TELIGENT : Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

This "Management's Discussion and Analysis of Financial Condition and Results of
Operations" section and other sections of this Quarterly Report on Form 10-Q
contain forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act
of 1934, as amended, and the Private Securities Litigation Reform Act of 1995,
that are based on current expectations, estimates, forecasts and projections
about the industry and markets in which the Company operates and on management's
beliefs and assumptions. In addition, other written or oral statements, which
constitute forward-looking statements, may be made by or on behalf of the
Company. Words such as "expects," "anticipates," "intends," "plans," "believes,"
"seeks," "estimates," variations of such words and similar expressions are
intended to identify such forward-looking statements. These statements are based
on current expectations of management and are not guarantees of future
performance, and involve certain risks, uncertainties, and assumptions, which
are difficult to predict. These risks and uncertainties include, without
limitation:

•our capital resources are not currently sufficient for us to meet our obligations as they become due, and there is substantial doubt about our ability to continue as a going concern;

•our substantial indebtedness coupled with our significant losses and negative
cash flows makes it unlikely that we will be able to generate cash sufficient to
repay our indebtedness;

•if we fail to comply with the financial covenants contained in our Senior
Credit Facilities, our senior lenders could accelerate all amounts owing
thereunder which, in turn, could result in the acceleration of all amounts owing
under our 2023 Series C Secured Convertible Notes and the 2023 Series D
Convertible Notes;

•if we fail to maintain compliance with the continued listing standards of
Nasdaq, it may result in the delisting of our common stock from the Nasdaq
Global Select Market and in the acceleration of amounts owing under our 2023
Series C Secured Convertible Notes, our 2023 Series D Convertible Notes and our
Senior Credit Facilities;

•in the event we pursue an in-court bankruptcy restructuring, we will be subject
to the risks and uncertainties associated with bankruptcy proceedings, including
the potential delisting of our common stock from trading on the Nasdaq Global
Select Market and all notes becoming due and payable; and

•issues identified by the FDA in its warning letter and additional product quality issues identified by the Company will have a negative impact on the Company's business, financial position and results of operations, and cash flows

In addition, these risks and uncertainties include competitive factors,
outsourcing trends in the pharmaceutical industry, the general economic
conditions in the markets in which the Company operates, levels of industry
research and development spending, the Company's ability to continue to attract
and retain qualified personnel, the fixed price nature of product development
agreements or the loss of customers and other factors described in the Company's
filings with the Securities and Exchange Commission, including the "Risk
Factors" section as set forth in our Annual Report on Form 10-K for the year
ended December 31, 2019, as updated below in this Quarterly Report on Form 10-Q.
Therefore, actual outcomes and results may differ materially from what is
expressed or forecasted in such forward-looking statements. The forward-looking
statements set forth herein speak only as of the date of this report. The
Company undertakes no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events or otherwise,
except as may be required by applicable law. The Company operates its business
under one reportable segment.

Company Overview

Strategic Overview

Teligent, Inc. and its subsidiaries (collectively the "Company") is a specialty
generic pharmaceutical company. All references to "Teligent," the "Company,"
"we," "us," and "our" refer to Teligent, Inc. Our mission is to become a leader
in the specialty generic pharmaceutical market. Our platform for growth is
centered around the development, manufacturing and marketing a portfolio of
generic pharmaceutical products in our own label in topical, injectable, complex
and ophthalmic dosage forms. We believe that expanding our development and
commercial base beyond topical generics, historically the cornerstone of our
expertise, to include injectable generics, complex generics and ophthalmic
generics (what we call our "TICO" strategy"), will leverage our existing
expertise and capabilities, and broaden our platform for more diversified
strategic growth.
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We currently market and sell generic topical and generic and branded generic
injectable pharmaceutical products in the United States and Canada. In the
United States, we currently market thirty-eight generic topical pharmaceutical
products and four branded injectable pharmaceutical products. We have received
FDA approvals for thirty-six topical generic products from our internally
developed pipeline and we have seventeen Abbreviated New Drug Applications,
("ANDAs") submitted to the FDA that are awaiting approval. In Canada, we sell
thirty-six generic and branded generic injectable products and medical
devices. In addition, we have 45 product candidates at various stages of our
development pipeline. Generic pharmaceutical products are bioequivalent to their
brand name counterparts. We also provide contract manufacturing services to the
pharmaceutical, ("OTC"), and cosmetic markets. We operate our business under one
segment. Our common stock is traded on the Nasdaq Global Select Market under the
trading symbol "TLGT." Our principal executive office, laboratories and
manufacturing facilities are located at 105 Lincoln Avenue, Buena, New Jersey.
We have additional offices located in Iselin, New Jersey, Mississauga, Canada,
and Tallinn, Estonia. As of September 30, 2020, we decided to reposition the
research and development operation mainly performed at our Tallinn, Estonia
office to our US manufacturing site at Buena, New Jersey and consequently to
dissolve our Estonia operation.

The manufacturing and commercialization of generic specialty pharmaceutical markets is competitive, and there are established manufacturers, suppliers and distributors actively engaged in all phases of our business. We currently manufacture and sell topical generic pharmaceutical products under our own label.

The three large wholesale drug distributors are AmerisourceBergen Corporation
("ABC"); Cardinal Health, Inc. ("Cardinal"); and McKesson Drug Company,
("McKesson"). ABC, Cardinal and McKesson are key distributors of our products,
as well as a broad range of health care products for many other companies. None
of these distributors is an end user of our products. Generally, if sales to any
one of these distributors were to diminish or cease, we believe that the end
users of our products would likely find little difficulty obtaining our products
either directly from us or from another distributor. However, the loss of one or
more of these distributors, together with a delay or inability to secure an
alternative distribution source for end users, could have a material negative
impact on our revenue, business, financial condition and results of operations.
There are generally three major negotiating entities in the US market. Walgreens
Boot Alliance, Inc. consists of Walgreens, Amerisource Bergen's PRxO Generics
program, and Econdisc members. Red Oak Sourcing consists of CVS and Cardinal's
source program. Finally, ClarusOne consists of Walmart, RiteAid and McKesson's
OneStop program. A loss of any of these major entities could result in a
significant reduction in revenue.

We consider our business relationships with ABC, Cardinal and McKesson to be in
good standing and have fee for services contracts with each of them. However, a
change in purchasing patterns, a decrease in inventory levels, an increase in
returns of our products, delays in purchasing products and delays in payment for
products by one or more of these distributors could have a material negative
impact on our revenue, business, financial condition and results of operations.
We continue to analyze the market for other specialty generic drug products
through internal research and development. In addition, we continue to explore
business development opportunities to add additional products and/or
capabilities to our existing portfolio.

For the three months ended September 30, 2020, three customers accounted for 47%
of the Company's revenue consisting of 21%, 13% and 13%, respectively. For the
three months ended September 30, 2019, two of the Company's customers accounted
for 47% of the Company's revenue, consisting of 35% and 12%, respectively. For
the nine months ended September 30, 2020, two of the Company's customers
accounted for 34% of the Company's revenue, consisting of 22% and 12%,
respectively. For the nine months ended September 30, 2019, two of the Company's
customers accounted for 48% of the Company's revenue, consisting of 29% and 19%,
respectively. Accounts receivable related to the Company's major customers
comprised 46% of all accounts receivable as of September 30, 2020 and 47% as of
September 30, 2019, respectively. The loss of one or more of these major
customers could have a significant impact on our revenues and harm our business
and results of operations.

Our customers in the contract manufacturing business generally consist of
pharmaceutical companies, as well as cosmetic and OTC product marketers, who
require product development/manufacturing support. For the three months ended
September 30, 2020, approximately 55% of our contract manufacturing revenue was
derived from pharmaceutical projects, as compared to 0% of total contract
manufacturing revenue for the three months ended September 30, 2019. For the
nine months ended September 30, 2020, approximately 42% of our contract
manufacturing revenue was derived from pharmaceutical projects, as compared to
53% of total contract manufacturing revenue for the nine months ended September
30, 2019. None of our contract manufacturing services customers represented
greater than 10% of total revenue for the three and nine months ended
September 30, 2020 and 2019, respectively.

FDA Warning Letter and Quality Issues

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The Company received a warning letter from the FDA in November 2019 relating to
the Company's Buena, NJ manufacturing facility resulting from an inspection at
such facility from April 2, 2019 to May 20, 2019. The warning letter cited
issues regarding out-of-specification test results, the Company's stability
program, its complaint handling, and drug product validation issues. The Company
investigated the issues with the assistance of a consultant, responded to the
FDA in December 2019 and March 2020, and submitted a final closeout letter on
April 12, 2020. On August 13, 2020, the Company received an additional comment
letter from the FDA in which the FDA indicated that it had reviewed the
Company's responses and deemed them to be inadequate as the Company failed to
address and/or provide supporting documentation to several of the concerns
raised in the warning letter. The Company has since submitted response letters
to the FDA outlining certain changes in its practices, submitting additional
documentation to support previous and ongoing independent assessments, and
providing additional detail on ongoing remediation projects (including
comprehensive product quality assessments) to ensure all of the Company's
products are safe, effective and compliant.

As part of the Company's efforts to remediate the issues identified in the FDA's
warning letter and to strengthen its quality systems, the Company has undertaken
a comprehensive review of all of its products that it anticipates being complete
during the fourth quarter of 2020. While the review did not identify material
issues with many of the Company's products, it did identify issues of
non-conformance with respect to certain products that the Company is actively
reviewing and remediating. The Company believes there will be supply disruptions
or process changes with respect to these products including product recalls,
long-term production pauses, short-term clear path to market production pauses,
and continued production with minor process corrections. The Company believes
disruptions with respect to certain of its products and the diversion of
resources to remediate the product quality issues will have a negative impact on
the Company's business, financial position, operating results and cash flows
during the fourth quarter of 2020 and during 2021, including reducing its
revenue, negatively impacting operating/(loss), and possibly resulting in
impairment and other charges. Further, the Company anticipates that the FDA's
issuance of the warning letter and review of the Company's processes will
continue to delay the FDA's pre-approval inspection for commercial production on
the newly installed injectable line at the Buena, NJ facility. The continued
failure to address the issues identified by the FDA in its warning letter and
those subsequently identified by the Company in its comprehensive product
quality review as well as the continued delay in obtaining the FDA's
pre-approval inspection for commercial production on the newly installed
injectable line at the Buena, NJ facility will have a negative impact on the
Company's business, financial position, operating results and cash flows.

COVID-19 Pandemic Update:

The current financial results and anticipated future results of the Company have been negatively impacted due to COVID-19.

In March 2020, the World Health Organization declared the outbreak of novel
coronavirus disease ("COVID-19") as a pandemic, and the Company expects its
operations in all locations to be affected as the virus continues to
proliferate. In alignment with the directives in the state of New Jersey, as a
Pharmaceutical manufacturing facility, Teligent is considered "essential" and
the Company has remained open for its business. The Company will stay open as
long as permitted and conditions remain safe for its employees to continue to
supply its products to the patients that need them.

Teligent's first priority is the health and safety of its employees while
positioning its business to manage throughout this pandemic. The outbreak and
any preventative or protective actions that Teligent, its customers, suppliers
or other third parties with which it has business relationships, or governments
may take in respect of the COVID-19 outbreak could disrupt its business and the
business of its customers. Global health concerns, such as COVID-19, could also
result in social, economic, and labor instability in the countries in which the
Company or the third parties with whom it engages operate. In addition, the
COVID-19 outbreak could result in a severe economic downturn and has already
significantly affected the financial markets of many countries. A severe or
prolonged economic downturn or political disruption could result in a variety of
risks to its business, including its ability to raise capital when needed on
acceptable terms, if at all. A weak or declining economy or political disruption
could also strain its suppliers or third party CMOs, possibly resulting in
supply disruption, or cause its customers to delay purchases or payments for its
products. The COVID-19 pandemic may also create delays in the review and
approval of its regulatory submissions as well as its pending reinspection
related to the Company's warning letter and pre-approval inspection for
commercial production on the newly installed injectable line at the Company's
New Jersey facility by the FDA. Given these uncertainties, the Company is unable
to predict the overall impact that the COVID-19 pandemic will have on its
business as of the date of this filing.

The Company has taken preventative measures to help ensure business continuity
while maintaining safe and stable operations. It has directed all non-production
employees to work from home in accordance with state and local guidelines and
has implemented social distancing measures on-site at its manufacturing facility
to protect employees and its products. Its employees are provided daily personal
protective equipment upon their arrival to the facility and the Company has
implemented
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temperature monitoring services at its newly established single point of
entrance. The Company has also implemented a routine sanitization process of the
facility. It has adjusted its production schedule to concentrate on high demand
or low stock product to help reduce employee concentrations while continuing to
focus on production levels necessary to meet our customer demand.

The Company's first quarter financial results and anticipated future results had
been negatively impacted due to COVID-19. Under the provisions of ASC 360-10-55,
the Company continues to review its long-lived assets for impairment whenever
events or changes in circumstances indicate that the carrying amount of the
assets may not be recoverable. The Company performs the analysis by comparing
the expected future cash flows of the assets to the carrying value of the
related long-lived assets. The Company recorded impairment charges of $8.4
million in the first quarter of 2020 related to trademarks and technology of
$4.9 million and product acquisition costs of $3.5 million (Note 10). There were
no changes to the assumptions made at the first quarter of this year that would
suggest further impairment. The Company did not have impairment triggers related
to the long-lived assets after the first quarter of this year.

The Company's financial performance has been adversely impacted by the
unprecedented COVID-19 pandemic. In the first quarter of 2020, the Company
initiated a company-wide cost reduction initiative targeted at eliminating
discretionary spending and ensuring that remaining expenditures are reduced in
line with the lower demand for its products in light of COVID-19 impact to the
business. Effective on May 4, 2020, the Company's Executive Leadership Team and
all employees with annual salaries exceeding $100,000 accepted a 20% and 15%
eight-week reduction in pay, respectively. Over the same eight-week period, the
Company furloughed a portion of employees at its Buena, NJ manufacturing
facility. Effective on June 19, 2020, the Company initiated a
reduction-in-force, terminating 53 employees and furloughing an additional 15
employees thus reducing the employee base at its Buena, NJ facility. Terminated
employees were offered a severance package and the Company will pay both the
employee and employer portion of health benefits for the employees that were
furloughed.

On May 15, 2020, the Company received $3.4 million of proceeds from the U.S.
Small Business Administration Paycheck Protection Program ( the "Government
Grant Advance") and has been utilizing the advance to balance its
employee-related actions previously taken with the business needs to ensure a
significant portion of the loan will be forgiven. The Advance matures in 2 years
with accrued interest at an annual rate of 1.00%, being deferred for payments
until the date of forgiveness or 24 weeks from the date when the fund was
received by the Company. According to ASC 450-30, Gain Contingencies, the
Company recorded the $3.4 million of proceeds in the Government Grant Advance
line on its Condensed Consolidated Balance Sheet as of September 30, 2020. The
Company will record the related earnings impact on its Condensed Consolidated
Statement of Operations in the period when the associated conditions attached to
the Advance are reasonably assured to be met.

In May 2020, the Company modified one of its office lease agreements and
obtained a deferral of 2 months rental payments amid the Pandemic. According to
FASB Staff Q&A on Topic 842 and 841, because the amount of the total
consideration paid under the modified lease agreement is substantially the same
as the original agreement, except the deferral of the lease payments which only
affect the timing of the payments, the Company accounted for the concession as
if no changes to the lease contract were made and continues to recognize
expenses during the deferral period.

In order to preserve cash and align manufacturing-related resources with
downward adjustments made to its production schedule, the Company initiated a
reduction in force at its Buena, NJ manufacturing facility effective June 19,
2020. In connection with the reduction, the Company terminated 53 employees and
furloughed another 15 employees. The Company's employee base after these actions
and a company-wide effort to reduce recruitment is down 31% from the start of
the year. The associated one-time employee severance costs totaled $0.3 million
and are reflected in primarily cost of revenues and the product development and
research expenses in the Company's Condensed Consolidated Statement of
Operations in the nine months ended September 30, 2020. In addition, the company
decided to shift its research and development operation being performed in its
Tallinn, Estonia office to its US manufacturing site at Buena, New Jersey and
subsequently to wind-down its Estonia operation. In September of 2020, the
Company entered into a letter of intent with its former Chief Executive Officer
to sell certain of Estonia's assets, primarily lab machinery, equipment and
office furniture for a sales price of $125 thousand in cash.

The Company markets a portfolio of FDA-approved medicines, including several
generic alternatives in the United States. These products include both
injectable and topical prescription medicines. From late March to the end of
April 2020, several data sources suggested that patient visits to the
dermatologist in the United States were down more than 50% in comparison to the
typical number of dermatologist visits realized prior to shelter-in-place
guidelines. As a consequence of COVID-19, dermatology visits are still down vs.
pre-pandemic levels. But, as shelter-in-place guidelines across the country were
relaxed, several data sources reflected an increase in dermatology visits to
approximately 80% of normal visits pre COVID-19 and thus patient demand for
topical pharmaceutical products. Since June, there have been positive signs that
the market for dermatology pharmaceutical products is rebounding driven by
increased 90-day prescription refills approved by the Pharmacy Benefit
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Managers and the emergence of stronger telehealth networks. In fact, since
mid-June data sources have shown the category return to 85% of pre-pandemic
levels. Teligent sales have mostly mirrored these increases, although
percentages vary by product. The Company remains cautiously optimistic given the
consequences of COVID-19 in some locations have proven to change rapidly. Due to
the level of uncertainty and potential consequences of less stringent
guidelines, it is still extremely challenging to predict the pace of the
anticipated increase and whether or not there might be a second wave of decline.

Product and Pipeline Approvals

There were no significant approvals announced in 2020 to date.

Results of Operations

Three months ended September 30, 2020 compared to September 30, 2019

We had net loss of $0.5 million, or $0.08 per share, for the three months ended
September 30, 2020 (the "Current Period"), compared to a net loss of $7.1
million, or $1.32 per share, for the three months ended September 30, 2019 (the
"Prior Period"). Product Sales, net, include Company Product Sales and Contract
Manufacturing Sales.

Revenues:
                                                Three Months Ended September 30,                     Increase/(Decrease)
Components of Revenue:                              2020                   2019                      $                      %
Product sales, net                           $         14,239          $   18,395          $           (4,156)               (23) %
Research and development services and
other income                                              100                  71                          29                 41  %
Total Revenues                               $         14,339          $   18,466          $           (4,127)               (22) %



Total revenues decreased by 22% to $14.3 million in the Current Period from the
$18.5 million recorded in the Prior Period. The $4.1 million decrease in
comparison to the Prior Period was driven primarily by a net reduction of $0.8
million in our US Sales due to lost contract volume and incremental price
erosion amid pandemic and a $3.4 million decrease in Canadian revenues due to
supply constraints.

Research and development services and other revenues will not be consistent and
will vary, from period to period, depending on the required timeline of each
development project and/or agreement.

Costs and Expenses:
                                                 Three Months Ended September 30,                      Increase/(Decrease)
                                                    2020                    2019                      $                       %
Cost of revenues                             $         14,225          $    11,186          $            3,039                  27  %
Selling, general and administrative
expenses                                                6,543                5,007                       1,536                  31  %
Product development and research
expenses                                                2,370                2,064                         306                  15  %
Totals costs and expenditures                $         23,138          $    18,257          $            4,881                  27  %



Cost of revenues increased by 27% to $14.2 million in the Current Period in
comparison to the $11.2 million reported in the Prior Period. The deteriorated
gross profit in the Current Period was mainly attributable to build in inventory
reserves and increased absorption allocations due to lower contract volume and
price erosion in light of COVID-19.

Selling, general and administrative expenses in the Current Period increased by
$1.5 million to $6.5 million as compared to a $5.0 million in the Prior Period.
The increase was primarily due to i) a $0.9 million increase in bad debt
expenses, ii) a $0.8 million increase in consulting fees, partially offset by
iii) a $0.2 million decline in personnel costs.

Product development and research expenses were $2.4 million in the Current
Period and $2.1 million in the Prior Period, The change was primarily due to a
$0.9 million increase in write off of material costs associated with research
and development activities and a $0.1 million increase in occupancy due to the
write down of the Estonia fixed assets as part of the Business
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Transfer Agreement (Note 15), partially offset by declined personnel costs of $0.5 million and reduced outside testing of $0.2 million.

Other (Expense) Income, net:

                                              Three Months Ended September 30,                       (Increase)/Decrease
                                                  2020                   2019                      $                        %
Interest and other expense, net            $         (8,056)         $   (5,160)         $           (2,896)                  (56) %
Foreign currency exchange
gain/(loss)                                           1,856              (2,167)                      4,023                  (186) %
Gain on debt restructuring                           10,882                   -                      10,882                  (100) %
Inducement loss                                        (701)                  -                        (701)                 (100) %
Change in the fair value of
derivative liabilities                                4,326                   -                       4,326                  (100) %

Other (expense) income, net                $          8,307          $   (7,327)         $           15,634                   213  %

The net increase in interest and other expense in the Current Period of $2.9 million is related to the increase in total debt and a higher cost of capital.

Foreign exchange gain of $1.9 million in the Current Period was mainly related
to the foreign currency translation of our intercompany loans denominated in
U.S. dollars to our foreign subsidiaries to be repaid in November 2022.
Depending on the changes in foreign currency exchange rates, we will continue to
record a non-cash gain or loss on translation for the remaining term of these
loans.

The gain on debt restructuring and inducement loss of $10.2 million in the
Current Period is due to the exchange of Series A and Series B Convertible Notes
for Series C and Series D Convertible Notes in the amount of $8.2 million as
well as the conversion of Series D Convertible Notes in the amount of $2.0
million.

The change in the fair value of derivatives of $4.3 million was related to a
$5.6 million gain on the Senior Credit Facilities offset by a $1.3 million loss
on the Senior C Notes.
Net loss attributable to common stockholders (in thousands, except per share
numbers):

                                            Three Months Ended September 30,                     Increase/(Decrease)
                                               2020                    2019                      $                      %
Net loss attributable to common
stockholders                            $           (510)         $    (7,113)         $           (6,603)               (93) %
Basic loss per share                    $          (0.08)         $     (1.32)         $            (1.24)                94  %



Net loss for the Current Period was $0.5 million as compared to a net loss of
$7.1 million of the Prior Period. The decrease was primarily due to a decrease
in revenues of $4.1 million, an increase in interest expense of $2.9 million, a
$4.9 million increase in cost and expenses, offset by the gain on debt
restructuring and inducement loss of $10.2 million, change in the fair value of
derivative liabilities of $4.3 million and a $4.0 million increase on foreign
currency exchange gain, as discussed above.

Nine months ended September 30, 2020 compared to September 30, 2019

We had a net loss of $41.7 million, or $7.32 per share, for the nine months
ended September 30, 2020 (the "Current Year"), compared to a net loss of $19.8
million, or $3.68 per share, for the nine months ended September 30, 2019 (the
"Prior Year"). Product Sales, net, include Company Product Sales and Contract
Manufacturing Sales.

Revenues:
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                                                 Nine months ended September 30,                     Increase/(Decrease)
Components of Revenue:                              2020                   2019                      $                      %
Product sales, net                           $         34,910          $   49,688          $          (14,778)               (30) %

Research and development services and
other income                                              462                 241                         221                 92  %
Total Revenues                               $         35,372          $   49,929          $          (14,557)               (29) %



Total revenues decreased by 29% to $35.4 million of the Current Year from the
$49.9 million reported in the Prior Year. The decrease of $14.6 million was
driven primarily by a net reduction of $8.7 million in US sales due to lost
contract volume and incremental price erosion and a decrease of $5.9 million in
Canadian revenues due to supply constraints.

Research and development services and other revenues may not be consistent and
will vary, from period to period, depending on the required timeline of each
development project and/or agreement.

Costs and Expenses:
                                                 Nine months ended September 30,                       Increase/(Decrease)
                                                    2020                    2019                      $                       %
Cost of revenues                             $         33,919          $    28,346          $            5,573                  20  %
Selling, general and administrative
expenses                                               18,249               15,707                       2,542                  16  %
Impairment charges                                      8,373                    -                       8,373                 100  %
Product development and research
expenses                                                6,050                7,721                      (1,671)                (22) %
Totals costs and expenditures                $         66,591          $    51,774          $           14,817                  29  %



Cost of revenues increased by 20% to $33.9 million of the Current Year from a
$28.3 million of the Prior Year. The deteriorated gross margin resulted from
continued inventory management/build and decreased volume lowering fixed cost
absorption and product mix changes in light of COVID-19 this year.

Selling, general and administrative expenses in the Current Year increased by
$2.5 million to $18.2 million as compared to $15.7 million reported in the Prior
Year. The increase was primarily due to i) increased bad debt expenses of $1.2
million, ii) increased personnel costs of $0.9 million, iii) increased
consulting services of $0.8 million and iv) increased legal fees and other of
$0.5 million, partially offset by v) reduced ANDA filing fees of $ 0.5 million,
vi) decrease in audit fees of $0.2 million and vii) reduced travel expenses of
$0.2 million.

An intangible assets impairment charge was recorded in the Current Year of $8.4
million related to trademark and technology of $4.9 million and product
acquisition costs of $3.5 million. There were no impairment charges in the Prior
Year.

Product development and research expenses decreased by $1.7 million to $6.0
million as compared to $7.7 million reported in the Prior Year. The decrease in
product development and research expenses was primarily due to i) a $ 1.3
million of reduced personnel costs, ii) a $0.7 million of reduced outside
testings, iii) reduced ANDA filings, lab supplies, occupancy and business
insurance expenses aggregated to $0.5 million, partially offset by iv) a $0.9
million increase in write off of material costs associated with research and
development activities.

Other (Expense) Income, net:

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                                                Nine months ended September 30,                       (Increase)/Decrease
                                                   2020                   2019                      $                        %
Interest and other expense, net             $        (21,452)         $  (15,262)         $           (6,190)                   41  %
Foreign currency exchange gain/(loss)                  2,384              (2,458)                      4,842                  (197) %
Gain on debt restructuring                            10,882                   -                      10,882                   100  %
Inducement loss                                         (701)                  -                        (701)                  100  %
Change in the fair value of
derivative liabilities                                (1,523)                  -                      (1,523)                  100  %
Debt partial extinguishment of 2019
Notes                                                      -                (185)                        185                  (100) %
Other (expense) income, net                 $        (10,410)         $  (17,905)         $            7,495                   (42) %



Interest and other expense, net increased in the Current Year primarily due to
the increase in interest expense of $6.2 million related to our current debt
structure.

Foreign exchange gain of $2.4 million in the Current Year was related to the
foreign currency translation of our intercompany loans denominated in U.S.
dollars to our foreign subsidiaries to be repaid in November 2022. Depending on
the changes in foreign currency exchange rates, we will continue to record a
non-cash gain or loss on translation for the remaining term of these loans.

The gain on debt restructuring and inducement loss of $10.2 million in the
Current Period is due to the exchange of Series A and Series B Convertible Notes
for Series C and Series D Convertible Notes in the amount of $8.2 million as
well as the conversion of Series D Convertible Notes in the amount of $2.0
million.

The change in the fair value of derivatives of $1.5 million included a $1.2
million loss on the derivative liability pertaining to the Series C Notes, a
$0.8 million loss on the Warrants, partially offset by a $0.5 million gain on
the 2023 Series B Notes in the Current Year (Note 9).

Debt partial extinguishment of the 2019 Notes was zero in the Current Year compared to $0.2 million in the Prior Year.

Net loss attributable to common stockholders (in thousands, except per share
numbers):

                                            Nine months ended September 30,                      Increase/(Decrease)
                                               2020                    2019                      $                      %
Net loss attributable to common
stockholders                            $        (41,678)         $   (19,826)         $           21,852                110  %
Basic loss per share                    $          (7.32)         $     (3.68)         $             3.64                 99  %



Net loss for the Current Year was $41.7 million as compared to a net loss of
$19.8 million reported in the Prior Year. The decline was due primarily to a
decrease in revenues of $14.6 million, an increase in cost and expenses of $14.8
million, an increase in interest expense of $6.2 million, the derivative
liability increase of $1.5 million offset by the gain on debt restructuring and
inducement loss of $10.2 million and a $4.8 million increase of foreign exchange
gain, as stated above.

Liquidity and Capital Resources

                                       57
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The Company has incurred significant losses and generated negative cash flows
from operations in recent years and expects to continue to incur losses and
generate negative cash flow for the foreseeable future. As a result, we had an
accumulated deficit of $163.2 million, total principal amount of outstanding
borrowings of $198.8 million, and limited capital resources to fund ongoing
operations at September 30, 2020. These capital resources were comprised of cash
and equivalents of $10.4 million at September 30, 2020 and the generation of
cash inflows from working capital. The Company is not currently generating
revenues from operations that are sufficient to cover its operating expenses,
and its available capital resources are not sufficient for it to continue to
meet its obligations as they become due. As a result, the Company has engaged
financial and legal advisors to assist it in, among other things, analyzing all
available strategic alternatives to address its liquidity and capital structure
including, but not limited to, making significant changes to its operating plan,
pursuing a merger or other transaction involving a change of control, or
restructuring its outstanding debt via out of court or in court methods,
including the pursuit of a plan of reorganization which would be filed under
Chapter 11 of the U.S. Bankruptcy Code and/or ceasing its operations. However,
the Company cannot provide assurances that additional capital will be available
when needed or that any strategic alternatives or restructuring pursued will be
on acceptable terms.

The Company's liquidity needs have typically arisen from the funding of its new
manufacturing facility, product manufacturing costs, research and development
programs, and the launch of new products. In the past, the Company has met these
cash requirements through cash inflows from operations, working capital
management, and proceeds from borrowings discussed in Note 8. Although the
construction of the Company's new manufacturing facility was substantially
completed in October 2018, additional investment was made in order to prepare
the facility and the Company's employees for a prior approval inspection from
the FDA for the new injectable line. The Company's liquidity has been negatively
impacted in 2020 as a result of the COVID-19 pandemic, and the Company believes
its liquidity will be negatively impacted during the fourth quarter of 2020 and
during 2021 by disruptions with respect to certain of its products and the
diversion of resources to remediate the product quality issues identified in
connection with the Company's response to the FDA's warning letter. In addition,
the Company expects to continue to incur significant expenditures for the
development of new products in its pipeline, and the manufacturing, sales and
marketing of its existing products. As described above, notwithstanding the
Company's significant current liquidity needs, the Company cannot provide
assurances that additional capital will be available on acceptable terms or at
all.

The $5.8 million decrease in our cash during the nine months ended September 30,
2020 was mainly to support our operational activities, which included continued
inventory management/build to help avoid failure-to-supply fees and normal
timing differences in working capital balances. In addition, we had an
accumulated deficit of $163.2 million as of September 30, 2020, inclusive of a
$41.7 million net loss in this year.

2023 Series A Convertible Notes

In the beginning of 2019, the Company used a total of $2.7 million of proceeds
from the Senior Credit Facilities to repurchase a portion of the remaining 2019
Convertible 3.75% Senior Notes. The repurchase of the 2019 Convertible 3.75%
Senior Notes was considered a debt extinguishment under ASC 470-50. The 2019
Convertible 3.75% Senior Notes were accounted for under cash conversion guidance
ASC 470-20, which required the Company to allocate the fair value of the
consideration transferred upon settlement to the extinguishment of the liability
component and the reacquisition of the equity component upon derecognition. In
accordance with the guidance above, the Company allocated a portion of the $2.7
million to the extinguishment of the liability component equal to the fair value
of that component immediately before extinguishment and recognized a $0.2
million extinguishment loss in the Condensed Consolidated Statement of
Operations to measure the difference between (i) the fair value of the liability
component and (ii) the net carrying value amount of the liability component
(which was already net of any unamortized debt issuance costs). The reduction of
Additional Paid in Capital in connection with this extinguishment was
immaterial. The Company settled the remaining 2019 Convertible 3.75% Senior
Notes of $13.0 million in principal upon its maturity in December 2019.

Following the issuance of the 2023 Series D Convertible Notes described below,
all amounts owing with respect to the 2023 Series A Convertible Notes had been
extinguished through exchange of 2023 Series C and 2023 Series D Convertible
Notes (see below).

2023 Series B Convertible Notes

On October 31, 2019, the Company closed its offering of the 2023 Series B
Convertible Notes. The 2023 Series B Convertible Notes were scheduled to mature
in May 2023 and were convertible at the option of the holder at any time prior
to their maturity. The initial conversion price was $7.20 per share, subject to
adjustment under certain circumstances.

As part of the offering, the Company entered into agreements with certain
holders of its existing 2023 Series A Convertible Notes to exchange $9.0 million
of the 2023 Series A Convertible Notes for $5.1 million of the 2023 Series B
Convertible Notes.
                                       58
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The gross cash proceeds of approximately $29.3 million from the financing were
used to extinguish the Company's existing 2019 Convertible 3.75% Senior Notes in
December 2019 and intended to pay amounts owing with respect to other
indebtedness and to fund general corporate and working capital requirements. The
net proceeds from the financing were $26.9 million after deducting a total of
$2.3 million of the initial purchasers' discounts and professional fees
associated with the transaction. The 2023 Series B Convertible Notes bore
interest at a rate of 7.00% per annum if paid in cash, semiannually in arrears
on May 1 and November 1 of each year, beginning on May 1, 2020. The Company also
had an option, and agreed with its senior lender, to PIK the interest at 8.00%
per annum, to defer cash payments. The Company elected the paid-in-kind interest
option and increased the principal balance of the 2023 Series B Convertible
Notes by $0.6 million and $2.0 million during the three months and nine months
ended September 30, 2020.

Following the issuance of the 2023 Series D Convertible Notes described below,
all outstanding debt with respect to the 2023 Series B Convertible Notes had
been extinguished through exchange of 2023 Series C and 2023 Series D
Convertible Notes (see below).

2023 Series C Secured Convertible Notes

On July 20, 2020, the Company completed the sale and issuance of $13.8 million
aggregate principal amount of 2023 Series C Secured Convertible Notes. After
taking into account an original issue discount and other fees payable to the
Purchasers, the Company received net cash proceeds of approximately $10.0
million, which the Company is using for general corporate purposes.

The Company also issued approximately $32.3 million in aggregate principal
amount of 2023 Series C Secured Convertible Notes in exchange for approximately
$35.9 million in aggregate principal amount, plus accrued but unpaid interest
thereon, of the Company's outstanding 2023 Series B Convertible Notes, giving
effect to a 10% discount on the principal amount of the 2023 Series B
Convertible Notes exchanged. In addition, the Company issued approximately $3.7
million in aggregate principal amount of 2023 Series C Secured Convertible Notes
in exchange for approximately $8.2 million in aggregate principal amount, plus
accrued but unpaid interest thereon, of the Company's outstanding 2023 Series A
Convertible Notes, giving effect to a 55% discount on the principal amount of
the 2023 Series A Convertible Notes exchanged.

Interest on the 2023 Series C Secured Convertible Notes accrues at the rate of
9.5% per annum and is payable in kind and capitalized with principal
semiannually in arrears on March 1 and September 1 of each year, beginning on
September 1, 2020. The 2023 Series C Secured Convertible Notes will mature on
March 30, 2023, unless earlier converted or repurchased and are subordinate to
the indebtedness under the Senior Credit Facilities. The Company has elected the
paid-in-kind interest option and increased the principal balance of the 2023
Series C Secured Convertible Notes by $0.5 million in the three months ended
September 30, 2020. The Company has agreed to use its commercially reasonable
best efforts to obtain the approval of its stockholders that is required under
applicable Nasdaq rules and regulations to permit holders of the 2023 Series C
Secured Convertible Notes to beneficially own shares of common stock without
being subject to the Nasdaq Change of Control Cap. In the event that the Company
did not obtain such stockholder approval at an annual or special meeting of its
stockholders on or before October 31, 2020, holders of a majority in aggregate
principal amount of outstanding 2023 Series C Secured Convertible Notes may
elect to increase the interest rate payable on the 2023 Series C Secured
Convertible Notes to 18.0% per annum until such stockholder approval is
obtained, which will continue to be paid in kind in the form of additional
principal with respect to any applicable period in which the increased interest
rate remains in effect. Pursuant to a notice dated November 2, 2020, the holders
of a majority in principal amount of the outstanding 2023 Series C Secured
Convertible Notes elected to increase the interest rate payable on the 2023
Series C Secured Convertible Notes from 9.5% to 18.0%. The Company convened and
adjourned a special meeting of stockholders on October 22, 2020, and further
adjourned such special meeting on November 11, 2020 and November 25, 2020 due to
a lack of quorum. The special meeting of stockholders is currently rescheduled
for December 16, 2020, pursuant to which the stockholders of the Company are
being asked to approve the holders of the 2023 Series C Secured Convertible
Notes beneficially owning shares of common stock without being subject to the
Nasdaq Change of Control Cap. If the holders of the Company's common stock
approve the proposal, the interest rate payable on the 2023 Series C Secured
Convertible Notes will be decreased to 9.5% on such date.

2023 Series D Convertible Notes

On September 22, 2020, the Company completed the issuance of approximately $27.5
million aggregate principal amount of 2023 Series D Convertible Notes in
exchange for approximately $59.0 million in aggregate principal amount, plus
accrued but unpaid interest, of 2023 Series A Convertible Notes, giving effect
to a 53.4% discount on the principal amount of the 2023 Series A Convertible
Notes exchanged. The Company also issued approximately $0.4 million aggregate
principal amount of the 2023 Series D Convertible Notes in exchange for
approximately $0.5 million in aggregate principal amount, plus accrued but
                                       59
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unpaid interest, of the Company's outstanding 2023 Series B Convertible Notes,
giving effect to a 31.9% discount on the principal amount of the 2023 Series B
Convertible Notes exchanged.

Following the issuance of the 2023 Series D Convertible Notes, all amounts owing
with respect to the 2023 Series A Convertible Notes and 2023 Series B
Convertible Notes had been paid and the related indentures and the Company's
obligations thereunder were satisfied and discharged.

Senior Credit Facilities

On November 12, 2018, the Company secured a credit agreement for $120.0 million.
The facility includes three tranches of funding, an asset based revolving credit
facility of $25.0 million due November 2022 ("Revolver"), a term loan of $80.0
million due February 2023 ("2023 Term Loan"), and a delayed draw term loan of
$15.0 million also due in February 2023 ("2023 Delayed Draw Term Loan"). The
interest rate under the Revolver was calculated, at the option of the Company,
at either the one, two, three or six-month LIBOR plus 3.75% or the base rate
plus 2.75%. The interest rate on the 2023 Term Loan and the 2023 Delayed Draw
Term Loan bore interest, at the option of the Company, at either the one, two,
three or six-month LIBOR plus 8.75% or the base rate plus 7.75%, with a 24-month
paid-in-kind interest option available to the Company should it choose to defer
cash payments in order to maintain the liquidity needed to continue launching
new products, build inventory, and prepare for the FDA prior approval
inspection.

The Initial Term Loan of $50.0 million and $15.0 million of the Revolver were
drawn by the Company on December 13, 2018. On December 21, 2018, the Company
drew $20.0 million of the Delayed Draw Term Loan A. In January 2019, the Company
drew $5.0 million and subsequently the remaining $5.0 million under the Revolver
were drawn down by the Company in April 2019. On September 18, 2019, pursuant to
terms of the First Lien Credit Agreement, the Company borrowed an advance in the
aggregate principal amount of $2.5 million (the "Protective Advance"). The
Protective Advance is a secured Obligation under the First Lien Credit Agreement
and bears interest at the rate applicable to the Revolver. The Protective
Advance was subsequently repaid in November 2019 along with a repayment fee of
$0.1 million. The Company drew down the remaining $10.0 million under its
borrowing capacity of Delayed Draw Term Loan A before its expiry in December of
2019. The $15.0 million Delayed Draw Term Loan B expired upon the issuance of
the Series B Notes, prior to the Company drawing down any monies.

The Term Loans are governed by the Second Lien Credit Agreement. The Term Loans
include a 24-month paid-in-kind interest option available to the Company should
it choose to defer cash payments in order to maintain the liquidity needed to
continue launching new products, and preparing for an FDA prior approval
inspection of its new injectable manufacturing facility. The Company has elected
the paid-in-kind interest option and increased the principal balance of Term
Loans by $3.5 million and $19.2 million for the three months and since inception
through the period ended September 30, 2020, respectively.

On April 6, 2020, the Company entered (i) Amendment No. 2 of the Revolver and
Amendment No. 4 of the Term Loans (the "Amendment 4"), effective as of December
31, 2019 (together, the "April 2020 Amendments"). The April 2020 Amendments
together, among other things, (i) increase the interest rates, (ii) reset
certain prepayment premiums and modify the terms of certain mandatory
prepayments and (iii) modify certain financial covenant levels inclusive of the
disposition of prior covenants as of and for the period ended December 31, 2019.
The additions and changes to financial covenants set forth in the April 2020
Amendments: (i) add a new minimum net revenue covenant that is tested on the
last day of each fiscal quarter from March 31, 2020 until the quarter ending
December 31, 2020, (ii) reset a minimum consolidated adjusted EBITDA covenant
that is tested on the last day of each fiscal quarter ending during the period
from March 31, 2021 to maturity, (iii) eliminate a total net leverage covenant
and (iv) add a minimum liquidity covenant tested at all times during the term of
the Senior Credit Facilities.

The associated increases in interest rates were effective as of April 6, 2020.
The Revolver bears interest at a fluctuating rate of interest equal to the one,
two, three or six-month LIBOR plus a margin of 5.5% or a rate based on the prime
rate plus a margin of 4.5%, with a LIBOR floor of 1.5%. The Term Loans bear
interest at a fluctuating rate of interest equal to the one, two, three or
six-month LIBOR plus a margin of 13.0% or a rate based on the prime rate plus a
margin of 12.0%, with a LIBOR floor of 1.5%. Interest on the Senior Credit
Facilities is payable in cash quarterly in arrears (or more frequently in
connection with customary LIBOR interest provisions), provided, that the Company
may elect (and has covenanted to the lenders under its Senior Credit Facilities
and subsequent amendments thereto) to pay interest on the Term Loans in kind
through December 13, 2021 but only if the following occurs: (1) the Company
receives a "warning letter close-out letter" from the Federal Drug
Administration in response to corrective actions taken by the Company since
receipt of the warning letter in November 2019 and (2) the Company receives a
written recommendation from the Federal Drug Administration setting forth its
approval decision in respect of the pre-approval inspection for commercial
production on the newly installed injectable line at the Company's New Jersey
facility. If only one of those items occurs by December 13, 2020, then the
Company may still elect to
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pay interest in kind during 2021, but only from the time the second condition
has been satisfied until December 13, 2021. Thereafter, a portion of interest on
the loans accruing at a rate of 4.25% per annum may continue to be paid in kind.

Both April 2020 Amendments provide that in the event of receipt of net proceeds
from a disposition triggering a mandatory prepayment, net proceeds of such
disposition will be applied as follows: (i) first, to be retained by the Company
or applied to amounts outstanding under the First Lien Credit Agreement until
such time as liquidity of the Company and its subsidiaries equals $10.0 million,
(ii) next to amounts outstanding under the Revolver (without a permanent
reduction in the revolving loan commitments of the lenders) until such amounts
are paid in full (with the first lien administrative agent having the right to
waive such prepayment, in which event, such net proceeds are applied to amounts
outstanding under the Second Lien Credit Agreement), and (iii) finally, to
amounts outstanding under the Term Loans. In addition, pursuant to the Revolver,
the Company has agreed at all times to maintain book cash of the Company and its
subsidiaries not in excess of $10.0 million with any excess being required to
prepay the outstanding obligations under the Revolver.

After giving effect to the April Amendments, the effective interest rates, inclusive of the debt discounts and issuance costs for the Initial Term Loan and Delayed Draw Term Loan A were between 16.6% and 17.7% and for the various borrowing tranches of the Revolver, were between 9.6% and 10.9%.

In connection with the Term Loan Amendments dated April 6, 2020, the Company
issued to the Term Loan lenders certain Warrants to purchase up to, in the
aggregate, 538,995 of post reverse stock split shares of the Company's common
stock at an exercise price of $0.01 per share. The Warrants initially were
recorded at fair value upon issuance and classified as a liability as the
Company did not have sufficient authorized unissued shares for the Warrants'
exercise. The Warrants were remeasured to fair value up to the reverse stock
split date, with any fair value adjustments recognized in the condensed
consolidated statements of operations. The Warrants were reclassified as equity
at their fair value upon the reverse stock split date and will not be remeasured
subsequently. The estimated fair value of the Warrants on the date of issuance
of $1.4 million was recorded as a debt discount. The Warrants had a fair value
of $2.2 million as of the reverse stock split date which was reclassified to
equity. The Warrants are exercisable at any time after the reverse stock split
which occurred on May 28, 2020 and will remain exercisable, in whole or in part,
for a period of 5 years from the issuance date. As of September 30, 2020, all
538,995 Warrants remain outstanding (Note 9).

The number of shares issuable upon the exercise of the Warrants is subject to
customary adjustments upon the occurrence of certain events, including (i)
payment of a dividend or distribution to holders of shares of the Company's
common stock payable in shares of the Company's common stock, (ii) a
subdivision, capital reorganization or reclassification of the Company's common
stock or (iii) a merger, sale or other change of control transaction.

On July 20, 2020, the Company entered into (i) a Consent and Amendment No. 3 to
First Lien Revolving Credit Agreement (the "First Lien Amendment"), and (ii) a
Consent and Amendment No. 5 to Second Lien Credit Agreement (the "Second Lien
Amendment"). The First Lien Amendment amended the First Lien Credit Agreement
to, among other things, (i) permit the issuance of the New 2023 Notes and the
other transactions contemplated by the indenture related thereto, (ii) modify
the terms of certain mandatory prepayments, (iii) modify certain negative
covenants and (iv) modify certain financial covenants. The July 2020 Second Lien
Amendment amended the Second Lien Credit Agreement to, among other things, (i)
permit the issuance of the New 2023 Notes and the other transactions
contemplated by the indenture related thereto, (ii) modify the terms of certain
mandatory prepayments, (iii) modify certain negative covenants, (iv) modify
certain financial covenants and (v) extend the time period in which the Company
may elect to pay interest in kind.

In connection with the transactions contemplated by the July 2020 Second Lien
Amendment, the Company issued to the lenders party to the Second Lien Credit
Agreement certain Warrants to purchase shares of the Company's common stock. The
Warrants are exercisable for up to, in the aggregate, 134,667 shares of the
Company's common stock at an exercise price of $0.01 per share of common stock.
The Warrants are immediately exercisable upon issuance and will remain
exercisable, in whole or in part, for a period of five years from the original
issuance date. The number of shares issuable upon the exercise of the Warrants
is subject to customary adjustments upon the occurrence of certain events,
including (i) payment of a dividend or distribution to holders of shares of the
Company's common stock payable in shares of the Company's common stock, (ii) a
subdivision, capital reorganization or reclassification of the Company's common
stock or (iii) a merger, sale or other change of control transaction. As of
September 30, 2020, all 134,667 Warrants remain outstanding.

The Company was in compliance with its financial covenants as of September 30,
2020. However, the Company is at risk of failing the trailing twelve month
Adjusted EBITDA covenant for the second quarter of 2021. If the Company fails to
comply with its trailing twelve months revenue covenant, events of default under
the First Lien Credit Agreement and the Second Lien Credit Agreement would be
triggered and its obligations under the Senior Credit Facilities or other
agreements (including as a
                                       61
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result of cross-default provisions of the indentures relating to the 2023 Series
C Secured Convertible Notes and 2023 Series D Convertible Notes) may be
accelerated. As such, the Company recorded a $5.6 million derivative liability
associated with certain mandatory prepayment penalties and the recognition of
future interest payments in the anticipation of a potential future default on
its Senior Credit Facilities. The Company reversed the event of default
liability of in the third quarter of 2020 based on the 2023 Series C Secured
Senior Notes offering which terminates the previous revenue covenant under the
Senior Credit Facilities, according to which the Company recognized a $1.3
million loss in change in the fair value of the derivative liability line on the
Condensed Consolidated Statement of Operations for nine months ended September
30, 2020 (Note 9).

Government Grant Advance

On May 15, 2020, the Company received $3.4 million of proceeds from the U.S.
Small Business Administration Paycheck Protection Program ( the "Government
Grant Advance") and has been utilizing the advance to balance its
employee-related actions previously taken with the business needs to ensure a
significant portion of the loan will be forgiven. The Advance matures in 2 years
with accrued interest at an annual rate of 1.00%, being deferred for payments
until the date of forgiveness or 24 weeks from the date when the fund was
received by the Company. According to ASC 450-30, Gain Contingencies, the
Company expects the full balance of the Advance to meet the forgivable criteria,
resulting in no gain or loss to be recognized.

Nasdaq Delisting Notice

In June 2019, the Company received a delisting notice from the Nasdaq due to its
share price being below $1.00 for 30 consecutive trading days. The notice
specified that the Company's share price must trade above $1.00 per share for
ten consecutive trading days prior to December 2, 2019 in order to prevent its
common stock from being delisted. For the 180 days preceding December 2, 2019,
the Company's share price remained below $1.00. The Company requested a second
180-day extension. Nasdaq denied its request and the Company chose to file for
an appeal. The Company was granted a hearing date for the end of January 2020.
Subsequent to the appeal hearing, Nasdaq set a deadline of April 17, 2020 for
the Company to regain compliance with Nasdaq's continuing listing requirements.
In early March 2020, the COVID-19 global pandemic triggered a significant
decline in global capital markets, including Nasdaq. In light of this
significant decline, the Company requested Nasdaq to reconsider the April 17,
2020 deadline. Nasdaq agreed to the Company's request and set a new deadline to
regain compliance by June 1, 2020. In response to the COVID-19 pandemic and
related extraordinary market conditions, Nasdaq provided additional temporary
relief ("Relief") from the continued listing bid price and market value of
publicly held shares listing requirements through August 17, 2020. Under the
Relief, the company had additional time to regain compliance with the Nasdaq
through August 17, 2020. In January 2020, the Company's Board of Directors and
shareholders approved a reverse stock split in the range of any whole number
between five (5) and ten (10) to one (1). On May 28, 2020, the Company
effectuated a one-for-ten reverse stock split (Note 2). On June 18, 2020, the
Company received a written notice from the Nasdaq that it had regained
compliance with the Bid Price Requirement.

On July 28, 2020, the Company received a notice (the "Notice") from The Nasdaq
Stock Market stating that the Company was not in compliance with Nasdaq Listing
Rule 5450(b)(3)(C) relating to the minimum Market Value of Publicly Held Shares
(the "MVPHS Rule"). The notice stated that the Company failed to maintain a
minimum market value of publicly held shares of $15.0 million for the 30
consecutive days preceding the date of the notice. The notice has no immediate
effect on the Company's Nasdaq listing or trading of the Company's common stock.
The Company has a compliance period for the MVPHS Rule of 180 calendar days, or
until January 25, 2021, in which to regain compliance. To regain compliance the
Company's minimum market value of publicly held shares must equal $15.0 million
or more for a minimum of 10 consecutive business days, Nasdaq will notify the
Company that it has achieved compliance with the Rule. If the Company does not
regain compliance by January 25, 2021, then Nasdaq will notify the Company that
the Company's common stock will be delisted from the Nasdaq Global Market,
unless the Company requests a hearing before a Nasdaq Hearings Panel. The
accompanying financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

On November 24, 2020, the Company received a notice (the "Notice") from The
Nasdaq Stock Market stating that the Company was not in compliance with Nasdaq
Listing Rule 5250(c)(1) (the "Filing Requirement") as a result of the Company
not having timely filed its Quarterly Report on Form 10-Q for the three months
ended September 30, 2020 ("Form 10-Q") with the Securities and Exchange
Commission. The Notice has no immediate effect on the Company's Nasdaq listing
or trading of the Company's common stock.

On December 4, 2020, the Company received a notice (the "Notice") from The
Nasdaq Stock Market informing the Company that for the last 30 consecutive
business days, the bid price of the Company's securities had closed below $1.00
per share, which is the minimum required closing bid price for continued listing
on Nasdaq pursuant to Listing Rule 5450(a)(1) (the "Bid Price Requirement"). The
Notice has no immediate effect on the Company's Nasdaq listing or trading of the
Company's common stock. The Company has 180 calendar days, or until June 2,
2021, to regain compliance. To regain compliance, the
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closing bid price of the Company's securities must be at least $1.00 per share
for a minimum of ten consecutive business days. If the Company does not regain
compliance by June 2, 2021, the Company may be eligible for additional time to
regain compliance or if the Company is otherwise not eligible, the Company may
request a hearing before a Hearings Panel.

The negative financial conditions described above raise substantial doubt about
our ability to continue as a going concern as of September 30, 2020. To that
end, and as described above, the Company is not currently generating revenues
from operations that are sufficient to cover its operating expenses, and its
available capital resources are not sufficient for it to continue to meet its
obligations as they become due. As a result, the Company has engaged financial
and legal advisors to assist it in, among other things, analyzing all available
strategic alternatives to address its liquidity and capital structure including,
but not limited to, making significant changes to its operating plan, pursuing a
merger or other transaction involving a change of control, or restructuring its
outstanding debt via out of court or in-court methods, including the pursuit of
a plan of reorganization which would be filed under Chapter 11 of the U.S.
Bankruptcy Code and or ceasing its operations. However, the Company cannot
provide assurances that additional capital will be available when needed or that
any strategic alternatives or restructuring pursued will be on acceptable. The
accompanying financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

Our cash flows from operating, investing and financing activities, as reflected
in the condensed Consolidated Statements of Cash Flows, are summarized in the
following table:
                                                              Nine months ended September 30,
                                                                2020                    2019
Net cash provided by (used in)
Operating Activities                                     $       (15,607)         $      (8,661)
Investing Activities                                     $        (3,164)         $      (6,082)
Financing Activities                                     $        12,592          $       9,536



Operating Activities

Our operating activities used $15.6 million of cash and cash equivalents in the
nine months ended September 30, 2020 mainly to support our operational
activities, which included continued inventory management/build to help avoid
failure-to-supply fees and normal timing differences in working capital
balances.

Investing Activities

Our investing activities used $3.2 million of cash and equivalents during the
nine months ended September 30, 2020, compared to $6.1 million used during the
same period last year, which was used for the continued facility expansion in
Buena, NJ.

Financing Activities

During the nine months ended September 30, 2020, our financing activities provided $12.6 million of cash and cash equivalents, which included $12.0 million of proceeds from the Series C Convertible Notes.

Our capital resources were comprised of cash and cash equivalents of $9.7 million and $15.5 million as of September 30, 2020 and December 31, 2019 respectively. We had working capital of $32.4 million and $45.0 million at September 30, 2020 and December 31, 2019, respectively.

In order to continue normal business operations and execution of the Company's
growth strategy, the Company may exercise its ability to significantly defer or
reduce planned discretionary investments in research and development and capital
projects or seek other financing alternatives. Other financing alternatives may
include raising additional capital through the sale of its equity, a strategic
alliance with a third party or securing debt. If additional acquisition and
growth opportunities arise, external financing will be required.

On November 12, 2018, the Company secured a credit agreement for $120.0 million.
The facility includes three tranches of funding, an asset based revolving credit
facility of $25.0 million due November 2022 ("Revolver"), a term loan of $80.0
million due February 2023 ("2023 Term Loan"), and a delayed draw term loan of
$15.0 million also due in February 2023 ("2023 Delayed Draw Term Loan"). The
interest rate under the Revolver was calculated, at the option of the Company,
at either the one, two, three or six-month LIBOR plus 3.75% or the base rate
plus 2.75%. The interest rate on the 2023 Term Loan and the 2023 Delayed Draw
Term Loan bore interest, at the option of the Company, at either the one, two,
three or six-month LIBOR
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plus 8.75% or the base rate plus 7.75%, with a 24-month paid-in-kind interest
option available to the Company should it choose to defer cash payments in order
to maintain the liquidity needed to continue launching new products, build
inventory, and prepare for the FDA prior approval inspection.

On April 6, 2020, the Company entered (i) Amendment No. 2 of the Revolver and
Amendment No. 4 of the Term Loans, effective as of December 31, 2019 (together,
the "April 2020 Amendments"). The April 2020 Amendments together, among other
things, (i) increase the interest rates, (ii) reset certain prepayment premiums
and modify the terms of certain mandatory prepayments and (iii) modify certain
financial covenant levels inclusive of the disposition of prior covenants as of
and for the period ended December 31, 2019. The additions and changes to
financial covenants set forth in the April 2020 Amendments: (i) add a new
minimum net revenue covenant that is tested on the last day of each fiscal
quarter from March 31, 2020 until the quarter ending December 31, 2020, (ii)
reset a minimum consolidated adjusted EBITDA covenant that is tested on the last
day of each fiscal quarter ending during the period from March 31, 2021 to
maturity, (iii) eliminate a total net leverage covenant and (iv) add a minimum
liquidity covenant tested at all times during the term of the Senior Credit
Facilities.

The associated increases in interest rates were effective as of April 6, 2020.
The Revolver bears interest at a fluctuating rate of interest equal to the one,
two, three or six-month LIBOR plus a margin of 5.5% or a rate based on the prime
rate plus a margin of 4.5%, with a LIBOR floor of 1.5%. The Term Loans bear
interest at a fluctuating rate of interest equal to the one, two, three or
six-month LIBOR plus a margin of 13.0% or a rate based on the prime rate plus a
margin of 12.0%, with a LIBOR floor of 1.5%. Interest on the Senior Credit
Facilities is payable in cash quarterly in arrears (or more frequently in
connection with customary LIBOR interest provisions), provided, that the Company
may elect (and has covenanted to the lenders under its Senior Credit Facilities
and subsequent amendments thereto) to pay interest on the Term Loans in kind
through December 13, 2021 but only if the following occurs: (1) the Company
receives a "warning letter close-out letter" from the Federal Drug
Administration in response to corrective actions taken by the Company since
receipt of the warning letter in November 2019 and (2) the Company receives a
written recommendation from the Federal Drug Administration setting forth its
approval decision in respect of the pre-approval inspection for commercial
production on the newly installed injectable line at the Company's New Jersey
facility. If only one of those items occurs by December 13, 2020, then the
Company may still elect to pay interest in kind during 2021, but only from the
time the second condition has been satisfied until December 13, 2021.
Thereafter, a portion of interest on the loans accruing at a rate of 4.25% per
annum may continue to be paid in kind. The Company has elected the paid-in-kind
interest option and increased the principal balance of Term Loans by $3.5
million and $19.2 million for the three months and since inception through the
period ended September 30, 2020, respectively.

In connection with the Term Loan Amendments dated April 6, 2020, the Company
issued to the Term Loan lenders certain Warrants to purchase up to, in the
aggregate, 538,995 of post-reverse stock split shares of the Company's common
stock at an exercise price of $0.01 per share. The Warrants initially were
recorded at fair value upon issuance and classified as a liability as the
Company did not have sufficient authorized unissued shares for the Warrants'
exercise. The Warrants were remeasured to fair value up to the reverse stock
split date, with any fair value adjustments recognized in the Condensed
Consolidated Statements of Operations. The Warrants were reclassified as equity
at their fair value upon the reverse stock split date and will not be remeasured
subsequently. The estimated fair value of the Warrants on the date of issuance
of $1.4 million was recorded as a debt discount. The Warrants had a fair value
of $2.2 million as of the reverse stock split date which was reclassified to
equity. The Warrants are exercisable at any time after the reverse stock split
which occurred on May 28, 2020 and will remain exercisable, in whole or in part,
for a period of 5 years from the issuance date. As of September 30, 2020, all
538,995 Warrants remain outstanding (Note 9).

The number of shares issuable upon the exercise of the Warrants is subject to
customary adjustments upon the occurrence of certain events, including (i)
payment of a dividend or distribution to holders of shares of the Company's
common stock payable in shares of the Company's common stock, (ii) a
subdivision, capital reorganization or reclassification of the Company's common
stock or (iii) a merger, sale or other change of control transaction.

On July 20, 2020, the Company entered into (i) a Consent and Amendment No. 3 to
First Lien Revolving Credit Agreement (the "July 2020 First Lien Amendment"),
and (ii) a Consent and Amendment No. 5 to Second Lien Credit Agreement (the
"July 2020 Second Lien Amendment"). The July 2020 First Lien Amendment amended
the First Lien Credit Agreement to, among other things, (i) permit the issuance
of the 2023 Series C Secured Convertible Notes and the other transactions
contemplated by the indenture related thereto, (ii) modify the terms of certain
mandatory prepayments, (iii) modify certain negative covenants and (iv) modify
certain financial covenants. The July 202 Second Lien Amendment amended the
Second Lien Credit Agreement to, among other things, (i) permit the issuance of
the 2023 Series C Secured Convertible Notes and the other transactions
contemplated by the indenture related thereto, (ii) modify the terms of certain
mandatory prepayments, (iii) modify certain negative covenants, (iv) modify
certain financial covenants and (v) extend the time period in which the Company
may elect to pay interest in kind.
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In connection with the transactions contemplated by the July 2020 Second Lien
Amendment, the Company issued to the lenders party to the Second Lien Credit
Agreement certain Warrants to purchase shares of the Company's common stock. The
Warrants are exercisable for up to, in the aggregate, 134,667 shares of the
Company's common stock at an exercise price of $0.01 per share of common stock.
The Warrants are immediately exercisable upon issuance and will remain
exercisable, in whole or in part, for a period of five years from the original
issuance date. The number of shares issuable upon the exercise of the Warrants
is subject to customary adjustments upon the occurrence of certain events,
including (i) payment of a dividend or distribution to holders of shares of the
Company's common stock payable in shares of the Company's common stock, (ii) a
subdivision, capital reorganization or reclassification of the Company's common
stock or (iii) a merger, sale or other change of control transaction. As of
September 30, 2020, all 134,667 Warrants remain outstanding

On October 31, 2019, the Company closed its offering of the 2023 Series B Notes
in the aggregate principal amount of $34.4 million ("2023 Series B Convertible
Notes"). The 2023 Series B Convertible Notes will mature in May 2023 and are
convertible at the option of the holder at any time prior to its maturity. The
initial conversion price was $7.20 per share, subject to adjustment under
certain circumstances. consider to remove the previous disclosure. The 2023
Series B Convertible Notes bear interest at a rate of 7.00% per annum if paid in
cash, semiannually in arrears on May 1 and November 1 of each year, beginning on
May 1, 2020. The Company also has an option, and has agreed with its senior
lender, to PIK the interest at 8.00% per annum, to defer cash payments. The
Company has elected the paid-in-kind interest option and increased the principal
balance of the 2023 Series B Convertible by $2.0 million as of September 30,
2020. Following the issuance of the 2023 Series D Convertible Notes described
below, all amounts owing with respect to the 2023 Series B Convertible Notes had
been repaid and the related indenture and the Company's obligations thereunder
were satisfied and discharged.

On July 20, 2020, the Company completed the sale and issuance of $13.8 million
aggregate principal amount of 2023 Series C Secured Convertible Notes. After
taking into account an original issue discount and other fees payable to the
Purchasers, the Company received net cash proceeds of approximately $10.0
million, which the Company is using for general corporate purposes.

The Company also issued approximately $32.3 million in aggregate principal
amount of 2023 Series C Secured Convertible Notes in exchange for approximately
$35.9 million in aggregate principal amount, plus accrued but unpaid interest
thereon, of the Company's outstanding 2023 Series B Convertible Notes, giving
effect to a 10% discount on the principal amount of the 2023 Series B
Convertible Notes exchanged. In addition, the Company issued approximately $3.7
million in aggregate principal amount of 2023 Series C Secured Convertible in
exchange for approximately $8.2 million in aggregate principal amount, plus
accrued but unpaid interest thereon, of the Company's outstanding 2023 Series A
Convertible Notes, giving effect to a 55% discount on the principal amount of
the 2023 Series A Convertible Notes exchanged.

Interest on the 2023 Series C Secured Convertible Notes accrues at the rate of
9.5% per annum and is payable in kind and capitalized with principal
semiannually in arrears on March 1 and September 1 of each year, beginning on
September 1, 2020. The 2023 Series C Secured Convertible Notes will mature on
March 30, 2023, unless earlier converted or repurchased and are subordinate to
the indebtedness under the Senior Credit Facilities. The Company has elected the
paid-in-kind interest option and increased the principal balance of the 2023
Series C Secured Convertible Notes by $0.5 million in the three months ended
September 30, 2020. The Company has agreed to use its commercially reasonable
best efforts to obtain the approval of its stockholders that is required under
applicable Nasdaq rules and regulations to permit holders of the 2023 Series C
Secured Convertible Notes to beneficially own shares of common stock without
being subject to the Nasdaq Change of Control Cap. In the event that the Company
did not obtain such stockholder approval at an annual or special meeting of its
stockholders on or before October 31, 2020, holders of a majority in aggregate
principal amount of outstanding 2023 Series C Secured Convertible Notes may
elect to increase the interest rate payable on the 2023 Series C Secured
Convertible Notes to 18.0% per annum until such stockholder approval is
obtained, which will continue to be paid in kind in the form of additional
principal with respect to any applicable period in which the increased interest
rate remains in effect. Pursuant to a notice dated November 2, 2020, the holders
of a majority in principal amount of the outstanding 2023 Series C Secured
Convertible Notes elected to increase the interest rate payable on the 2023
Series C Secured Convertible Notes from 9.5% to 18.0%. The Company convened and
adjourned a special meeting of stockholders on October 22, 2020, and further
adjourned such special meeting on November 11, 2020 and November 25, 2020 due to
a lack of quorum. The special meeting of stockholders was held on December 16,
2020, pursuant to which the stockholders of the Company approved the holders of
the 2023 Series C Secured Convertible Notes beneficially owning shares of common
stock without being subject to the Nasdaq Change of Control Cap. The holders of
the Company's common stock approved the proposal and the interest rate payable
on the 2023 Series C Secured Convertible Notes was decreased to 9.5% on such
date.

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On September 22, 2020, the Company completed the issuance of approximately $27.5
million aggregate principal amount of 2023 Series D Convertible Notes in
exchange for approximately $59.0 million in aggregate principal amount, plus
accrued but unpaid interest, of 2023 Series A Convertible Notes, giving effect
to a 53.4% discount on the principal amount of the 2023 Series A Convertible
Notes exchanged. The Company also issued approximately $0.4 million aggregate
principal amount of the 2023 Series D Convertible Notes in exchange for
approximately $0.5 million in aggregate principal amount, plus accrued but
unpaid interest, of the Company's outstanding 2023 Series B Convertible Notes,
giving effect to a 31.9% discount on the principal amount of the 2023 Series B
Convertible Notes exchanged.
Following the issuance of the 2023 Series D Convertible Notes, all amounts owing
with respect to the 2023 Series A Convertible Notes and 2023 Series B
Convertible Notes had been paid and the related indentures and the Company's
obligations thereunder were satisfied and discharged.

On May 15, 2020, the Company received $3.4 million of proceeds from the U.S.
Small Business Administration Paycheck Protection Program ( the 'Government
Grant Advance") and has been utilizing the advance to balance its
employee-related actions previously taken with the business needs to ensure a
significant portion of the loan will be forgiven. The Advance matures in 2 years
with accrued interest at an annual rate of 1.00%, being deferred for payments
until the date of forgiveness or 24 weeks from the date when the fund was
received by the Company. According to ASC 450-30, Gain Contingencies, the
Company recorded the $3.4 million of proceeds in the Government Grant Advance
line on its Condensed Consolidated Balance Sheet as of September 30, 2020. The
Company will record the related earnings impact on its Condensed Consolidated
Statement of Operations in the period when the associated conditions attached to
the Advance are reasonably assured to be met.

Off Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that are material to our
shareholders.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements are prepared in accordance with
U.S. generally accepted accounting principles, which require management to make
estimates and assumptions about future events that affect the amounts reported
in the financial statements and the accompanying notes. Actual results could
differ from these estimates.

Please refer to our Annual Report on Form 10-K for the year ended December 31,
2019 for a complete list of all Critical Accounting Policies and Estimates. See
also Item 1 for our Condensed Consolidated Financial Statements.

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