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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Nevada
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87-0449967
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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Title of Each Class
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Name of Exchange on Which Registered
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Common Stock, par value $.001
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The Nasdaq Capital Market
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
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(do not check if a smaller reporting company)
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Smaller reporting company
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ý
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Emerging growth company
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o
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Page
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1.
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Want a fast-acting and on-demand treatment;
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2.
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Prefer a locally-acting treatment instead of an oral systemic treatment;
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3.
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Have contraindications to PDE5 inhibitors due to medications or concurrent disease (estimated to be approximately 18% of the ED market);
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4.
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Are healthy enough to take the PDE5 inhibitors but stop taking them because they are non-responders (estimated to be approximately 21% of the ED market); or
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5.
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Drop out because of poor tolerability or side effects from oral PDE5 inhibitors.
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•
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submission to the FDA of an investigational new drug (“IND”) which must become effective before human clinical trials may begin and must be updated annually;
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completion of extensive preclinical laboratory tests and preclinical animal studies, all performed in accordance with the FDA’s Good Laboratory Practice regulations;
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performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the product candidate for each proposed indication in accordance with good clinical practices, or GCPs;
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submission to the FDA of an NDA after completion of all pivotal clinical trials;
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a determination by the FDA within 60 days of its receipt of an NDA to file the NDA for review;
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satisfactory completion of an FDA pre-approval inspection of the manufacturing facilities at which the active pharmaceutical ingredient, (“API”), and finished drug product are produced and tested to assess compliance with cGMP regulations; and
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FDA review and approval of an NDA prior to any commercial marketing or sale of the drug in the United States.
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Phase 1. Phase 1 includes the initial introduction of an investigational new drug into humans. Phase 1 clinical trials are typically closely monitored and may be conducted in patients with the target disease or condition or in healthy volunteers. These studies are designed to evaluate the safety, dosage tolerance, metabolism and pharmacologic actions of the investigational drug in humans, the side effects associated with increasing doses, and if possible, to gain early evidence on effectiveness. During Phase 1 clinical trials, sufficient information about the investigational drug’s pharmacokinetics and pharmacological effects may be obtained to permit the design of well-controlled and scientifically valid Phase 2 clinical trials. The total number of participants included in Phase 1 clinical trials varies, but is generally in the range of 20 to 80.
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Phase 2. Phase 2 includes controlled clinical trials conducted to preliminarily or further evaluate the effectiveness of the investigational drug for a particular indication(s) in patients with the disease or condition under study, to determine dosage tolerance and optimal dosage, and to identify possible adverse side effects and safety risks associated with the drug. Phase 2 clinical trials are typically well-controlled, closely monitored, and conducted in a limited patient population, usually involving no more than several hundred participants.
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Phase 3. Phase 3 clinical trials are generally controlled clinical trials conducted in an expanded patient population generally at geographically dispersed clinical trial sites. They are performed after preliminary evidence suggesting effectiveness of the drug has been obtained, and are intended to further evaluate dosage, clinical effectiveness and safety, to establish the overall benefit-risk relationship of the investigational drug product, and to provide an adequate basis for product approval. Phase 3 clinical trials usually involve several hundred to several thousand participants.
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Centralized Procedure. Under the Centralized Procedure a so-called Community Marketing Authorization is issued by the European Commission, based on the opinion of the Committee for Medicinal Products for Human Use of the European Medicines Agency (“EMA”). The Community Marketing Authorization is valid throughout the entire territory of the European Economic Area (“EEA”) (which includes the 28 Member States of the EU plus Norway, Liechtenstein and Iceland). The Centralized Procedure is mandatory for certain types of products, such as biotechnology medicinal products, orphan medicinal products, and medicinal products indicated for the treatment of AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and viral diseases. The Centralized Procedure is optional for products containing a new
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For medicines that do not fall within these categories, an applicant has the option of submitting an application for a centralized marketing authorization to the EMA, as long as the medicine concerned is a significant therapeutic, scientific or technical innovation, or if its authorization would be in the interest of public health.
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National Authorization Procedures. There are also two other possible routes to authorize medicinal products in several countries, which are available for investigational drug products that fall outside the scope of the centralized procedure:
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◦
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Decentralized Procedure. Using the Decentralized Procedure, an applicant may apply for simultaneous authorization in more than one European Union country of medicinal products that have not yet been authorized in any European Union country and that do not fall within the mandatory scope of the centralized procedure. Under the Decentralized Procedure the applicant chooses one country as Reference Member State. The regulatory authority of the Reference Member State will then be in charge of leading the assessment of the marketing authorization application.
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Mutual Recognition Procedure. In the Mutual Recognition Procedure, a medicine is first authorized in one European Union Member State, in accordance with the national procedures of that country. Following this, further marketing authorizations can be sought from other European Union countries in a procedure whereby the countries concerned agree to recognize the validity of the original, national marketing authorization.
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ITEM 1A.
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RISK FACTORS
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collaborators may not have sufficient resources or may decide not to devote the necessary resources due to internal constraints such as budget limitations, lack of human resources, or a change in strategic focus;
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collaborators may believe our intellectual property is not valid or is unenforceable or the product candidate infringes on the intellectual property rights of others;
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collaborators may dispute their responsibility to conduct development and commercialization activities pursuant to the applicable collaboration, including the payment of related costs or the division of any revenues;
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collaborators may decide to pursue a competitive product developed outside of the collaboration arrangement;
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collaborators may not be able to obtain, or believe they cannot obtain, the necessary regulatory approvals;
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collaborators may delay the development or commercialization of our product candidates in favor of developing or commercializing their own or another party’s product candidate; or
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collaborators may decide to terminate or not to renew the collaboration for these or other reasons.
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difficulties in achieving identified financial revenue synergies, growth opportunities, operating synergies and cost savings;
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difficulties in assimilating the personnel, operations and products of an acquired company, and the potential loss of key employees;
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difficulties in consolidating information technology platforms, business applications and corporate infrastructure;
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difficulties in integrating our corporate culture with local customs and cultures;
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possible overlap between our products or customers and those of an acquired entity that may create conflicts in relationships or other commitments detrimental to the integrated businesses;
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our inability to achieve expected revenues and gross margins for any products we may acquire;
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the diversion of management’s attention from other business concerns;
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risks and challenges of entering or operating in markets in which we have limited or no prior experience, including the unanticipated effects of export controls, exchange rate fluctuations, foreign legal and regulatory requirements, and foreign political and economic conditions; and
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difficulties in reorganizing, winding-down or liquidating operations if not successful.
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an annual, nondeductible fee payable by any entity that manufactures or imports specified branded prescription drugs and biologic agents;
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an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program;
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a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;
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a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts, which, through subsequent legislative amendments, was increased to 70%, off negotiated prices of applicable brand drugs to eligible beneficiaries under their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D;
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extension of manufacturers’ Medicaid rebate liability to individuals enrolled in Medicaid managed care organizations;
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expansion of eligibility criteria for Medicaid programs;
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expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;
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a new requirement to annually report drug samples that manufacturers and distributors provide to physicians; and a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.
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the availability of financial resources for us to commence and complete our planned clinical trials;
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reaching agreement on acceptable terms and pricing with prospective contract research organizations (“CROs”) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites;
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obtaining independent institutional review board (“IRB”) approval at each clinical trial site;
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obtaining regulatory approval to commence clinical trials in each country;
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recruiting a sufficient number of eligible patients to participate in a clinical trial;
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having patients complete a clinical trial or return for post-treatment follow-up;
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clinical trial sites deviating from trial protocol or dropping out of a trial;
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adding new clinical trial sites; or
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manufacturing sufficient quantities of our product candidate for use in clinical trials.
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the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials;
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we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that our product candidates are safe and effective for any of the proposed indications;
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the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;
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we may be unable to demonstrate that our product candidates’ clinical and other benefits outweigh their safety risks;
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the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;
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the data collected from clinical trials of our product candidates may not be sufficient to the satisfaction of the FDA or comparable foreign regulatory authorities to support the submission of an NDA or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere;
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the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies;
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the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval; and
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even after following regulatory guidance or advice, the FDA or comparable foreign regulatory authorities may still reject our ultimate regulatory submissions since their guidance is generally considered non-binding and the regulatory authorities have the authority to revise or adopt new and different guidance at any time.
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restrictions on the marketing or manufacturing of our product candidates, withdrawal of the product from the market, or voluntary or mandatory product recalls;
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fines, warning letters or holds on clinical trials;
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refusal by the FDA to approve pending applications or supplements to approved applications filed by us or suspension or revocation of license approvals;
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product seizure or detention, or refusal to permit the import or export of our product candidates; and
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injunctions or the imposition of civil or criminal penalties.
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the federal Anti-Kickback Statute which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a
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the federal False Claims Act, which imposes criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;
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the federal HIPAA, which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;
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HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, which also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;
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the federal Physician Payment Sunshine Act, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the government information related to payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, and requires applicable manufacturers and group purchasing organizations to report annually to the government ownership and investment interests held by the physicians described above and their immediate family members and payments or other “transfers of value” to such physician owners (manufacturers are required to submit reports to the government by the 90
th
day of each calendar year); and
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analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third party payors, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and pricing information; and state and foreign laws governing the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
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regulatory authorities may withdraw approvals of such product;
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regulatory authorities may require additional warnings on the label;
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we may be required to create a medication guide outlining the risks of such side effects for distribution to patients;
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we could be sued and held liable for harm caused to patients; and
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our reputation may suffer.
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2017
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2016
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||||||||||||
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High
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Low
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High
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Low
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First quarter
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$
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4.07
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$
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1.19
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$
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15.50
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$
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5.80
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Second quarter
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$
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2.45
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$
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0.86
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$
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6.49
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$
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3.21
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Third quarter
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$
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1.87
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$
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1.00
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$
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4.94
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$
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2.85
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Fourth quarter
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$
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2.14
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$
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1.20
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$
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3.70
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$
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1.10
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Plan category
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Number of securities to
be issued upon exercise
of outstanding options, warrants and rights
(a)(1)
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Weighted-average
exercise price of
outstanding options, warrants and rights
(b)(2)
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Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a)(3)
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Equity compensation plans approved by security holders
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1,086,509
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$
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17.37
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225,975
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(1)
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Consists of options and restricted stock units outstanding as of December 31,
2017
under the 2012 Plan, and the 2006 Plan.
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(2)
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Consists of the weighted average exercise price of outstanding options as of December 31,
2017
.
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(3)
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Consists entirely of shares of Common Stock that remain available for future issuance under the 2012 Plan as of December 31, 2017.
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ITEM 7.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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Year Ended December 31,
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2017 vs 2016
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2017
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2016
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$ Change
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% Change
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Operating expense
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Research and development
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$
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3,463
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$
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5,880
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$
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(2,417
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)
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(41
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)%
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General and administrative
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7,210
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7,778
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(568
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(7
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)%
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Loss on disposal of assets
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2
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14
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(12
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(86
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)%
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Total operating expense
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10,675
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13,672
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(2,997
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)
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(22
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)%
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Loss from continuing operations
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$
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(10,675
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)
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$
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(13,672
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)
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$
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2,997
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(22
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)%
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Year Ended December 31,
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2017 vs 2016
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2017
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2016
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$ Change
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% Change
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Other (expense) income
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Interest expense, net
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$
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(83
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)
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$
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(983
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$
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900
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(92
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)%
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Change in fair value of warrant liabilities
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(646
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)
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7,479
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(8,125
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)
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(109
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)%
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Loss on extinguishment of debt
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(422
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—
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(422
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N/M
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Other financing expenses
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—
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(461
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461
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(100
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)%
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Other income (expense), net
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77
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(22
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99
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(450
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)%
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Total other income
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$
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(1,074
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)
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$
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6,013
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$
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(7,087
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)
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(118
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)%
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Year Ended
December 31, |
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2017
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2016
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Product sales
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$
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143
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$
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675
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Royalty revenue
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368
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1,088
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License fee revenue
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—
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4,000
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Cost of goods sold
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(74
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)
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(511
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)
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Cost of Sandoz rights
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(10
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(3,380
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)
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Operating expenses
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(658
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)
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(1,606
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)
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Other expense
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(16
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(40
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)
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Gain on sale
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12,317
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—
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Income from discontinued operations
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$
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12,070
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$
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226
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•
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our ability to raise additional funds to finance our operations;
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•
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the outcome of our meeting we plan to request with the FDA regarding the Vitaros NDA resubmission and our ability to overcome deficiencies raised in the 2018 CRL, if we believe it’s commercially reasonable to do so;
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•
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our ability to maintain compliance with the listing requirements of Nasdaq;
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•
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the outcome, costs and timing of any clinical trial results for our current or future product candidates;
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•
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the extent and amount of any indemnification claims made by Ferring under the Ferring Asset Purchase Agreement;
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•
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litigation expenses;
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•
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the emergence and effect of competing or complementary products;
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•
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our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;
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•
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our ability to retain our current employees and the need and ability to hire additional management and scientific and medical personnel;
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•
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the terms and timing of any collaborative, licensing or other arrangements that we have or may establish;
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•
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the trading price of our common stock; and
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•
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our ability to increase the number of authorized shares outstanding to facilitate future financing events.
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2017
|
|
2016
|
||||
Net cash provided by (used in) operations
|
|
|
|
|
||||
Net cash used in operating activities from continuing operations
|
|
$
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(10,571
|
)
|
|
$
|
(13,780
|
)
|
Net cash provided by investing activities from continuing operations
|
|
—
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|
|
265
|
|
||
Net cash provided by financing activities from continuing operations
|
|
2,501
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|
|
11,003
|
|
||
Net cash provided by discontinued operations
|
|
12,314
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|
|
712
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|
||
Net increase (decrease) in cash
|
|
$
|
4,244
|
|
|
$
|
(1,800
|
)
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PAGE
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Report of Independent Registered Public Accounting Firm
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Financial Statements:
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Consolidated Balance Sheets as of December 31, 2017 and 2016
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Consolidated Statements of Operations for the years ended December 31, 2017 and 2016
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Consolidated Statements of Cash Flows for the years ended December 31, 2017 and 2016
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Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the years ended December 31, 2017 and 2016
|
|
Notes to the Consolidated Financial Statements
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash
|
$
|
6,331
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|
|
$
|
2,087
|
|
Prepaid expenses and other current assets
|
261
|
|
|
177
|
|
||
Current assets of discontinued operations
|
—
|
|
|
1,370
|
|
||
Total current assets
|
6,592
|
|
|
3,634
|
|
||
Property and equipment, net
|
79
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|
|
164
|
|
||
Other long term assets
|
35
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|
|
60
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|
||
Noncurrent assets of discontinued operations
|
—
|
|
|
842
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|
||
Total assets
|
$
|
6,706
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|
|
$
|
4,700
|
|
|
|
|
|
||||
Liabilities and stockholders’ equity (deficit)
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
58
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|
|
$
|
763
|
|
Accrued expenses
|
650
|
|
|
1,333
|
|
||
Accrued compensation
|
863
|
|
|
614
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|
||
Deferred revenue
|
12
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|
|
—
|
|
||
Note payable, net
|
—
|
|
|
6,650
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|
||
Current liabilities of discontinued operations
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—
|
|
|
1,934
|
|
||
Total current liabilities
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1,583
|
|
|
11,294
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|
||
Warrant liabilities
|
694
|
|
|
846
|
|
||
Other long term liabilities
|
58
|
|
|
76
|
|
||
Total liabilities
|
2,335
|
|
|
12,216
|
|
||
|
|
|
|
||||
Commitments and contingencies (note 10)
|
|
|
|
||||
Stockholders’ equity (deficit)
|
|
|
|
||||
Preferred stock, $.001 par value, 10,000,000 shares authorized, no shares issued or outstanding as of December 31, 2017 and 2016
|
—
|
|
|
—
|
|
||
Common stock, $.001 par value, 30,000,000 shares authorized, 15,217,231 and 7,733,205 issued and outstanding as of December 31, 2017 and 2016, respectively
|
15
|
|
|
8
|
|
||
Additional paid-in-capital
|
320,343
|
|
|
308,784
|
|
||
Accumulated deficit
|
(315,987
|
)
|
|
(316,308
|
)
|
||
Total stockholders’ equity (deficit)
|
4,371
|
|
|
(7,516
|
)
|
||
Total liabilities and stockholders’ equity (deficit)
|
$
|
6,706
|
|
|
$
|
4,700
|
|
|
|
For the Years Ended December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Operating expense
|
|
|
|
|
||||
Research and development
|
|
$
|
3,463
|
|
|
$
|
5,880
|
|
General and administrative
|
|
7,210
|
|
|
7,778
|
|
||
Loss on disposal of assets
|
|
2
|
|
|
14
|
|
||
Total operating expense
|
|
10,675
|
|
|
13,672
|
|
||
Loss before other income (expense)
|
|
(10,675
|
)
|
|
(13,672
|
)
|
||
Other income (expense)
|
|
|
|
|
||||
Interest expense, net
|
|
(83
|
)
|
|
(983
|
)
|
||
Change in fair value of warrant liabilities
|
|
(646
|
)
|
|
7,479
|
|
||
Loss on extinguishment of debt
|
|
(422
|
)
|
|
—
|
|
||
Other financing expenses
|
|
—
|
|
|
(461
|
)
|
||
Other income (expense), net
|
|
77
|
|
|
(22
|
)
|
||
Total other income (expense)
|
|
(1,074
|
)
|
|
6,013
|
|
||
Loss from continuing operations
|
|
(11,749
|
)
|
|
(7,659
|
)
|
||
Income from discontinued operations
|
|
12,070
|
|
|
226
|
|
||
Net income (loss)
|
|
$
|
321
|
|
|
$
|
(7,433
|
)
|
Total earnings (loss) per share
|
|
|
|
|
||||
Continuing operations
|
|
$
|
(0.99
|
)
|
|
$
|
(1.18
|
)
|
Discontinued operations
|
|
$
|
1.01
|
|
|
$
|
0.03
|
|
Total earnings (loss) per share
|
|
$
|
0.02
|
|
|
$
|
(1.15
|
)
|
|
|
|
|
|
||||
Weighted average common shares outstanding used for basic and diluted earnings (loss) per share
|
|
11,892
|
|
|
6,517
|
|
|
For the Year Ended
December 31, |
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
321
|
|
|
$
|
(7,433
|
)
|
Net income from discontinued operations
|
12,070
|
|
|
226
|
|
||
Net loss from continuing operations
|
(11,749
|
)
|
|
(7,659
|
)
|
||
Adjustments to reconcile net income (loss) to net cash used in operating activities from continuing operations:
|
|
|
|
||||
Depreciation and amortization
|
117
|
|
|
106
|
|
||
Non-cash interest expense
|
56
|
|
|
362
|
|
||
Stock-based compensation expense
|
1,138
|
|
|
1,747
|
|
||
Warrant liabilities revaluation
|
646
|
|
|
(7,479
|
)
|
||
Other financing expenses
|
—
|
|
|
461
|
|
||
Loss on debt extinguishment
|
422
|
|
|
—
|
|
||
Other
|
2
|
|
|
10
|
|
||
Changes in operating assets and liabilities from continuing operations:
|
|
|
|
||||
Prepaid expenses and other current assets
|
(84
|
)
|
|
408
|
|
||
Other assets
|
25
|
|
|
40
|
|
||
Accounts payable
|
(705
|
)
|
|
45
|
|
||
Accrued expenses
|
(681
|
)
|
|
(1,340
|
)
|
||
Accrued compensation
|
249
|
|
|
(360
|
)
|
||
Other liabilities
|
(7
|
)
|
|
(121
|
)
|
||
Net cash used in operating activities from continuing operations
|
(10,571
|
)
|
|
(13,780
|
)
|
||
Cash flows from investing activities from continuing operations:
|
|
|
|
||||
Purchase of fixed assets, net
|
—
|
|
|
(18
|
)
|
||
Proceeds from the sale of property and equipment
|
—
|
|
|
3
|
|
||
Release of restricted cash
|
—
|
|
|
280
|
|
||
Net cash provided by investing activities from continuing operations
|
—
|
|
|
265
|
|
||
Cash flows from financing activities from continuing operations:
|
|
|
|
||||
Issuance of common stock and warrants
|
10,733
|
|
|
14,762
|
|
||
Issuance costs related to common stock and warrants
|
(1,392
|
)
|
|
(641
|
)
|
||
Repayment of notes payable
|
(7,129
|
)
|
|
(3,113
|
)
|
||
Proceeds from exercise of warrants
|
289
|
|
|
—
|
|
||
Repayment of capital lease obligations
|
—
|
|
|
(5
|
)
|
||
Net cash provided by financing activities from continuing operations
|
2,501
|
|
|
11,003
|
|
||
Cash flows from discontinued operations:
|
|
|
|
||||
Net cash (used in) provided by operating activities of discontinued operations
|
105
|
|
|
712
|
|
||
Net cash provided by investing activities of discontinued operations
|
12,209
|
|
|
—
|
|
||
Net cash provided by discontinued operations
|
12,314
|
|
|
712
|
|
||
Net increase (decrease) in cash
|
4,244
|
|
|
(1,800
|
)
|
||
Cash, beginning of period
|
2,087
|
|
|
3,887
|
|
||
Cash, end of period
|
$
|
6,331
|
|
|
$
|
2,087
|
|
|
Common
Stock (Shares) |
|
Common
Stock (Amount) |
|
Additional
Paid-In Capital |
|
Accumulated
Deficit |
|
Total
Stockholders’
(Deficit) Equity
|
||||||||||
Balance as of December 31, 2015
|
5,042
|
|
|
$
|
5
|
|
|
$
|
298,926
|
|
|
$
|
(308,875
|
)
|
|
$
|
(9,944
|
)
|
|
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
1,747
|
|
|
—
|
|
|
1,747
|
|
|||||
Issuance of restricted stock units to settle bonus liability
|
—
|
|
|
—
|
|
|
249
|
|
|
—
|
|
|
249
|
|
|||||
Issuance of common stock and warrants, net of offering costs
|
2,691
|
|
|
3
|
|
|
7,862
|
|
|
—
|
|
|
7,865
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,433
|
)
|
|
(7,433
|
)
|
|||||
Balance as of December 31, 2016
|
7,733
|
|
|
8
|
|
|
308,784
|
|
|
(316,308
|
)
|
|
(7,516
|
)
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
1,138
|
|
|
—
|
|
|
1,138
|
|
|||||
Issuance of common stock due to the vesting of restricted stock units, net of shares withheld to cover taxes
|
131
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of common stock and warrants
|
7,353
|
|
|
7
|
|
|
10,726
|
|
|
—
|
|
|
10,733
|
|
|||||
Issuance costs related to common stock and warrants
|
—
|
|
|
—
|
|
|
(1,392
|
)
|
|
—
|
|
|
(1,392
|
)
|
|||||
Proceeds from exercise of warrants
|
—
|
|
|
—
|
|
|
289
|
|
|
—
|
|
|
289
|
|
|||||
Reclassification of warrant liabilities to equity
|
—
|
|
|
—
|
|
|
798
|
|
|
—
|
|
—
|
|
798
|
|
||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
321
|
|
|
321
|
|
|||||
Balance as of December 31, 2017
|
15,217
|
|
|
$
|
15
|
|
|
$
|
320,343
|
|
|
$
|
(315,987
|
)
|
|
$
|
4,371
|
|
•
|
its ability to raise additional funds to finance its operations;
|
•
|
the outcome of the Company’s meeting with the FDA that it plans to request regarding the Vitaros NDA resubmission and its ability to overcome deficiencies raised in the 2018 CRL, if the Company believes it’s commercially reasonable to do so;
|
•
|
its ability to maintain compliance with the listing requirements of The Nasdaq Capital Market (“Nasdaq”);
|
•
|
the outcome, costs and timing of clinical trial results for the Company’s current or future product candidates;
|
•
|
the extent and amount of any indemnification claims made by Ferring under the Ferring Asset Purchase Agreement;
|
•
|
litigation expenses;
|
•
|
the emergence and effect of competing or complementary products;
|
•
|
its ability to maintain, expand and defend the scope of its intellectual property portfolio, including the amount and timing of any payments the Company may be required to make, or that it may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;
|
•
|
its ability to retain its current employees and the need and ability to hire additional management and scientific and medical personnel;
|
•
|
the terms and timing of any collaborative, licensing or other arrangements that it has or may establish;
|
•
|
the trading price of its common stock; and
|
•
|
its ability to increase the number of authorized shares outstanding to facilitate future financing events.
|
•
|
Machinery and equipment:
three
to
five
years
|
•
|
Furniture and fixtures:
ten
years
|
•
|
Computer software:
five
years
|
Warrant liabilities
|
|
Quoted Market Prices for Identical Assets
(Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Total
|
||||||||
Balance as of December 31, 2017
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
694
|
|
|
$
|
694
|
|
Balance as of December 31, 2016
|
|
—
|
|
|
$
|
—
|
|
|
$
|
846
|
|
|
$
|
846
|
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Risk-free interest rate
|
|
2.2%-2.2%
|
|
|
1.64%-1.99%
|
|
||
Volatility
|
|
89%-89.41%
|
|
|
77.25%-81.03%
|
|
||
Dividend yield
|
|
—
|
%
|
|
—
|
%
|
||
Expected term
|
|
5.04-5.17
|
|
|
4.75-6.17
|
|
||
Weighted average fair value
|
|
$
|
0.80
|
|
|
$
|
0.49
|
|
|
|
Warrant liabilities
|
||
Balance as of December 31, 2016
|
|
$
|
846
|
|
Change in fair value measurement of warrant liability
|
|
646
|
|
|
Warrant liability reclassified to stockholders' equity
|
|
(798
|
)
|
|
Balance as of December 31, 2017
|
|
$
|
694
|
|
|
|
Year Ended December 31,
|
||||
|
|
2017
|
|
2016
|
||
Outstanding stock options
|
|
368
|
|
|
415
|
|
Outstanding warrants
|
|
7,084
|
|
|
2,318
|
|
Restricted stock units
|
|
718
|
|
|
115
|
|
|
|
8,170
|
|
|
2,848
|
|
|
|
Year Ended December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Europe
(1)(2)
|
|
$
|
364
|
|
|
$
|
5,093
|
|
Canada
(1)
|
|
142
|
|
|
570
|
|
||
Asia Pacific
(1)(2)
|
|
—
|
|
|
100
|
|
||
Other
(1)(2)
|
|
5
|
|
|
—
|
|
||
|
|
$
|
511
|
|
|
$
|
5,763
|
|
(1)
|
As a result of the Ferring Asset Purchase Agreement, all revenues have been reflected as discontinued operations in the statement of operations for all periods presented.
|
(2)
|
Amounts included have not been broken out by country as it is impractical to do so given the nature and structure of the license agreements which cover multiple countries and/or territories. The basis for attributing product sales and royalty revenues from external customers to individual countries was based on the geographic location of the end user customer.
|
Upfront payment received
|
$
|
11,500
|
|
Transition services payments
|
500
|
|
|
Payment received for inventory
|
709
|
|
|
Total proceeds from sale
|
$
|
12,709
|
|
Carrying value of assets sold in sale
|
(1,578
|
)
|
|
Liabilities transferred upon sale
|
1,186
|
|
|
Total gain on sale of Purchased Assets
|
$
|
12,317
|
|
|
December 31,
2016 |
||
Accounts receivable
|
$
|
530
|
|
Inventories
|
764
|
|
|
Prepaid expenses and other current assets
|
76
|
|
|
Current assets of discontinued operations
|
1,370
|
|
|
Property and equipment, net
|
842
|
|
|
Total assets of discontinued operations
|
$
|
2,212
|
|
|
|
||
Accounts payable
|
197
|
|
|
Accrued expenses
|
1,737
|
|
|
Total liabilities of discontinued operations
|
$
|
1,934
|
|
|
Year Ended
December 31, |
||||||
|
2017
|
|
2016
|
||||
Product sales
|
$
|
143
|
|
|
$
|
675
|
|
Royalty revenue
|
368
|
|
|
1,088
|
|
||
License fee revenue
|
—
|
|
|
4,000
|
|
||
Cost of goods sold
|
(74
|
)
|
|
(511
|
)
|
||
Cost of Sandoz rights
|
(10
|
)
|
|
(3,380
|
)
|
||
Operating expenses
|
(658
|
)
|
|
(1,606
|
)
|
||
Other expense
|
(16
|
)
|
|
(40
|
)
|
||
Gain on sale
|
12,317
|
|
|
—
|
|
||
Income from discontinued operations
|
$
|
12,070
|
|
|
$
|
226
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Leasehold improvements
|
$
|
20
|
|
|
$
|
20
|
|
Machinery and equipment
|
270
|
|
|
279
|
|
||
Capital lease equipment
|
76
|
|
|
76
|
|
||
Computer software
|
130
|
|
|
130
|
|
||
Furniture and fixtures
|
25
|
|
|
25
|
|
||
Total property and equipment
|
521
|
|
|
530
|
|
||
Less: accumulated depreciation and amortization
|
(442
|
)
|
|
(366
|
)
|
||
Property and equipment, net
|
$
|
79
|
|
|
$
|
164
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Professional fees
|
$
|
575
|
|
|
$
|
880
|
|
Outside research and development services
|
61
|
|
|
142
|
|
||
Deferred compensation
|
—
|
|
|
134
|
|
||
Other
|
14
|
|
|
177
|
|
||
Accrued expenses, net
|
$
|
650
|
|
|
$
|
1,333
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred rent
|
46
|
|
|
76
|
|
||
Security deposit
|
12
|
|
|
—
|
|
||
Other long term liabilities, net
|
$
|
58
|
|
|
$
|
76
|
|
|
|
December 31,
2016 |
||
Notes payable, principal
|
|
$
|
6,392
|
|
Add: accretion of final payment fee
|
|
378
|
|
|
Less: unamortized debt discount
|
|
(120
|
)
|
|
Total notes payable
|
|
6,650
|
|
|
Common Shares
Issuable upon Exercise |
|
Weighted
Average Exercise Price |
|||
Outstanding at December 31, 2016
|
2,318
|
|
|
$
|
15.19
|
|
Issued
|
5,199
|
|
|
$
|
1.60
|
|
Exercised
|
(186
|
)
|
|
$
|
1.55
|
|
Cancelled
|
(247
|
)
|
|
52.50
|
|
|
Outstanding as of December 31, 2017
|
7,084
|
|
|
$
|
3.91
|
|
Exercisable as of December 31, 2017
|
7,084
|
|
|
$
|
3.91
|
|
Shares Issuable Upon Exercise
|
|
Exercise Price
|
|
Expiration Date
|
|||
300
|
|
|
$
|
34.00
|
|
|
May 2018
|
1,068
|
|
|
$
|
1.67
|
|
|
March 2020
|
107
|
|
|
$
|
2.16
|
|
|
March 2020
|
252
|
|
|
$
|
1.75
|
|
|
April 2022
|
4,452
|
|
|
$
|
1.55
|
|
|
May 2022
|
429
|
|
|
$
|
8.80
|
|
|
January 2023
|
442
|
|
|
$
|
8.80
|
|
|
March 2023
|
19
|
|
|
$
|
12.90
|
|
|
October 2024
|
15
|
|
|
$
|
16.40
|
|
|
July 2025
|
7,084
|
|
|
|
|
|
|
Number of
Shares |
|
Weighted
Average Exercise Price |
|
Weighted
Average Remaining Contractual Life (in years) |
|
Total
Aggregate Intrinsic Value |
||||||
Outstanding as of December 31, 2016
|
415
|
|
|
$
|
17.23
|
|
|
7.6
|
|
|
$
|
—
|
|
Cancelled
|
(46
|
)
|
|
16.08
|
|
|
—
|
|
|
—
|
|
||
Outstanding as of December 31, 2017
|
369
|
|
|
$
|
17.37
|
|
|
6.7
|
|
|
$
|
—
|
|
Vested and expected to vest as of December 31, 2017
|
356
|
|
|
$
|
17.61
|
|
|
6.7
|
|
|
$
|
—
|
|
Exercisable as of December 31, 2017
|
293
|
|
|
$
|
18.91
|
|
|
6.4
|
|
|
$
|
—
|
|
|
Number of
Shares |
|
Weighted Average Grant Date Fair Value
|
||||
Nonvested as of December 31, 2016
|
$
|
115
|
|
|
$
|
5.11
|
|
Granted
|
873
|
|
|
$
|
1.13
|
|
|
Vested
|
(214
|
)
|
|
$
|
1.70
|
|
|
Forfeited
|
(56
|
)
|
|
$
|
1.45
|
|
|
Nonvested as of December 31, 2017
|
$
|
718
|
|
|
$
|
1.57
|
|
|
2016
|
||
Risk-free interest rate
|
1.36%-1.78%
|
|
|
Volatility
|
72.35%-80.02%
|
|
|
Dividend yield
|
—
|
%
|
|
Expected term
|
5.25-6.08 years
|
|
|
Forfeiture rate
|
11.33
|
%
|
|
Weighted average fair value
|
$
|
7.23
|
|
|
|
Year Ended December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Research and development
|
|
$
|
227
|
|
|
$
|
534
|
|
General and administrative
|
|
911
|
|
|
1,213
|
|
||
|
|
$
|
1,138
|
|
|
$
|
1,747
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Net operating tax loss and capital loss carryforwards
|
|
$
|
23,463
|
|
|
$
|
68,672
|
|
Capitalized research and development costs
|
|
4,620
|
|
|
5,270
|
|
||
Research and development tax credits
|
|
1,923
|
|
|
1,659
|
|
||
Deferred compensation
|
|
—
|
|
|
46
|
|
||
Other accruals and reserves
|
|
721
|
|
|
1,214
|
|
||
Basis of intangible assets
|
|
3,658
|
|
|
3,870
|
|
||
Total deferred tax asset
|
|
34,385
|
|
|
80,731
|
|
||
Less valuation allowance
|
|
(34,385
|
)
|
|
(80,731
|
)
|
||
Net deferred tax asset
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Year Ended December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Beginning balance
|
|
$
|
3,047
|
|
|
$
|
2,882
|
|
Change in current period positions
|
|
34
|
|
|
68
|
|
||
Change in prior period positions
|
|
(2,368
|
)
|
|
97
|
|
||
Ending balance
|
|
$
|
713
|
|
|
$
|
3,047
|
|
|
|
Year Ended December 31,
|
||||
|
|
2017
|
|
2016
|
||
Federal statutory tax rate
|
|
(34
|
)%
|
|
(34
|
)%
|
Change in rate
|
|
165
|
%
|
|
—
|
%
|
Valuation allowance
|
|
(360
|
)%
|
|
81
|
%
|
Deferred tax true-ups
|
|
227
|
%
|
|
(5
|
)%
|
Revaluation of warrants
|
|
2
|
%
|
|
(34
|
)%
|
Permanent differences
|
|
1
|
%
|
|
(4
|
)%
|
Tax credits
|
|
(1
|
)%
|
|
(4
|
)%
|
Income tax expense
|
|
—
|
%
|
|
—
|
%
|
2018
|
|
$
|
364
|
|
2019
|
|
374
|
|
|
2020
|
|
32
|
|
|
Total
|
|
$
|
770
|
|
•
|
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
|
ITEM 9B.
|
OTHER INFORMATION
|
Name
|
|
Age
|
|
Position
|
|
Non-Employees Directors
|
|
|
|
|
|
Kleanthis G. Xanthopoulos, Ph.D.
(1)(2)
|
|
59
|
|
|
Chairman
|
Paul V. Maier
(1)(3)
|
|
70
|
|
|
Director
|
Sandford D. Smith
(1)(2)
|
|
70
|
|
|
Director
|
Russell Ray
(1)(3)
|
|
47
|
|
|
Director
|
Wendell Wierenga, Ph.D.
(2)(3)
|
|
70
|
|
|
Director
|
Executive Officers
|
|
|
|
|
|
Richard W. Pascoe
|
|
54
|
|
|
Chief Executive Officer, Secretary and Director
|
Brian T. Dorsey
|
|
49
|
|
|
Senior Vice President, Chief Development Officer
|
Neil Morton
|
|
42
|
|
|
Senior Vice President, Chief Business Officer
|
Name and Position
|
|
Year
|
|
Salary
|
|
Bonus (4)
|
|
Stock Awards (5)
|
|
Option
Awards (6)
|
|
Non-Equity Incentive Plan Compensation (7)
|
|
All Other
Compensation
|
|
Total
|
||||||||||||||
Richard W. Pascoe, Chief Executive Officer, Secretary and Director (1)
|
|
2017
|
|
$
|
487,396
|
|
|
$
|
97,479
|
|
|
$
|
64,000
|
|
|
$
|
—
|
|
|
$
|
176,681
|
|
|
$
|
13,036
|
|
|
$
|
838,592
|
|
|
2016
|
|
$
|
487,396
|
|
|
$
|
—
|
|
|
$
|
179,555
|
|
|
$
|
383,891
|
|
|
$
|
—
|
|
|
$
|
12,836
|
|
|
$
|
1,063,678
|
|
|
Brian T. Dorsey, Senior Vice President, Chief Development Officer (2)
|
|
2017
|
|
$
|
319,300
|
|
|
$
|
63,860
|
|
|
$
|
48,000
|
|
|
$
|
—
|
|
|
$
|
92,597
|
|
|
$
|
12,788
|
|
|
$
|
536,545
|
|
|
2016
|
|
$
|
319,300
|
|
|
$
|
—
|
|
|
$
|
95,250
|
|
|
$
|
153,559
|
|
|
$
|
—
|
|
|
$
|
12,588
|
|
|
$
|
580,697
|
|
|
Neil Morton, Senior Vice President, Chief Business Officer (3)
|
|
2017
|
|
$
|
275,000
|
|
|
$
|
55,000
|
|
|
$
|
48,000
|
|
|
$
|
—
|
|
|
$
|
79,750
|
|
|
$
|
12,006
|
|
|
$
|
469,756
|
|
|
2016
|
|
$
|
275,000
|
|
|
$
|
—
|
|
|
$
|
46,691
|
|
|
$
|
130,180
|
|
|
$
|
—
|
|
|
$
|
11,806
|
|
|
$
|
463,677
|
|
(1)
|
Mr. Pascoe’s all other compensation in
2017
includes $10,800 for the Company’s matching and profit sharing contribution to the 401(k) plan and $2,236 in life insurance premiums.
|
(2)
|
Mr. Dorsey’s all other compensation in
2017
includes $10,800 for the Company’s matching and profit sharing contribution to the 401(k) plan and $1,988 in life insurance premiums.
|
(3)
|
Mr. Morton’s all other compensation in
2017
includes $10,800 for the Company’s matching and profit sharing contribution to the 401(k) plan and $1,206 in life insurance premiums.
|
(4)
|
Represents the dollar amount of the special one-time bonus approved and ratified by the Compensation Committee on June 1, 2017, which was intended to recognize the efforts of such executives related to the sale of our ex-U.S. Vitaros business.
|
(5)
|
Represents the grant date fair value of the stock awards granted in the applicable fiscal year, computed in accordance with FASB ASC Topic 718. For information relating to our assumptions made in valuing the stock awards granted to our Named Executive Officers in
2017
, see note 8 to our audited consolidated financial statements included in this annual report on Form 10-K for the year ended December 31, 2017.
|
(6)
|
Represents the grant date fair value of the stock option awards granted in 2016, calculated in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. For a discussion of valuation assumptions for stock-based compensation, see note 8 to our audited consolidated financial statements filed with this annual report on Form 10-K for the year ended December 31, 2017. These figures do not reflect the amortized compensation expense or value received by the officer in the year indicated or that may be received by the officer with respect to such equity awards.
|
(7)
|
Represents the bonuses paid to the Named Executive Officers in cash in 2018 for 2017 performance pursuant to our annual incentive program. There were no bonuses paid to the Named Executive Officers in 2017 for 2016 performance pursuant to our annual incentive program.
|
Name
|
|
Title
|
|
Fiscal Year 2017 Incentive Bonus Rate at Target
|
|
2017 Evaluation of Company Performance
|
|
Final Ratio Incentive Bonus as a Percentage of Base Salary
|
|
Fiscal 2017 Incentive Bonus Award
|
|||||
Richard W. Pascoe
|
|
Chief Executive Officer, Secretary and Director
|
|
50
|
%
|
|
72.5
|
%
|
|
36.25
|
%
|
|
$
|
176,681
|
|
Brian T. Dorsey
|
|
Senior Vice President, Chief Development Officer
|
|
40
|
%
|
|
72.5
|
%
|
|
29
|
%
|
|
$
|
92,597
|
|
Neil Morton
|
|
Senior Vice President, Chief Business Officer
|
|
40
|
%
|
|
72.5
|
%
|
|
29
|
%
|
|
$
|
79,750
|
|
|
|
Option Awards (1)
|
|
Stock Awards
|
||||||||||||||||||||||||||
Name
|
|
Number of Securities Underlying Unexercised Options Exercisable (#)
|
|
Number of Securities Underlying Unexercised Options Non-Exercisable (#)
|
|
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)
|
|
Option
Exercise
Price ($)
|
|
Option
Expiration
Date
|
|
Number of Shares or Units of Stock That Have Not Vested (#) (3)
|
|
Market Value of Shares or Units of Stock That Have Not Vested ($) (4)
|
|
Equity Incentive Plan Awards: Number of Unearned shares, Units or Other Rights That Have Not Vested (#) (5)
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (4)
|
||||||||||||
Richard W. Pascoe
|
|
90,000
|
|
—
|
|
—
|
|
|
—
|
|
|
$
|
25.10
|
|
|
3/18/2023
|
|
67,500
|
|
|
$
|
124,200
|
|
|
117,500
|
|
|
$
|
216,200
|
|
|
|
21,875
|
|
|
8,125
|
|
|
—
|
|
|
$
|
14.30
|
|
|
1/29/2025
|
|
|
|
|
|
|
|
|
|||||||
|
|
21,875
|
|
|
28,125
|
|
|
—
|
|
|
$
|
11.10
|
|
|
3/15/2026
|
|
|
|
|
|
|
|
|
|||||||
Brian T. Dorsey
|
|
22,500
|
|
|
7,500
|
|
|
—
|
|
|
$
|
11.30
|
|
|
12/1/2024
|
|
50,000
|
|
|
$
|
92,000
|
|
|
87,500
|
|
|
$
|
161,000
|
|
|
|
|
8,750
|
|
|
11,250
|
|
|
—
|
|
|
$
|
11.10
|
|
|
3/15/2026
|
|
|
|
|
|
|
|
|
|||||||
Neil Morton
|
|
11,250
|
|
|
750
|
|
|
—
|
|
|
$
|
23.20
|
|
|
3/20/2024
|
|
42,500
|
|
|
$
|
78,200
|
|
|
80,000
|
|
|
$
|
147,200
|
|
|
|
|
8,000
|
|
|
—
|
|
|
—
|
|
(2)
|
$
|
23.20
|
|
|
3/20/2024
|
|
|
|
|
|
|
|
|
|||||||
|
|
4,375
|
|
|
1,625
|
|
|
|
|
$
|
14.30
|
|
|
1/29/2025
|
|
|
|
|
|
|
|
|
||||||||
|
|
3,721
|
|
|
4,779
|
|
|
|
|
$
|
11.10
|
|
|
3/15/2026
|
|
|
|
|
|
|
|
|
||||||||
|
|
6,875
|
|
|
9,625
|
|
|
|
|
$
|
5.70
|
|
|
4/1/2026
|
|
|
|
|
|
|
|
|
(1)
|
Except as otherwise noted, all stock options have a term of ten years from the date of grant and vest over four years, with 25% of the shares subject to the options vesting on the first anniversary of the date of grant and the remainder vesting in 36 monthly tranches thereafter. For a description of the accelerated vesting provisions applicable to the stock options granted to the Named Executive Officer, see “Payments Upon Termination or Change in Control” below.
|
(2)
|
Represents performance-based stock options that vested based on the Company’s initiation of one or more Phase II or later clinical trials of assets approved by the Board (each, a “
Qualifying Trial
”) on or before December 31, 2015, as follows: (1) 25% of the underlying shares vested upon the First Vesting Date (e.g., the enrollment of the first patient in the first Qualifying Trial), which occurred as a result of the randomization and first dosing of the first RayVa Phase 2a patient in December 2014; 1/96
th
of the total number of shares subject to the option vested monthly thereafter over a 24-month period so that the option was vested and exercisable with respect to 50% of the total number of shares of stock underlying the option on the second anniversary of the First Vesting Date, and (2) 25% of the underlying shares vested upon the Second Vesting Date (e.g., the enrollment of the first patient in the second Qualifying Trial), which occurred as a result of the randomization and first dosing of the first fispemifene patient in May 2015; 1/96
th
of the total number of shares subject to the option vested monthly thereafter over a 24-month period so that the option was vested and exercisable with respect to 100% of the total number of shares of stock underlying the option on the second anniversary of the Second Vesting Date.
|
(3)
|
Includes restricted stock units granted in April 2016 (with respect to Mr. Pascoe) and May 2016 (with respect to Messrs. Dorsey and Morton) that vested on January 1, 2018, as follows: Mr. Pascoe, 17,500 restricted stock units; Mr. Dorsey, 12,500 restricted stock units; and Mr. Morton, 5,000 restricted stock units.
|
(4)
|
Computed by multiplying the number of shares underlying each RSU by $1.84, the closing market price of the Company’s Common stock on December 29, 2017, the last trading day of 2017.
|
(5)
|
Includes performance-based restricted stock units granted in April 2016 (with respect to Mr. Pascoe) and May 2016 (with respect to Messrs. Dorsey and Morton) that will vest upon our receipt of marketing approval of Vitaros in the United States by the FDA on or before December 31, 2018, subject to the executive’s continuous employment or service with us through the vesting date, as follows: Mr. Pascoe, 17,500 restricted stock units; Mr. Dorsey, 12,500 restricted stock units; and Mr. Morton, 5,000 restricted stock units.
|
Name
|
|
Cash
Compensation (1)
|
|
Option Grants (2)
|
|
Stock Awards (3)
|
|
Total
|
||||||||
Kleanthis G. Xanthopoulos, Ph.D.
|
|
$
|
92,000
|
|
|
$
|
—
|
|
|
$
|
19,200
|
|
|
$
|
111,200
|
|
Russell Ray
|
|
$
|
55,000
|
|
|
$
|
—
|
|
|
$
|
14,400
|
|
|
$
|
69,400
|
|
Paul V. Maier
|
|
$
|
58,000
|
|
|
$
|
—
|
|
|
$
|
14,400
|
|
|
$
|
72,400
|
|
Wendell Wierenga, Ph.D.
|
|
$
|
48,000
|
|
|
$
|
—
|
|
|
$
|
14,400
|
|
|
$
|
62,400
|
|
Sandford D. Smith
|
|
$
|
52,000
|
|
|
$
|
—
|
|
|
$
|
14,400
|
|
|
$
|
66,400
|
|
(1)
|
Includes the value of the annual retainers payable to our non-employee directors.
|
(2)
|
No stock options were granted to the directors in 2017. As of December 31,
2017
, each of our non-employee directors held stock options to purchase the following number of shares of our Common Stock: Dr. Xanthopoulos, options to purchase 18,200 shares; Mr. Ray, options to purchase 10,700 shares; Mr. Maier, options to purchase 11,600 shares; Dr. Wierenga, options to purchase 15,000 shares; and Mr. Smith, options to purchase 13,500 shares. As of December 31,
2017
, each of our non-employee directors held the following amounts of unvested restricted stock units: Dr. Xanthopoulos, 15,000; Mr. Ray, 11,250; Mr. Maier, 11,250; Dr. Wierenga, 11,250; and Mr. Smith, 11,250.
|
(3)
|
Represents the grant date fair value of the stock awards granted in 2017, computed in accordance with FASB ASC Topic 718. For information relating to our assumptions made in valuing the stock awards granted to our non-employee directors in 2017, see note 8 to our audited consolidated financial statements included in this annual report on Form 10-K for the year ended December 31, 2017.
|
Name and Address of Beneficial Owner
|
|
Number of Shares Beneficially Owned
|
|
Percentage of Class (%) (1)
|
||
|
||||||
Armistice Capital Master Fund, Ltd. (2)
|
|
2,377,160
|
|
|
13.31
|
%
|
Sarissa Capital Management LP (3)
|
|
2,120,361
|
|
|
12.46
|
%
|
Iroquois Capital Management, LLC (4)
|
|
1,408,455
|
|
|
8.35
|
%
|
Anson Investments Master Fund, LP (5)
|
|
1,016,188
|
|
|
5.86
|
%
|
|
|
|
|
|
||
Directors and Executive Officers (6)
|
|
|
|
|
||
Richard W. Pascoe (7)
|
|
191,542
|
|
|
1.16
|
%
|
Brian T. Dorsey (8)
|
|
69,537
|
|
|
*
|
|
Neil Morton (9)
|
|
65,763
|
|
|
*
|
|
Kleanthis G. Xanthopoulos, Ph.D. (10)
|
|
55,276
|
|
|
*
|
|
Wendell Wierenga, Ph.D. (11)
|
|
39,124
|
|
|
*
|
|
Sandford D. Smith (12)
|
|
37,703
|
|
|
*
|
|
Russell Ray (13)
|
|
36,656
|
|
|
*
|
|
Paul V. Maier (14)
|
|
34,205
|
|
|
*
|
|
All current executive officers and directors as a group (eight persons) (15)
|
|
529,806
|
|
|
3.18
|
%
|
*
|
Less than one percent.
|
(1)
|
Percentage ownership is calculated based on a total of
16,338,812
shares of Common Stock issued and outstanding as of the Reference Date.
|
(2)
|
Represents shares of Common Stock beneficially owned by Armistice Capital Master Fund, Ltd. (“
Armistice Capital Master Fund
”) at December 31, 2017, as indicated in the entity’s Schedule 13G/A filed with the SEC on February 14, 2018, plus warrants to purchase up to 1,527,160 shares. Armistice Capital, LLC is an investment manager to Armistice Capital Master Fund and Steven J. Boyd, the chief investment officer of Armistice Capital, LLC, may be deemed to have voting and investment power with respect to the securities held by Armistice Capital Master Fund. Armistice Capital Master Fund’s beneficial ownership includes warrants to purchase up to 1,527,160 shares. The principal business address of (i) Armistice Capital Master Fund is c/o dms Corporate Services Ltd., 20 Genesis Close, P.O. Box 314, Grand Cayman KY1-1104, Cayman Islands, (ii) Armistice Capital, LLC is 510 Madison Avenue, 22nd Floor, New York, NY 10022 and (iii) Steven Boyd is c/o Armistice Capital, LLC, 510 Madison Avenue, 22nd Floor, New York, NY 10022.
|
(3)
|
Represents shares of Common Stock beneficially owned by Sarissa Capital Management LP (“
Sarissa Management
”) at January 31, 2018, as indicated in the entity’s Schedule 13D/A filed with the SEC on January 31, 2018. The shares of Common Stock are owned by Sarissa Management, Alexander J. Denner, the Chief Investment Officer of Sarissa Management and Sarissa Capital Offshore Master Fund LP (“
Sarissa Offshore
”). Sarissa Management’s beneficial ownership includes warrants to purchase up to 672,455 shares. The principal business address of (i) each of Sarissa Management and Dr. Denner is c/o Sarissa Capital Management LP, 660 Steamboat Road, 3rd Floor, Greenwich, CT 06830 and (ii) Sarissa Offshore is c/o Ogier Fiduciary Services (Cayman) Limited, 89 Nexus Way, Camana Bay, Grand Cayman KY1-9007, Cayman Islands.
|
(4)
|
Represents shares of Common Stock beneficially owned by Iroquois Capital Management, LLC and Iroquois Master Fund, Ltd. (collectively “
Iroquois
”) at December 31, 2017, as indicated in the entity’s Schedule 13G/A filed with the SEC on February 14, 2018. Iroquois Capital Management, LLC is the investment manager of Iroquois Master Fund, Ltd. Iroquois Capital Management, LLC has voting control and investment discretion over securities held by Iroquois Master Fund, Ltd. As President of Iroquois Capital Management, LLC, Richard Abbe makes voting and investment decisions on behalf of Iroquois Capital Management, LLC in his capacity as investment manager to Iroquois Master Fund Ltd. As a result of the foregoing, Mr. Abbe may be deemed to have beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended) of the securities held by Iroquois Capital Management, LLC and Iroquois Master Fund Ltd. Iroquois’ beneficial ownership includes warrants to purchase up to 521,430 shares. The principal business address of Iroquois is 205 East 42nd Street, 20th Floor, New York, NY 10017.
|
(5)
|
Represents warrants to purchase shares of Common Stock beneficially owned by Anson Investments Master Fund LP (“
Anson
”) as indicated by information provided by the beneficial owner in connection with the Company’s filing of a registration statement on Form S-3 related to the beneficial owner’s securities and internal records. Anson Funds Management LP and Anson Advisors Inc. serve as Co-Investment Advisors to Anson and hold voting and dispositive power over the shares held by Anson. Bruce Winson is the managing member of Anson Management GP LLC, which
|
(6)
|
Unless otherwise indicated, the address for each of our executive officers and directors is c/o 11975 El Camino Real, Suite 300, San Diego, California, 92130.
|
(7)
|
Includes 139,796 shares issuable upon exercise of stock options and 1,750 shares issuable upon exercise of warrants exercisable within 60 days of the Reference Date.
|
(8)
|
Includes 35,421 shares issuable upon exercise of stock options exercisable within 60 days of the Reference Date.
|
(9)
|
Includes 37,432 shares issuable upon exercise of stock options exercisable within 60 days of the Reference Date.
|
(10)
|
Includes 30,701 shares issuable upon exercise of stock options exercisable within 60 days of the Reference Date and 24,575 shares of Common Stock held jointly in a trust controlled by Dr. Xanthopoulos.
|
(11)
|
Includes 23,751 shares issuable upon exercise of stock options exercisable within 60 days of the Reference Date and 15,373 shares of Common Stock held jointly in a trust controlled by Dr. Wierenga.
|
(12)
|
Includes 21,543 shares issuable upon exercise of stock options exercisable within 60 days of the Reference Date.
|
(13)
|
Includes 19,451 shares issuable upon exercise of stock options and 250 shares issuable upon exercise of warrants exercisable within 60 days of the Reference Date.
|
(14)
|
Includes 20,351 shares issuable upon exercise of stock options exercisable within 60 days of the Reference Date.
|
(15)
|
Includes 328,446 shares issuable upon exercise of stock options and 2,000 shares issuable upon exercise of warrants exercisable within 60 days of the Reference Date.
|
|
|
2017
|
|
2016
|
||||
Audit Fees
(1)
:
|
|
$
|
349,000
|
|
|
$
|
358,000
|
|
Other Fees:
|
|
|
|
|
||||
Audit-Related Fees
(2)
|
|
—
|
|
|
—
|
|
||
Tax Fees
(3)
|
|
102,000
|
|
|
24,000
|
|
||
All Other Fees
(4)
|
|
—
|
|
|
—
|
|
||
Total Other Fees
|
|
102,000
|
|
|
24,000
|
|
||
Total All Fees
|
|
$
|
451,000
|
|
|
$
|
382,000
|
|
ITEM 15.
|
EXHIBITS
|
EXHIBITS
NO. |
|
DESCRIPTION
|
|
|
|
|
Stock Purchase Agreement, dated December 15, 2011, by and among Apricus Biosciences Inc., TopoTarget A/S, and TopoTarget USA, Inc. (incorporated herein by reference to Exhibit 2.1 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 13, 2012).
|
|
|
|
|
|
Stock Contribution Agreement, dated June 19, 2012, by and among Apricus Biosciences, Inc., Finesco SAS, Scomedica SA and the shareholders of Finesco named therein (incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report Form 8-K filed with the Securities and Exchange Commission on July 13, 2012).
|
|
|
|
|
|
Asset Purchase Agreement by and between Apricus Pharmaceuticals USA, Inc. and Biocodex, Inc., dated March 26, 2013 (incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 1, 2013).
|
|
|
|
|
|
Amendment to Stock Purchase Agreement, dated June 13, 2014, by and between Apricus Biosciences, Inc. and Samm Solutions, Inc. (doing business as BTS Research and formerly doing business as BioTox Sciences) (incorporated herein by reference to Exhibit 2.1 to the Company’s Form 10-Q filed with Securities and Exchange Commission on August 11, 2014).
|
|
|
|
|
|
Amended and Restated Articles of Incorporation of Apricus Biosciences, Inc. (incorporated herein by reference to Exhibit 2.1 to the Company’s Registration Statement on Form 10-SB filed with the Securities and Exchange Commission on March 14, 1997).
|
|
|
|
|
|
Certificate of Amendment to Articles of Incorporation of Apricus Biosciences, Inc., dated June 22, 2000 (incorporated herein by reference to Exhibit 3.2 to the Company’s Form 10-K filed with the Securities and Exchange Commission on March 31, 2003).
|
|
Certificate of Amendment to Articles of Incorporation of Apricus Biosciences, Inc., dated June 14, 2005 (incorporated herein by reference to Exhibit 3.4 to the Company’s Form 10-K filed with the Securities and Exchange Commission on March 16, 2006).
|
|
|
|
|
|
Certificate of Amendment to Amended and Restated Articles of Incorporation of Apricus Biosciences, Inc., dated March 3, 2010 (incorporated herein by reference to Exhibit 3.6 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2010).
|
|
|
|
|
|
Certificate of Correction to Certificate of Amendment to Amended and Restated Articles of Incorporation of Apricus Biosciences, Inc., dated March 3, 2010 (incorporated herein by reference to Exhibit 3.7 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2010).
|
|
Certificate of Designation for Series D Junior-Participating Cumulative Preferred Stock (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-A12GK filed with the Securities and Exchange Commission on March 24, 2011).
|
|
|
|
|
|
Certificate of Change filed with the Nevada Secretary of State (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 17, 2010).
|
|
|
|
|
|
Certificate of Amendment to Amended and Restated Articles of Incorporation of Apricus Biosciences, Inc., dated September 10, 2010 (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 10, 2010).
|
|
|
|
|
|
Certificate of Withdrawal of Series D Junior Participating Cumulative Preferred Stock, dated May 15, 2013 (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 16, 2013).
|
|
|
|
|
|
Certificate of Change filed with the Nevada Secretary of State (incorporated herein by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on October 25, 2016).
|
|
|
|
|
|
Certificate of Amendment filed with the Nevada Secretary of State (incorporated herein by reference to Exhibit 3.10 to the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 2, 2017).
|
|
|
|
|
|
Fourth Amended and Restated Bylaws, dated December 18, 2012 (incorporated herein by reference to Exhibit 3.9 to the Company’s Form 10-K filed with the Securities and Exchange Commission on March 18, 2013).
|
|
|
|
|
|
Amendment to the Fourth Amended and Restated Bylaws of Apricus Biosciences, Inc., dated January 11, 2016 (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 13, 2016).
|
|
|
|
|
|
Second Amendment to the Fourth Amended and Restated Bylaws of Apricus Biosciences, Inc., dated March 3, 2016 (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 7, 2016).
|
|
|
|
|
|
Form of Common Stock Certificate (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 24, 2011).
|
|
|
|
|
|
Form of Warrant (incorporated herein by reference to Exhibit 1.1 to the Company’s Current Report on From 8-K filed with the Securities and Exchange Commission on May 24, 2013).
|
|
|
|
|
Form of Warrant issued to the lenders under the Loan and Security Agreement, dated as of October 17, 2014, by and among Apricus Biosciences, Inc., NexMed (U.S.A.), Inc., NexMed Holdings, Inc. and Apricus Pharmaceuticals USA, Inc., as borrowers, Oxford Finance LLC, as collateral agent, and the lenders party thereto from time to time including Oxford Finance LLC and Silicon Valley Bank. (incorporated herein by reference to Exhibit 4.2 to the Company’s Form 8-K filed with the Securities and Exchange Commission on October 20, 2014).
|
|
|
|
|
|
Form of Warrant (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 12, 2015).
|
|
|
|
|
|
Form of Warrant issued to Sarissa Capital Domestic Fund LP and Sarissa Capital Offshore Master Fund LP (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 13, 2016).
|
|
|
|
|
|
Form of Warrant issued to other purchasers (incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 13, 2016).
|
|
|
|
|
|
Form of Warrant Amendment (incorporated herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 13, 2016).
|
|
|
|
|
|
Form of Warrant (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 28, 2016).
|
|
|
|
|
|
Form of Warrant Amendment (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 21, 2017).
|
|
|
|
|
|
Form of Warrant (incorporated herein by reference to Exhibit 4.9 of Amendment No. 1 to Company’s Registration Statement on Form S-1 (File No. 333-217036) filed with the Securities and Exchange Commission on April 17, 2017).
|
|
|
|
|
|
Form of Warrant (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 11, 2017).
|
|
|
|
|
|
Form of Indenture (incorporated herein by reference to Exhibit 4.13 to the Company’s Form S-3 (File No. 333-221285) filed with the Securities and Exchange Commission on November 2, 2017).
|
|
|
|
|
10.1
*
|
|
NexMed, Inc. 2006 Stock Incentive Plan (incorporated herein by reference to Annex A of the Company’s Definitive Proxy Statement filed with the Securities and Exchange Commission on April 6, 2006).
|
|
|
|
10.2
*
|
|
NexMed, Inc. Amendment to 2006 Stock Incentive Plan (incorporated herein by reference to Appendix A of the Company’s Definitive Proxy Statement filed with the Securities and Exchange Commission on April 18, 2008).
|
|
|
|
|
Asset Purchase Agreement, dated February 3, 2009, by and between Warner Chilcott Company, Inc. and NexMed, Inc. (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 5, 2009).
|
|
|
|
|
License Agreement, dated February 3, 2009, by and between NexMed, Inc. and Warner Chilcott Company, Inc. (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 5, 2009).
|
|
|
|
|
10.5
*
|
|
Apricus Biosciences, Inc. 2012 Stock Long Term Incentive Plan (incorporated by reference to Exhibit A of the Registrant’s Definitive Proxy Statement filed on April 6, 2012).
|
|
|
|
|
Settlement Agreement and Release, dated as of September 23, 2013, by and between Apricus Biosciences, Inc. and Topotarget A/S (incorporated by reference to Exhibit 10.1 of Amendment No. 1 to the Company's Registration Statement on Form S-3 (File No. 333-191679) filed with the Securities and Exchange Commission on October 31, 2013).
|
|
|
|
|
10.7
*
|
|
Form of Stock Option Grant Notice and Stock Option Agreement under the Apricus Biosciences, Inc. 2012 Stock Long Term Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 10-Q filed with the Securities and Exchange Commission on August 11, 2014).
|
|
|
|
10.8
*
|
|
Non-Employee Director Compensation Policy (incorporated herein by reference to Exhibit 10.2 to the Company’s Form 10-Q filed with the Securities and Exchange Commission on August 11, 2014).
|
|
|
|
10.9
†
|
|
License Agreement by and between NexMed (U.S.A.), Inc. and Forendo Pharma Ltd., dated as of October 17, 2014 (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on October 20, 2014).
|
|
|
|
|
Stock Issuance Agreement, by and among Apricus Biosciences, Inc., Forendo Pharma Ltd. and Birch & Lake Partners, LLC, dated as of October 17, 2014 (incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the Securities and Exchange Commission on October 20, 2014).
|
|
|
|
|
|
Loan and Security Agreement by and among Apricus Biosciences, Inc., NexMed (U.S.A.), Inc., NexMed Holdings, Inc. and Apricus Pharmaceuticals USA, Inc., as borrowers, Oxford Finance LLC, as collateral agent, and the lenders party thereto from time to time, including Oxford Finance LLC and Silicon Valley Bank, dated as of October 17, 2014 (incorporated herein by reference to Exhibit 10.3 to the Company’s Form 8-K filed with the Securities and Exchange Commission on October 20, 2014).
|
|
|
|
|
10.12
†
|
|
License Agreement and Amendment, by and between NexMed (U.S.A.), Inc. and Warner Chilcott Company, LLC, dated September 9, 2015 (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 10-Q filed with the Securities and Exchange Commission on November 5, 2015).
|
|
|
|
|
Subscription Agreement dated January 12, 2016, among Apricus Biosciences, Inc., Sarissa Capital Domestic Fund LP and Sarissa Capital Offshore Master Fund LP (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 13, 2016).
|
|
|
|
|
|
Employment Transition Agreement, by and between Apricus Biosciences, Inc. and Dr. Barbara Troupin, dated April 13, 2016 (incorporated herein by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 9, 2016).
|
|
|
|
|
10.15
*
|
|
Form of Restricted Stock Unit Award Agreement (incorporated herein by reference to Exhibit 10.6 to the Company’s Form 10-Q filed with the Securities and Exchange Commission on May 9, 2016).
|
|
|
|
10.16
*
|
|
Non-Employee Director Compensation Policy (incorporated herein by reference to Exhibit 10.7 to the Company’s Form 10-Q filed with the Securities and Exchange Commission on May 9, 2016).
|
|
|
|
|
Common Stock Purchase Agreement, by and between the Company and Aspire Capital Fund, LLC, dated as of July 5, 2016 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 6, 2016).
|
|
|
|
|
|
Registration Rights Agreement, by and between the Company and Aspire Capital Fund, LLC, dated as of July 5, 2016 (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 6, 2016).
|
|
|
|
|
|
Form of Securities Purchase Agreement (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 28, 2016).
|
|
|
|
|
10.20
*
|
|
Amended and Restated Employment Agreement by and between Apricus Biosciences, Inc. and Richard W. Pascoe, December 20, 2016 (incorporated herein by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 13, 2017).
|
|
|
|
10.21
*
|
|
Amended and Restated Employment Agreement, by and between Apricus Biosciences, Inc. and Neil Morton, dated December 20, 2016 (incorporated herein by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 13, 2017).
|
|
|
|
10.22
*
|
|
Amended and Restated Employment Agreement by and between Apricus Biosciences, Inc. and Brian Dorsey, dated December 20, 2016 (incorporated herein by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 13, 2017).
|
|
|
|
|
Asset Purchase Agreement, dated March 8, 2017, by and between Ferring International Center S.A. and Apricus Biosciences, Inc., NexMed (U.S.A.), Inc., NexMed Holdings, Inc. and NexMed International Limited (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 8, 2017).
|
|
|
|
|
|
License Agreement, dated March 8, 2017, by and between Apricus Biosciences, Inc. and Ferring International Center S.A. (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 8, 2017).
|
|
|
|
|
|
Transition Services Agreement, dated March 8, 2017, by and between Apricus Biosciences, Inc. and Ferring International Center S.A. (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 8, 2017).
|
|
|
|
|
|
2012 Stock Long Term Incentive Plan, as amended and restated effective May 17, 2017 (incorporated herein by reference to Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A filed on April 13, 2017.
|
|
|
|
|
|
Form of Registration Rights Agreement (incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 11, 2017).
|
|
|
|
|
|
Securities Purchase Agreement dated as of September 10, 2017, between Apricus Biosciences, Inc. and each purchaser named in the signature pages thereto (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 11, 2017).
|
|
|
|
|
|
Engagement Letter between Apricus Biosciences, Inc. and H.C. Wainwright & Co., LLC, dated as of September 10, 2017 (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 11, 2017).
|
|
|
|
|
|
Non-Employee Director Compensation Policy, effective January 3, 2017.
|
|
|
|
|
|
Subsidiaries.
|
|
|
|
|
|
Consent of BDO USA, LLP, independent registered public accounting firm.
|
|
Certification of Principal Executive Officer and Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
101.INS
|
|
XBRL Instance Document. (1)
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema. (1)
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase. (1)
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase. (1)
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase. (1)
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase. (1)
|
(1)
|
Furnished, not filed.
|
|
Apricus Biosciences, Inc.
|
|
|
Date: March 1, 2018
|
/s/ RICHARD W. PASCOE
|
|
Richard W. Pascoe
|
|
Chief Executive Officer and Secretary
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ RICHARD W. PASCOE
|
|
Chief Executive Officer, Secretary and Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
|
|
March 1, 2018
|
Richard W. Pascoe
|
|
|
|
|
|
|
|
|
|
/s/ KLEANTHIS G. XANTHOPOULOS, PH.D.
|
|
Chairman of the Board of Directors
|
|
March 1, 2018
|
Kleanthis G. Xanthopoulos, Ph.D.
|
|
|
|
|
|
|
|
|
|
/s/ RUSSELL RAY
|
|
Director
|
|
March 1, 2018
|
Russell Ray
|
|
|
|
|
|
|
|
|
|
/s/ PAUL V. MAIER
|
|
Director
|
|
March 1, 2018
|
Paul V. Maier
|
|
|
|
|
|
|
|
|
|
/s/ WENDELL WIERENGA
|
|
Director
|
|
March 1, 2018
|
Wendell Wierenga, Ph.D.
|
|
|
|
|
|
|
|
|
|
/s/ SANDFORD D. SMITH
|
|
Director
|
|
March 1, 2018
|
Sandford D. Smith
|
|
|
|
|
(d)
|
Terms of Options Granted to Non-Employee Directors
|
1.
|
NexMed (U.S.A.), Inc., incorporated in Delaware on June 18, 1997.
|
2.
|
Apricus Pharmaceuticals USA, Inc. (formerly Topotarget USA, Inc.), incorporated in Delaware on July 12, 2006 and acquired by Apricus Biosciences, Inc. on December 29, 2011.
|
3.
|
NexMed Holdings, Inc., incorporated in Delaware on February 28, 1997.
|
4.
|
NexMed International Limited, incorporated in the British Virgin Islands on August 2, 1996.
|
1.
|
I have reviewed this
Annual
Report on Form
10-K
of Apricus Biosciences, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: March 1, 2018
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/S/ RICHARD W. PASCOE
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Richard W. Pascoe
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Chief Executive Officer & Secretary
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Date: March 1, 2018
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By:
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/S/ RICHARD W. PASCOE
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Name:
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Richard W. Pascoe
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Title:
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Chief Executive Officer & Secretary
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