0001558370-21-017076 | 10-Q/A | XBRL Viewer

Print Document View Excel Document

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2021	Oct. 29, 2021
Document and Entity Information
Document Type	10-Q/A
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
Document Transition Report	false
Entity File Number	001-36464
Entity Registrant Name	AGILE THERAPEUTICS INC
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	23-2936302
Entity Address, Address Line One	101 Poor Farm Road
Entity Address, City or Town	Princeton
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	08540
City Area Code	609
Local Phone Number	683-1880
Title of 12(b) Security	Common stock
Trading Symbol	AGRX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		121,396,033
Entity Central Index Key	0001261249
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Amendment Flag	true
Amendment Description	EXPLANATORY NOTE

Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 14,735	$ 14,463
Marketable securities		40,008
Accounts receivable, net	1,309	865
Inventory, net	3,460
Prepaid expenses and other current assets	2,258	1,449
Total current assets	21,762	56,785
Property and equipment, net	12,911	14,243
Right of use asset	37	138
Other non-current assets	1,972	1,896
Total assets	36,682	73,062
Current liabilities:
Accounts payable	5,632	3,867
Accrued expenses	3,899	3,348
Lease liability, current portion	37	138
Total current liabilities	9,568	7,353
Long-term debt	16,434	16,381
Total liabilities	26,002	23,734
Commitments and contingencies (Note 11)
Stockholders' equity
Common stock, $.0001 par value, 150,000,000 shares authorized, 94,729,385 and 87,563,753 issued and outstanding at September 30, 2021 and December 31, 2020, respectively	9	9
Additional paid-in capital	374,431	361,539
Accumulated other comprehensive income		3
Accumulated deficit	(363,760)	(312,223)
Total stockholders' equity	10,680	49,328
Total liabilities and stockholders' equity	$ 36,682	$ 73,062

Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2021	Dec. 31, 2020
Balance Sheets
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, authorized (in shares)	150,000,000	150,000,000
Common stock, issued (in shares)	94,729,385	87,563,753
Common stock, outstanding (in shares)	94,729,385	87,563,753

Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Statements of Operations - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Statements of Operations
Revenues, net	$ 1,287		$ 2,587
Cost of product revenues	2,711		5,017
Gross profit (loss)	(1,424)		(2,430)
Operating expenses:
Research and development	1,593	$ 3,663	4,568	$ 10,488
Selling and marketing	9,386	7,723	30,263	12,616
General and administrative	3,371	3,270	11,386	9,208
Total operating expenses	14,350	14,656	46,217	32,312
Loss from operations	(15,774)	(14,656)	(48,647)	(32,312)
Other income (expense)
Interest income	1	37	24	284
Interest expense	(999)	(905)	(2,914)	(2,205)
Total other income (expense), net	(998)	(868)	(2,890)	(1,921)
Loss before benefit from income taxes	(16,772)	(15,524)	(51,537)	(34,233)
Net loss	$ (16,772)	$ (15,524)	$ (51,537)	$ (34,233)
Net loss per share (basic) (in dollars per share)	$ (0.18)	$ (0.18)	$ (0.57)	$ (0.41)
Net loss per share (diluted) (in dollars per share)	$ (0.18)	$ (0.18)	$ (0.57)	$ (0.41)
Weighted-average common shares (basic) (in shares)	93,757,215	87,350,505	90,048,183	83,754,550
Weighted-average common shares (diluted) (in shares)	93,757,215	87,350,505	90,048,183	83,754,550
Comprehensive loss:
Net loss	$ (16,772)	$ (15,524)	$ (51,537)	$ (34,233)
Other comprehensive income:
Unrealized loss on marketable securities		1	(3)	11
Comprehensive loss	$ (16,772)	$ (15,523)	$ (51,540)	$ (34,222)

Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Common stock Public offering	Common stock At-the-market sales	Common stock	Additional Paid in Capital. Public offering	Additional Paid in Capital. At-the-market sales	Additional Paid in Capital.	Accumulated Other Comprehensive Income	Accumulated Deficit	Public offering	At-the-market sales	Total
Balance at Dec. 31, 2019			$ 7			$ 306,108		$ (260,370)			$ 45,745
Balance (in shares) at Dec. 31, 2019			69,810,305
Increase (decrease) in stockholders' equity
Share-based compensation - stock options and RSUs						621					621
Issuance of common stock	$ 2			$ 48,433					$ 48,435
Issuance of common stock (in shares)	17,250,000
Issuance of common stock upon exercise of options						119					119
Issuance of common stock upon exercise of options (in shares)			152,907
Warrants issued in connection with long-term debt						3,570					3,570
Net loss								(7,883)			(7,883)
Balance at Mar. 31, 2020			$ 9			358,851		(268,253)			90,607
Balance (in shares) at Mar. 31, 2020			87,213,212
Balance at Dec. 31, 2019			$ 7			306,108		(260,370)			45,745
Balance (in shares) at Dec. 31, 2019			69,810,305
Increase (decrease) in stockholders' equity
Unrealized net gain on marketable securities											11
Net loss											(34,233)
Balance at Sep. 30, 2020			$ 9			360,713	$ 11	(294,603)			66,130
Balance (in shares) at Sep. 30, 2020			87,434,604
Balance at Mar. 31, 2020			$ 9			358,851		(268,253)			90,607
Balance (in shares) at Mar. 31, 2020			87,213,212
Increase (decrease) in stockholders' equity
Share-based compensation - stock options and RSUs						839					839
Issuance of common stock upon exercise of options						166					166
Issuance of common stock upon exercise of options (in shares)			84,393
Unrealized net gain on marketable securities							10				10
Net loss								(10,826)			(10,826)
Balance at Jun. 30, 2020			$ 9			359,856	10	(279,079)			80,796
Balance (in shares) at Jun. 30, 2020			87,297,605
Increase (decrease) in stockholders' equity
Share-based compensation - stock options and RSUs						647					647
Issuance of common stock upon exercise of options						210					210
Issuance of common stock upon exercise of options (in shares)			136,999
Unrealized net gain on marketable securities							1				1
Net loss								(15,524)			(15,524)
Balance at Sep. 30, 2020			$ 9			360,713	11	(294,603)			66,130
Balance (in shares) at Sep. 30, 2020			87,434,604
Balance at Dec. 31, 2020			$ 9			361,539	3	(312,223)			49,328
Balance (in shares) at Dec. 31, 2020			87,563,753
Increase (decrease) in stockholders' equity
Share-based compensation - stock options and RSUs						742					742
Issuance of common stock					$ 960					$ 960
Issuance of common stock (in shares)		520,937
Issuance of common stock upon exercise of options						75					75
Issuance of common stock upon exercise of options (in shares)			126,400
Vesting of RSUs (in shares)			52,651
Warrants issued in connection with long-term debt						1,080					1,080
Unrealized net gain on marketable securities							(3)				(3)
Net loss								(17,128)			(17,128)
Balance at Mar. 31, 2021			$ 9			364,396		(329,351)			35,054
Balance (in shares) at Mar. 31, 2021			88,263,741
Balance at Dec. 31, 2020			$ 9			361,539	$ 3	(312,223)			49,328
Balance (in shares) at Dec. 31, 2020			87,563,753
Increase (decrease) in stockholders' equity
Issuance of common stock (in shares)		6,915,151
Unrealized net gain on marketable securities											(3)
Net loss											(51,537)
Balance at Sep. 30, 2021			$ 9			374,431		(363,760)			10,680
Balance (in shares) at Sep. 30, 2021			94,729,385
Balance at Mar. 31, 2021			$ 9			364,396		(329,351)			35,054
Balance (in shares) at Mar. 31, 2021			88,263,741
Increase (decrease) in stockholders' equity
Share-based compensation - stock options and RSUs						843					843
Issuance of common stock					6,349					6,349
Issuance of common stock (in shares)		4,593,034
Vesting of RSUs (in shares)			71,430
Net loss								(17,637)			(17,637)
Balance at Jun. 30, 2021			$ 9			371,588		(346,988)			24,609
Balance (in shares) at Jun. 30, 2021			92,928,205
Increase (decrease) in stockholders' equity
Share-based compensation - stock options and RSUs						887					887
Issuance of common stock					$ 1,956					$ 1,956
Issuance of common stock (in shares)		1,801,180
Net loss								(16,772)			(16,772)
Balance at Sep. 30, 2021			$ 9			$ 374,431		$ (363,760)			$ 10,680
Balance (in shares) at Sep. 30, 2021			94,729,385

Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
Statements of Cash Flows - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities:
Net loss	$ (51,537)	$ (34,233)
Adjustments to reconcile net loss to net cash used in operating activities:
Noncash inventory reserve	1,415
Depreciation	1,546	20
Amortization	102	127
Noncash stock-based compensation	2,472	2,107
Noncash interest	1,262	898
Changes in operating assets and liabilities:
Accounts receivable	(444)
Inventory	(4,875)
Prepaid expenses and other assets	(885)	(2,347)
Accounts payable and accrued expenses	2,462	3,597
Lease liability	(102)	(138)
Net cash used in operating activities	(48,584)	(29,969)
Cash flows from investing activities:
Purchases of marketable securities		(52,921)
Sales and maturities of marketable securities	39,729	5,000
Acquisition of property and equipment	(214)	(296)
Net cash provided by (used in) investing activities	39,515	(48,217)
Cash flows from financing activities:
Proceeds from issuance of long-term debt		20,000
Debt financing costs paid		(1,059)
Proceeds from exercise of stock options	75	495
Net cash provided by financing activities	9,341	67,870
Net increase in cash and cash equivalents	272	(10,316)
Cash and cash equivalents, beginning of period	14,463	34,479
Cash and cash equivalents, end of period	14,735	24,163
Supplemental disclosure of noncash financing activities
Warrants issued in connection with long-term debt	1,080	3,570
Supplemental cash flow information
Interest paid	1,782	1,498
Public offering
Cash flows from financing activities:
Proceeds from issuance of common stock, net of offering costs		$ 48,434
At-the-market sales
Cash flows from financing activities:
Proceeds from issuance of common stock, net of offering costs	$ 9,266

Organization and Description of Business

9 Months Ended

Sep. 30, 2021

Organization and Description of Business

Organization and Description of Business

1. Organization and Description of Business

Nature of Operations

Agile Therapeutics, Inc. (“Agile” or the “Company”) was incorporated in Delaware on December 22, 1997. Agile is a women’s healthcare company dedicated to fulfilling the unmet health needs of today’s women. The Company’s activities since inception have consisted principally of raising capital, performing research and development, including development of the Company’s lead product, Twirla, and more recently commercializing Twirla. The Company is headquartered in Princeton, New Jersey.

The Company’s sole approved product, Twirla^®, also known as AG200-15, is a once-weekly prescription contraceptive patch that received approval from the U.S. Food and Drug Administration, or FDA, in February 2020. Substantially all of the Company’s resources are currently dedicated to commercializing Twirla in the United States. The Company has generated minimal product revenue to date and is subject to a number of risks similar to those of other early stage companies, including, but not limited to, dependence on key individuals, the difficulties and uncertainties inherent in the development of commercially usable products, market acceptance of products, protection of proprietary technology, the potential need to obtain additional capital necessary to fund the development of its products, competition from larger companies and compliance with FDA and other government regulations. If the Company does not successfully commercialize any product candidates, it will be unable to generate recurring product revenue or achieve profitability. The Company has incurred operating losses and negative cash flows from operating activities each year since inception. As of September 30, 2021, the Company had an accumulated deficit of approximately $364 million.

The Company expects to continue to incur significant operating expenses for the foreseeable future in connection with its ongoing activities, as the Company:

●

maintains a sales and marketing infrastructure to support the continued commercialization of Twirla in the United States;

●

continues to evaluate additional line extensions for Twirla and initiates development of potential product candidates in addition to Twirla;

●

maintains, leverages and expands the Company’s intellectual property portfolio; and

●

adds operational, financial and management information systems and personnel, including personnel to support the Company’s product development and future commercialization efforts.

The Company has financed its operations to date primarily through the issuance and sale of its common stock in both public and private offerings (see Note 8), private placements of its convertible preferred stock, venture loans, and non-dilutive grant funding.

Going Concern

As of September 30, 2021, the Company had cash and cash equivalents of $14.7 million. The Company closely monitors its cash, cash equivalents and marketable securities and will need to raise additional funds to meet its projected operating requirements, including the continued commercialization of Twirla, and exploring the advancement of its existing pipeline and its possible expansion through business development activities.

The Company has generated losses since inception, used substantial cash in operations and anticipates it will continue to incur net losses for the foreseeable future. The Company’s future success depends on its ability to obtain additional capital and/or implement various strategic alternatives, and there can be no assurance that any financing can be realized by the Company, or if realized, what the terms of any such financing may be, or that any amount that the Company is able to raise will be adequate. Based upon the foregoing, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern through the 12 months following the date on which this Quarterly Report on Form 10-Q is filed.

The Company continues to analyze various alternatives, including refinancing alternatives, asset sales and mergers and acquisitions. The Company’s future success depends on its ability to raise additional capital as

discussed above. The Company cannot be certain that these initiatives or raising additional capital, whether through selling additional debt or equity securities or obtaining a line of credit or other loan, will be available to it or, if available, will be on terms acceptable to the Company. If the Company issues additional securities to raise funds, these securities may have rights, preferences, or privileges senior to those of its common stock, and the Company’s current stockholders will experience dilution. If the Company is unable to obtain funds when needed or on acceptable terms, the Company then may be unable to continue the commercialization of Twirla, and may also be required to cut operating costs, and forego future development and other opportunities.

The unaudited financial statements as of September 30, 2021 have been prepared under the assumption that the Company will continue as a going concern for the next 12 months. The Company’s ability to continue as a going concern is dependent upon its uncertain ability to obtain additional capital, reduce expenditures and/or execute on its business plan and successfully commercialize Twirla. The unaudited financial statements as of September 30, 2021 do not include any adjustments that might result from the outcome of this uncertainty. If the Company is unable to continue as a going concern, it may have to liquidate its assets and may receive less than the value at which those assets are carried on the financial statements.

Basis of Presentation

The accompanying unaudited interim financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP has been condensed or omitted pursuant to such rules and regulations. These interim financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the SEC on March 1, 2021.

In the opinion of management, the unaudited interim financial statements reflect all adjustments, which are normal recurring adjustments, necessary for the fair presentation of the financial information for the interim periods presented. The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the operating results for the full fiscal year or any future period. Certain reclassifications have been made to prior periods to conform with current reporting. On the statement of operations, the Company has separated the presentation of selling and marketing expenses from total general and administrative expenses. To conform prior year amounts to the current period presentation, $7.7 million and $12.6 million was reclassified from general and administrative expenses to selling and marketing expenses for the three and nine months ended September 30, 2020, respectively.

The accompanying financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. The Company has incurred recurring losses and negative cash flows from operations. If the COVID-19 pandemic or other factors impact the Company’s current business plan or its ability to generate revenue from the launch of Twirla, the Company believes it has the ability to revise its commercial plans, including curtailing sales and marketing spending, to allow it to continue to fund its operations.

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2021

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

The Company’s complete listing of significant accounting policies is described in Note 2 to the Company’s audited financial statements as of December 31, 2020 included in its Annual Report on Form 10-K filed with the SEC.

Use of Estimates

The preparation of the Company’s financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company bases its estimates and judgments on historical experience and various other assumptions that it believes are reasonable under the circumstances. The amounts of assets and liabilities reported in the Company’s balance sheets and the amounts of revenue and expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for, but not limited to, revenue recognition, the accounting for common

stock warrants, stock-based compensation, income taxes, and accounting for research and development costs. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates.

Risks and Uncertainties

While Twirla has been approved by the FDA, other potential product candidates developed by the Company will require approval from the FDA prior to commercial sales. There can be no assurance that the Company’s other product candidates will receive the required approval. If the Company is denied approval or such approval is delayed, or is unable to obtain the necessary financing to complete development and approval, there could be a material adverse impact on the Company’s financial condition and results of operations.

It should be noted that current public health threats could adversely affect the Company’s ongoing or planned business operations. In particular, the ongoing COVID-19 pandemic has resulted in federal, state and local governments and private entities mandating various restrictions, including travel restrictions, access restrictions, restrictions on public gatherings, and stay at home orders. The effect of these orders, government imposed quarantines and measures the Company has taken, such as implementing work-at-home policies, may negatively impact productivity, disrupt the Company’s business and could delay the Company’s commercialization timeline. The Company cannot presently predict the scope and severity of any potential business shutdowns or disruptions, but if the Company or any of the third parties with whom it engages, including personnel at third-party manufacturing facilities and other third parties with whom the Company conducts business, were to experience shutdowns or other business disruptions, the Company’s ability to conduct its business in the manner and on the timeline presently planned could be materially and adversely impacted. It is unknown how long these conditions will last and what the complete effect will be on the Company. While to date we have been able to continue to execute our overall business plan, some of our business activities have been slowed and taken longer to complete and we continue to adjust to the challenges of operating in a largely remote setting with our employees. We have only recently launched our commercial activities for Twirla and begun engaging with healthcare providers to promote Twirla. We expect that, as we broaden our sales detailing activities, in some instances our sales force may encounter challenges engaging with healthcare providers during this on-going pandemic. Although many areas of the United States have begun to re-open access to offices and other commercial facilities, there continue to be areas where restrictions remain in place, which may have the potential to affect our ability to conduct our business. Further, new variants, including those which are more easily transmissible or resistant to existing vaccines, may lead to new shutdowns or business disruptions in the future. The Company will continue to closely monitor events as they develop and evaluate alternative, mitigating measures it can implement if needed.

Cash and Cash Equivalents

The Company considers all highly-liquid investments with an original maturity of three months or less when purchased to be cash equivalents. All cash and cash equivalents are held in United States financial institutions. Cash and cash equivalents include money market funds that invest primarily in commercial paper and U.S. government and U.S. government agency obligations.

The Company maintains balances with financial institutions in excess of the Federal Deposit Insurance Corporation limit.

Marketable Securities

The Company may invest a portion of its excess cash balances in marketable securities, including U.S. government agency securities, and highly rated corporate bonds. The Company classifies all of its marketable securities as current assets on the balance sheet because they are available-for-sale and available to fund current operations. Marketable securities are stated at fair value with unrealized gains and losses included as a component of accumulated other comprehensive income (loss), which is a separate component of stockholders' equity, until such gains and losses are realized. If a decline in the fair value is considered other-than-temporary, based on available evidence, the unrealized loss is reclassified from accumulated other comprehensive income (loss) to the statements of operations. Realized gains and losses are determined on the specific identification method and are included in other income.

Trade Accounts Receivable and Allowances

Trade accounts receivable are amounts owed to the Company by its customers for product that has been delivered. The trade accounts receivable are recorded at the invoice amount, less prompt pay and other discounts, chargebacks, and an allowance for credit losses, if any. The allowance for credit losses represents the Company’s estimate of losses over the life of the receivables. The Company evaluates forward looking economic factors and uses professional judgment to determine the allowance for credit losses, as Twirla was commercially launched in December 2020 and historical data is not yet available. The credit loss reserves are reviewed and adjusted periodically. Credit loss reserves were not material as of September 30, 2021.

Trade accounts receivable are aged based on the contractual payment terms. When the collectability of an invoice is no longer probable, the Company will create a reserve for that specific receivable. If a receivable is determined to be uncollectible, it is charged against the general credit loss reserve or the reserve for the specific receivable, if one exists.

Fair Value of Financial Instruments

In accordance with Accounting Standards Codification (“ASC”) 825, Financial Instruments, disclosures of fair value information about financial instruments are required, whether or not recognized in the balance sheet, for which it is practicable to estimate that value. Cash, cash equivalents, and marketable securities are carried at fair value (see Note 3).

Other financial instruments, including accounts receivable, accounts payable and accrued liabilities, are carried at cost, which approximates fair value given their short-term nature.

Inventory

Inventory is valued utilizing the weighted average costing method. The Company records an inventory reserve for losses associated with dated, expired, excess or obsolete items. This reserve is based on management’s current knowledge with respect to inventory levels, planned production and sales volume assumptions. During the third quarter of 2021, the Company established a reserve of approximately $1.4 million for inventory not expected to be sold prior to its shelf life date.

The Company’s third-party manufacturer, Corium, completed the validation of the commercial manufacturing process for Twirla in the fourth quarter of 2020. The costs associated with validation batches were expensed as research and development expenses during the period the costs were incurred. The Company used this validation product for commercial supplies and samples of Twirla into May 2021. Since the Company did not capitalize any validation product, all sales of this validation product had no associated product cost. During the nine months ended September 30, 2021, units sold with no associated product cost were approximately 3,000. Had such inventory been valued at acquisition cost, it would have resulted in an immaterial increase to cost of goods sold and a corresponding decrease to gross profit.

Property and Equipment

Property and equipment, consisting of computer equipment and manufacturing equipment, is stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets.

Expenditures incurred after the fixed assets have been put into operation, such as repairs and maintenance, are charged to earnings in the period in which costs are incurred. Improvements and additions are capitalized in accordance with Company policy.

Long-Lived Assets

In accordance with ASC 360, Property, Plant and Equipment, the Company’s policy is to review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Management does not believe the carrying values of any long-lived assets are impaired as of September 30, 2021.

Research and Development Expenses

Research and development expenses consist primarily of costs related to personnel, including salaries and other personnel-related expenses, expenses related to manufacturing, clinical trial expenses, consulting fees and support services used in product development. All research and development costs are charged to operations as incurred in accordance with ASC 730, Research and Development.

In certain circumstances, the Company is required to make advance payments to vendors for goods or services that will be received in the future for use in research and development activities. In such circumstances, the advance payments are deferred and are expensed when the activity has been performed or when the goods have been received.

Advertising Costs

The Company has elected to expense advertising costs when incurred. Advertising costs totaled $2.7 million and $0 for the three months ended September 30, 2021 and 2020, respectively, and totaled $8.8 million and $0 for the nine months ended September 30, 2021 and 2020, respectively.

Deferred Financing Costs

Costs directly attributable to the Company’s senior secured term loan (see Note 7) are deferred and reported as a reduction of the related term loan. These costs represent a 1% facility fee paid directly to the lender, legal fees and other costs related to the term loan and are being amortized over the term of the loan. Amortization of deferred financing costs charged to interest expense was $69,000 for each of the three months ended September 30, 2021 and 2020, and was $208,000 and $162,000 for the nine months ended September 30, 2021 and 2020, respectively.

Concentrations of Credit Risk

Financial instruments which potentially subject the Company to credit risk consist principally of cash, cash equivalents, marketable securities and accounts receivable. The Company invests its cash, cash equivalents and marketable securities in debt instruments and interest-bearing accounts in United States financial institutions, the balances of which exceed federally insured limits. The Company has not recognized any losses from credit risks on such accounts. The Company mitigates credit risk by limiting the investment type and maturity to securities that preserve capital, maintain liquidity and have a high credit quality. The Company has no financial instruments with off balance sheet risk of accounting loss.

Major customers of the Company are defined as those constituting greater than 10% of its total revenue. In the three months ended September 30, 2021, the Company had sales to three customers that individually accounted for more than 10% of its total revenue. Each of these customers had sales of $0.4 million, which represented 92% of total revenues in the quarter. Accounts receivable related to these three customers comprised 35%, 34%, and 27%, respectively, as of September 30, 2021.

Revenue Recognition

The Company recognizes revenue from the sale of its product, Twirla, in accordance with ASC 606, Revenue from Contracts with Customers (ASC 606). The provisions of ASC 606 require the following steps to determine revenue recognition: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

In accordance with ASC 606, the Company recognizes revenue at the point in time when its performance obligation is satisfied by transferring control of the promised goods or services to a customer. In accordance with the Company’s contracts with customers, control of the product is transferred upon the conveyance of title, which occurs when the product is sold to and received by a customer. The Company’s customers are located in the United States and consist primarily of wholesale distributors. Trade accounts receivable due to the Company from contracts with its customers are stated separately in the balance sheet, net of various allowances as described in the Trade Accounts Receivable and Allowance policy.

The amount of revenue recognized by the Company is equal to the amount of consideration that is expected to be received from the sale of product to its customers. Revenue is only recognized when it is probable that a significant reversal will not occur in future periods. To determine whether a significant reversal will occur in future periods, the Company assesses both the likelihood and magnitude of any such potential reversal of revenue.

Twirla is sold to customers at the Wholesale Acquisition Cost (WAC). However, the Company records product revenue, net of reserves for applicable variable consideration. These types of variable consideration items reduce revenue and include the following:

•

Distribution services fees;

•

Prompt pay and other discounts;

•

Product returns;

•

Chargebacks;

•

Rebates; and

•

Co-payment assistance.

An estimate for each variable consideration item is made and is recorded in conjunction with the revenue being recognized. Generally, if the estimated amount is payable to a customer, it is recorded as a reduction to accounts receivable. If the estimated amount is payable to an entity other than a customer, it is recorded as a current liability. An estimated amount of variable consideration may differ from the actual amount. At each balance sheet date, these provisions are analyzed, and adjustments are made if necessary. Any adjustments made to these provisions would affect net product revenue and earnings in the current period.

In accordance with ASC 606, the Company must make significant judgments to determine the estimate for certain variable consideration. For example, the Company must estimate the percentage of end-users that will obtain the product through public insurance such as Medicaid or through private commercial insurance. To determine these estimates, the Company relies on industry standard data and trend analysis as historical sales data for Twirla are not yet available based on the December 2020 launch date. Once historical data becomes available, the Company will incorporate Twirla specific data into its estimates of variable consideration.

The Company uses the following specific considerations to estimate variable consideration.

Distribution services fees – The Company pays distribution service fees to its wholesale distributors. These fees are a contractually fixed percentage of WAC and are calculated at the time of sale based on the purchase amount. The Company records these fees as contra trade accounts receivable on the balance sheet.

Prompt pay and other discounts – The Company incentivizes its customers to pay their invoices on time through prompt pay discounts. These discounts are an industry standard practice and the Company offers a prompt pay discount to each wholesale distributor customer. The specific prompt pay terms vary by customer and are contractually fixed. Prompt pay discounts are typically taken by the Company’s customers, so an estimate of the discount is recorded at the time of sale based on the WAC. Prompt pay discount estimates are recorded as contra trade accounts receivable on the balance sheet.

The Company may also give other discounts to its customers to incentivize purchases and promote customer loyalty. The terms of such discounts may vary by customer. These discounts reduce gross product revenue at the time the revenue is recorded.

Product returns – Customers have the right to return product that is within six months or less of the labeled expiration date or that is past the expiration date by no more than twelve months. Twirla was commercially launched in December 2020 and with limited historical sales data, an estimate for product returns as of September 30, 2021 was made based on industry-standard data and trend analysis. As time passes and historical data becomes available, the Company will use historical sales and return data to estimate future product returns.

Chargebacks – Certain government entities and indirect customers (for example group purchasing organizations and 340B covered entities) will be able to purchase the product at a price discounted below WAC. The difference between the price paid by the government or other indirect purchaser and the price paid by the

wholesale distributor will be charged back to the Company. The Company estimates the amount in chargebacks based on the expected number of claims and related cost that is associated with the revenue being recognized for product that remains in the distribution channel at the end of each reporting period. Estimated chargebacks are recorded as contra trade accounts receivable on the balance sheet.

Rebates – The Company will be subject to mandatory discount obligations under the Medicaid and Tricare programs. The Company is currently in the process of finalizing these agreements with Medicaid and Tricare. The rebate amounts for these programs are determined by statutory requirements or contractual arrangements. Rebates are owed after the product has been dispensed to an end user and the Company has been invoiced. Rebates for Medicaid and Tricare are typically invoiced in arrears. The Company estimates the amount in rebates based on the expected number of claims and related cost that is associated with the revenue being recognized for product that remains in the distribution channel at the end of each reporting period. Rebate estimates are recorded as other current liabilities on the balance sheet.

Co-payment assistance - The Company offers a co-payment assistance program to commercially insured patients whose insurance requires a co-payment to be made when filling their prescription. This is a voluntary program that is intended to provide financial assistance to patients meeting certain eligibility requirements. The Company estimates the amount of co-payment assistance based on the expected number of claims and related cost that is associated with the revenue being recognized for product that remains in the distribution channel at the end of each reporting period. Co-payment assistance estimates are recorded as other current liabilities on the balance sheet.

Provisions for the revenue reserves described above totaled $0.6 million and $0.9 million for the three- and nine-months ending September 30, 2021, respectively. As of September 30, 2021, reserves on the balance sheet associated with variable consideration were $0.5 million.

Warrants

The Company accounts for its warrants to purchase common stock in accordance with ASC 480, Distinguishing Liabilities from Equity.

In connection with entering into a senior secured term loan facility in February 2020, the Company issued warrants to purchase 1,400,000 shares of its common stock. In connection with an amendment to that facility in February 2021, the Company issued a warrant to purchase 450,000 shares of the Company’s common stock. These warrant instruments qualify for equity classification and have been allocated based upon the relative fair value of the base instrument and the warrant. See Note 7 for additional information.

In connection with an underwritten public offering completed in October 2021, the Company issued warrants to purchase 13,333,324 shares of its common stock. This offering also triggered an adjustment to the exercise price of the existing warrants mentioned above, which the Company is currently reviewing. See Notes 7 and 12 for additional information.

Income Taxes

The Company accounts for deferred taxes using the asset and liability method as specified by ASC 740, Income Taxes. Deferred income tax assets and liabilities are determined based on differences between the financial statement reporting and the tax basis of assets and liabilities, operating losses and tax credit carryforwards. Deferred income taxes are measured using the enacted tax rates and laws that are anticipated to be in effect when the differences are expected to reverse. The measurement of deferred income tax assets is reduced, if necessary, by a valuation allowance for any tax benefits which are not expected to be realized. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted.

The Company has adopted the authoritative guidance on accounting for and disclosure of uncertainty in tax positions which prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The Company has no uncertain tax positions as of September 30, 2021 that qualify for either recognition or disclosure in the financial statements under this guidance.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation. The Company grants stock options for a fixed number of shares to employees and non-employees with an exercise price equal to no less than the fair value of the shares at grant date. Compensation cost is recognized for all share-based payments granted and is based on the grant-date fair value estimated using the weighted-average assumption of the Black-Scholes option pricing model based on key assumptions such as stock price, expected volatility and expected term. The Company elects to account for forfeitures when they occur. The equity instrument is not considered to be issued until the instrument vests. As a result, compensation cost is recognized over the requisite service period with an offsetting credit to additional paid-in capital.

The Company also awards restricted stock units (“RSUs”) to employees and its board of directors. RSUs are generally subject to forfeiture if employment terminates prior to the completion of the vesting restrictions. The Company expenses the cost of the RSUs, which is determined to be the fair market value of the shares of common stock underlying the RSUs at the date of grant, ratably over the period during which the vesting restrictions lapse.

Net Loss Per Share

Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding plus the effect of dilutive potential common shares outstanding during the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, common stock warrants, unvested RSUs and stock options are considered to be potentially dilutive securities but are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive, and therefore, basic and diluted net loss per share were the same for all periods presented.

The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share for the three months ended September 30, 2021 and 2020, respectively, because to do so would be anti-dilutive (in common equivalent shares):


	September 30,
	2021	2020
Common stock warrants	1,850,000	1,400,000
Unvested restricted stock units	253,697	159,795
Common stock options	10,325,326	8,602,755
Total	12,429,023	10,162,550

Recent Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). This guidance simplifies the accounting for income taxes by, among other things, reducing complexity in the interim-period accounting for year-to-date loss limitations and changes in tax laws. The Company adopted ASU 2019-12 effective January 1, 2021. The adoption of this standard did not have a material impact on its financial statements.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation— Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815- 40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”). The guidance is effective for the Company on January 1, 2022. The Company is currently evaluating the impact of adopting this standard and does not expect the guidance to have a material impact on its financial statements.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying financial statements.

Fair Value Measurements

9 Months Ended

Sep. 30, 2021

Fair Value Measurements

Fair Value Measurements

3. Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures, describes the fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Assets and liabilities that are measured at fair value are reported using a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

●

Level 1 — Quoted prices in active markets for identical assets or liabilities. The Company’s Level 1 assets consist of cash and cash equivalents. The Company has no Level 1 liabilities.

●

Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted market prices for similar assets or liabilities in active markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities. Level 2 assets consist of marketable securities. The Company has no Level 2 liabilities.

●

Level 3 — Unobservable inputs that are supported by little or no market data and which require internal development of assumptions about how market participants price the fair value of the assets or liabilities. The Company has no Level 3 assets or liabilities.

The following table sets forth the Company’s financial instruments measured at fair value by level within the fair value hierarchy as of September 30, 2021 and December 31, 2020 (in thousands):


	Level 1		Level 2		Level 3
September 30, 2021
Assets:
Cash and cash equivalents	$	14,735	$	—	$	—
Marketable securities		—		—		—
Total assets at fair value	$	14,735	$	—	$	—


	Level 1		Level 2		Level 3
December 31, 2020
Assets:
Cash and cash equivalents	$	14,463	$	—	$	—
Marketable securities		—		40,008		—
Total assets at fair value	$	14,463	$	40,008	$	—

There were no transfers between Level 1, 2 or 3 during 2021 or 2020.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Prepaid Expenses and Other Current Assets

9 Months Ended

Sep. 30, 2021

Prepaid Expenses and Other Current Assets

Prepaid Expenses and Other Current Assets

4. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):


	September 30,		December 31,
	2021		2020
Prepaid insurance	$	1,186	$	680
Other		1,072		769
Total prepaid expenses and other current assets	$	2,258	$	1,449

Accrued Liabilities

9 Months Ended

Sep. 30, 2021

Accrued Liabilities

Accrued Liabilities

5. Accrued Liabilities

Accrued liabilities consist of the following (in thousands):


	September 30,		December 31,
	2021		2020
Accrued compensation	$	942	$	1,697
Accrued professional fees and other		2,957		1,651
Total accrued liabilities	$	3,899	$	3,348

Leases

9 Months Ended

Sep. 30, 2021

Leases

Leases

6. Leases

In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. The Company adopted ASU No. 2016-02 on January 1, 2019.

The Company has no finance leases and one operating lease for office space in Princeton, NJ. Operating lease expense was $38,000 and $113,000 for the three and nine months ended September 30, 2021, respectively. The current operating lease is set to expire on December 31, 2021.

Operating cash flows used for operating leases during the three and nine months ended September 30, 2021 were $35,000 and $102,000, respectively. As of September 30, 2021, the weighted-average remaining lease term was 0.25 years and the weighted average discount rate was 15.2%.

Future minimum lease payments under non-cancellable leases as of September 30, 2021 were as follows (in thousands):


2021	$	38
Total	$	38
Less: Interest		(1)
Present value of lease liability	$	37

In addition to the above lease, the Company has entered into a lease for new office space that has not yet commenced. This lease will commence on the later of December 1, 2021 or the date on which certain building improvements are substantially completed, all as set forth in the lease (the “Commencement Date”). The term of the lease is forty months following the Commencement Date. Upon the Commencement Date, prepaid costs and minimum guarantees specified in the agreement will be combined to establish an operating lease ROU asset and operating lease liability.

Credit Agreement and Guaranty

9 Months Ended

Sep. 30, 2021

Credit Agreement and Guaranty

Credit Agreement and Guaranty

7. Credit Agreement and Guaranty

On February 10, 2020 (the “Closing Date”), the Company entered into a Credit Agreement and Guaranty with Perceptive Credit Holdings III, LP, a related party (“Perceptive”), for a senior secured term loan credit facility of up to $35.0 million, (the “Perceptive Credit Agreement”), which was amended in February 2021 (“Amended Perceptive Credit Agreement”) to increase the total amount available to the Company to $45.0 million. A first tranche of $5.0 million was funded on execution of the Perceptive Credit Agreement. A second tranche of $15.0 million was funded as a result of the approval of Twirla by the FDA. While another $25.0 million is available in two separate tranches upon the achievement of certain revenue milestones, we do not believe we will achieve these milestones.

The facility will mature on February 10, 2024 (“Maturity Date”). The Company is scheduled to make interest-only payments on the loans under the Amended Perceptive Credit Agreement until February 10, 2023. Thereafter, the Company is required to make monthly principal payments in an amount equal to 1.50% of the principal amount of the outstanding loans until the Maturity Date.

Borrowings under the Amended Perceptive Credit Agreement will accrue interest at an annual rate equal to the London Interbank Offered Rate for one-month deposits (“LIBOR”) plus 10.25%, provided that LIBOR shall not be less than 1.5%. The rate of interest in effect as of the Closing Date and at September 30, 2021 was 11.75%. Upon the occurrence and during the continuance of any event of default under the Amended Perceptive Credit Agreement, the interest rate automatically increases by 3.0% per annum.

The Company may prepay any outstanding loans in whole or in part. Any such prepayment of the loans is subject to a prepayment fee of 8.0% if such prepayment occurs after February 10, 2021 and on or prior to February 10, 2022; 4.0% if such prepayment occurs after February 10, 2022 and on or prior to February 10, 2023; and 2.0% if such prepayment occurs after February 10, 2023 and prior to the Maturity Date.

All of the Company’s obligations under the Amended Perceptive Credit Agreement are secured by a first-priority lien and security interest in substantially all of the Company’s tangible and intangible assets, including intellectual property.

The Amended Perceptive Credit Agreement contains certain representations and warranties, affirmative covenants, negative covenants and conditions that are customary for similar financings. The negative covenants restrict or limit the ability of the Company to, among other things and subject to certain exceptions contained in the Amended Perceptive Credit Agreement, incur new indebtedness; create liens on assets; engage in certain fundamental corporate changes, such as mergers or acquisitions, or changes to the Company’s business activities; make certain investments or restricted payments (each as defined in the Amended Perceptive Credit Agreement); change its fiscal year; pay dividends; repay other certain indebtedness; engage in certain affiliate transactions; or enter into, amend or terminate any other agreements that have the impact of restricting the Company’s ability to make loan repayments under the Amended Perceptive Credit Agreement. In addition, the Company must (i) at all times prior to the Maturity Date maintain a minimum cash balance of $3.0 million; and (ii) as of the last day of each fiscal quarter commencing with the fiscal quarter ending June 30, 2021, report revenues for the trailing 12-month period that exceed the amounts set forth in the Amended Perceptive Credit Agreement, which range from $10.2 million for the fiscal quarter ending September 30, 2021 to $87.1 million for the fiscal quarter ending December 31, 2023. At September 30, 2021, the Company was in compliance with the cash balance covenant, but not in compliance with the revenue covenant. The Company obtained a written waiver from the lender with respect to the Company’s failure to meet the revenue covenant for the three months ended September 30, 2021.

In connection with the Perceptive Credit Agreement, the Company issued to Perceptive two warrants to purchase an aggregate of 1,400,000 shares of the Company’s common stock (together, the “2020 Perceptive Warrants”). The first warrant is exercisable for 700,000 shares of common stock at an exercise price of $3.74 per share. The second warrant is exercisable for 700,000 shares of common stock at an exercise price of $4.67 per share. The 2020 Perceptive Warrants expire on February 10, 2027. In connection with the Amended Perceptive Credit Agreement, the Company issued to Perceptive a warrant to purchase 450,000 shares of the Company’s common stock (the “2021 Perceptive Warrant” and, together with the 2020 Perceptive Warrants, the “Perceptive Warrants”) at an exercise price of $2.87 per share. The 2021 Perceptive Warrant expires on February 26, 2028. The Perceptive Warrants contain anti-dilution provisions and other warrant holder protections. The public offering that the Company completed in October 2021 triggered an adjustment to the exercise price of the Perceptive Warrants, which the Company is currently reviewing. The Perceptive Warrants are not exercisable to the extent that Perceptive would beneficially own more than 19.99% of the Company’s common stock as a result of the exercise.

The Company allocated the proceeds of $20.0 million in accordance with ASC 470 based on the relative fair values of the debt and the Perceptive Warrants. The relative fair value of the Perceptive Warrants of approximately $3.6 million at the time of issuance, which was determined using the Black-Scholes option-pricing model, was recorded as additional paid-in capital and reduced the carrying value of the debt. The significant assumptions used in preparing the option pricing model for valuing the Perceptive Warrants issued include (i) volatility (70.0%), (ii) risk free interest rate of 1.47% (estimated using treasury bonds with a 7-year life), (iii) strike prices of $3.74 and $4.67 for the common stock warrants, (iv) fair value of common stock ($4.01) and (v) expected life (7 years). The fair value of the 2021 Perceptive Warrants of approximately $1.1 million at the time of issuance, which was determined using the Black-Scholes option-pricing model, was recorded as additional paid-in capital and reduced the carrying value of the debt. The significant assumptions used in preparing the option pricing model for valuing the 2021 Perceptive Warrants issued include (i) volatility (103.5%), (ii) risk free interest rate of 1.15% (estimated using treasury bonds with a 7-year life), (iii) strike price of $2.87 for the common stock warrant, (iv) fair value of common stock ($2.87) and (v) expected life (7 years). The fair value of the warrants as well as the debt issue costs incurred in connection with the entry into the Perceptive Credit Agreement, including a facility fee of 1% of the total amount of

loans available under the facility, are presented as a direct deduction from the carrying amount of the term loan on the consolidated balance sheet as detailed below (in thousands).


	September 30,
	2021
Notes payable	$	20,000
Debt issuance costs		(620)
Warrant discount		(2,946)
Long-term debt	$	16,434

The fair value of the warrants and the debt issue costs are being amortized utilizing the effective interest method over the term of the loan. The Company recorded interest expense for the amortization of the fair value of the warrants and debt issue costs of $399,000 and $303,000 for the three months ended September 30, 2021 and 2020, respectively, and $1,132,000 and $707,000 for the nine months ended September 30, 2021 and 2020, respectively.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Stockholders' Equity

9 Months Ended

Sep. 30, 2021

Stockholders' Equity

Stockholders' Equity

8. Stockholders’ Equity

Shelf Registration Statement

On October 2, 2020, the Company filed a universal shelf registration statement with the SEC for the issuance of common stock, preferred stock, warrants, rights, debt securities and units up to an aggregate amount of $200.0 million (the “2020 Shelf Registration Statement”). On October 14, 2020, the 2020 Shelf Registration Statement was declared effective by the SEC. In the future, the Company may periodically offer one or more of these securities in amounts, prices and terms to be announced when and if the securities are offered. At the time any of the securities covered by the 2020 Shelf Registration Statement are offered for sale, a prospectus supplement will be prepared and filed with the SEC containing specific information about the terms of any such offering.

Public Offerings

In February 2020, the Company completed a public offering of 17,250,000 shares of its common stock at a price of $3.00 per share. Proceeds from the public offering, net of underwriting discounts, commissions and offering expenses were approximately $48.4 million.

In October 2021, the Company completed a public offering of 26,666,648 shares of its common stock and warrants to purchase 13,333,324 shares of its common stock at a combined price of $0.85 per share of common stock and one-half of a warrant to purchase one share of common stock. Proceeds from the public offering, net of underwriting discounts, commissions and offering expenses were approximately $21.1 million.

ATM Sales Agreement

In March 2021, the Company entered into a common stock sales agreement (the “Sales Agreement”) under which the Company may sell up to an aggregate of $50.0 million in gross proceeds through the sale of shares of common stock from time to time in “at-the-market” equity offerings (as defined in Rule 415 promulgated under the Securities Act of 1933, as amended). The Company agreed to pay a commission of up to 3% of the gross proceeds of any common stock sold under the Sales Agreement. During the nine months ended September 30, 2021, the Company issued and sold 6,915,151 shares of common stock under the Sales Agreement resulting in net proceeds to the Company of approximately $9.3 million. The Company’s ability to access additional capital though the sale of equity securities will be limited by the number of authorized shares of common stock available to the Company pursuant to its certificate of incorporation.

Stock-Based Compensation Expense

Stock-based compensation expense was allocated as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Cost of goods sold	$	84	$	—	$	219	$	—
Research and development		134		134		362		471
Selling and marketing		31		23		109		86
General and administrative		638		490		1,782		1,550
Total	$	887	$	647	$	2,472	$	2,107

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (g)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI http://asc.fasb.org/topic&trid=2208762

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (h)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 16
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496180-112644

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (i)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2021

Accumulated Other Comprehensive Income Loss Net of Tax [Abstract]

Accumulated Other Comprehensive Income

9. Accumulated Other Comprehensive Income

The change in accumulated other comprehensive income, which is reported as a component of stockholders’ equity, for the nine months ended September 30, 2021 is summarized below (in thousands):


	Unrealized
	Gain on
	Marketable
	Securities
Balance December 31, 2020	$	3
Other comprehensive income		(3)
Balance September 30, 2021	$	—

No amounts were classified out of accumulated other comprehensive income during the nine months ended September 30, 2021.

Income Taxes

9 Months Ended

Sep. 30, 2021

Income Taxes

Income Taxes

10. Income Taxes

On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) which includes numerous modifications to income tax provisions, including a limitation on business interest expense and net operating loss provisions and the acceleration of alternative minimum tax credits. Given the Company’s history of losses, the CARES Act did not have a material impact on its income tax provision.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Commitments and Contingencies

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies

Commitments and Contingencies

11. Commitments and Contingencies

The Company has several firm purchase commitments, primarily related to the manufacture and supply of Twirla and the supply of a field force of sales representatives to provide certain detailing services, sales operation services, compliance services, and training services. Future firm purchase commitments under these agreements, the last of which ends in 2030, total $10.6 million. This amount does not represent all of the Company’s anticipated purchases in the future, but instead represents only purchases that are the subject of contractually obligated minimum purchases. The minimum commitments disclosed are determined based on non-cancelable minimum spend in 2021 or termination amounts. Additionally, the Company purchases products and services as needed with no firm commitment.

The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company's operations or its financial position. As of September 30, 2021, the Company has not recorded a provision for any contingent losses.

Subsequent Event

9 Months Ended

Sep. 30, 2021

Subsequent Event [Abstract]

Subsequent Event

12. Subsequent Event

On October 13, 2021 the Company completed a public offering of 26,666,648 shares of its common stock and warrants to purchase 13,333,324 shares of its common stock at a combined offering price of $0.85 per share of common stock and one-half of a warrant to purchase one share of common stock. The warrants have an exercise price of $0.85 per share of common stock, are exercisable immediately, and will expire five years from the date of issuance. Proceeds from the public offering, net of underwriting discounts, commissions and offering expenses were approximately $21.1 million.

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2021

Summary of Significant Accounting Policies

Use of Estimates

Risks and Uncertainties

Risks and Uncertainties

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company maintains balances with financial institutions in excess of the Federal Deposit Insurance Corporation limit.

Marketable Securities

Marketable Securities

Trade Accounts Receivable and Allowances

Trade Accounts Receivable and Allowances

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Other financial instruments, including accounts receivable, accounts payable and accrued liabilities, are carried at cost, which approximates fair value given their short-term nature.

Inventory

Inventory

Property and Equipment

Long-Lived Assets

Research and Development Expense

Research and Development Expenses

Advertising Costs

Advertising Costs

Deferred Financing Costs

Deferred Financing Costs

Concentrations of Credit Risk

Concentrations of Credit Risk

Revenue Recognition

Revenue Recognition

•

Distribution services fees;

•

Prompt pay and other discounts;

•

Product returns;

•

Chargebacks;

•

Rebates; and

•

Co-payment assistance.

The Company uses the following specific considerations to estimate variable consideration.

Warrants

The Company accounts for its warrants to purchase common stock in accordance with ASC 480, Distinguishing Liabilities from Equity.

Income Taxes

Income Taxes

Stock-Based Compensation

Net Loss Per Share


	September 30,
	2021	2020
Common stock warrants	1,850,000	1,400,000
Unvested restricted stock units	253,697	159,795
Common stock options	10,325,326	8,602,755
Total	12,429,023	10,162,550

Recent Accounting Pronouncements

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying financial statements.

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2021

Summary of Significant Accounting Policies

Schedule of outstanding potentially dilutive securities excluded from calculation of diluted net loss per share


	September 30,
	2021	2020
Common stock warrants	1,850,000	1,400,000
Unvested restricted stock units	253,697	159,795
Common stock options	10,325,326	8,602,755
Total	12,429,023	10,162,550

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2021

Fair Value Measurements

Schedule of financial instruments measured at fair value by level within the fair value hierarchy

The following table sets forth the Company’s financial instruments measured at fair value by level within the fair value hierarchy as of September 30, 2021 and December 31, 2020 (in thousands):


	Level 1		Level 2		Level 3
September 30, 2021
Assets:
Cash and cash equivalents	$	14,735	$	—	$	—
Marketable securities		—		—		—
Total assets at fair value	$	14,735	$	—	$	—


	Level 1		Level 2		Level 3
December 31, 2020
Assets:
Cash and cash equivalents	$	14,463	$	—	$	—
Marketable securities		—		40,008		—
Total assets at fair value	$	14,463	$	40,008	$	—

Prepaid Expenses and Other Current Assets (Tables)

9 Months Ended

Sep. 30, 2021

Prepaid Expenses and Other Current Assets

Schedule of prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following (in thousands):


	September 30,		December 31,
	2021		2020
Prepaid insurance	$	1,186	$	680
Other		1,072		769
Total prepaid expenses and other current assets	$	2,258	$	1,449

Accrued Liabilities (Tables)

9 Months Ended

Sep. 30, 2021

Accrued Liabilities

Schedule of accrued liabilities

Accrued liabilities consist of the following (in thousands):


	September 30,		December 31,
	2021		2020
Accrued compensation	$	942	$	1,697
Accrued professional fees and other		2,957		1,651
Total accrued liabilities	$	3,899	$	3,348

Leases (Tables)

9 Months Ended

Sep. 30, 2021

Leases

Maturity of lease liabilities

Future minimum lease payments under non-cancellable leases as of September 30, 2021 were as follows (in thousands):


2021	$	38
Total	$	38
Less: Interest		(1)
Present value of lease liability	$	37

Credit Agreement and Guaranty (Tables)

9 Months Ended

Sep. 30, 2021

Credit Agreement and Guaranty

Schedule of carrying amount of term loan

The fair value of the warrants as well as the debt issue costs incurred in connection with the entry into the Perceptive Credit Agreement, including a facility fee of 1% of the total amount of loans available under the facility, are presented as a direct deduction from the carrying amount of the term loan on the consolidated balance sheet as detailed below (in thousands).


	September 30,
	2021
Notes payable	$	20,000
Debt issuance costs		(620)
Warrant discount		(2,946)
Long-term debt	$	16,434

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 3
-Subparagraph (SX 210.12-04(a))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e24072-122690

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=124435984&loc=d3e28541-108399

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=123467817&loc=d3e21506-112644

Reference 5: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 55
-Paragraph 69B
-URI http://asc.fasb.org/extlink&oid=123466577&loc=SL123495735-112612

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=124435984&loc=d3e28551-108399

Reference 7: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 55
-Paragraph 69E
-URI http://asc.fasb.org/extlink&oid=123466577&loc=SL123495743-112612

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=123467817&loc=d3e21521-112644

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=123467817&loc=d3e21538-112644

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=123599511&loc=d3e64711-112823

Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=123467817&loc=d3e21475-112644

+ Details

Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2021

Stockholders' Equity

Schedule of allocation of stock-based compensation expense

Stock-based compensation expense was allocated as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Cost of goods sold	$	84	$	—	$	219	$	—
Research and development		134		134		362		471
Selling and marketing		31		23		109		86
General and administrative		638		490		1,782		1,550
Total	$	887	$	647	$	2,472	$	2,107

Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2021

Accumulated Other Comprehensive Income Loss Net of Tax [Abstract]

Schedule of change in accumulated other comprehensive income, which is reported as a component of stockholders' equity

The change in accumulated other comprehensive income, which is reported as a component of stockholders’ equity, for the nine months ended September 30, 2021 is summarized below (in thousands):


	Unrealized
	Gain on
	Marketable
	Securities
Balance December 31, 2020	$	3
Other comprehensive income		(3)
Balance September 30, 2021	$	—

Organization and Description of Business (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Nature of Operations
Accumulated deficit	$ 363,760	$ 312,223
Cash, cash equivalents and marketable securities	$ 14,700

- Definition

The cumulative amount of the reporting entity's undistributed earnings or deficit.

+ References + Details

Organization and Description of Busines - Basis of Presentation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Organization and Description of Business
Selling and marketing	$ 9,386	$ 7,723	$ 30,263	$ 12,616

Summary of Significant Accounting Policies - Inventory (Details) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2021 USD ($)	Sep. 30, 2021 item
Summary of Significant Accounting Policies
Inventory reserve \| $	$ 1.4
Number of units sold \| item		3,000

Summary of Significant Accounting Policies - Advertising Costs (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Summary of Significant Accounting Policies
Advertising costs	$ 2.7	$ 0.0	$ 8.8	$ 0.0

Summary of Significant Accounting Policies - Deferred Financing Costs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Deferred Financing Costs
Facility fee percentage			1.00%
Interest expense [Member]
Deferred Financing Costs
Amortization of deferred financing costs	$ 69,000	$ 69,000	$ 208,000	$ 162,000

Summary of Significant Accounting Policies - Concentrations of Credit Risk (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2021 USD ($) customer	Sep. 30, 2021 USD ($)
Concentration of risk, financial assets
Financial instruments with off-balance sheet risk of accounting loss, assets	$ 0	$ 0
Concentration risk, financial liabilities
Financial instruments with off-balance sheet risk of accounting loss, liabilities	0	0
Total revenue	$ 1,287	$ 2,587
Customer Concentration Risk
Concentration risk, financial liabilities
Number of major customers \| customer	3
Customer Concentration Risk \| Sales Revenue \| Three Customers
Concentration risk, financial liabilities
Total revenue	$ 400
Concentration risk, percentage	92.00%
Customer Concentration Risk \| Accounts Receivable \| Customer One
Concentration risk, financial liabilities
Concentration risk, percentage	35.00%
Customer Concentration Risk \| Accounts Receivable \| Customer Two
Concentration risk, financial liabilities
Concentration risk, percentage	34.00%
Customer Concentration Risk \| Accounts Receivable \| Customer Three
Concentration risk, financial liabilities
Concentration risk, percentage	27.00%

Summary of Significant Accounting Policies - Co-Payment Assistance (Details) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2021 USD ($)	Sep. 30, 2021 USD ($)
Receivables [Abstract]
Provision for revenue reserve	$ 0.6	$ 0.9
Reserve for variable consideration	$ 0.5	$ 0.5

Summary of Significant Accounting Policies - Warrants (Details) - shares	Oct. 31, 2021	Oct. 13, 2021	Feb. 28, 2021	Feb. 29, 2020
Warrants
Common stock that can be purchased with warrants (in shares)			450,000	1,400,000
Subsequent event
Warrants
Common stock that can be purchased with warrants (in shares)	13,333,324	13,333,324

Summary of Significant Accounting Policies - Income Taxes (Details) $ in Thousands	Sep. 30, 2021 USD ($)
Uncertainty in tax positions
Uncertain tax positions	$ 0

Summary of Significant Accounting Policies - Net Loss Per Share (Details) - shares	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Anti-dilutive securities
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares)	12,429,023	10,162,550
Common stock warrants
Anti-dilutive securities
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares)	1,850,000	1,400,000
Restricted Stock Units
Anti-dilutive securities
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares)	253,697	159,795
Common stock options
Anti-dilutive securities
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares)	10,325,326	8,602,755

Fair Value Measurements - Financial Instruments Measured at Fair Value by Hierarchy Level (Details) - Recurring - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Level 1
Assets:
Cash and cash equivalents	$ 14,735	$ 14,463
Total assets at fair value	$ 14,735	14,463
Level 2
Assets:
Marketable securities		40,008
Total assets at fair value		$ 40,008

Fair Value Measurements - Transfers Between Levels (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Fair value measurements
Asset transfers out of Level 1 into Level 2	$ 0	$ 0
Asset transfers out of Level 2 into Level 1	0	0
Asset transfers into (out of) Level 3	0	0
Liability transfers out of Level 1 into Level 2	0	0
Liability transfers out of Level 2 into Level 1	0	0
Liability transfers into (out of) Level 3	$ 0	$ 0

Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Prepaid Expenses and Other Current Assets
Prepaid insurance	$ 1,186	$ 680
Other	1,072	769
Total prepaid expenses and other current assets	$ 2,258	$ 1,449

Accrued Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Accrued Liabilities
Accrued compensation	$ 942	$ 1,697
Accrued professional fees and other	2,957	1,651
Total accrued liabilities	$ 3,899	$ 3,348

Leases - Summary (Details)	3 Months Ended	9 Months Ended
Leases - Summary (Details)	Sep. 30, 2021 USD ($) lease	Sep. 30, 2021 USD ($) lease	Sep. 30, 2020 USD ($)
Leases
Number of finance leases \| lease	0	0
Number of operating leases \| lease	1	1
Operating lease expense \| $	$ 38,000	$ 113,000
Operating lease expense information:
Cash paid for amounts included in measurement of lease liabilities \| $	$ 35,000	$ 102,000	$ 138,000
Weighted-average remaining lease term (years)	3 months	3 months
Weighted-average discount rate	15.20%	15.20%

Leases - Maturity of lease liabilities (Details) $ in Thousands	Sep. 30, 2021 USD ($)
Operating Leases
2021	$ 38
Total	38
Less: Interest	(1)
Present value of lease liability	$ 37

Credit Agreement and Guaranty (Details)		3 Months Ended		9 Months Ended
Credit Agreement and Guaranty (Details)	Feb. 10, 2020 USD ($) item Y $ / shares shares	Dec. 31, 2023 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2021	Sep. 30, 2020 USD ($)	Feb. 28, 2021 shares	Feb. 26, 2021 USD ($) $ / shares shares	Feb. 29, 2020 shares
Debt Instrument [Line Items]
Amount borrowed					$ 20,000,000
Interest rate (as a percent)	11.75%		11.75%	11.75%
Percentage of annual interest rate	3.00%
Common stock that can be purchased with warrants (in shares) \| shares						450,000		1,400,000
Proceeds from warrant exercises	$ 20,000,000.0
Facility fee percentage				1.00%
Perceptive Credit Agreement
Debt Instrument [Line Items]
Percentage of outstanding debt	1.50%
Minimum cash covenants	$ 3,000,000.0
Revenue generated under debt		$ 87,100,000	$ 10,200,000
Perceptive Credit Agreement \| Perceptive Warrants
Debt Instrument [Line Items]
Exercise price of warrants (in dollars per share) \| $ / shares							$ 2.87
Common stock that can be purchased with warrants (in shares) \| shares	1,400,000						450,000
Number of warrants issued \| item	2
Beneficial ownership percentage	19.99%
Facility fee percentage	1.00%
Perceptive Credit Agreement \| First Seven Lakhs Shares
Debt Instrument [Line Items]
Exercise price of warrants (in dollars per share) \| $ / shares	$ 3.74
Common stock that can be purchased with warrants (in shares) \| shares	700,000
Perceptive Credit Agreement \| Remaining Seven Lakhs Shares
Debt Instrument [Line Items]
Exercise price of warrants (in dollars per share) \| $ / shares	$ 4.67
Common stock that can be purchased with warrants (in shares) \| shares	700,000
Senior secured delayed draw term loan facility \| Perceptive Credit Agreement
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 35,000,000.0
Additional amount available	$ 25,000,000.0
Number of separate tranches \| item	2
Senior secured delayed draw term loan facility \| Perceptive Credit Agreement \| Perceptive Warrants
Debt Instrument [Line Items]
Maximum borrowing capacity							$ 45,000,000.0
Senior secured delayed draw term loan facility \| Perceptive Credit Agreement, Tranche One
Debt Instrument [Line Items]
Amount borrowed	$ 5,000,000.0
Senior secured delayed draw term loan facility \| Perceptive Credit Agreement, Tranche Two
Debt Instrument [Line Items]
Amount borrowed	$ 15,000,000.0
LIBOR \| Perceptive Credit Agreement
Debt Instrument [Line Items]
Variable interest rate margin (as a percent)	10.25%
Interest rate for the base rate	1.50%
Prepayment Occur on or Before February, 10, 2021 \| Perceptive Credit Agreement
Debt Instrument [Line Items]
Prepayment fee percent	8.00%
Prepayment Occur on or Before February, 10, 2022 \| Perceptive Credit Agreement
Debt Instrument [Line Items]
Prepayment fee percent	4.00%
Prepayment Occur on or Before February, 10, 2023 \| Perceptive Credit Agreement
Debt Instrument [Line Items]
Prepayment fee percent	2.00%
Two Thousand Twenty Perceptive Warrants [Member]
Debt Instrument [Line Items]
Fair value of warrants	$ 3,600,000
Two Thousand Twenty One Perceptive Warrants [Member]
Debt Instrument [Line Items]
Fair value of warrants	$ 1,100,000
Option pricing model \| Two Thousand Twenty Perceptive Warrants [Member] \| Perceptive Warrants
Debt Instrument [Line Items]
Warrants and rights outstanding, term	7 years
Option pricing model \| Two Thousand Twenty Perceptive Warrants [Member] \| Perceptive Warrants \| Volatility
Debt Instrument [Line Items]
Warrants, Measurement Input \| item	0.700
Option pricing model \| Two Thousand Twenty Perceptive Warrants [Member] \| Perceptive Warrants \| Risk free interest rate
Debt Instrument [Line Items]
Warrants, Measurement Input \| item	0.0147
Option pricing model \| Two Thousand Twenty Perceptive Warrants [Member] \| Perceptive Warrants \| Expected life
Debt Instrument [Line Items]
Warrants, Measurement Input \| Y	7
Option pricing model \| Two Thousand Twenty Perceptive Warrants [Member] \| Perceptive Warrants \| Share price [Member]
Debt Instrument [Line Items]
Warrants, Measurement Input \| item	4.01
Option pricing model \| Two Thousand Twenty Perceptive Warrants [Member] \| Maximum \| Perceptive Warrants \| Strike price
Debt Instrument [Line Items]
Warrants, Measurement Input \| item	4.67
Option pricing model \| Two Thousand Twenty Perceptive Warrants [Member] \| Minimum \| Perceptive Warrants \| Strike price
Debt Instrument [Line Items]
Warrants, Measurement Input \| item	3.74
Option pricing model \| Two Thousand Twenty One Perceptive Warrants [Member] \| Perceptive Warrants \| Volatility
Debt Instrument [Line Items]
Warrants, Measurement Input \| item	1.035
Option pricing model \| Two Thousand Twenty One Perceptive Warrants [Member] \| Perceptive Warrants \| Risk free interest rate
Debt Instrument [Line Items]
Warrants, Measurement Input \| item	0.0115
Option pricing model \| Two Thousand Twenty One Perceptive Warrants [Member] \| Perceptive Warrants \| Strike price
Debt Instrument [Line Items]
Warrants, Measurement Input \| item	2.87
Option pricing model \| Two Thousand Twenty One Perceptive Warrants [Member] \| Perceptive Credit Agreement \| Expected life
Debt Instrument [Line Items]
Warrants, Measurement Input \| Y	7
Warrants and rights outstanding, term	7 years

Credit Agreement and Guaranty - Carrying Amount Of term Loan (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Credit Agreement and Guaranty
Notes payable	$ 20,000,000		$ 20,000,000
Debt issuance costs	(620,000)		(620,000)
Warrant discount	(2,946,000)		(2,946,000)
Total	16,434,000		16,434,000		$ 16,381,000
Warrants and debt issue costs	$ 399,000	$ 303,000	$ 1,132,000	$ 707,000

- Definition

Amount, after unamortized (discount) premium and debt issuance costs, of long-term debt. Includes, but not limited to, notes payable, bonds payable, debentures, mortgage loans and commercial paper. Excludes capital lease obligations.

+ References + Details

Stockholders' Equity - Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended			3 Months Ended				9 Months Ended
	Oct. 13, 2021	Oct. 31, 2021	Mar. 31, 2021	Feb. 29, 2020	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020	Feb. 28, 2021	Oct. 02, 2020
Sale of stock
Common stock that can be purchased with warrants (in shares)				1,400,000							450,000
Commission percentage			3.00%
Subsequent event
Sale of stock
Common stock that can be purchased with warrants (in shares)	13,333,324	13,333,324
Common stock that can be purchased with one-half of warrant (in shares)	1	1
2020 Shelf Registration Statement
Sale of stock
Aggregate amount of securities issuable												$ 200,000
At-the-market sales
Sale of stock
Proceeds from issuance of common stock in public offering, net of offering costs									$ 9,266
At-the-market sales \| Common stock
Sale of stock
Issuance of common stock (in shares)					1,801,180	4,593,034	520,937		6,915,151
Public offering
Sale of stock
Proceeds from issuance of common stock in public offering, net of offering costs										$ 48,434
Public offering \| Common stock
Sale of stock
Issuance of common stock (in shares)				17,250,000				17,250,000
Share price (in dollars per share)				$ 3.00
Proceeds from issuance of common stock in public offering, net of offering costs				$ 48,400
Public offering \| Common stock \| Subsequent event
Sale of stock
Issuance of common stock (in shares)	26,666,648	26,666,648
Share price (in dollars per share)	$ 0.85	$ 0.85
Proceeds from issuance of common stock in public offering, net of offering costs	$ 21,100	$ 21,100
At The Market Offering \| Common stock
Sale of stock
Proceeds from issuance of common stock in public offering, net of offering costs									$ 9,300
Gross Proceeds			$ 50,000

Stockholders' Equity - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Stock-Based Compensation Expense
Total stock-based compensation expense	$ 887	$ 647	$ 2,472	$ 2,107
Cost of goods sold
Stock-Based Compensation Expense
Total stock-based compensation expense	84		219
Research and development
Stock-Based Compensation Expense
Total stock-based compensation expense	134	134	362	471
Selling and marketing
Stock-Based Compensation Expense
Total stock-based compensation expense	31	23	109	86
General and administrative
Stock-Based Compensation Expense
Total stock-based compensation expense	$ 638	$ 490	$ 1,782	$ 1,550

Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Mar. 31, 2021	Sep. 30, 2020	Jun. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Accumulated Other Comprehensive Income Loss Net of Tax [Abstract]
Balance at beginning of the period	$ 3			$ 3
Other comprehensive income of unrealized gain on marketable securities	$ (3)	$ 1	$ 10	(3)	$ 11
Amounts classified out of accumulated other comprehensive income				$ 0

- Definition

Accumulated change in equity from transactions and other events and circumstances from non-owner sources, net of tax effect, at period end. Excludes Net Income (Loss), and accumulated changes in equity from transactions resulting from investments by owners and distributions to owners. Includes foreign currency translation items, certain pension adjustments, unrealized gains and losses on certain investments in debt and equity securities, other than temporary impairment (OTTI) losses related to factors other than credit losses on available-for-sale and held-to-maturity debt securities that an entity does not intend to sell and it is not more likely than not that the entity will be required to sell before recovery of the amortized cost basis, as well as changes in the fair value of derivatives related to the effective portion of a designated cash flow hedge.

+ References + Details

Commitments and Contingencies (Details) $ in Millions	Sep. 30, 2021 USD ($)
Commitments and Contingencies
Future purchase commitments	$ 10.6

Subsequent Event (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended		3 Months Ended	9 Months Ended
	Oct. 13, 2021	Oct. 31, 2021	Feb. 29, 2020	Mar. 31, 2020	Sep. 30, 2020	Feb. 28, 2021
Subsequent Event [Line Items]
Common stock that can be purchased with warrants (in shares)			1,400,000			450,000
Public offering
Subsequent Event [Line Items]
Proceeds from issuance of common stock in public offering, net of offering costs					$ 48,434
Common stock \| Public offering
Subsequent Event [Line Items]
Issuance of common stock (in shares)			17,250,000	17,250,000
Share price (in dollars per share)			$ 3.00
Proceeds from issuance of common stock in public offering, net of offering costs			$ 48,400
Subsequent event
Subsequent Event [Line Items]
Common stock that can be purchased with warrants (in shares)	13,333,324	13,333,324
Common stock that can be purchased with one-half of warrant (in shares)	1	1
Exercise price of warrants (in dollars per share)	$ 0.85
Warrants and rights outstanding, term	5 years
Subsequent event \| Common stock \| Public offering
Subsequent Event [Line Items]
Issuance of common stock (in shares)	26,666,648	26,666,648
Share price (in dollars per share)	$ 0.85	$ 0.85
Proceeds from issuance of common stock in public offering, net of offering costs	$ 21,100	$ 21,100