COLLEGIUM PHARMACEUTICAL, INC. You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. The following discussion contains forward-looking statements that involve risks uncertainties and assumptions. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of many factors. We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this Quarterly Report on Form 10-Q, including those set forth under "Forward-looking Statements" and "Risk Factors", as revised and supplemented by those risks described from time to time in other reports which we file with theSEC . OVERVIEW
We are a specialty pharmaceutical company committed to being the leader in responsible pain management. Our first product, Xtampza ER, is an abuse-deterrent, extended-release, oral formulation of oxycodone. InApril 2016 , the FDA approved our NDA for Xtampza ER for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate. InJune 2016 , we announced the commercial launch of Xtampza ER. Our product portfolio also includes Nucynta IR and Nucynta ER (collectively, the "Nucynta Products"). InDecember 2017 , we entered into a Commercialization Agreement (the "Nucynta Commercialization Agreement") withAssertio Therapeutics, Inc. ("Assertio"), pursuant to which we licensed the right to commercialize the Nucynta Products inthe United States . Nucynta ER is an extended-release formulation of tapentadol that is indicated for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment, including neuropathic pain associated with diabetic peripheral neuropathy in adults, and for which alternate treatment options are inadequate. Nucynta IR is an immediate-release formulation of tapentadol that is indicated for the management of acute adult pain severe enough to require an opioid analgesic and for which alternative treatments are inadequate. We began shipping and recognizing product sales on the Nucynta Products onJanuary 9, 2018 and began marketing the Nucynta Products inFebruary 2018 . OnFebruary 6, 2020 , we entered into an Asset Purchase Agreement with Assertio (the "Nucynta Purchase Agreement"), pursuant to which we agreed to acquire from Assertio certain assets related to the Nucynta Products (the "Nucynta Acquisition"), including the license from Grünenthal GmbH ("Grünenthal"), for an aggregate purchase price of$375.0 million . OnFebruary 13, 2020 , we closed the Nucynta Acquisition in accordance with the Nucynta Purchase Agreement. Upon closing, the Nucynta Commercialization Agreement was effectively terminated and our royalty payment obligations to Assertio thereunder ceased. Following the closing, we pay royalties directly to Grünenthal at a rate of 14% of net sales of the Nucynta Products and no longer pay royalties to Assertio. Outlook We expect to continue to incur significant commercialization expenses related to marketing, manufacturing, distribution, selling and reimbursement activities. We are promoting Xtampza ER to approximately 11,000 health care professionalswho write approximately 65% of the branded extended-release oral opioid prescriptions inthe United States with a sales team of approximately 150 sales representatives and managers. We are promoting the Nucynta Products to the same health care professionals to whom we promote Xtampza ER, leveraging our existing sales organization.
Net income for the three and nine months endedSeptember 30, 2020 was$11.3 million and$19.8 million , respectively. In every annual reporting period since inception, we have incurred net losses. As ofSeptember 30, 2020 , we had an accumulated deficit of$340.1 million . Substantially all of our prior net losses resulted from costs incurred in connection with selling, general and administrative costs associated with our operations and research and development programs. We have historically paid royalties to Assertio on all revenues from the sale of Nucynta Products based on certain net sales thresholds, which ceased upon closing of the Nucynta Acquisition. Our net income (loss) may fluctuate significantly from quarter to quarter and year to year. We believe that our cash and cash equivalents atSeptember 30, 2020 , together with expected cash inflows from the commercialization of our products, will enable us to fund our operating expenses, debt service and capital expenditure requirements under our current business plan for the foreseeable future. 35 Table of Contents InDecember 2019 , a novel strain of coronavirus began infecting people inChina ; since then, the disease caused by that virus, COVID-19, has sickened millions of people across the world and inMarch 2020 , theWorld Health Organization declared COVID-19 a pandemic. The pandemic has severely impacted global economic activity, and many countries and many states inthe United States have reacted to the outbreak by instituting quarantines, mandating business and school closures and restricting travel. As of the date of the filing of this Quarterly Report on Form 10-Q, we expect the COVID-19 pandemic and actions taken to contain it to impact our revenue (due to fewer new patients beginning therapy with our products and adverse impact on our ability to promote our products due to closure or limited operations of many physicians' offices) and have decreased certain operating expenses, including travel, marketing and expenses associated with participation in congresses that have been postponed. We believe that the disruptions caused by COVID-19 will continue and there remains substantial uncertainty as to when such disruptions will cease (or ease).
CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES
We believe that several accounting policies are important to understanding our historical and future performance. We refer to these policies as "critical" because these specific areas generally require us to make judgments and estimates about matters that are uncertain at the time we make the estimate, and different estimates-which also would have been reasonable-could have been used, which would have resulted in different financial results. The critical accounting policies we identified in our Annual Report on Form 10-K for the fiscal year endedDecember 31, 2019 ("Annual Report"), relate to revenue recognition and impairment of intangible assets. Estimates include revenue recognition, including the estimates of product returns, units prescribed, discounts and allowances related to commercial sales of our products, estimates utilized in the valuation of inventory, estimates of useful lives with respect to intangible assets, accounting for stock-based compensation, contingencies, intangible assets, and tax valuation reserves. We base our estimates and assumptions on historical experience when available and on various factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions. It is important that the discussion of our operating results that follows be read in conjunction with the critical accounting policies disclosed in our Annual Report. 36 Table of Contents RESULTS OF OPERATIONS (in thousands) Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 (in thousands) (in thousands) Product revenues, net$ 79,176 $ 72,942 $ 233,745 $ 222,498 Cost of product revenues Cost of product revenues (excluding intangible asset amortization) 14,188 43,066 54,316 133,508 Intangible asset amortization 16,795 3,688 43,885 11,064 Total cost of products revenues 30,983 46,754 98,201 144,572 Gross profit 48,193 26,188 135,544 77,926 Operating expenses Research and development 2,141 2,491 7,300 7,942 Selling, general and administrative 26,426 30,072 87,008 91,359 Total operating expenses 28,567 32,563 94,308 99,301 Income (loss) from operations 19,626 (6,375)
41,236 (21,375) Interest expense (8,063) (228) (21,145) (698) Interest income 3 494 229 1,552
Income (loss) before income taxes 11,566 (6,109) 20,320 (20,521) Provision for income taxes 280 -
526 -
Net income (loss) $ 11,286 $ (6,109) $ 19,794 $ (20,521) Comparison of the three months ended
Product revenues, net were$79.2 million for the three months endedSeptember 30, 2020 (the "2020 Quarter"), compared to$72.9 million for the three months endedSeptember 30, 2019 (the "2019 Quarter"). The$6.3 million increase was related to an increase in revenue for Xtampza ER of$5.6 million combined with an increase in revenue for the Nucynta Products of$588,000 . For the 2020 Quarter, Xtampza ER product revenues, net were$32.1 million , compared to$26.5 million for the 2019 Quarter. The increase in revenue for Xtampza ER was primarily related to an increase in sales volume due to increased demand and an increase in price. For the 2020 Quarter, Nucynta IR and ER product revenues, net were$30.0 million and$17.1 million , respectively, compared to$28.1 million and$18.3 million , respectively, for the 2019 Quarter. The increase in revenue for the Nucynta Products was primarily related to an increase in price, partially offset by lower sales volume. Cost of product revenues (excluding intangible asset amortization) was$14.2 million for the 2020 Quarter, compared to$43.1 million for the 2019 Quarter. The$28.9 million decrease was primarily related to a decrease in royalty expense for the Nucynta Products. In the 2019 Quarter, we recognized$30.2 million in sales-based royalty expense due to Assertio under the terms of the Nucynta Commercialization Agreement. Our sales-based royalty obligations to Assertio ceased upon closing of the Nucynta Acquisition onFebruary 13, 2020 . Intangible asset amortization was$16.8 million for the 2020 Quarter, compared to$3.7 million for the 2019 Quarter. The$13.1 million increase was primarily related to the Nucynta Acquisition, in which$367.1 million of consideration was allocated to the existing intangible asset as incremental cost in 2020. The intangible asset is being amortized on a straight-line basis over its estimated useful life of approximately six years.
Research and development expenses were
Selling, general and administrative expenses were
? a decrease in travel, trainings, conferences and meetings of
primarily due to the restrictions imposed in response to the COVID-19 outbreak;
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a decrease in sales, marketing, and consulting costs of
? due to lower costs incurred in the 2020 Quarter to support the ongoing
commercialization of our products; and
? a decrease in fees, permits and other regulatory costs, including
post-marketing requirements, of
Interest expense was
Interest income was$3,000 for the 2020 Quarter, compared to$494,000 in the 2019 Quarter. The$491,000 decrease was primarily due to lower interest rates in the 2020 Quarter.
Comparison of the nine months ended
Product revenues, net were$233.7 million for the nine months endedSeptember 30, 2020 (the "2020 Period"), compared to$222.5 million for the nine months endedSeptember 30, 2019 (the "2019 Period"). The$11.2 million increase was related to an increase in revenue for Xtampza ER of$19.6 million , offset by a decrease in revenue for the Nucynta Products of$8.4 million . For the 2020 Period, Xtampza ER product revenues, net were$97.2 million , compared to$77.6 million for the 2019 Period. The increase in revenue for Xtampza ER was primarily related to an increase in sales volume due to increased demand and an increase in price. For the 2020 Period, Nucynta IR and ER product revenues, net were$87.0 million and$49.5 million , respectively, compared to$87.5 million and$57.4 million , respectively, for the 2019 Period. The decrease in revenue for the Nucynta Products was primarily related to lower sales volume, partially offset by an increase in price. Cost of product revenues (excluding intangible asset amortization) was$54.3 million for the 2020 Period, compared to$133.5 million for the 2019 Period. The$79.2 million decrease was primarily related to a decrease in royalty expense for the Nucynta Products. In the 2019 Period, we recognized$94.2 million in sales-based royalty expense due to Assertio under the terms of the Nucynta Commercialization Agreement, compared to$19.1 million in the 2020 Period. The$19.1 million represented sales-based royalties due to Assertio prior to the closing of the Nucynta Acquisition onFebruary 13, 2020 . Our sales-based royalty obligations due to Assertio ceased upon closing the Nucynta Acquisition. Intangible asset amortization was$43.9 million for the 2020 Period, compared to$11.1 million for the 2019 Period. The$32.8 million increase was primarily related to the Nucynta Acquisition, in which$367.1 million of consideration was allocated to the existing intangible asset as incremental cost. The intangible asset is being amortized on a straight-line basis over its estimated useful life of approximately six years.
Research and development expenses were
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Selling, general and administrative expenses were $87.0 million for the 2020
Period, compared to $91.4 million for the 2019 Period. The $4.4 million decrease
was primarily related to:
? a decrease in audit, legal, and other professional fees of
primarily due to lower litigation costs;
a decrease in sales, marketing, and consulting costs of
? due to lower costs incurred in the 2020 Period to support the ongoing
commercialization of our products;
a decrease in travel, trainings, conferences, and meetings of
? primarily due to the restrictions imposed in response to the COVID-19 outbreak;
partially offset by
? an increase in product taxes and fees of
states recently enacting excise taxes on the sale of opioids;
an increase in salaries, wages and benefits of
? stock-based compensation expense, wage increases and incentive compensation
expense;
? an increase in insurance of
? an increase in fees, permits and other regulatory costs, including
post-marketing requirements, of
? an increase in systems, licenses and support of
Interest expense was
Interest income was$229,000 for the 2020 Period, compared to$1.6 million in the 2019 Period. The$1.3 million decrease was primarily due to lower interest rates in the 2020 Period. Provision for income taxes was$526,000 for the 2020 Period, compared to none in the 2019 Period. The$526,000 increase was primarily due state income tax expense as, in the 2020 Quarter, certain states enacted changes in tax laws that prevent us from using our state-level NOLs to offset taxable income. In addition, we continue to generate more taxable income from sales of our products in states in which we do not have sufficient state-level NOLs to fully offset state taxable income. We did not record income tax expense in the 2019 Period due to the utilization of federal and state NOLs carried forward to offset taxable income.
LIQUIDITY AND CAPITAL RESOURCES
Sources of Liquidity
As of
Although it is difficult to predict future liquidity requirements, we believe that our cash and cash equivalents atSeptember 30, 2020 , together with expected cash inflows from the commercialization of our products, will enable us to fund our operating expenses, debt service and capital expenditure requirements under our current business plan for the foreseeable future.
Borrowing Arrangements and Equity Offerings
The following transactions represent the material changes in borrowing arrangements and equity offerings that were previously disclosed in our most recent Annual Report.
Pharmakon Term Notes OnFebruary 6, 2020 , in connection with the execution of the Nucynta Purchase Agreement, we, together with our subsidiary,Collegium Securities Corporation , entered into the Loan Agreement with BioPharma Credit PLC, as collateral agent and lender; andBioPharma Credit Investments V (Master) LP , as lender. The Loan Agreement provides for a$200.0 million secured term loan (the "term notes"), the proceeds of which were used to finance a portion of the purchase price paid pursuant to the Nucynta Purchase Agreement. 39 Table of Contents The term notes will mature on the calendar quarter end immediately following the 48-month anniversary of the closing of the Nucynta Acquisition, and is guaranteed by our material domestic subsidiaries and is also secured by substantially all of our material domestic assets. The term notes will bear interest at a rate based upon LIBOR (subject to a LIBOR floor of 2.0%), plus a margin of 7.5% per annum. We are required to repay the term notes by making equal quarterly payments. The Loan Agreement contains certain covenants and obligations of the parties, including, without limitation, covenants that require us to maintain$200.0 million in annual net sales and covenants that limit our ability to incur additional indebtedness or liens, make acquisitions or other investments or dispose of assets outside the ordinary course of business. Failure to comply with these covenants would constitute an event of default under the Loan Agreement, notwithstanding our ability to meet its debt service obligations. The Loan Agreement also includes various customary remedies for the lenders following an event of default, including the acceleration of repayment of outstanding amounts under the Loan Agreement and execution upon the collateral securing obligations under the Loan Agreement. 2026 Convertible Notes OnFebruary 13, 2020 , in connection with the execution of the Nucynta Purchase Agreement, we issued 2.625% convertible senior notes due 2026 (the "convertible notes"), in the aggregate principal amount of$143.8 million , in a public offering registered under the Securities Act of 1933, as amended. The proceeds were used to finance a portion of the purchase price paid pursuant to the Nucynta Purchase Agreement. The convertible notes are senior, unsecured obligations and will accrue interest at a rate of 2.625% per annum, payable semi-annually in arrears onFebruary 15 andAugust 15 of each year, beginning onAugust 15, 2020 . The notes will mature onFebruary 15, 2026 , unless earlier repurchased, redeemed or converted. BeforeAugust 15, 2025 , noteholders will have the right to convert their notes only upon the occurrence of certain events. From and afterAugust 15, 2025 , noteholders may convert their notes at any time at their election until the close of business on the scheduled trading day immediately before the maturity date. We will settle conversions by paying or delivering, as applicable, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. The initial conversion rate is 34.2618 shares of common stock per$1,000 principal amount of notes, which represents an initial conversion price of approximately$29.19 per share of common stock. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events.
Silicon Valley Bank Term Loan Facility
FromAugust 2012 untilJanuary 2020 , we maintained a term loan facility withSilicon Valley Bank , which was amended in connection with, and as a condition to, consummation of the transactions contemplated by the Nucynta Commercialization Agreement. Under the amended term loan, we had a term loan facility in an amount of$11.5 million , which replaced our previously existing term loan facility. The proceeds were used to finance certain payment obligations under the Nucynta Commercialization Agreement and to repay the balance of the previously existing term loan. InJanuary 2020 , in anticipation of consummation of the Nucynta Acquisition and related financing activities, we repaid all of our outstanding indebtedness under the amended term loan. Cash Flows Nine months endedSeptember 30, 2020 2019
Net cash provided by operating activities$ 71,365 $ 12,127 Net cash used in investing activities (372,291)
(5,549)
Net cash provided by financing activities 298,877 627 Net (decrease) increase in cash, cash equivalents and restricted cash$ (2,049) $ 7,205 Operating activities. Cash provided by operating activities was$71.4 million in the 2020 Period, compared to cash provided by operating activities of$12.1 million in 2019 Period. The$59.3 million increase in cash provided by operating activities was primarily due to higher net income and non-cash adjustments related to the Nucynta Acquisition, 40
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which resulted in higher intangible asset amortization and higher non-cash interest expense from the term notes and convertible notes. These increases were partially offset by decreases in working capital accounts.
Investing activities. Cash used in investing activities was$372.3 million in the 2020 Period, compared to cash used in investing activities of$5.5 million in the 2019 Period. The$366.8 million increase in cash used in investing activities was primarily related to the Nucynta Acquisition. The remaining change is primarily related to the timing of purchases of property, plant, and equipment primarily for the dedicated production suite at our contract manufacturing organization. Financing activities. Cash provided by financing activities was$298.9 million for the 2020 Period, compared to cash provided by financing activities of$627,000 in the 2019 Period. The$298.3 million increase in cash provided by financing activities was primarily related to net proceeds from the term notes of$192.1 million and issuance of the convertible notes of$138.3 million , both of which were issued in the 2020 Period. This increase was partially offset by term note repayments of$25.0 million and the SVB term loan repayment of$11.5 million . The remaining change is primarily related to changes in proceeds from the issuance of shares under our employee stock purchase plan and proceeds from exercises of stock options, offset by payments made for employee restricted
stock tax withholdings. Funding Requirements We believe that our cash and cash equivalents atSeptember 30, 2020 together with expected cash inflows from the commercialization of our products, will enable us to fund our operating expenses, debt service and capital expenditure requirements under our current business plan for the foreseeable future. However, we are subject to all the risks common to the commercialization and development of new pharmaceutical products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. Certain economic or strategic considerations may cause us to seek additional cash through private or public debt or equity offerings. Such funds may not be available when needed, or, we may not be able to obtain funding on favorable terms, or at all. The continued spread of COVID-19 has led to severe disruption and volatility in the global capital markets, which could increase our cost of capital and adversely affect our ability to access the capital markets. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of one or more of our products. If we raise additional funds through the issuance of additional debt or equity securities, it could result in dilution to our existing shareholders, increased fixed payment obligations and the existence of securities with rights that may be senior to those of our common stock. If we incur indebtedness, we could become subject to covenants that would restrict our operations and potentially impair our competitiveness, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. Any of these events could significantly harm our business, financial condition and prospects. Our forecast that our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. The amount and timing of future funding requirements, both near- and long-term, will depend on many factors, including:
? the generation of reasonable levels of revenue from products sales and the
impact of the COVID-19 pandemic on our business and results of operations;
? the cost of growing and maintaining sales, marketing and distribution
capabilities for our products;
the cost of patent infringement litigation, including our litigation with
? Purdue, relating to Xtampza ER and the Nucynta Products, which may be expensive
to defend;
? the cost of litigation related to opioid marketing and distribution practices;
? the timing and costs associated with manufacturing our products, for commercial
sale and clinical trials; and
? the effect of competing technological and market developments
If we cannot capitalize on our business opportunities because we lack sufficient
capital, our business, financial condition and results of operations could be
materially adversely affected.
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ADDITIONAL INFORMATION
To supplement our financial results presented on a GAAP basis, we have included
information about non-GAAP adjusted income and adjusted EBITDA. We use these
non-GAAP financial measures to understand, manage and evaluate the Company as we
believe they represent the performance of our core business. Because these
non-GAAP financial measures are important internal measures for the Company, we
believe that the presentation of these non-GAAP financial measures provides
analysts, investors, lenders and other third parties insight into management's
view and assessment of the Company's ongoing operating performance. In addition,
we believe that the presentation of these non-GAAP financial measures, when
viewed with our results under GAAP and the accompanying reconciliation, provide
supplementary information that may be useful to analysts, investors, lenders,
and other third parties in assessing the Company's performance and results from
period to period. We report these non-GAAP financial measures to portray the
results of our major operations prior to considering certain income statement
elements. These non-GAAP financial measures should be considered in addition to,
and not as a substitute for, or superior to, net income or other financial
measures calculated in accordance with GAAP.
Non-GAAP Adjusted Income
Non-GAAP adjusted income is not based on any standardized methodology prescribed
by GAAP and represents GAAP net income (loss) adjusted to exclude stock-based
compensation expense, amortization expense, non-cash interest expense, certain
royalty costs recognized in connection with the Nucynta Commercialization
Agreement and the provision for income taxes. Non-GAAP adjusted income as used
by us may be calculated differently from, and therefore may not be comparable
to, similarly titled measures used by other companies.
Three months ended Nine months ended
September 30, September 30,
2020 2019 2020 2019
GAAP net income (loss) $ 11,286 $ (6,109) $ 19,794 $ (20,521)
Non-GAAP adjustments:Stock-based compensation expense(1) 5,165 4,137 15,700
12,562
Intangible asset amortization(2) 16,795 3,688 43,885
11,064
Non-cash interest expense(3) 2,567 - 6,427
-
Nucynta royalty adjustment (4) - - 14,216
-
Provision for income taxes (5) 280 - 526
-
Total non-GAAP adjustments
23,626 Non-GAAP adjusted income$ 36,093 $ 1,716 $ 100,548 $ 3,105 (1) Represents stock-based compensation expense associated with our stock option, restricted stock unit and performance stock unit grants and our employee share purchase plan. (2) Represents amortization expense from the Nucynta Intangible Asset. (3) Represents non-cash interest expense recognized related to the accretion of debt discount and amortization of debt issuance costs. (4) Represents non-recurring adjustment for royalty expense recognized in 2020 prior to the closing of the Nucynta Asset Purchase Agreement inFebruary 2020 . The royalty expense was included as a reduction to the base purchase price for the Nucynta Asset Purchase Agreement and, upon closing, the Company was discharged of any unpaid royalties due to Assertio. (5) Represents current provision for estimated income taxes. Adjusted EBITDA Adjusted EBITDA represents GAAP net income (loss) adjusted to exclude interest expense, interest income, income tax expense, depreciation, amortization, and stock-based compensation. Adjusted EBITDA as used by us may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.
There are several limitations related to the use of adjusted EBITDA rather than net income (loss), which is the nearest GAAP equivalent, such as:
adjusted EBITDA excludes depreciation and amortization, and, although these are
? non-cash expenses, the assets being depreciated or amortized may have to be
replaced in the future, the cash requirements for which are not reflected in
adjusted EBITDA;
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we exclude stock-based compensation expense from adjusted EBITDA although (a)
it has been, and will continue to be for the foreseeable future, a significant
? recurring expense for our business and an important part of our compensation
strategy and (b) if we did not pay out a portion of our compensation in the
form of stock-based compensation, the cash salary expense included in operating
expenses would be higher, which would affect our cash position;
? adjusted EBITDA does not reflect changes in, or cash requirements for, working
capital needs;
? adjusted EBITDA does not reflect provision for income taxes or the cash
requirements to pay taxes; and
? adjusted EBITDA does not reflect historical cash expenditures or future
requirements for capital expenditures or contractual commitments.
Three months ended Nine months ended
September 30, September 30,
2020 2019 2020 2019
GAAP net income (loss) $ 11,286 $ (6,109) $ 19,794 $ (20,521)
Adjustments:
Interest expense 8,063 228 21,145 698
Interest income (3) (494) (229) (1,552)
Provision for income taxes 280 - 526 -
Depreciation 195 180 589 535
Amortization 16,795 3,688 43,885 11,064
Stock-based compensation expense 5,165 4,137 15,700 12,562
Total adjustments $ 30,495 $ 7,739 $ 81,616 $ 23,307
Adjusted EBITDA $ 41,781 $ 1,630 $ 101,410 $ 2,786
First Quarter Second Quarter Third Quarter
2020 2020 2020
GAAP net income $ 450 $ 8,058 $ 11,286
Adjustments:
Interest expense 4,823 8,259 8,063
Interest income (212) (14) (3)
Provision for income taxes - 246 280
Depreciation 198 196 195
Amortization 10,295 16,795 16,795Stock-based compensation expense 4,951 5,584 5,165 Total adjustments$ 20,055 $ 31,066 $ 30,495 Adjusted EBITDA$ 20,505 $ 39,124 $ 41,781 First Quarter Second Quarter Third Quarter Fourth Quarter 2019 2019 2019 2019 GAAP net loss$ (9,700) $ (4,712) $ (6,109) $ (2,201) Adjustments: Interest expense 234 236 228 211 Interest income (526) (532) (494) (383) Provision for income taxes - - - - Depreciation 184 171 180 196 Amortization 3,688 3,688 3,688 3,688
Stock-based compensation expense 4,263 4,162
4,137 3,966
Total adjustments $ 7,843 $ 7,725 $ 7,739 $ 7,678
Adjusted EBITDA $ (1,857) $ 3,013 $ 1,630 $ 5,477
CONTRACTUAL OBLIGATIONS
With the exception of the Loan Agreement with Pharmakon and issuance of
convertible notes previously discussed, there have been no material changes to
the contractual obligations and commitments described under Management's
Discussion and Analysis of Financial Condition and Results of Operations in
our
most recent Annual Report.
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OFF-BALANCE SHEET ARRANGEMENTS
We did not have during the periods presented any offbalance sheet arrangements,
as defined under
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