Forward Looking Statements
All statements, other than statements of historical facts, included in this
Quarterly Report on Form 10-Q, including statements regarding our estimates,
expectations, beliefs, intentions, projections or strategies for the future,
results of operations, financial position, net sales, projected costs, prospects
and plans and objectives of management for future operations may be
"forward-looking statements" within the meaning of the safe harbor provisions of
the
Moreover, we operate in a very competitive and rapidly changing environment. New
risks emerge from time to time. It is not possible for our management to predict
all risks, nor can we assess the impact of all factors on our business or the
extent to which any factor, or combination of factors, may cause actual results
to differ materially from those contained in any forward-looking statements we
may make. Before investing in our common stock, investors should be aware that
the occurrence of the risks, uncertainties and events described in the section
entitled "Risk Factors" in our Annual Report on Form 10-K, for the year ended
Although we believe that the expectations reflected in the forward-looking statements are reasonable, forward-looking statements are inherently subject to known and unknown business, economic and other risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report. We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Quarterly Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected.
You should read this Quarterly Report, the documents that we reference in this
Quarterly Report and have filed with the
Unless otherwise indicated, the terms "Rubicon," the "Company," "we," "us," and
"our" refer to
OVERVIEW
The Company consisted of two primary operating subsidiaries,
RTW is a vertically integrated, advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. We use our proprietary crystal growth technology to produce high-quality sapphire products to meet our customers exacting specifications. We believe that we continue to have a reputation as one of the highest quality sapphire producers in the market. We provide optical and industrial sapphire products in various shapes and sizes, including round and rectangular windows and blanks, domes, tubes and rods.
Historically, we have also provided sapphire products to the LED and mobile
device markets, which are the largest markets for sapphire. However, given
competitive pressures in those markets, in the fourth quarter of 2016 we
announced our decision to limit our focus to the optical and industrial sapphire
markets and exit the LED market. Following this decision, we developed a plan to
close our
We operate in a very competitive market. Our ability to expand our optical and industrial business and acceptance of new product offerings are difficult to predict.
In addition, our current optical and industrial sapphire business serves smaller markets than our historical undertakings, therefore, we are actively evaluating the acquisition of profitable companies outside of the sapphire market to utilize our substantial NOL carry-forwards.
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On
Direct Dose Rx was a specialized pharmacy that provides prescription medications, over-the-counter drugs and vitamins to patients being discharged from skilled nursing facilities and hospitals and directly to retail customers who want such medications delivered to their home. The delivered products are sorted by the dose, date and time to be taken and come in easy to use perforated strip-packaging as opposed to separate pill bottles. Direct Dose Rx is currently licensed to operate in 11 states. The services offered by Direct Dose Rx used to benefits patients, skilled nursing facilities and hospitals by reducing the risk of hospital readmissions.
Historically, a significant portion of the Company's revenue has been derived
from sales to relatively few customers. For the three months ended
Customers individually representing more than 10% of trade receivables accounted
for approximately 85% and 44% of accounts receivable as of
We recognize revenue based upon the shipping terms with our customers. Delays in
product orders or changes to the timing of shipments could cause our quarterly
revenue to vary significantly. We sell our products on a global basis, and
historically derived a significant portion of our revenue from customers outside
of the
Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing-related overhead, such as utilities, depreciation, provisions for excess and obsolete inventory reserves, idle plant charges, outsourcing costs, freight, warranties and pharmaceutical products. We purchase materials and supplies to support current and future demand for our products. We are subject to variations in the cost of consumable assets from period to period because we do not have long-term fixed-price agreements with our suppliers. We currently outsource some of our production processes and needs.
Our operating expenses are comprised of sales and marketing, and general and administrative ("G&A") expenses. G&A expenses consist primarily of compensation and associated costs for finance, human resources, information technology and administrative activities, including charges for accounting, legal services and insurance. Additionally, the majority of our stock-based compensation relates to administrative personnel and is accounted for as a G&A expense.
Other income consists of interest income, unrealized gain (loss) on investments, realized gain (loss) on investments and realized gains (loss) on currency translation.
We account for income taxes under the asset and liability method, whereby the
expected future tax consequences of temporary differences between the book value
and the tax basis of assets and liabilities are recognized as deferred tax
assets and liabilities, using enacted tax rates in effect for the year in which
the differences are expected to be recognized. Our analysis of ownership changes
that limit the utilization of our NOL carry-forwards as of
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We continue to review a variety of strategic alternatives with a goal of providing greater value to our stockholders. These alternatives could result in, among other things, further modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling the business, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potential acquisitions or recapitalizations, or we may continue to operate with our current business plan and strategy. We cannot provide assurance that this process will result in the consummation of any transaction, or that the consummation of any transaction will provide greater value to our stockholders.
Direct Dose Rx revenue and expenses are currently not material to the consolidated financial information of the Company and therefore there is limited disclosure relating specifically to it. Based on the Company's review and analysis of ASC 205-20 Presentation of Discontinued Operations it concluded to present the discontinued operations separately.
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