0001494650-23-000020 | 10-K | XBRL Viewer

Cover Page - USD ($) $ in Millions	12 Months Ended
Cover Page - USD ($) $ in Millions	Dec. 31, 2022	Mar. 01, 2023	Jun. 30, 2022
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2022
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-38241
Entity Registrant Name	OPTINOSE, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	42-1771610
Entity Address, Address Line One	1020 Stony Hill Road
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	Yardley
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19067
City Area Code	267
Local Phone Number	364-3500
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	OPTN
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
ICFR Auditor Attestation Flag	false
Entity Shell Company	false
Entity Public Float			$ 201.7
Entity Common Stock, Shares Outstanding (in shares)		111,810,073
Documents Incorporated by Reference	Portions of the registrant’s definitive proxy statement for its 2023 annual meeting of stockholders are incorporated by reference into Part III of this Form 10-K where indicated. Such definitive proxy statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the year ended December 31, 2022.
Entity central index key	0001494650
Document fiscal year focus	2022
Document fiscal period focus	FY
Amendment flag	false

Audit Information	12 Months Ended
Audit Information	Dec. 31, 2022
Auditor Information [Abstract]
Auditor Name	Ernst & Young LLP
Auditor Location	Philadelphia, PA
Auditor Firm ID	42

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 94,244	$ 110,502
Accounts receivable, net	33,932	35,449
Inventory	9,443	11,847
Prepaid expenses and other current assets	2,865	2,581
Total current assets	140,484	160,379
Property and equipment, net	795	1,347
Other assets	2,943	4,345
Total assets	144,222	166,071
Current liabilities:
Accounts payable	5,291	8,013
Accrued expenses and other current liabilities	44,864	51,222
Short term debt, net	128,575	0
Total current liabilities	178,730	59,235
Long-term debt, net	0	126,418
Warrant liability	21,490	0
Other liabilities	626	2,190
Total liabilities	200,846	187,843
Stockholders' deficit:
Common stock, $0.001 par value; 200,000,000 shares authorized at December 31, 2022 and 2021; 111,492,761 and 82,238,900 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively	111	82
Additional paid-in capital	628,242	588,288
Accumulated deficit	(684,893)	(610,061)
Accumulated other comprehensive loss	(84)	(81)
Total stockholders' deficit	(56,624)	(21,772)
Total liabilities and stockholders' deficit	$ 144,222	$ 166,071

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Shares authorized (in shares)	200,000,000	200,000,000
Shares issued (in shares)	111,492,761	82,238,900
Shares outstanding (in shares)	111,492,761	82,238,900

Consolidated Statements of Operations - USD ($)	12 Months Ended
Consolidated Statements of Operations - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Total revenues	$ 76,276,000	$ 74,652,000
Costs and expenses:
Cost of product sales	9,263,000	9,151,000
Research and development	15,260,000	25,318,000
Selling, general and administrative	107,649,000	106,633,000
Total costs and expenses	132,172,000	141,102,000
Loss from operations	(55,896,000)	(66,450,000)
Other (income) expense:
Unrealized loss on fair value of warrants	1,211,000	0
Other (income) expense	1,396,000	(75,000)
Interest income	(513,000)	(52,000)
Interest expense	16,843,000	15,973,000
Net loss	$ (74,833,000)	$ (82,296,000)
Net (loss) income per share of common stock, basic (in dollars per share)	$ (0.87)	$ (1.45)
Net (loss) income per share of common stock, diluted (in dollars per share)	$ (0.87)	$ (1.45)
Weighted average common shares outstanding, basic (in shares)	85,900,139	56,851,921
Weighted average common shares outstanding, diluted (in shares)	85,900,139	56,851,921
Net product revenues
Total revenues	$ 76,276,000	$ 73,652,000
Licensing revenues
Total revenues	$ 0	$ 1,000,000

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Statement of Comprehensive Income [Abstract]
Net loss	$ (74,833)	$ (82,296)
Other comprehensive loss:
Foreign currency translation adjustment	(3)	4
Comprehensive loss	$ (74,836)	$ (82,292)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid -in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss
Beginning balance at Dec. 31, 2020	$ 6,788	$ 53	$ 534,585	$ (527,765)	$ (85)
Beginning balance (in shares) at Dec. 31, 2020		52,945,865
Increase (Decrease) in Stockholders' Equity
Stock compensation expense	9,977		9,977
Vesting of restricted stock units (in shares)		383,631
Sale of common stock, net of issuance costs	42,814	$ 29	42,785
Sale of common stock and warrants, net of issuance costs (in shares)		28,750,000
Issuance of warrants in connection with Pharmakon Second Amendment, net of cancellation	534		534
Exercise of common stock options	39		39
Exercise of common stock options (in shares)		23,879
Issuance of common stock under employee stock purchase plan	368		368
Issuance of common stock under employee stock purchase plan (in shares)		135,525
Foreign currency translation adjustment	4				4
Net loss	(82,296)			(82,296)
Ending balance at Dec. 31, 2021	$ (21,772)	$ 82	588,288	(610,061)	(81)
Ending balance (in shares) at Dec. 31, 2021	82,238,900	82,238,900
Increase (Decrease) in Stockholders' Equity
Stock compensation expense	$ 8,889		8,889
Vesting of restricted stock units	94	$ 1	93
Vesting of restricted stock units (in shares)		949,857
Sale of common stock, net of issuance costs	30,446	$ 28	30,418
Sale of common stock and warrants, net of issuance costs (in shares)		27,861,300
Issuance of warrants in connection with Pharmakon Second Amendment, net of cancellation	$ 0
Exercise of common stock options (in shares)	95,000	55,360
Issuance of common stock under employee stock purchase plan	$ 554		554
Issuance of common stock under employee stock purchase plan (in shares)		387,344
Foreign currency translation adjustment	(3)				(3)
Net loss	(74,833)			(74,833)
Ending balance at Dec. 31, 2022	$ (56,624)	$ 111	$ 628,242	$ (684,893)	$ (84)
Ending balance (in shares) at Dec. 31, 2022	111,492,761	111,492,761

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Operating activities:
Net loss	$ (74,833)	$ (82,296)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	532	646
Stock-based compensation	8,877	10,003
Change in fair value of warrant liability	1,211	0
Amortization of debt discount and issuance costs	2,318	1,795
Allowance for doubtful accounts	0	(233)
Gain on sale of equipment	0	(67)
Changes in operating assets and liabilities:
Accounts receivable	1,517	(11,823)
Grants and other receivables	0	43
Prepaid expenses and other assets	1,963	3,543
Inventory	2,492	(2,713)
Accounts payable	(2,723)	2,564
Accrued expenses and other liabilities	(9,005)	1,603
Cash used in operating activities	(67,651)	(76,935)
Investing activities:
Purchases of property and equipment	(63)	(167)
Proceeds from sale of property and equipment	0	105
Cash used in investing activities	(63)	(62)
Financing activities:
Proceeds from the sale of common stock and warrants	51,086	43,140
Proceeds from the issuance of common stock under employee stock purchase plan	554	368
Proceeds from the exercise of stock options	94	39
Cash paid for financing costs	(298)	(227)
Cash provided by financing activities	51,436	43,320
Effects of exchange rate changes on cash and cash equivalents	7	13
Net decrease in cash, cash equivalents and restricted cash	(16,271)	(33,664)
Cash, cash equivalents and restricted cash at beginning of period	110,515	144,179
Cash, cash equivalents and restricted cash at end of period	94,244	110,515
Supplemental disclosure of cash flow information:
Cash paid for interest	15,091	14,170
Supplemental disclosure of noncash activities:
Fixed asset purchases within accounts payable and accrued expenses	4	11
Fair value of warrants issued	0	534
Financing costs within accounts payable and accrued expenses	408	318
Recognition of right-of-use assets and lease liabilities	$ 704	$ 157

Organization and Description of Business	12 Months Ended
Organization and Description of Business	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Description of Business	Organization and Description of BusinessOptiNose, Inc. (the Company) was incorporated in Delaware in May 2010 (inception) and has facilities in Yardley, Pennsylvania and Ewing, New Jersey. The Company's predecessor entity, OptiNose AS, was formed under the laws of Norway in September 2000. In 2010, OptiNose AS became a wholly-owned subsidiary of the Company as part of an internal reorganization. During 2022, the Company's board of directors approved the liquidation of Optionse AS and Optinose UK, which is expected to be completed in 2023, in order to simplify the corporate structure. The Company is a specialty pharmaceutical company focused on the development and commercialization of products for patients treated by ear, nose and throat (ENT) and allergy specialists. The Company's first commercial product, XHANCE® (fluticasone propionate) nasal spray, 93 microgram (mcg), is a therapeutic utilizing the Company's proprietary Exhalation Delivery System (EDS) that delivers a topically-acting corticosteroid for the treatment of chronic rhinosinusitis with nasal polyps and, if approved, chronic rhinosinusitis without nasal polyps (also known as chronic sinusitis). XHANCE was approved by the United States (US) Food and Drug Administration (FDA) in September 2017 for the treatment of nasal polyps in patients 18 years of age or older. XHANCE was made widely available through commercial channels in April 2018. In January 2023, the indication statement for XHANCE was changed from “for the treatment of nasal polyps” to “for the treatment of chronic rhinosinusitis with nasal polyps” to reflect current FDA labeling terminology and not based on new XHANCE clinical trial data.

Liquidity	12 Months Ended
Liquidity	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Liquidity	Liquidity Since inception, the Company's operations have focused on organization and staffing, business planning, raising capital, establishing an intellectual property portfolio, conducting preclinical studies and clinical trials, pursuing regulatory approvals and most recently, launching XHANCE in the US. As of December 31, 2022, the Company had cash and cash equivalents of $94,244 and a working capital deficiency of $38,246. The Company is subject to a number of risks similar to other life sciences companies, including successful discovery, development and commercialization of its products and product candidates, raising additional capital, the development by its competitors of new technological innovations, protection of proprietary technology and market acceptance of the Company's products. The Company has incurred recurring net losses since its inception and has accumulated a deficit of $684,893 as of December 31, 2022. The Company entered into a Note Purchase Agreement (the Note Purchase Agreement) on September 12, 2019 with funds managed by Pharmakon Advisors, LP (Pharmakon), the investment manager of the BioPharma Credit Funds (BioPharma) which was subsequently amended on August 13, 2020, March 2, 2021, November 16, 2021, August 10, 2022, and November 9, 2022. On November 23, 2022, the Company amended and restated the Note Purchase Agreement (the A&R Note Purchase Agreement). Pursuant to the A&R Note Purchase Agreement, the financial covenants requiring the Company to achieve minimum trailing twelve-month consolidated XHANCE net product sales and royalties were modified (See Note 10). The principal balance outstanding under the A&R Note Purchase Agreement was $130 million at December 31, 2022. The Company's continuation as a going concern is dependent on its ability to maintain compliance with its covenants under the A&R Note Purchase Agreement, including minimum trailing twelve-month consolidated XHANCE net sales and royalties the Company is required to achieve commencing with the trailing twelve months ending March 31, 2024 and its ability to generate sufficient cash flows from operations to meet its obligations and/or obtain additional capital through equity or debt financings, partnerships, collaborations, or other sources, as may be required. The A&R Note Purchase Agreement includes events of default, in certain cases subject to customary periods to cure, following which Pharmakon may accelerate all amounts outstanding pursuant to the Note Purchase Agreement. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The A&R Note Purchase Agreement also requires the Company to maintain at all times a minimum of $30,000 of cash and cash equivalents. The Company believes that it is probable that its existing cash and cash equivalents will not be adequate to fund its operations and maintain at least $30,000 of cash and cash equivalents as required under the A&R Note Purchase Agreement for at least twelve-months following the filing of this Form 10-K, which will also constitute a default of the liquidity financial covenant under the A&R Note Purchase Agreement if the Company is unable to obtain additional capital or obtain a waiver or modification to this liquidity covenant prior to falling below such $30,000 threshold. The Company also believes it is probable that it will not achieve the trailing twelve-month minimum consolidated XHANCE net sales and royalties thresholds under the A&R Note Purchase Agreement for the initial period ending March 31, 2024, which will constitute a default under the A&R Note Purchase Agreement if the Company is unable to obtain a modification or waiver of such minimum consolidated XHANCE net sales and royalties thresholds. Further, the A&R Note Purchase Agreement includes a requirement that the report and opinion on the consolidated financial statements commencing with the year ending December 31, 2023, not be subject to any statement as to “going concern.” In addition, the consolidated financial statements commencing with the quarter ended March 31, 2024, shall also not be subject to any statement as to “going concern.” The Company has concluded that it is unlikely that it will be able comply with these provisions in 2024. Failure to comply with these provisions would also constitute an event of default under the A&R Note Purchase Agreement. In the event of any of the foregoing defaults, the holders of the Pharmakon Senior Secured Notes may declare an event of default under the A&R Note Purchase Agreement and may elect to accelerate the repayment of all unpaid principal, accrued interest and other amounts due, which may require the Company to delay or curtail its operations until additional funding is received. The terms of the A&R Note Purchase Agreement and the Pharmakon Senior Secured Notes, including applicable covenants, are described in Note 10. Management’s plans to mitigate this risk may include reducing expenses, raising additional capital through equity or debt financings, partnerships, collaborations or other sources and requesting a modification or waiver of the covenants under the A&R Note Purchase Agreement. However, there can be no assurance that the Company will be successful in reducing expenses, raising additional capital, or obtaining a modification or waiver of the covenants under the A&R Note Purchase Agreement. If the Company is unable to reduce expenses, raise additional capital or obtain a modification or waiver of the covenants under the A&R Note Purchase Agreement, the Company may need to delay or curtail its operations. As a result of these factors, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern within one year after the date these consolidated financial statements are issued.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Significant Accounting Policies

Basis of presentation

The accompanying consolidated financial statements have been prepared in conformity with US generally accepted accounting principles (GAAP). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB).

Principles of consolidation

The consolidated financial statements include the accounts of OptiNose, Inc. and its wholly-owned subsidiaries, OptiNose US, Inc., OptiNose AS and OptiNose UK Ltd. All inter-company balances and transactions have been eliminated in consolidation.

Use of estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Due to the uncertainty of factors surrounding the estimates or judgments used in the preparation of the consolidated financial statements, actual results may materially vary from these estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary.

Concentration of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and accounts receivable. The Company generally invests its cash in deposits with high credit quality financial institutions. Additionally, the Company performs periodic evaluations of the relative credit standing of these financial institutions.

Customer and supplier concentration

The Company has exposure to credit risk in accounts receivable from sales of product. XHANCE is sold to wholesale pharmaceutical distributors and preferred pharmacy network (PPN) partners, who, in turn, sell XHANCE to pharmacies, hospitals and other customers. Five customers represented approximately 52% of the Company's accounts receivable at December 31, 2022 and five customers represented approximately 33% of the Company's net product sales for the year ended December 31, 2022.

The Company purchases XHANCE and its components from several third-party suppliers and manufacturing partners, certain of which are available through a single source. Although the Company could obtain each of these components from alternative third-party suppliers, it would need to qualify and obtain FDA approval for another supplier as a source for each such component. The Company has initiated the process of qualifying an alternate third-party supplier for select components of XHANCE. Alternate third party suppliers of XHANCE components are subject to qualification and approval from the FDA.

Cash and cash equivalents

All highly liquid investments purchased with an original maturity date of three months or less at the date of purchase are considered to be cash equivalents. The Company maintains its cash and cash equivalent balances at foreign and domestic financial institutions. Bank deposits with Norwegian banks are insured up to approximately 2,000 Norwegian krone by the Norwegian Banks' Guarantee Fund. Bank deposits with US banks are insured up to $250 by the Federal Deposits Insurance Corporation. The Company had uninsured cash balances of $92,988 and $109,017 at December 31, 2022 and 2021, respectively.

Fair value of financial instruments

The Company measures certain assets and liabilities at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability (the exit price) in an orderly transaction between market participants at the measurement date. The FASB accounting guidance outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value, the Company uses quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. The fair value hierarchy is broken down into three levels based on the source of the inputs as follows:

•Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities.

•Level 2 — Valuations based on observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

•Level 3 — Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement.

At December 31, 2022 and 2021, the Company's financial instruments included cash and cash equivalents, accounts receivable, grants receivable, accounts payable, accrued expenses and certain liability classified warrants. The carrying amounts reported in the Company's financial statements for cash and cash equivalents, accounts receivable, grants receivable, accounts payable and accrued expenses approximates their respective fair values because of the short-term nature of these instruments. In addition, at December 31, 2022, the Company believed

the carrying value of debt approximates fair value as the interest rates were reflective of the rate the Company could obtain on debt with similar terms and conditions. At December 31, 2022 and 2021, there were no financial assets or liabilities measured at fair value on a recurring basis other than the liability classified warrants shown below.

In November 2022, the Company issued warrants in connection with the a public offering. Pursuant to the terms of the warrant agreement, the Company could be required to settle the warrants in cash in the event of an acquisition of the Company and, as a result, the warrants are required to be measured at fair value and reported as liability in the consolidated balance sheet. The Company recorded the fair value of the warrants upon issuance using a Monte Carlo simulation and is required to revalue the warrants at each reporting date with any changes in fair value recorded on our statement of operations. The valuation of the warrants is considered under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable. The change in the fair value of the Level 3 warrants liabilities is reflected in the statement of operations for the years ended December 31, 2022.

Accounts receivable

Accounts receivable primarily relates to amounts due from customers, which are typically due within 31 to 61 days. The Company analyzes accounts that are past due for collectability. There was no allowance for doubtful accounts related to customers subject to credit risk at December 31, 2022. The Company recognized an allowance for doubtful accounts related to customers subject to credit risk of $444 at December 31, 2021. The accounts receivable balance at December 31, 2021 on the accompanying balance sheet is net of the allowance.

Inventory

Inventories are stated at the lower of cost or net realizable value. Costs of inventories, which include amounts related to materials and manufacturing overhead, are determined on a first-in, first-out basis. An assessment of the recoverability of capitalized inventory is performed during each reporting period and any excess and obsolete inventories are written down to their estimated net realizable value in the period in which the impairment is first identified.

Property and equipment

Property and equipment is recorded at cost less accumulated depreciation. Significant additions or improvements are capitalized and expenditures for repairs and maintenance are charged to expense as incurred. Gains and losses on disposal of assets are included in the consolidated statements of operations. Depreciation is calculated on a straight-line basis over the estimated useful lives of the respective assets.

The estimated useful lives of property and equipment are as follows:

Computer equipment

2-3 years

Software

3 years

Machinery & production equipment

5-10 years

Furniture & fixtures

3-5 years

Leasehold improvements

Shorter of lease term or useful life

Long lived assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated. Impairment charges are recognized at the amount by which the carrying amount of an asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell. The Company did not recognize any impairment or disposition of long-lived assets for the years ended December 31, 2022 and 2021.

Leases

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the terms of the arrangement. The Company accounts for a contract as a lease when it has the right to control the asset for a period of time while obtaining substantially all of the asset’s economic benefits. The Company determines the initial classification and measurement of its operating right-of-use (“ROU”) assets and operating lease liabilities at the lease commencement date, and thereafter if modified. The lease term includes any renewal options that the Company is reasonably assured to exercise. The Company’s policy is to not record leases with a lease term of 12 months or less on its balance sheets.

The ROU asset represents the right to use the leased asset for the lease term. The lease liability represents the present value of the lease payments under the lease. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, the Company uses its estimated secured incremental borrowing rate for that lease term. Lease expense for operating leases is recognized on a straight-line basis over the reasonably assured lease term based on the total lease payments and is included in operating expense in the statements of operations.

Payments due under each lease agreement include fixed and variable payments. Variable payments relate to the Company’s share of the lessor’s operating costs associated with the underlying asset and are recognized when the event on which those payments are assessed occurs. Variable payments have been excluded from the lease liability and associated right-of-use asset.

The interest rate implicit in lease agreements is typically not readily determinable, and as such, the Company utilizes the incremental borrowing rate to calculate lease liabilities, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

Net product revenues

The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (ASC 606), which was adopted on January 1, 2018. The Company performs the following five steps to recognize revenue under ASC 606: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only recognizes revenue when it is probable that it will collect the consideration to which it is entitled in exchange for the goods or services that will be transferred to the customer.

The Company sells XHANCE to preferred pharmacy network partners and wholesalers in the US (collectively, Customers). These Customers subsequently resell the Company’s products to healthcare providers, patients and other retail pharmacies. In addition to agreements with Customers, the Company enters into arrangements with healthcare providers and payors that provide for government-mandated and/or privately-negotiated rebates, chargebacks and discounts for the purchase of the Company’s products.

The Company recognizes revenue from XHANCE sales at the point Customers obtain control of the product, which generally occurs upon delivery. The transaction price that is recognized as revenue for products includes an estimate of variable consideration which is described below. Payment terms with Customers do not exceed one year and, therefore, the Company does not account for a financing component in its arrangements. The Company expenses incremental costs of obtaining a contract with a Customer (for example, sales commissions) when incurred as the period of benefit is less than one year. Shipping and handling costs for product shipments to Customers are recorded as selling, general and administrative expenses.

Transaction Price, including Estimates of Variable Consideration

Revenue from products is recognized at the estimated net sales price (transaction price), which includes estimates of variable consideration. The Company includes estimated amounts in the transaction price to the extent it is determined probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment

of its anticipated performance and all information (historical, current and forecasted) that is reasonably available. The components of the Company's variable consideration include the following:

•Provider Chargebacks and Discounts. Chargebacks for fees and discounts to providers represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices charged to Customers who directly purchase the product from the Company. Customers charge the Company for the difference between what they pay for the product and the ultimate selling price to the qualified healthcare providers. These components of variable consideration are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and accounts receivable.

◦Trade Discounts and Allowances. The Company generally provides Customers with discounts that include incentive fees which are explicitly stated in the Company’s contracts. These discounts are recorded as a reduction of revenue and accounts receivable in the period in which the related product revenue is recognized.

◦Product Returns. Consistent with industry practice, the Company has a product returns policy that provides Customers a right of return for product purchased within a specified period prior to and subsequent to the product’s expiration date. The Company estimates the amount of its products that may be returned and presents this amount as a reduction of revenue in the period the related product revenue is recognized, in addition to establishing a current liability. The Company considers several factors in the estimation process, including expiration dates of product shipped to Customers, inventory levels within the distribution channel, product shelf life, prescription trends and other relevant factors.

◦Government Rebates. The Company is subject to discount obligations under state Medicaid programs and Medicare. Reserves related to these discount obligations are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. The Company’s liability for these rebates consists of estimates of claims for the current reporting period and estimated future claims that will be made for product that has been recognized as revenue but remains in the distribution channel inventories at the end of the reporting period.

◦Payor Rebates. The Company contracts with certain third-party payors, primarily health insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of its products. These rebates are based on contractual percentages applied to the amount of product prescribed to patients who are covered by the plan or the organization with which it contracts. The Company estimates these rebates and records such estimates in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability.

◦Patient Assistance. Other programs that the Company offers include voluntary co-pay patient assistance programs intended to provide financial assistance to eligible patients with prescription drug co-payments required by payors and coupon programs for cash payors. The calculation of the current liability for this assistance is based on an estimate of claims and the cost per claim that the Company expects to receive associated with product that has been recognized as revenue but remains in the distribution channel inventories at the end of each reporting period.

◦Distribution and Other Fees. We pay distribution and other fees to certain customers in connection with the sales of our products. We record distribution and other fees paid to our customers as a reduction of revenue, unless the payment is for a distinct good or service from the customer and we can reasonably estimate the fair value of the goods or services received. If both conditions are met, we record the consideration paid to the customer as an operating expense. These costs are typically known at the time of sale, resulting in minimal adjustments subsequent to the period of sale.

Licensing Revenues

The Company has a license agreement with Currax Pharmaceuticals LLC (Currax) (Note 9). This license agreement provides for exclusive licensed rights to certain intellectual property, a non-refundable up-front payment, potential

milestone payment(s) and potential royalty payment(s). The Company analyzed the performance obligations under the license agreement, the consideration received to date and the consideration the Company could receive in the future as part of its analysis related to ASC 606. There was no licensing revenue recognized during the year ended December 31, 2022. The Company recognized $1,000 as licensing revenue during the year ended December 31, 2021.

Advertising expenses

The Company expenses the costs of advertising, including promotional expenses, as incurred. Advertising expenses were $16,575 and $15,638 for the years ended December 31, 2022 and 2021, respectively.

Research and development

Research and development costs are expensed as incurred. Research and development costs consist primarily of device development, clinical trial related costs and regulatory related costs. The Company enters into agreements with contract research organizations (CROs) to facilitate, coordinate and perform agreed upon research and development activities for the Company's clinical trials. These CRO contracts typically call for the payment of fees for services at the initiation of the contract and/or upon the achievement of certain clinical trial milestones. The Company prepays certain CRO fees whereby the prepayments are recorded as a current or non-current prepaid asset and are amortized into research and development expense over the period of time the contracted research and development services were performed. The Company's CRO contracts generally also include other fees such as project management and pass through fees whereby the Company expenses these costs as incurred, using the Company's best estimate. Pass through fees include, but are not limited to, regulatory expenses, investigator fees, travel costs, and other miscellaneous costs. Pass through fees incurred are based on the amount of work completed for the clinical trials and are monitored through reporting provided by the Company's CROs.

Stock-based compensation

The Company measures and recognizes compensation expense for all stock options and restricted stock units (RSUs) awarded to employees and non-employees and shares issued under the employee stock purchase plan based on the estimated fair value of the awards on the respective grant dates. The Company uses the Black-Scholes option pricing model to value its time-based and performance-based stock options and shares issued under the employee stock purchase plan. The Company uses a Monte Carlo simulation to value its market-based stock options. RSUs are valued at the fair market value per share of the Company's common stock on the date of grant. The Company recognizes compensation expense for time-based awards on a straight-line basis over the requisite service period, which is generally the vesting period of the award. The Company recognizes compensation expense for performance-based awards when the performance condition is probable of achievement. The Company recognizes compensation expense for market-based awards over the derived service period, estimated at the time of the grant. The Company recognizes expense for The Company accounts for forfeitures of stock option awards as they occur.

Estimating the fair value of options and shares issued under the employee stock purchase plan requires the input of subjective assumptions, including the estimated fair value of the Company's common stock, the expected life of the options, stock price volatility, the risk-free interest rate and expected dividends. The assumptions used in the Company's Black-Scholes option-pricing model and Monte Carlo simulation represent management's best estimates and involve a number of variables, uncertainties and assumptions and the application of management's judgment, as they are inherently subjective.

Income taxes

Income taxes are accounted for under the asset and liability method. The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities and the expected benefits of net operating loss carryforwards. The impact of changes in tax rates and laws on deferred taxes, if any, applied during the period in which temporary differences are expected to be settled, is reflected in the Company's financial statements in the period of enactment. The measurement of deferred tax assets is reduced, if necessary, if, based on the weight of the evidence, it is more likely than not that some, or

all, of the deferred tax assets will not be realized. As of December 31, 2022 and 2021, the Company concluded that a full valuation allowance was necessary for all of its net deferred tax assets. The Company had no amounts recorded for uncertain tax positions, interest or penalties in the accompanying consolidated financial statements.

Net income (loss) per common share

Basic net income (loss) per common share is determined by dividing net income (loss) applicable to common stockholders by the weighted average common shares outstanding during the period. For the years ended December 31, 2022 and 2021, outstanding common stock options and common stock warrants have been excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive. Therefore, the weighted average shares used to calculate both basic and diluted net loss per share are the same.

Diluted net loss per common share for the periods presented does not reflect the following potential common shares, as the effect would be antidilutive:


	Year Ended December 31,
	2022	2021
Stock options	9,364,070	7,958,781
Restricted stock units	1,477,660	1,959,358
Common stock warrants	32,768,000	2,500,000

Total	43,609,730	12,418,139

Recent accounting pronouncements

In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. Since the issuance of ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, the Board has provided resources to monitor and assist stakeholders with the implementation of Topic 326. Post-Implementation Review (PIR) activities have included forming a Credit Losses Transition Resource Group, conducting outreach with stakeholders of all types, developing educational materials and staff question-and-answer guidance, conducting educational workshops, and performing an archival review of financial reports. ASU No. 2022-02 is intended to respond to feedback received during the PIR process. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. The Company does not expect ASU No. 2022-02 to have a significant impact on its results of operations, financial position and cash flows and related disclosures.

Fair Value Measurements

12 Months Ended

Dec. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Company applies the guidance in ASC 820, Fair Value Measurements, to account for financial assets and liabilities measured on a recurring basis. Fair value is measured as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability.

The Company uses a fair value hierarchy, which distinguishes between assumptions based on market data (observable inputs) and an entity's own assumptions (unobservable inputs). The guidance requires that fair value measurements be classified and disclosed in one of the following 3 categories:

Level l: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full te1m of the asset or liability; and

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each reporting period. There were no transfers between Level I, 2 and 3 during the years ended December 31, 2022 and December 31, 2021.

The table below presents the liabilities (in thousands) measured and recorded in the financial statements at fair value on a recurring basis at December 31, 2022 categorized by the level of inputs used in the valuation of each liability.


	December 31, 2022
	Total		Level 1		Level 2		Level 3
Liabilities
Warrant Liability	$	21,490	$	—	$	—	$	21,490
Total Liabilities	$	21,490	$	—	$	—	$	21,490

As of December 31, 2021, the Company had no assets or liabilities measured and recorded at fair value on a recurring basis.

Changes in Level 3 Liabilities Measured at Fair Value on a Recurring Basis

Warrant Liability

The reconciliation of the Company's warrant liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows (in thousands):



	Warrant Liability
Balance, December 31, 2021	$	—
Warrants issued	20,279
Change in fair value of liability	1,211
Balance, December 31, 2022	$	21,490

Assumptions Used in Determining Fair Value of Liability-Classified Warrants

The Company utilizes a Monte Carlo simulation valuation model which incorporates assumptions as to the stock price volatility, the expected life of the warrants, a risk-free interest rate, as well as timing and probability of equity financing. The Company values the Warrant Liability at each reporting period, with changes in fair value recognized in the consolidated statements of operations. The estimated fair value of the warrant liability is determined using Level 3 inputs. The inputs and values were as follows:



	November 23, 2022			December 31, 2022
Stock price	$	1.77		$	1.85
Strike price	$	2.57		$	2.57
Expected volatility	45.0		%	45.0		%
Risk-free interest rate	3.8		%	3.8		%
Expected dividend yield	—		%	—		%
Expected life (years)	5.00			4.90
Fair value per warrant	$	0.67		$	0.71

- Definition

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

+ References + Details

Inventory

12 Months Ended

Dec. 31, 2022

Inventory Disclosure [Abstract]

Inventory

Inventory consisted of the following:


	December 31,
	2022		2021
Raw materials	$	1,691	$	3,504
Work-in-process	5,010		4,816
Finished goods	2,742		3,527
Total inventory	$	9,443	$	11,847

Inventories are stated at the lower of cost or net realizable value, as determined on a first-in, first-out basis.

Property and Equipment

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment, net, consisted of:


	December 31,
	2022		2021
Computer equipment and software	$	1,203	$	1,173
Furniture and fixtures	366		366
Machinery and equipment	3,067		3,367
Leasehold improvements	609		609
Construction in process	115		115
	5,360		5,630
Less: accumulated depreciation	(4,565)		(4,283)
	$	795	$	1,347

Depreciation expense was $530 and $645 for the years ended December 31, 2022 and 2021, respectively. In addition, depreciation expense of $665 was charged to inventory and no depreciation was charged to prepaid expenses and other assets as of December 31, 2022, which represents depreciation expense related to equipment involved in the manufacturing process.

Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

LeasesThe Company leases office space, storage space and equipment (primarily vehicles). The Company evaluates renewal options at lease inception on an ongoing basis and includes renewal options that it is reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities. Lease agreements generally do not require material variable lease payments, residual value guarantees or restrictive covenants.

The table below presents the operating lease assets and liabilities recognized on the Company's consolidated balance sheets:


	Balance Sheet Line Item	December 31, 2022		December 31, 2021
Non-current operating lease assets	Other assets	$	2,445	$	4,051
Operating lease liabilities:
Current operating lease liabilities	Accrued expenses and other current liabilities	1,971		2,094
Non-current operating lease liabilities	Other liabilities	625		2,190
Total operating lease liabilities		$	2,596	$	4,284

The depreciable lives of operating lease asset leasehold improvements are limited by the lease term.

The Company's leases generally do not provide an implicit rate, and therefore, the Company uses its incremental borrowing rate as the discount rate when measuring operating leases liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. The Company used the incremental borrowing rates as of January 1, 2019 for operating leases that commenced prior to that date.

The Company's weighted average remaining lease term and weighted average discount rate for operating leases as of December 31, 2022 are:


	December 31, 2022
Weighted average remaining lease term (years)	2.04
Weighted average discount rate	5.24	%

The table below reconciles the undiscounted future minimum lease payments (displayed in aggregate by year) under non-cancelable operating leases with terms of more than one year to the total operating lease liabilities recognized on the consolidated balance sheets as of December 31, 2022:


	December 31, 2022
2023	2,153
2024	548
2025	82
Thereafter	—
Total undiscounted future minimum lease payments	2,783
Less: difference between undiscounted lease payments and discounted operating lease liabilities	187
Total operating lease liabilities	$	2,596

No operating lease payments include options to extend lease terms that are reasonably certain of being exercised for the year ended December 31, 2022.

Operating lease costs were $2,985 and $2,843 for the years ended December 31, 2022 and 2021, respectively. Operating lease costs are included within selling, general and administrative expenses on the consolidated statements of operations.

Cash paid for amounts included in the measurement of operating lease liabilities were $2,570 and $2,466 for the years ended December 31, 2022 and 2021, respectively. This amount is included in operating activities in the consolidated statements of cash flows.

Accrued Expenses and Other Current Liabilities

12 Months Ended

Dec. 31, 2022

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of:


	December 31,
	2022		2021
Accrued expenses:
Product revenue allowances	27,993		26,521
Selling, general and administrative expenses	3,799		6,124
Research and development expenses	1,298		6,857
Payroll expenses	7,888		7,569
Other	1,915		2,057
Total accrued expenses	42,893		49,128
Other current liabilities:
Lease liability	$	1,971	$	2,094
Total other current liabilities	1,971		2,094
Total accrued expenses and other current liabilities	$	44,864	$	51,222

License Agreements	12 Months Ended
License Agreements	Dec. 31, 2022
Research and Development [Abstract]
License Agreements	License Agreements Currax License Agreement On September 25, 2019, OptiNose AS entered into a license agreement (the Currax License Agreement) with Currax pursuant to which the Company granted Currax an exclusive license to certain intellectual property for the commercialization of Onzetra Xsail in the US, Canada and Mexico. In January 2021, a specified regulatory milestone was met and the Company received a $1,000 milestone payment. The Company does not expect to receive any further payments from Currax under the terms of the License Agreement other than reimbursement for certain expenses.

Debt, net

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Debt, net

On September 12, 2019 (the Closing Date), the Company entered into a Note Purchase Agreement with funds managed by Pharmakon Advisors, LP (Pharmakon), the investment manager of BioPharma Credit Funds (BioPharma). The Note Purchase Agreement provided the Company with $130,000 in debt financing, of which $80,000 of senior secured notes (the Pharmakon Senior Secured Notes) was issued on the Closing Date, $30,000 was issued on February 13, 2020 after achieving the $9,000 consolidated XHANCE net sales and royalties threshold for the quarter ended December 31, 2019 and $20,000 was issued on December 1, 2020 after achieving the $14,500 consolidated XHANCE net sales and royalties threshold for the quarter ended September 30, 2020.

On August 10, 2022, the Company entered into a Third Amendment to the Note Purchase Agreement (the Third Amendment). The Third Amendment reduced the minimum consolidated XHANCE net sales and royalties required to be achieved under the Note Purchase Agreement for the trailing twelve-month period ending December 31, 2022 from $90,000 to $85,000 in exchange for a $780 fee due on the repayment of the Pharmakon Senior Secured Notes.

On November 9, 2022, the Company entered into a Fourth Amendment to the Note Purchase Agreement (the Fourth Amendment). The Fourth Amendment resulted in the waiver of the minimum consolidated XHANCE net sales and royalties required to be achieved under the Note Purchase Agreement for the trailing twelve-month period ending September 30, 2022 and December 31, 2022 in exchange for a $1,300 fee due upon repayment of the Pharmakon Senior Secured Notes.

On November 23, 2022, the Company amended and restated the Note Purchase Agreement, initially entered into on September 12, 2019 and amended through November 9, 2022, among the Company, its subsidiaries, OptiNose US, Inc., OptiNose AS and OptiNose UK, Ltd. and BioPharma Credit PLC, as collateral agent, and the purchasers party thereto from time to time (the A&R Note Purchase Agreement). Pursuant to the A&R Note Purchase Agreement, certain modifications to the affirmative and negative covenants, events of default and other provisions were made, including, without limitation, (i) the requirement for the Company to deliver quarterly and annual financial statements that, commencing with the Company's consolidated financial statements for the year ending December 31, 2023, are not subject to a “going concern” statement (the Going Concern Covenant) and (ii) the removal of certain exceptions to the negative covenants which previously permitted the Company to enter into certain transactions without the consent of the holders of the Pharmakon Senior Secured Notes, including permitted acquisitions, swap contracts, convertible bonds and revolving credit facilities. The financial covenants requiring the Company to achieve minimum trailing twelve-month consolidated XHANCE net product sales and royalties were also modified as follows (in thousands):

Trailing Twelve-Months Ending

Requirement Prior to A&R Note Purchase Agreement

Requirement under the A&R Note Purchase Agreement

September 30, 2022

N/A

December 31, 2022

N/A

March 31, 2023

$98,750

N/A

June 30, 2023

102,500

N/A

September 30, 2023

106,250

N/A

December 31, 2023

110,000

N/A

March 31, 2024

113,750

$82,500

June 30, 2024

117,500

90,000

September 30, 2024

N/A

102,500

December 31, 2024

N/A

110,000

March 31, 2025

N/A

115,000

June 30, 2025

N/A

120,000

September 30, 2025

N/A

125,000

December 31, 2025

N/A

130,000

March 31, 2026

N/A

135,000

June 30, 2026

N/A

140,000

September 30, 2026

N/A

145,000

December 31, 2026

N/A

150,000

March 31, 2027

N/A

155,000

June 30, 2027

N/A

160,000

September 30, 2027

N/A

165,000

The A&R Note Purchase Agreement provided for an extension of the maturity date of the Pharmakon Senior Secured Notes from September 12, 2024 to June 30, 2027 (New Maturity Date), an extension of the interest-only period from September 2023 to September 2025, after which principal repayments will commence starting on September 30, 2025 and will be made in eight equal quarterly installments of principal and interest through the New Maturity Date. As part of the A&R Note Purchase Agreement the Pharmakon Senior Secured Notes will now bear an amended interest rate through the New Maturity Date equal to the 3-month Secured Overnight Financing Rate (subject to a 2.50% floor), determined as of the date that is two business days prior to the commencement of each quarter, plus 8.50% per annum (effective rate of 13.62% at December 31, 2022), which interest rate shall be increased by an additional 3.00% per annum upon the occurrence and during the continuation of any event of default.

In conjunction with the A&R Note Purchase Agreement, a modification was made to the “make-whole” premium payment due in connection with any principal prepayments (whether mandatory or voluntary) made prior to the 3-year anniversary of the date of the A&R Note Purchase Agreement. On any such prepayment date, the Company will be required to pay a make-whole premium in the amount of (i) for any prepayment date occurring up until and including the 18-month anniversary of the date of the A&R Note Purchase Agreement, the foregone interest from such prepayment date through the 18-month anniversary of such prepayment date; and (ii) for any prepayment after the 18-month anniversary of the date of the A&R Note Purchase Agreement, the foregone interest from such prepayment date through the 3-year anniversary of the date of the A&R Note Purchase Agreement; provided, however, that in no event shall the amount of all make-whole premium payments exceed $24,000 in the aggregate;

As an inducement for the holders of the Pharmakon Senior Secured Notes to enter into the A&R Note Purchase Agreement, the Company is required to pay the holders of the Pharmakon Senior Secured Notes an amendment fee of $3,900 (representing 3.00% of the outstanding principal balance of such notes) due on the New Maturity Date or the earlier repayment of the Pharmakon Senior Secured Notes, which amendment fee shall be (i) reduced to $1,300 in the event that the Company repays the Pharmakon Senior Secured Notes in full prior to the one-year anniversary of the date of the A&R Note Purchase Agreement and (ii) reduced to $2,600 in the event that the Company repays the Pharmakon Senior Secured Notes in full on or after the one-year anniversary of the date of the A&R Note Purchase Agreement and prior to second anniversary of the date of the A&R Note Purchase Agreement. Additionally, the $1,300 fee payable under the Fourth Amendment to the Note Purchase Agreement that the Company entered into on November 9, 2022 will be credited against the amendment fee payable in connection with the A&R Note Purchase Agreement.

The Pharmakon Senior Secured Notes are secured by a pledge of substantially all of the assets of the Company and the Guarantors and the A&R Note Purchase Agreement contains affirmative and negative covenants customary for financings of this type, including limitations on the Company’s and its subsidiaries’ ability, among other things, to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, repay junior indebtedness, incur a material adverse change and enter into affiliate transactions, in each case, subject to certain exceptions. In addition, the A&R Note Purchase Agreement contains financial covenants requiring the Company to maintain certain minimum trailing twelve-month consolidated XHANCE net sales and royalties, tested on a quarterly basis as noted in the table above, and to have at least $30,000 of cash and cash equivalents at all times. The A&R Note Purchase Agreement also includes events of default customary for financings of this type, in certain cases subject to customary periods to cure, following which BioPharma may accelerate all amounts outstanding under the Pharmakon Senior Secured Notes.

The Company believes that it is probable that it will not achieve the trailing twelve-month minimum consolidated XHANCE net sales and royalties thresholds that it is required to achieve commencing with the period ending March 31, 2024. Additionally, without additional capital, the Company believes that it is probable that it will not be able to maintain at least $30,000 of cash and cash equivalents for at least twelve-months following the filing of this Form 10-K. In addition, the Company believes that it is unlikely that it will be able to maintain compliance with the Going Concern Covenant in 2024. As a result, in accordance with FASB Accounting Standards Codification 470, the Company has classified all outstanding principal and the payment of additional fees upon maturity as a current liability in the accompanying consolidated balance sheet as of December 31, 2022.

The Company recorded interest expense of $16,843 and $15,973 during the years ended December 31, 2022 and 2021, respectively. Interest expense included total coupon interest and the amortization of debt issuance costs.

The debt balance is comprised of the following:



	December 31,
	2022		2021
Face amount	$	130,000	$	130,000
Front end fees	(666)		(717)
Debt issuance costs	(6,739)		(4,165)
Back end fees	5,980		1,300
Debt, net	$	128,575	$	126,418

- Definition

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

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+ Details

Employee Benefit Plans	12 Months Ended
Employee Benefit Plans	Dec. 31, 2022
Retirement Benefits [Abstract]
Employee Benefit Plans	Employee Benefit PlansThe Company maintains a defined contribution 401(k) retirement plan, which covers all eligible US employees. Employees are eligible to participate in the plan on the first of the month following their date of hire. Under the 401(k) retirement plan, participating employees may defer up to 100% of their pre-tax salary, but not more than statutory limits. The Company matches 100% of the first 3% of participating employee contributions and 50% of the next 2% of participating employee contributions, subject to applicable IRC limits. The Company incurred costs of $1,112 and $1,340 related to the Company match applicable to employee contributions for the years ended December 31, 2022 and 2021, respectively. The Company's contributions are made in cash. The Company's common stock is not currently an investment option available to participants in the 401(k) retirement plan. As of December 31, 2022, approximately $256 was recorded in accrued expenses related to the Company match. For former Norway employees, the Company maintained a defined contribution pension plan which met the statutory requirements. The Company incurred costs of $11 and $6 related to the pension plans for the years ended December 31, 2022 and 2021, respectively.

- Definition

The entire disclosure for retirement benefits.

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+ Details

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Purchase commitments As of December 31, 2022, the Company had no material outstanding non-cancellable purchase commitments related to inventory and other goods and services, including pre-commercial manufacturing scale-up and sales and marketing activities. Employment agreements The Company has entered into employment contracts with its officers and certain employees that provide for severance and continuation of benefits in the event of termination of employment by the Company without cause or by the employee for good reason. In addition, in the event of termination of employment following a change in control, the vesting of certain equity awards may be accelerated. Litigation Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. The Company is not currently a party to any material pending legal proceedings.

Stockholders' Equity

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

Stockholders' Equity

Common stock

On November 18, 2021, the Company closed an underwritten public offering (the 2021 Offering) of 28,750,000 shares of Company common stock (Common Stock) at a price of $1.60 per share. As a result of the Offering, the Company received $42,842 in net proceeds, after deducting commissions and expenses of $2,860 and offering costs payable by the Company of $298.

On November 23, 2022, the Company closed an underwritten public offering (the 2022 Offering) of 26,320,000 shares of Common Stock at a price of $1.89 per share and accompanying warrants to purchase 26,320,000 shares of Common Stock at a public offering price of $0.01 per warrant. In addition, the Company granted the underwriters an option for a period of 30 days to purchase up to an additional 3,948,000 shares of Common Stock (the Option Shares) and/or warrants to purchase 3,948,000 shares of Common Stock (The Option Warrants). The underwriters exercised their option to purchase the Option Warrants on November 22, 2022. In December 2022, the Underwriter partially exercised the option to purchase an additional 1,541,299 of the Option Shares. As a result of the 2022 Offering and the exercise of the options, the Company received $49,296 in net proceeds, after deducting commissions of $3,238 and offering costs payable by the Company of $359.

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Subject to preferences that may apply to any outstanding preferred stock, holders of common stock are entitled to receive ratably any dividends that the Company’s board of directors may declare out of funds legally available for that purpose on a non-cumulative basis. No dividends had been declared through December 31, 2022.

Common stock warrants

On November 18, 2021, in conjunction with the Second Amendment to the original Note Purchase Agreement (Second Amendment), the Company issued warrants to purchase an aggregate of 2,500,000 shares of Common Stock at a per share exercise price of $1.60 and fair value of $2,009. Upon execution of the Second Amendment, previously issued warrants to purchase 810,357 shares of Common Stock at a per share exercise price of $6.72 which were set to expire on September 12, 2022, were cancelled.

The grant date fair value of the 2,500,000 warrants issued in connection with the Pharmakon Senior Secured Notes was estimated at the time of grant using the Black-Scholes option-pricing model using the following weighted average assumptions:


Risk free interest rate	0.87		%
Expected term (in years)	3
Expected volatility	78.25		%
Annual dividend yield	0.00		%
Fair value of common stock	$	1.60

As part of the 2022 Offering, the Company issued warrants to purchase 30,268,000 shares of Common Stock at a public offering price of $0.01 per warrant (the Warrants). Each Warrant has an exercise price of $2.565 per share of Common Stock and is exercisable until the expiration date, which is the fifth anniversary of the date of issuance (November 23, 2027). After such date, any unexercised Warrants will expire and have no further value. If the Company issues or sells, or is deemed pursuant to the terms of the Warrants to have issued or sold, any shares of Common Stock (which includes, among other things, options and securities convertible into shares of Common Stock), excluding certain issuances defined in the Warrants as "excluded issuances, for a price per share less than the exercise price of the Warrants in effect immediately prior to such issuance or sale or deemed issuance or sale (such event, a dilutive issuance), then immediately after such dilutive issuance the exercise price then in effect of the Warrants shall be reduced to the price of the shares of Common Stock issued or sold or deemed to be issued or sold in the dilutive issuance in the manner set forth in the Warrant.

A holder of Warrants will not have the right to exercise any portion of a Warrant if the holder (together with its affiliates) would beneficially own in excess of 4.99% (or on election of such holder, prior to the issuance of any Warrants, 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants; provided, however, such holder may increase or decrease such percentage to any other percentage not in excess of 19.99%, provided that any increase in such percentage shall not be effective until 61 days after such notice is delivered to the Company.

Pursuant to the terms of the Warrant, the Company could be required to settle the Warrants in cash in the event of a "fundamental transaction" as defined in the Warrant (which includes, among other things, an acquisition of the Company) and, as a result, the Warrants are required to be measured at fair value and reported as liability in the consolidated balance sheet. The Company recorded the fair value of the Warrants upon issuance using a Monte Carlo simulation and are required to revalue the Warrants at each reporting date with any changes in fair value recorded on our statement of operations.

As of December 31, 2022, the Company had the following warrants outstanding to purchase shares of Common Stock:

Number of Shares

Classification

Exercise Price Per Share

Expiration Date

2,500,000

Equity

$1.60

November 15, 2024

30,268,000

Liability

$2.565

November 23, 2027

- Definition

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

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-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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-Section 50
-Paragraph 18
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-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 16
-Subparagraph (b)
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

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

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 40
-Section 50
-Paragraph 6
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008

+ Details

Stock-based Compensation

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation

The Company issues stock-based awards pursuant to its 2010 Stock Incentive Plan. Effective as of October 12, 2017, the Company's 2010 Stock Incentive Plan was amended and restated (A&R Plan). The A&R Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, deferred stock units, performance shares, stock appreciation rights and other equity-based awards. The Company's employees, officers, directors and other persons are eligible to receive awards under the A&R Plan. As of December 31, 2022, 17,299,284 shares of the Company's common stock were authorized to be issued under the A&R Plan, and 3,607,066 shares were reserved for future awards under the A&R Plan. The number of shares of the Company's common stock authorized under the A&R Plan will automatically increase on January 1st of each year until the expiration of the A&R Plan, in an amount equal to four percent of the total number of shares of the Company's common stock outstanding on December 31st of the preceding calendar year, subject to the discretion of the Company's board of directors or compensation committee to determine a lesser number of shares shall be added for such year.

The amount, terms of grants, and exercisability provisions are determined and set by the Company's board of directors or compensation committee. The Company measures stock-based awards at grant-date fair value and records compensation expense on a straight-line basis over the vesting period of the award.

Stock options

The Company has issued service-based, performance-based and market-based stock options that generally have a contractual life of up to 10 years and may be exercisable in cash or as otherwise determined by the board of directors. Vesting generally occurs over a period of not greater than four years. Performance-based options may vest upon the achievement of certain milestones in connection with the Company's development programs. As of December 31, 2022, all of the performance conditions related to performance-based stock options issued by the Company have been achieved. Market-based options may vest upon the achievement of certain market-based objectives relating to the trading price of the Company's Common Stock.

The following table summarizes the activity related to stock option grants to employees and non-employees for the year ended December 31, 2022:


	Shares	Weighted average exercise price per share		Weighted average remaining contractual life
Outstanding at December 31, 2021	7,958,781	$	8.87	6.50
Granted	3,473,370	1.88
Exercised	(95,000)	2.18
Expired	(947,999)	9.56
Forfeited	(1,025,082)	3.35
Outstanding at December 31, 2022	9,364,070	$	6.88	6.05
Exercisable at December 31, 2022	5,521,738	$	9.98	4.55

During the year ended December 31, 2022, stock options to purchase 3,473,370 shares of common stock were granted to employees that generally vest over four years. Included in the total stock options granted were market-based options to purchase 959,215 shares of Common Stock. The stock options, including the market-based options, had an estimated weighted average grant date fair value of $1.21. The grant date fair value of each service-based and performance-based option grant was estimated at the time of grant using the Black-Scholes option-pricing model. The grant date fair value of each market-based stock option grant was estimated at the time of grant using a Monte Carlo simulation.

The total aggregate intrinsic value of stock options, other than market-based stock options, exercised during the years ended December 31, 2022 and 2021 was $111 and $35, respectively. The aggregate intrinsic value of stock options outstanding and stock options exercisable, other than market-based stock options, as of December 31, 2022 was $81 and $8, respectively. At December 31, 2022, the unrecognized compensation cost related to unvested stock options, other than market-based stock options, expected to vest was $4,368. This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 2.35 years.

During the year ended December 31, 2022, market-based options to purchase 959,215 shares of Common Stock were granted to employees and generally become eligible to vest over four years, subject to the achievement of certain market-based objectives relating to the trading price of the Common Stock. Stock based compensation for these awards is recognized over the derived service period of approximately 2 years. The grant date fair value of each stock option grant, as well as the derived service period for these awards, was estimated at the time of grant using a Monte Carlo simulation. During the year ended December 31, 2022, 297,677 market-based options vested upon the achievement of certain market-based objectives relating to the trading price of the Company's Common Stock.

Included in the table above are 753,500 options granted outside the A&R Plan. The grants were made pursuant to the Nasdaq inducement grant exception in accordance with Nasdaq Listing Rule 5635(c)(4).

Restricted stock units

The Company has issued service-based and performance-based restricted stock units (RSUs). Vesting generally occurs over a period not greater than four years. Vesting of the performance-based RSUs is subject to the achievement of certain milestones in connection with the Company's development programs.

The following table summarizes the activity related to RSUs granted to employees for the year ended December 31, 2022:


			Shares
Balance at December 31, 2021			1,959,358
Granted			1,105,246
Vested and settled			(949,857)
Expired/forfeited/canceled			(637,087)
Balance at December 31, 2022			1,477,660
Expected to vest at December 31, 2022			1,477,660

During the year ended December 31, 2022, the Company granted 1,105,246 RSUs at a weighted-average grant date fair value of $1.85, all of which were service-based RSUs. No performance-based RSUs were granted in 2022. As of December 31, 2022, the milestone associated with the previously granted performance based-RSUs was achieved. As a result 248,827 RSUs vested on June 15, 2022. At December 31, 2022, the recognized compensation cost related to vested performance-based RSUs was $1,669. At December 31, 2022, the unrecognized compensation cost related to unvested service-based RSUs expected to vest was $3,123, to be recognized over an estimated weighted-average amortization period of 2.24 years. The unrecognized compensation cost related to unvested performance-based RSUs was $942, which will be recognized over the remaining service period.

Included in the table above are 60,000 RSUs granted outside the A&R Plan. The grants were made pursuant to the Nasdaq inducement grant exception in accordance with Nasdaq Listing Rule 5635(c)(4).

2017 Employee Stock Purchase Plan

The Company's 2017 Employee Stock Purchase Plan (the 2017 Plan) became effective on October 12, 2017. As of December 31, 2022, 2,021,813 shares of the Company's common stock were authorized to be issued pursuant to purchase rights granted to its employees or to employees of any of its participating affiliates under the 2017 Plan. 982,989 shares of the Company's common stock were reserved for future issuance under the 2017 Plan. The number of shares of the Company's common stock that may be issued pursuant to rights granted under the 2017 Plan shall automatically increase on January 1st of each year until the expiration of the 2017 Plan, in an amount equal to one percent of the total number of shares of the Company's common stock outstanding on December 31st of the preceding calendar year, subject to the discretion of the board of directors or compensation committee to determine a lesser number of shares shall be added for such year.

Under the 2017 Plan, eligible employees can purchase the Company’s common stock through accumulated payroll deductions at such times as are established by the administrator. The 2017 Plan is administered by the compensation committee. Eligible employees may contribute up to 15% of their eligible compensation. A participant may not accrue rights to purchase more than $25 worth of the Company’s common stock for each calendar year in which such right is outstanding.

Payroll withholdings accumulate during the following six month offering periods each calendar year while the Purchase Plan is effective:

•January 1 through June 30, and

•July 1 through December 31.

At the end of each offering period, shares of the Company’s common stock may be purchased at 85% of the lesser of the average of the high and low sales price of the Company’s common stock on (i) the first trading day of the relevant offering period and (ii) the last trading day of the relevant offering period (or, if the relevant offering period has multiple purchase periods, the last trading day of the relevant purchase period). In accordance with the guidance in ASC 718-50 – Compensation – Stock Compensation, the ability to purchase shares of the Company’s common stock at the lower of the price on the first day of the offering period or the last day of the offering period (i.e. the purchase date) represents an option and, therefore, the 2017 Plan is a compensatory plan under this guidance. Accordingly, stock-based compensation expense is determined based on the option’s grant-date fair value as estimated by applying the Black-Scholes option-pricing model and is recognized over the requisite service period of the option. The Company has recognized stock-based compensation expense of $253 and $402 during the years ended December 31, 2022 and 2021, respectively, related to the 2017 Plan.

Stock-based compensation expense

The Company recorded stock-based compensation expense in the following expense categories of its accompanying consolidated statements of operations for the years ended December 31, 2022 and 2021:


	Year Ended December 31,
	2022		2021
Cost of product sales	$	35	$	50
Research and development	809		1,079
Selling, general and administrative	8,033		8,874
Total stock-based compensation expense	$	8,877	$	10,003

In addition, stock-based compensation expense of $83 was charged to inventory as of December 31, 2022. No stock-based compensation expense was charged to prepaid expenses and other assets as of December 31, 2022. These charges represent the total stock-based compensation expense incurred related to employees involved in the manufacturing process of finished goods and samples during the period.

The Company utilized the Black-Scholes valuation model for estimating the fair value of stock options issued under the 2017 Plan. The Company calculated the fair value of each option grant and the shares issued under the 2017 Plan on the respective dates of grant using the following weighted average assumptions:


	December 31, 2022
	2010 A&R Stock Incentive Plan		2017 Employee Stock Purchase Plan
Risk free interest rate	2.22	%	0.17	%
Expected term (in years)	6.08		0.50
Expected volatility	73.23	%	88.13	%
Annual dividend yield	0.00	%	0.00	%

Option valuation methods, including Black-Scholes, require the input of subjective assumptions, which are discussed below.

•The expected term of employee options is determined using the "simplified" method, as prescribed in SEC's Staff Accounting Bulletin (SAB) No. 107, Share Based Payment (SAB No. 107), whereby the expected life equals the arithmetic average of the vesting term and the original contractual term of the option due to the Company's lack of sufficient historical data. The expected term of non-employee options is equal to the contractual term.

•The expected volatility is based on a weighted average of the Company's historical volatility and the volatilities of similar entities within the Company's industry which were commensurate with the expected term assumption as described in SAB No. 107.

•The risk-free interest rate is based on the interest rate payable on US Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected term.

•The expected dividend yield is 0% because the Company has not historically paid, and does not expect for the foreseeable future to pay, a dividend on its common stock.

Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income taxes are based on the following book income (loss) before income tax expense:


	Year Ended December 31,
	2022		2021
Domestic operations	$	(72,750)	$	(78,801)
Foreign operations	(2,083)		(3,495)
Loss before provision for income taxes	$	(74,833)	$	(82,296)

A reconciliation of income tax expense (benefit) at the US federal statutory income tax rate and the income tax provision in the financial statements is as follows:


	Year Ended December 31,
	2022		2021
Income tax expense at statutory rate	21.0	%	21.0	%
Permanent items	(1.5)		(0.4)
Foreign rate differential	(0.7)		0.1
Impact of foreign operations	(14.5)		—
State taxes, net of federal benefit	2.6		4.7
Tax rate changes	(2.9)		—
Foreign exchange and other	(1.7)		(0.9)
Stock based compensation	(2.9)		—
Prepaid royalty write off	(11.8)		—
Change in valuation allowance	12.4		(24.5)
Effective income tax rate	0.0	%	0.0	%

The principal components of the Company’s deferred tax assets and liabilities are as follows:


	Year Ended December 31,
	2022		2021
Deferred tax assets:
Accrued expenses and other	$	5,144	$	6,712
Prepaid licensing arrangement	—		9,441

Interest expense	14,304		10,708
Stock compensation	7,193		8,583
Lease liability	642		1,081
Research and development credits	2,460		2,461
Capitalized R&D	3,377
Net operating losses	83,376		87,324
Total deferred tax assets	116,496		126,310
Deferred tax liabilities:
Fixed assets, including leases	(171)		(210)
Right-to-use asset	(605)		(1,024)
Total deferred tax liabilities:	(776)		(1,234)
Less: Valuation allowance	(115,720)		(125,076)
Total net deferred tax assets (liabilities)	$	—	$	—

As of December 31, 2022, the Company had foreign net operating loss (NOL) carry forwards of $9,073, primarily from its operations in Norway. As of December 31, 2022, the Company had federal and state NOLs of $335,009 and $252,324, respectively. These domestic NOL carry forwards may be subject to an annual limitation in the event of cumulative changes in the ownership interests of significant stockholders over a three-year period in excess of 50%. This could limit the amount of NOLs that the Company can utilize annually to offset future domestic taxable income, if any. The amount of the annual limitation, if any, will be determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The federal NOLs generated after 2017 have an indefinite carry forward period. The federal NOLs generated prior to 2018 will expire from 2030 through 2037. Some state NOLs will not expire while other state NOLs expire over various periods depending on the rules of the jurisdiction in which they were generated. The earliest state NOL expiration is in 2030.

The U.S. NOL and tax credit carry forwards could expire unused and be unavailable to offset future income tax liabilities because of their limited duration or because of other restrictions under U.S. tax law. Under Sections 382 and 383, if a corporation undergoes an “ownership change”, generally defined as a greater than 50% change, by value, in equity ownership during a three-year period, the corporation’s ability to offset pre-change tax attributes, such as NOLs and R&D tax credits, against post-change income or tax may be limited. We have not performed an analysis under Section 382 and cannot predict or otherwise determine whether utilization of our federal tax attribute carry forwards may be limited. As a result, if we have taxable income in the future, our ability to use existing U.S. NOL and R&D tax credit carry forwards to reduce U.S. taxable income or tax liability may be subject to limitation resulting in increased future tax liabilities. Similar rules at the state level may also limit our ability to use state NOLs. Also, there may be periods when the use of NOLs is suspended or otherwise limited at the state level, which could accelerate or permanently increase state taxes owed.

The company also has federal and state R&D credit carryforwards of $2,487 which can be carried forward for 20 years beginning to expire in 2031.

ASC 740 requires the establishment of a valuation allowance to reduce deferred tax assets if, based on the weight of the available positive and negative evidence it is more likely than not that all or a portion of the deferred tax assets will not be realized. There is insufficient positive evidence to overcome the negative evidence attributable to the Company’s cumulative operating losses. Consequently, the Company established a full valuation allowance against its net deferred tax assets at December 31, 2022 and 2021, respectively, because the Company’s management was unable to conclude that it is more likely than not that these assets will be fully realized. The Company had a net decrease in its valuation allowance of $9,356 during the year ended December 31, 2022, primarily related to material deferred tax asset write offs from prepaid royalty and equity compensation as well as Norway NOL utilization in the current year.

The Company files income tax returns in Norway, the UK, the US, and various states. The Company is subject to examination by federal, state and foreign jurisdictions. The Company’s tax years in the US are open under statute from inception to present. All open years may be examined to the extent that tax credits or net operating loss carry forwards are used in future periods.

The Company’s policy is to record interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2022, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company’s statement of operations.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted into law in response to the COVID-19 pandemic. The CARES Act contains income tax provisions, such an enhanced interest deductibility, repeal of the 80% limitation with respect to net operating losses arising in taxable years 2018-2020, and additional depreciation deductions related to qualified improvement property. The Company has concluded the analysis of these provisions as of year-end and the CARES Act did not have a material impact on the Company’s income taxes for 2021.

On December 27, 2020, the Consolidated Appropriations Act, 2021 (CAA) was signed into law. Along with providing funding for normal government operations ($1.4 trillion), this bill provides for additional COVID-19 focused relief ($900 billion). The CAA extends certain provisions of the CARES Act, provides additional funding for others and contains new relief provisions. The CAA did not have a material impact on the Company’s income taxes for 2021.

On August 16, 2022, the Inflation Reduction Act of 2022 was enacted into law containing corporate income tax provisions such as the corporate alternative minimum tax and an excise tax on the repurchase of corporate stock. These provisions are not expected to have a material impact on the Company's income taxes in the near term.

- Definition

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

+ References

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

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

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

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

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

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

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

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

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

+ Details

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of presentation

Principles of consolidation

Use of estimates

Concentration of credit risk

Customer and supplier concentration

Cash and cash equivalents

Cash and cash equivalentsAll highly liquid investments purchased with an original maturity date of three months or less at the date of purchase are considered to be cash equivalents. The Company maintains its cash and cash equivalent balances at foreign and domestic financial institutions.

Fair value of financial instruments

•Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities.

•Level 3 — Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement.

Accounts receivable

Inventory

Inventory Inventories are stated at the lower of cost or net realizable value. Costs of inventories, which include amounts related to materials and manufacturing overhead, are determined on a first-in, first-out basis. An assessment of the recoverability of capitalized inventory is performed during each reporting period and any excess and obsolete inventories are written down to their estimated net realizable value in the period in which the impairment is first identified.

Property and equipment

The estimated useful lives of property and equipment are as follows:

Computer equipment

2-3 years

Software

3 years

Machinery & production equipment

5-10 years

Furniture & fixtures

3-5 years

Leasehold improvements

Shorter of lease term or useful life

Long lived assets

Long lived assetsLong-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated. Impairment charges are recognized at the amount by which the carrying amount of an asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

Leases

Net product revenues and licensing revenues

Net product revenues

Transaction Price, including Estimates of Variable Consideration

of its anticipated performance and all information (historical, current and forecasted) that is reasonably available. The components of the Company's variable consideration include the following:

Licensing Revenues

Advertising expenses

Advertising expensesThe Company expenses the costs of advertising, including promotional expenses, as incurred.

Research and development

Stock-based compensation

Income taxes

Net income (loss) per common share

Recent accounting pronouncements

Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Level l: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full te1m of the asset or liability; and

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Property and Equipment Useful Lives

The estimated useful lives of property and equipment are as follows:

Computer equipment

2-3 years

Software

3 years

Machinery & production equipment

5-10 years

Furniture & fixtures

3-5 years

Leasehold improvements

Shorter of lease term or useful life

Property and equipment, net, consisted of:


	December 31,
	2022		2021
Computer equipment and software	$	1,203	$	1,173
Furniture and fixtures	366		366
Machinery and equipment	3,067		3,367
Leasehold improvements	609		609
Construction in process	115		115
	5,360		5,630
Less: accumulated depreciation	(4,565)		(4,283)
	$	795	$	1,347

Schedule of Antidilutive Shares Excluded from Earnings Per Share

Diluted net loss per common share for the periods presented does not reflect the following potential common shares, as the effect would be antidilutive:


	Year Ended December 31,
	2022	2021
Stock options	9,364,070	7,958,781
Restricted stock units	1,477,660	1,959,358
Common stock warrants	32,768,000	2,500,000

Total	43,609,730	12,418,139

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2022

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets Measured on Recurring Basis


	December 31, 2022
	Total		Level 1		Level 2		Level 3
Liabilities
Warrant Liability	$	21,490	$	—	$	—	$	21,490
Total Liabilities	$	21,490	$	—	$	—	$	21,490

Schedule of Fair Value, Liabilities Measured on Recurring Basis


	December 31, 2022
	Total		Level 1		Level 2		Level 3
Liabilities
Warrant Liability	$	21,490	$	—	$	—	$	21,490
Total Liabilities	$	21,490	$	—	$	—	$	21,490

Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Inputs Reconciliation

The reconciliation of the Company's warrant liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows (in thousands):



	Warrant Liability
Balance, December 31, 2021	$	—
Warrants issued	20,279
Change in fair value of liability	1,211
Balance, December 31, 2022	$	21,490

Schedule of Significant Unobservable Inputs in Valuation of Warrants



	November 23, 2022			December 31, 2022
Stock price	$	1.77		$	1.85
Strike price	$	2.57		$	2.57
Expected volatility	45.0		%	45.0		%
Risk-free interest rate	3.8		%	3.8		%
Expected dividend yield	—		%	—		%
Expected life (years)	5.00			4.90
Fair value per warrant	$	0.67		$	0.71

Inventory (Tables)

12 Months Ended

Dec. 31, 2022

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory consisted of the following:


	December 31,
	2022		2021
Raw materials	$	1,691	$	3,504
Work-in-process	5,010		4,816
Finished goods	2,742		3,527
Total inventory	$	9,443	$	11,847

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment, Net

The estimated useful lives of property and equipment are as follows:

Computer equipment

2-3 years

Software

3 years

Machinery & production equipment

5-10 years

Furniture & fixtures

3-5 years

Leasehold improvements

Shorter of lease term or useful life

Property and equipment, net, consisted of:


	December 31,
	2022		2021
Computer equipment and software	$	1,203	$	1,173
Furniture and fixtures	366		366
Machinery and equipment	3,067		3,367
Leasehold improvements	609		609
Construction in process	115		115
	5,360		5,630
Less: accumulated depreciation	(4,565)		(4,283)
	$	795	$	1,347

Leases (Tables)

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Schedule of Lease Assets, Liabilities, Term and Discount Rate

The table below presents the operating lease assets and liabilities recognized on the Company's consolidated balance sheets:


	Balance Sheet Line Item	December 31, 2022		December 31, 2021
Non-current operating lease assets	Other assets	$	2,445	$	4,051
Operating lease liabilities:
Current operating lease liabilities	Accrued expenses and other current liabilities	1,971		2,094
Non-current operating lease liabilities	Other liabilities	625		2,190
Total operating lease liabilities		$	2,596	$	4,284

The Company's weighted average remaining lease term and weighted average discount rate for operating leases as of December 31, 2022 are:


	December 31, 2022
Weighted average remaining lease term (years)	2.04
Weighted average discount rate	5.24	%

Schedule of Operating Lease Liability Maturities


	December 31, 2022
2023	2,153
2024	548
2025	82
Thereafter	—
Total undiscounted future minimum lease payments	2,783
Less: difference between undiscounted lease payments and discounted operating lease liabilities	187
Total operating lease liabilities	$	2,596

Accrued Expenses and Other Current Liabilities (Tables)

12 Months Ended

Dec. 31, 2022

Payables and Accruals [Abstract]

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of:


	December 31,
	2022		2021
Accrued expenses:
Product revenue allowances	27,993		26,521
Selling, general and administrative expenses	3,799		6,124
Research and development expenses	1,298		6,857
Payroll expenses	7,888		7,569
Other	1,915		2,057
Total accrued expenses	42,893		49,128
Other current liabilities:
Lease liability	$	1,971	$	2,094
Total other current liabilities	1,971		2,094
Total accrued expenses and other current liabilities	$	44,864	$	51,222

Debt, net (Tables)

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Schedule of A&R Note Purchase Agreement and long term balance

Pursuant to the A&R Note Purchase Agreement, certain modifications to the affirmative and negative covenants, events of default and other provisions were made, including, without limitation, (i) the requirement for the Company to deliver quarterly and annual financial statements that, commencing with the Company's consolidated financial statements for the year ending December 31, 2023, are not subject to a “going concern” statement (the Going Concern Covenant) and (ii) the removal of certain exceptions to the negative covenants which previously permitted the Company to enter into certain transactions without the consent of the holders of the Pharmakon Senior Secured Notes, including permitted acquisitions, swap contracts, convertible bonds and revolving credit facilities. The financial covenants requiring the Company to achieve minimum trailing twelve-month consolidated XHANCE net product sales and royalties were also modified as follows (in thousands):

Trailing Twelve-Months Ending

Requirement Prior to A&R Note Purchase Agreement

Requirement under the A&R Note Purchase Agreement

September 30, 2022

N/A

December 31, 2022

N/A

March 31, 2023

$98,750

N/A

June 30, 2023

102,500

N/A

September 30, 2023

106,250

N/A

December 31, 2023

110,000

N/A

March 31, 2024

113,750

$82,500

June 30, 2024

117,500

90,000

September 30, 2024

N/A

102,500

December 31, 2024

N/A

110,000

March 31, 2025

N/A

115,000

June 30, 2025

N/A

120,000

September 30, 2025

N/A

125,000

December 31, 2025

N/A

130,000

March 31, 2026

N/A

135,000

June 30, 2026

N/A

140,000

September 30, 2026

N/A

145,000

December 31, 2026

N/A

150,000

March 31, 2027

N/A

155,000

June 30, 2027

N/A

160,000

September 30, 2027

N/A

165,000

The debt balance is comprised of the following:



	December 31,
	2022		2021
Face amount	$	130,000	$	130,000
Front end fees	(666)		(717)
Debt issuance costs	(6,739)		(4,165)
Back end fees	5,980		1,300
Debt, net	$	128,575	$	126,418

- Definition

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

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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-Paragraph 1
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-Subparagraph (SX 210.12-04(a))
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+ Details

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

Schedule of Grant Date Fair Value of Warrant, Valuation Assumptions


Risk free interest rate	0.87		%
Expected term (in years)	3
Expected volatility	78.25		%
Annual dividend yield	0.00		%
Fair value of common stock	$	1.60

Schedule of Warrants Outstanding

As of December 31, 2022, the Company had the following warrants outstanding to purchase shares of Common Stock:

Number of Shares

Classification

Exercise Price Per Share

Expiration Date

2,500,000

Equity

$1.60

November 15, 2024

30,268,000

Liability

$2.565

November 23, 2027

Stock-based Compensation (Tables)

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Schedule of Stock Option Activity

The following table summarizes the activity related to stock option grants to employees and non-employees for the year ended December 31, 2022:


	Shares	Weighted average exercise price per share		Weighted average remaining contractual life
Outstanding at December 31, 2021	7,958,781	$	8.87	6.50
Granted	3,473,370	1.88
Exercised	(95,000)	2.18
Expired	(947,999)	9.56
Forfeited	(1,025,082)	3.35
Outstanding at December 31, 2022	9,364,070	$	6.88	6.05
Exercisable at December 31, 2022	5,521,738	$	9.98	4.55

Schedule of Restricted Stock Unit Activity

The following table summarizes the activity related to RSUs granted to employees for the year ended December 31, 2022:


			Shares
Balance at December 31, 2021			1,959,358
Granted			1,105,246
Vested and settled			(949,857)
Expired/forfeited/canceled			(637,087)
Balance at December 31, 2022			1,477,660
Expected to vest at December 31, 2022			1,477,660

Schedule of Allocated Stock-based Compensation Expense

The Company recorded stock-based compensation expense in the following expense categories of its accompanying consolidated statements of operations for the years ended December 31, 2022 and 2021:


	Year Ended December 31,
	2022		2021
Cost of product sales	$	35	$	50
Research and development	809		1,079
Selling, general and administrative	8,033		8,874
Total stock-based compensation expense	$	8,877	$	10,003

Schedule of Fair Value Options using Black-Scholes Pricing Model

The Company calculated the fair value of each option grant and the shares issued under the 2017 Plan on the respective dates of grant using the following weighted average assumptions:


	December 31, 2022
	2010 A&R Stock Incentive Plan		2017 Employee Stock Purchase Plan
Risk free interest rate	2.22	%	0.17	%
Expected term (in years)	6.08		0.50
Expected volatility	73.23	%	88.13	%
Annual dividend yield	0.00	%	0.00	%

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of Income (Loss) Before Income Tax, Domestic and Foreign

Income taxes are based on the following book income (loss) before income tax expense:


	Year Ended December 31,
	2022		2021
Domestic operations	$	(72,750)	$	(78,801)
Foreign operations	(2,083)		(3,495)
Loss before provision for income taxes	$	(74,833)	$	(82,296)

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of income tax expense (benefit) at the US federal statutory income tax rate and the income tax provision in the financial statements is as follows:


	Year Ended December 31,
	2022		2021
Income tax expense at statutory rate	21.0	%	21.0	%
Permanent items	(1.5)		(0.4)
Foreign rate differential	(0.7)		0.1
Impact of foreign operations	(14.5)		—
State taxes, net of federal benefit	2.6		4.7
Tax rate changes	(2.9)		—
Foreign exchange and other	(1.7)		(0.9)
Stock based compensation	(2.9)		—
Prepaid royalty write off	(11.8)		—
Change in valuation allowance	12.4		(24.5)
Effective income tax rate	0.0	%	0.0	%

Schedule of Deferred Tax Assets and Liabilities

The principal components of the Company’s deferred tax assets and liabilities are as follows:


	Year Ended December 31,
	2022		2021
Deferred tax assets:
Accrued expenses and other	$	5,144	$	6,712
Prepaid licensing arrangement	—		9,441

Interest expense	14,304		10,708
Stock compensation	7,193		8,583
Lease liability	642		1,081
Research and development credits	2,460		2,461
Capitalized R&D	3,377
Net operating losses	83,376		87,324
Total deferred tax assets	116,496		126,310
Deferred tax liabilities:
Fixed assets, including leases	(171)		(210)
Right-to-use asset	(605)		(1,024)
Total deferred tax liabilities:	(776)		(1,234)
Less: Valuation allowance	(115,720)		(125,076)
Total net deferred tax assets (liabilities)	$	—	$	—

Liquidity - Narrative (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Nov. 23, 2022	Dec. 31, 2021
Subsidiary, Sale of Stock
Cash and cash equivalents	$ 94,244		$ 110,502
Working capital	(38,246)
Accumulated deficit	(684,893)		$ (610,061)
Note Purchase Agreement
Subsidiary, Sale of Stock
Debt covenant, cash and cash equivalents		$ 30,000
Senior Notes
Subsidiary, Sale of Stock
Principal balance outstanding	130,000
Senior Notes \| Note Purchase Agreement
Subsidiary, Sale of Stock
Debt covenant, cash and cash equivalents	$ 30	$ 30,000

Summary of Significant Accounting Policies - Concentration risk (Details) - Customer Concentration Risk - Five Customers	12 Months Ended
	Dec. 31, 2022 customer
Accounts Receivable
Concentration Risk
Number of customers (customer)	5
Concentration risk	52.00%
Sales Revenue, Net
Concentration Risk
Number of customers (customer)	5
Concentration risk	33.00%

Summary of Significant Accounting Policies - Cash and cash equivalents (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash, uninsured amount	$ 92,988	$ 109,017

Summary of Significant Accounting Policies - Accounts receivable (Details) - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Allowance for doubtful accounts	$ 0	$ 444,000

Summary of Significant Accounting Policies - Property and equipment (Details)	12 Months Ended
	Dec. 31, 2022
Computer equipment \| Minimum
Property, Plant and Equipment
Useful life	2 years
Computer equipment \| Maximum
Property, Plant and Equipment
Useful life	3 years
Software
Property, Plant and Equipment
Useful life	3 years
Machinery & production equipment \| Minimum
Property, Plant and Equipment
Useful life	5 years
Machinery & production equipment \| Maximum
Property, Plant and Equipment
Useful life	10 years
Furniture & fixtures \| Minimum
Property, Plant and Equipment
Useful life	3 years
Furniture & fixtures \| Maximum
Property, Plant and Equipment
Useful life	5 years

Summary of Significant Accounting Policies - Long lived assets (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Impairment or disposition of long-lived assets	$ 0	$ 0

Summary of Significant Accounting Policies - Licensing revenues (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Disaggregation of Revenue
Total revenues	$ 76,276,000	$ 74,652,000
Licensing revenues
Disaggregation of Revenue
Total revenues	$ 0	$ 1,000,000

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 280
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-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Summary of Significant Accounting Policies - Advertising expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Advertising expense	$ 16,575	$ 15,638

Summary of Significant Accounting Policies - Net income (loss) per common share (Details) - shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share
Securites excluded from computation of earnings per share (in shares)	43,609,730	12,418,139
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share
Securites excluded from computation of earnings per share (in shares)	9,364,070	7,958,781
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share
Securites excluded from computation of earnings per share (in shares)	1,477,660	1,959,358
Common stock warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share
Securites excluded from computation of earnings per share (in shares)	32,768,000	2,500,000

Fair Value Measurements - Fair value, assets and liabilities measured on recurring basis (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Liabilities
Warrant Liability	$ 21,490
Total Liabilities	21,490
Level 1
Liabilities
Warrant Liability	0
Total Liabilities	0
Level 2
Liabilities
Warrant Liability	0
Total Liabilities	0
Level 3
Liabilities
Warrant Liability	21,490
Total Liabilities	$ 21,490

Fair Value Measurements - Fair value liabilities measured on recurring basis using unobservable inputs (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Warrant Liability
Balance, December 31, 2021	$ 0
Warrants issued	20,279
Change in fair value of liability	1,211
Balance, December 31, 2022	$ 21,490
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Unrealized Gain (Loss) on Fair Value Of Warrants

Fair Value Measurements - Valuation of warrants (Details)	Dec. 31, 2022 $ / shares	Nov. 23, 2022 $ / shares	Nov. 18, 2021
Monte Carlo Simulation
Fair Value Measurement Inputs and Valuation Techniques
Expected life (years)	4 years 10 months 24 days	5 years
Fair value per warrant	$ 0.71	$ 0.67
Stock price
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input	1.60
Stock price \| Monte Carlo Simulation
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input	1.85	1.77
Strike price \| Monte Carlo Simulation
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input	2.57	2.57
Expected volatility
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input			0.7825
Expected volatility \| Monte Carlo Simulation
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input	0.450	0.450
Risk free interest rate
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input			0.0087
Risk free interest rate \| Monte Carlo Simulation
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input	0.038	0.038
Expected dividend yield
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input			0.0000
Expected dividend yield \| Monte Carlo Simulation
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input	0	0

Inventory (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 1,691	$ 3,504
Work-in-process	5,010	4,816
Finished goods	2,742	3,527
Total inventory	$ 9,443	$ 11,847

Property and Equipment (Details) - USD ($)	12 Months Ended
Property and Equipment (Details) - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment
Property and equipment, gross	$ 5,360,000	$ 5,630,000
Less: accumulated depreciation	(4,565,000)	(4,283,000)
Property and equipment, net	795,000	1,347,000
Depreciation	530,000	645,000
Computer equipment and software
Property, Plant and Equipment
Property and equipment, gross	1,203,000	1,173,000
Furniture and fixtures
Property, Plant and Equipment
Property and equipment, gross	366,000	366,000
Machinery and equipment
Property, Plant and Equipment
Property and equipment, gross	3,067,000	3,367,000
Leasehold improvements
Property, Plant and Equipment
Property and equipment, gross	609,000	609,000
Construction in process
Property, Plant and Equipment
Property and equipment, gross	115,000	$ 115,000
Inventories
Property, Plant and Equipment
Depreciation	665,000
Prepaid Expenses and Other Assets
Property, Plant and Equipment
Depreciation	$ 0

Leases - Narrative (Details) - USD ($)	12 Months Ended
Leases - Narrative (Details) - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Leases [Abstract]
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Other assets	Other assets
Option to renew, extension of lease term	$ 0
Operating lease costs	2,985,000	$ 2,843,000
Cash paid for amounts included in the measurement of operating lease liabilities	$ 2,570,000	$ 2,466,000

Leases - Operating lease assets and liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Leases [Abstract]
Operating lease assets	$ 2,445	$ 4,051
Operating lease liabilities:
Current operating lease liabilities	1,971	2,094
Non-current operating lease liabilities	625	2,190
Total operating lease liabilities	$ 2,596	$ 4,284
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Other assets	Other assets
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Accrued expenses and other current liabilities	Accrued expenses and other current liabilities
Operating Lease, Liability, Statement of Financial Position [Extensible List]	Other liabilities	Other liabilities

Leases - Weighted average remaining lease term and weighted average discount rate (Details)	Dec. 31, 2022
Leases [Abstract]
Weighted average remaining lease term (years)	2 years 14 days
Weighted average discount rate	5.24%

Leases - Operating lease maturities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Operating leases
2023	$ 2,153
2024	548
2025	82
Thereafter	0
Total undiscounted future minimum lease payments	2,783
Less: difference between undiscounted lease payments and discounted operating lease liabilities	187
Total operating lease liabilities	$ 2,596	$ 4,284

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Accrued expenses:
Product revenue allowances	$ 27,993	$ 26,521
Selling, general and administrative expenses	3,799	6,124
Research and development expenses	1,298	6,857
Payroll expenses	7,888	7,569
Other	1,915	2,057
Total accrued expenses	42,893	49,128
Other current liabilities:
Lease liability	1,971	2,094
Total other current liabilities	1,971	2,094
Total accrued expenses and other current liabilities	$ 44,864	$ 51,222

License Agreements (Details) $ in Thousands	1 Months Ended
License Agreements (Details) $ in Thousands	Jan. 31, 2021 USD ($)
Royalty Agreement Terms
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Sales milestone payments eligible to be received (up to)	$ 1,000

Debt, net - Narrative (Details) - USD ($)		3 Months Ended		12 Months Ended
Debt, net - Narrative (Details) - USD ($)	Nov. 21, 2022	Sep. 30, 2020	Dec. 31, 2019	Dec. 31, 2022	Dec. 31, 2021	Nov. 23, 2022	Nov. 09, 2022	Aug. 10, 2022	Aug. 09, 2022	Dec. 01, 2020	Feb. 13, 2020	Sep. 12, 2019
Note Purchase Agreement
Debt Instrument [Line Items]
Fee due on the maturity date of the note purchase agreement							$ 1,300,000	$ 780,000
Debt covenant, cash and cash equivalents						$ 30,000,000
Senior Notes \| Note Purchase Agreement
Debt Instrument [Line Items]
Debt maximum borrowing capacity												$ 130,000,000
Face amount												$ 80,000,000
Trailing twelve month net revenue covenant								$ 85,000,000	$ 90,000,000
Floor interest rate	8.50%
Increase in interest rate	3.00%
Make whole premium payment	$ 24,000,000
Amendment fee, percentage	3.00%
Amendment fee payable	$ 1,300,000
Debt covenant, cash and cash equivalents				$ 30,000		$ 30,000,000
Interest expense				$ 16,843,000	$ 15,973,000
Effective rate				13.62%
Senior Notes \| Note Purchase Agreement \| SOFR
Debt Instrument [Line Items]
Debt term	3 months
Senior Notes \| Note Purchase Agreement \| SOFR
Debt Instrument [Line Items]
Variable rate	2.50%
Senior Notes \| Note Purchase Agreement \| Debt Instrument, Redemption, Period One
Debt Instrument [Line Items]
Debt instrument, make-whole provision, payment accrual period	18 months
Amendment fee	$ 3,900,000
Senior Notes \| Note Purchase Agreement \| Debt Instrument, Redemption, Period Two
Debt Instrument [Line Items]
Amendment fee	$ 1,300,000
Senior Notes \| Note Purchase Agreement \| Debt Instrument, Redemption, Period Three
Debt Instrument [Line Items]
Debt instrument, make-whole provision, payment accrual period	3 years
Amendment fee	$ 2,600,000
Senior Notes \| Note Purchase Agreement - First Delayed Draw Notes
Debt Instrument [Line Items]
Face amount											$ 30,000,000
Senior Notes \| Note Purchase Agreement - First Delayed Draw Notes \| Quarter Ended December 31, 2019
Debt Instrument [Line Items]
Debt issuance criteria term, net sales and royalties benchmark			$ 9,000,000
Senior Notes \| Note Purchase Agreement - Third Delayed Draw Notes
Debt Instrument [Line Items]
Face amount										$ 20,000,000
Senior Notes \| Note Purchase Agreement - Third Delayed Draw Notes \| Quarter Ended September 30, 2020
Debt Instrument [Line Items]
Debt issuance criteria term, net sales and royalties benchmark		$ 14,500,000

Debt, net - A&R Note Purchase Agreement (Details) - Senior Notes - USD ($) $ in Thousands	Nov. 21, 2022	Nov. 20, 2022
March 31, 2023
Debt Instrument [Line Items]
XHANCE net product sales and royalties		$ 98,750
June 30, 2023
Debt Instrument [Line Items]
XHANCE net product sales and royalties		102,500
September 30, 2023
Debt Instrument [Line Items]
XHANCE net product sales and royalties		106,250
December 31, 2023
Debt Instrument [Line Items]
XHANCE net product sales and royalties		110,000
March 31, 2024
Debt Instrument [Line Items]
XHANCE net product sales and royalties	$ 82,500	113,750
June 30, 2024
Debt Instrument [Line Items]
XHANCE net product sales and royalties	90,000	$ 117,500
September 30, 2024
Debt Instrument [Line Items]
XHANCE net product sales and royalties	102,500
December 31, 2024
Debt Instrument [Line Items]
XHANCE net product sales and royalties	110,000
March 31, 2025
Debt Instrument [Line Items]
XHANCE net product sales and royalties	115,000
June 30, 2025
Debt Instrument [Line Items]
XHANCE net product sales and royalties	120,000
September 30, 2025
Debt Instrument [Line Items]
XHANCE net product sales and royalties	125,000
December 31, 2025
Debt Instrument [Line Items]
XHANCE net product sales and royalties	130,000
March 31, 2026
Debt Instrument [Line Items]
XHANCE net product sales and royalties	135,000
June 30, 2026
Debt Instrument [Line Items]
XHANCE net product sales and royalties	140,000
September 30, 2026
Debt Instrument [Line Items]
XHANCE net product sales and royalties	145,000
December 31, 2026
Debt Instrument [Line Items]
XHANCE net product sales and royalties	150,000
March 31, 2027
Debt Instrument [Line Items]
XHANCE net product sales and royalties	155,000
June 30, 2027
Debt Instrument [Line Items]
XHANCE net product sales and royalties	160,000
September 30, 2027
Debt Instrument [Line Items]
XHANCE net product sales and royalties	$ 165,000

Debt, net - Schedule of long term debt (Details) - Senior Notes - Note Purchase Agreement - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Face amount	$ 130,000	$ 130,000
Front end fees	(666)	(717)
Debt issuance costs	(6,739)	(4,165)
Back end fees	5,980	1,300
Long-term Debt	$ 128,575	$ 126,418

- Definition

Amount, excluding unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Employee Benefit Plans (Details) - USD ($) $ in Thousands	12 Months Ended
Employee Benefit Plans (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Defined Contribution Plan Disclosure
Maximum annual contributions per employee	100.00%
Accrued expenses related to the Company match	$ 256
Defined contribution plan, cost	1,112	$ 1,340
Foreign Plan
Defined Contribution Plan Disclosure
Defined contribution plan, cost	$ 11	$ 6
Defined Contribution Plan, Tranche One
Defined Contribution Plan Disclosure
Maximum annual contributions per employee	3.00%
Employer matching contribution	100.00%
Defined Contribution Plan, Tranche Two
Defined Contribution Plan Disclosure
Maximum annual contributions per employee	2.00%
Employer matching contribution	50.00%

Commitments and Contingencies (Details)	Dec. 31, 2022 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Purchase obligation	$ 0

Stockholders' Equity - Narrative (Details) $ / shares in Units, $ in Thousands			1 Months Ended	12 Months Ended
	Nov. 23, 2022 $ / shares shares	Nov. 18, 2021 USD ($) $ / shares shares	Dec. 31, 2022 USD ($) vote shares	Dec. 31, 2022 USD ($) vote $ / shares	Nov. 21, 2022 $ / shares
Class of Stock
Vote per share \| vote			1	1
Dividends declared (in dollars per share) \| $ / shares				$ 0
Class of warrant or right restriction, common shares maximum ownership If exercised, percent	4.99%
Class of warrant or right restriction, common shares maximum ownership prior to execution, percent	9.99%
Class of warrant or right restriction, common shares maximum ownership after effective waiting period, percent	19.99%
Common stock warrants
Class of Stock
Price per share (in dollars per share) \| $ / shares					$ 2.565
Warrants Expiring November 18, 2024
Class of Stock
Common stock warrant exercise price (in dollars per share) \| $ / shares		$ 1.60
Number of shares called by warrants (in shares)		2,500,000
Warrants and rights outstanding \| $		$ 2,009
Warrants Expiring September 12, 2022
Class of Stock
Common stock warrant exercise price (in dollars per share) \| $ / shares		$ 6.72
Number of shares called by warrants (in shares)		810,357
Public Offering
Class of Stock
Number of shares issued (in shares)		28,750,000
Price per share (in dollars per share) \| $ / shares		$ 1.60
Consideration received on transaction \| $		$ 42,842
Commissions \| $		2,860
Deferred offering costs \| $		$ 298
Public Offering \| Common Stock
Class of Stock
Number of shares issued (in shares)	26,320,000
Price per share (in dollars per share) \| $ / shares	$ 1.89
Public Offering \| Common Stock \| Underwriters
Class of Stock
Number of shares issued (in shares)	3,948,000		1,541,299
Consideration received on transaction \| $			$ 49,296
Commissions \| $			3,238
Deferred offering costs \| $			$ 359	$ 359
Number of shares called by warrants (in shares)	3,948,000
Public Offering \| Common stock warrants
Class of Stock
Number of shares issued (in shares)	30,268,000
Common stock warrant exercise price (in dollars per share) \| $ / shares	$ 0.01
Number of shares called by warrants (in shares)	26,320,000

Stockholders' Equity - Grant date fair value of warrants, valuation assumptions (Details)	Dec. 31, 2022	Nov. 18, 2021
Risk free interest rate
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input		0.0087
Expected term (in years)
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input		3
Expected volatility
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input		0.7825
Annual dividend yield
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input		0.0000
Fair value of common stock
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input	1.60

Stockholders' Equity - Warrants Outstanding (Details)	Dec. 31, 2022 $ / shares shares
Warrants Expiring November 15, 2024
Class of Stock
Number of warrants outstanding (in shares) \| shares	2,500,000
Common stock warrant exercise price (in dollars per share) \| $ / shares	$ 1.60
Warrants Expiring November 23, 2027
Class of Stock
Number of warrants outstanding (in shares) \| shares	30,268,000
Common stock warrant exercise price (in dollars per share) \| $ / shares	$ 2.565

Stock-based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award
Granted (in shares)	3,473,370
Stock-based compensation expense	$ 8,877	$ 10,003
Maximum annual contributions per employee	100.00%
Expected dividend yield	0.00%
Inventories
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation expense	$ 83
Service Based Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Award vesting period	4 years
Fair value of common stock (in dollars per share)	$ 1.21
Intrinsic value of exercised options	$ 111	35
Intrinsic value of options outstanding	81
Intrinsic value of exercisable options	8
Unrecognized compensation cost	$ 4,368
Unrecognized compensation, estimated weighted-average amortization period	2 years 4 months 6 days
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award
Award vesting period	4 years
Shares issued (in shares)	1,105,246
Price issued (in dollars per share)	$ 1.85
Stock-based compensation expense	$ 1,669
Restricted Stock Units, Performance-Based
Share-based Compensation Arrangement by Share-based Payment Award
Unrecognized compensation cost	942
Restricted Stock Units, Service-Based
Share-based Compensation Arrangement by Share-based Payment Award
Unrecognized compensation cost	$ 3,123
Unrecognized compensation, estimated weighted-average amortization period	2 years 2 months 26 days
Market Based Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Award vesting period	2 years
Granted (in shares)	959,215
Shares vested (in shares)	297,677
Amended and Restated Plan
Share-based Compensation Arrangement by Share-based Payment Award
Number of shares authorized under plan (shares)	17,299,284
Number of shares reserved for future issuance under plan (shares)	3,607,066
Yearly increase in shares reserved for future issuance	4.00%
Plan options contractual life	10 years
Award vesting period	4 years
NASDAQ Inducement Grant Exception \| Service Based Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Granted (in shares)	753,500
NASDAQ Inducement Grant Exception \| Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award
Shares issued (in shares)	60,000
2017 Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award
Number of shares authorized under plan (shares)	2,021,813
Number of shares reserved for future issuance under plan (shares)	982,989
Stock-based compensation expense	$ 253	$ 402
Increase in number of shares issuable each year	1.00%
Maximum annual contributions per employee	15.00%
Maximum employee accrued rights to purchase common stock (in dollars per share)	$ 25
Purchase price of common stock percent	85.00%
Expected dividend yield	0.00%

Stock-based Compensation - Service-based stock options (Details) - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Service-based stock options activity
Shares outstanding, beginning (in shares)	7,958,781
Granted (in shares)	3,473,370
Exercised (in shares)	(95,000)
Expired (in shares)	(947,999)
Forfeited (in shares)	(1,025,082)
Shares outstanding, ending (in shares)	9,364,070	7,958,781
Exercisable at end of period (in shares)	5,521,738
Service-based stock options weighted average exercise price
Beginning balance, Weighted average exercise price (in dollars per share)	$ 8.87
Granted, Weighted average exercise price (in dollars per share)	1.88
Exercised, Weighted average exercise price (in dollars per share)	2.18
Expired, Weighted average exercise price (in dollars per share)	9.56
Forfeited, Weighted average exercise price (in dollars per share)	3.35
Ending balance, Weighted average exercise price (in dollars per share)	6.88	$ 8.87
Options exercisable, Weighted average exercise price per share (in dollars per share)	$ 9.98
Service-based stock options, additional disclosures
Options outstanding, Weighted average remaining contractual life (in years)	6 years 18 days	6 years 6 months
Options exercisable, Weighted average remaining contractual life (in years)	4 years 6 months 18 days

Stock-based Compensation - Schedule of RSUs (Details) - Restricted stock units - shares		12 Months Ended
	Jun. 15, 2022	Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Balance at beginning (in shares)		1,959,358
Shares issued (in shares)		1,105,246
Vested and settled (in shares)	(248,827)	(949,857)
Expired/ forfeited/ canceled (in shares)		(637,087)
Balance at ending (in shares)		1,477,660
Expected to vest (in shares)		1,477,660

Stock-based Compensation - Stock-based compensation expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
Stock-based compensation expense	$ 8,877	$ 10,003
Cost of product sales
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
Stock-based compensation expense	35	50
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
Stock-based compensation expense	809	1,079
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
Stock-based compensation expense	$ 8,033	$ 8,874

Stock-based Compensation - Black-Scholes pricing model options (Details)	12 Months Ended
	Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award
Annual dividend yield	0.00%
2017 Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award
Risk free interest rate	0.17%
Expected term (in years)	6 months
Expected volatility	88.13%
Annual dividend yield	0.00%
2010 A&R Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award
Risk free interest rate	2.22%
Expected term (in years)	6 years 29 days
Expected volatility	73.23%
Annual dividend yield	0.00%

Income Taxes - Schedule of income before income tax, domestic and foreign (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Domestic operations	$ (72,750)	$ (78,801)
Foreign operations	(2,083)	(3,495)
Loss before provision for income taxes	$ (74,833)	$ (82,296)

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
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-Subparagraph (b)
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
-Paragraph 32
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
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-Topic 940
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-Section 25
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=126941158&loc=d3e41242-110953

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
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Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(10))
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Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
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Reference 9: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
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-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(15))
-URI https://asc.fasb.org/extlink&oid=120399700&loc=SL114874048-224260

+ Details

Income Taxes - Schedule of effective income tax rate reconciliation (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Income tax expense at statutory rate	21.00%	21.00%
Permanent items	(1.50%)	(0.40%)
Foreign rate differential	(0.70%)	0.10%
Impact of foreign operations	(14.50%)	0.00%
State taxes, net of federal benefit	2.60%	4.70%
Tax rate changes	(2.90%)	0.00%
Foreign exchange and other	(1.70%)	(0.90%)
Stock based compensation	(2.90%)	0.00%
Prepaid royalty write off	(11.80%)	0.00%
Change in valuation allowance	12.40%	(24.50%)
Effective income tax rate	0.00%	0.00%

Income Taxes - Schedule of deferred tax assets and liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Deferred tax assets:
Accrued expenses and other	$ 5,144	$ 6,712
Prepaid licensing arrangement	0	9,441
Interest expense	14,304	10,708
Stock compensation	7,193	8,583
Lease liability	642	1,081
Research and development credits	2,460	2,461
Capitalized R&D	3,377
Net operating losses	83,376	87,324
Total deferred tax assets	116,496	126,310
Deferred tax liabilities:
Fixed assets, including leases	(171)	(210)
Right-to-use asset	(605)	(1,024)
Total deferred tax liabilities:	(776)	(1,234)
Less: Valuation allowance	(115,720)	(125,076)
Total net deferred tax assets (liabilities)	$ 0	$ 0

Income Taxes - Narrative (Details)	12 Months Ended
Income Taxes - Narrative (Details)	Dec. 31, 2022 USD ($)
Operating Loss Carryforwards [Line Items]
Deferred tax assets tax credit carryforwards research	$ 2,487,000
Deferred tax assets tax credit carryforwards research term	20 years
Decrease in valuation allowance	$ (9,356,000)
Unrecognized tax benefits, income tax penalties and interest accrued	0
Foreign Tax Authority
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	9,073,000
Domestic Tax Authority
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	335,009,000
State and Local Jurisdiction
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	$ 252,324,000