achieve minimum trailing twelve-month consolidated XHANCE net product sales and royalties was modified as follows (amounts in thousands):
The Pharmakon debt balance is comprised of the following:
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Stockholders' Equity (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Warrants Outstanding | As of June 30, 2024, the Company had the following warrants outstanding to purchase shares of Common Stock:
|
Stock-based Compensation (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Allocated Stock-Based Compensation Expense | The Company recorded total stock-based compensation expense related to stock options, restricted stock units and it's employee stock purchase plan awarded under the Company's 2010 Stock Incentive Plan, as amended and restated effective as of October 12, 20217 (the 2010 Plan), 2017 Employee Stock Purchase Plan (2017 Plan) and grants made pursuant to the Nasdaq inducement grant exception in accordance with Nasdaq Listing Rule 5635(c)(4) (the "Nasdaq Inducement Grant Exception") in the following expense categories in the accompanying consolidated statements of operations as follows:
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Schedule of Stock Option Activity | The following table summarizes the activity related to stock option grants to employees and non-employees for the six months ended June 30, 2024:
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Schedule of Fair Value Options using Black-Scholes Pricing Model | The Company calculated the fair value of the stock option grants using the following weighted average assumptions:
The Company calculated the fair value of each grant under the 2017 Employee Stock Purchase Plan using the following weighted average assumptions:
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Schedule of Nonvested Restricted Stock Units Activity | The following table summarizes the activity related to RSUs granted to employees for the six months ended June 30, 2024:
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Liquidity (Details) - USD ($) $ / shares in Units, $ in Thousands |
May 10, 2024 |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|---|
Subsidiary, Sale of Stock | |||
Cash and cash equivalents | $ 91,358 | $ 73,684 | |
Working capital deficiency | $ 96,230 | ||
Sale of common stock, net of issuance costs (in shares) | 31,800,000 | ||
Purchase price (in dollars per share) | $ 1.00 | ||
Consideration received on transaction | $ 55,300 | ||
Prefunded Warrants | |||
Subsidiary, Sale of Stock | |||
Sale of common stock, net of issuance costs (in shares) | 23,700,000 | ||
Purchase price (in dollars per share) | $ 0.999 | ||
Prefunded Warrants | Common Stock | |||
Subsidiary, Sale of Stock | |||
Purchase price (in dollars per share) | $ 0.0001 |
Basis of Presentation and Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) - Customer Concentration Risk - Five Customers - customer |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Accounts Receivable | ||||
Concentration Risk | ||||
Number of customers (customer) | 5 | 5 | 5 | 5 |
Concentration risk (as a percent) | 89.00% | 64.00% | ||
Sales Revenue, Net | ||||
Concentration Risk | ||||
Number of customers (customer) | 5 | 5 | 5 | 5 |
Concentration risk (as a percent) | 80.00% | 42.00% | 72.00% | 34.00% |
Basis of Presentation and Summary of Significant Accounting Policies - Net income (loss) per common share (Details) |
May 10, 2024
$ / shares
|
---|---|
Antidilutive Securities Excluded from Computation of Earnings Per Share | |
Purchase price (in dollars per share) | $ 1.00 |
Prefunded Warrants | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | |
Purchase price (in dollars per share) | 0.999 |
Common Stock | Prefunded Warrants | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | |
Purchase price (in dollars per share) | $ 0.0001 |
Basis of Presentation and Summary of Significant Accounting Policies - Antidilutive Shares Excluded From Computation of Net Loss Per Share (Details) - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Securities excluded from computation of net loss per common share (in shares) | 39,910,760 | 45,832,200 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Securities excluded from computation of net loss per common share (in shares) | 9,298,311 | 10,634,934 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Securities excluded from computation of net loss per common share (in shares) | 4,737,875 | 2,429,266 |
Common stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Securities excluded from computation of net loss per common share (in shares) | 25,874,574 | 32,768,000 |
Fair Value Measurements - Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
Liabilities | ||
Warrant Liability | $ 15,400 | $ 17,200 |
Total Liabilities | 15,400 | 17,200 |
Level 1 | ||
Liabilities | ||
Warrant Liability | 0 | 0 |
Total Liabilities | 0 | 0 |
Level 2 | ||
Liabilities | ||
Warrant Liability | 0 | 0 |
Total Liabilities | 0 | 0 |
Level 3 | ||
Liabilities | ||
Warrant Liability | 15,400 | 17,200 |
Total Liabilities | $ 15,400 | $ 17,200 |
Fair Value Measurements - Fair Value Liabilities Measured on Recurring Basis Using Unobservable Inputs (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2024
USD ($)
| |
Warrant Liability | |
Balance, December 31, 2023 | $ 17,200 |
Warrants issued | 0 |
Change in fair value of liability | (1,800) |
Balance, June 30, 2024 | $ 15,400 |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Change in fair value of warrant liability |
Fair Value Measurements - Narrative (Details) |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2024
$ / shares
shares
|
May 10, 2024 |
May 09, 2024 |
Dec. 31, 2023 |
|
Fair Value Measurement Inputs and Valuation Techniques | ||||
Class of warrant or right restriction, common shares maximum ownership (as a percent) | 4.99% | |||
Class of warrant or right restriction, common shares maximum ownership prior to execution (as a percent) | 9.99% | |||
Class of warrant or right restriction, common shares maximum ownership after effective waiting period (as a percent) | 19.99% | |||
Strike price | Monte Carlo Simulation | ||||
Fair Value Measurement Inputs and Valuation Techniques | ||||
Warrants outstanding, measurement input | 1.00 | 1.00 | 2.565 | 2.57 |
Warrant | ||||
Fair Value Measurement Inputs and Valuation Techniques | ||||
Price per share (in dollars per share) | $ 1.00 | |||
Warrant | Public Offering | ||||
Fair Value Measurement Inputs and Valuation Techniques | ||||
Number of shares issued (in shares) | shares | 30,268,000 | |||
Warrants exercise price (in dollars per share) | $ 0.01 |
Fair Value Measurements - Valuation of Warrants (Details) - Monte Carlo Simulation |
Jun. 30, 2024
$ / shares
|
May 10, 2024 |
May 09, 2024 |
Dec. 31, 2023
$ / shares
|
---|---|---|---|---|
Fair Value Measurement Inputs and Valuation Techniques | ||||
Expected life (years) | 3 years 4 months 24 days | 3 years 10 months 24 days | ||
Fair value per warrant (in dollars per share) | $ 0.51 | $ 0.57 | ||
Stock price | ||||
Fair Value Measurement Inputs and Valuation Techniques | ||||
Warrants outstanding, measurement input | 1.04 | 1.29 | ||
Strike price | ||||
Fair Value Measurement Inputs and Valuation Techniques | ||||
Warrants outstanding, measurement input | 1.00 | 1.00 | 2.565 | 2.57 |
Expected volatility | ||||
Fair Value Measurement Inputs and Valuation Techniques | ||||
Warrants outstanding, measurement input | 0.575 | 0.600 | ||
Risk-free interest rate | ||||
Fair Value Measurement Inputs and Valuation Techniques | ||||
Warrants outstanding, measurement input | 0.044 | 0.039 | ||
Expected dividend yield | ||||
Fair Value Measurement Inputs and Valuation Techniques | ||||
Warrants outstanding, measurement input | 0 | 0 |
Inventory (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 3,698 | $ 2,400 |
Work-in-process | 4,430 | 3,281 |
Finished goods | 3,279 | 2,371 |
Total inventory | $ 11,407 | $ 8,052 |
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
Property, Plant and Equipment | ||
Property and equipment, gross | $ 5,731 | $ 5,679 |
Less: accumulated depreciation | (5,017) | (4,864) |
Property and equipment, net | 714 | 815 |
Computer equipment and software | ||
Property, Plant and Equipment | ||
Property and equipment, gross | 1,465 | 1,443 |
Furniture and fixtures | ||
Property, Plant and Equipment | ||
Property and equipment, gross | 366 | 366 |
Machinery and equipment | ||
Property, Plant and Equipment | ||
Property and equipment, gross | 3,150 | 3,146 |
Leasehold improvements | ||
Property, Plant and Equipment | ||
Property and equipment, gross | 622 | 609 |
Construction in process | ||
Property, Plant and Equipment | ||
Property and equipment, gross | $ 128 | $ 115 |
Property and Equipment - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 83 | $ 72 | $ 152 | $ 178 |
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
Accrued expenses: | ||
Product revenue allowances | $ 17,376 | $ 20,145 |
Selling, general and administrative expenses | 5,130 | 6,229 |
Research and development expenses | 221 | 644 |
Payroll expenses | 6,316 | 6,801 |
Accrued interest | 0 | 4,666 |
Other | 1,059 | 3,015 |
Total accrued expenses | 30,102 | 41,500 |
Other current liabilities: | ||
Lease liability | 865 | 911 |
Total other current liabilities | 865 | 911 |
Total accrued expenses and other current liabilities | $ 30,967 | $ 42,411 |
Debt - Schedule of Long Term Debt (Details) - Senior Notes - Note Purchase Agreement - USD ($) $ in Thousands |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
Debt Instrument | ||
Face amount | $ 130,000 | $ 130,000 |
Front end fees | (540) | (518) |
Debt issuance costs | (5,467) | (5,235) |
Back end fees | 1,300 | 5,980 |
Debt, net | $ 125,293 | $ 130,227 |
Commitments and Contingencies (Details) - Hikma $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2024
USD ($)
| |
Purchase Commitment, Excluding Long-Term Commitment [Line Items] | |
Minimum purchases in 2024 | $ 2.0 |
Minimum purchases in 2025 | 2.4 |
Minimum purchases in 2026 | $ 2.4 |
Shortfall reimbursement rate (as a percent) | 50.00% |
Payments to purchase supplies | $ 0.8 |
Employee Benefit Plans (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Jun. 30, 2023 |
---|---|---|
Retirement Benefits [Abstract] | ||
Accrued liabilities related to the Company match | $ 82 | $ 83 |
Stockholders' Equity - Warrants Outstanding (Details) - $ / shares |
Jun. 30, 2024 |
May 10, 2024 |
---|---|---|
Class of Stock | ||
Number of warrants outstanding (in shares) | 30,268,000 | |
Warrants Expiring November 18, 2026 | ||
Class of Stock | ||
Number of warrants outstanding (in shares) | 2,500,000 | |
Warrants exercise price (in dollars per share) | $ 1.00 | $ 1.00 |
Warrants Expiring November 23, 2027 | ||
Class of Stock | ||
Number of warrants outstanding (in shares) | 30,268,000 | |
Warrants exercise price (in dollars per share) | $ 1.00 | |
No Expiration | ||
Class of Stock | ||
Number of warrants outstanding (in shares) | 23,700,000 | |
Warrants exercise price (in dollars per share) | $ 0.0001 |
Stock-based Compensation - Allocated Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Share-based Payment Arrangement, Expensed and Capitalized, Amount | ||||
Stock-based compensation expense | $ 2,735 | $ 1,503 | $ 4,191 | $ 3,025 |
Cost of product sales | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount | ||||
Stock-based compensation expense | 33 | 12 | 50 | 18 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount | ||||
Stock-based compensation expense | 5 | 126 | 62 | 281 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount | ||||
Stock-based compensation expense | $ 2,697 | $ 1,365 | $ 4,079 | $ 2,726 |
Stock-based Compensation - Black-Scholes Pricing Model Options (Details) - 2017 Employee Stock Purchase Plan |
6 Months Ended | |
---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Share-based Compensation Arrangement by Share-based Payment Award | ||
Risk free interest rate | 0.05% | 0.05% |
Expected term (in years) | 6 months | 6 months |
Expected volatility | 65.06% | 71.43% |
Annual dividend yield | 0.00% | 0.00% |
Service Based Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Risk free interest rate | 4.26% | 3.97% |
Expected term (in years) | 5 years 10 months 24 days | 6 years 29 days |
Expected volatility | 75.02% | 75.31% |
Annual dividend yield | 0.00% | 0.00% |
Stock-based Compensation - Restricted Stock Units Activity (Details) - Restricted stock units |
6 Months Ended |
---|---|
Jun. 30, 2024
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Beginning balance (in shares) | 1,897,421 |
Granted (in shares) | 3,574,200 |
Vested and settled (in shares) | (638,204) |
Expired/ forfeited/ canceled (in shares) | (95,542) |
Ending balance (in shares) | 4,737,875 |
Expected to vest at end of period (in shares) | 4,737,875 |
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