Liquidity, Uncertainties and Going Concern

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Liquidity, Uncertainties and Going Concern

2. Liquidity, Uncertainties and Going Concern

The Company is subject to a number of risks similar to those of early stage commercial companies, including dependence on key individuals, the difficulties inherent in the development of a commercial market, the potential need to obtain additional capital necessary to fund the development of its products, and competition from larger companies. The Company expects that its sales performance and the resulting operating income or loss, as well as the status of each of its new product development programs, will significantly impact its cash requirements.

The Company has incurred losses each year since inception and has experienced negative cash flows from operations in each year since inception. As of September 30, 2016, the Company had $15.5 million in cash and cash equivalents and an accumulated deficit of $414.4 million. The Company’s restructured Term Loan includes a liquidity covenant whereby the Company must maintain a cash balance greater than $5.0 million. The Company’s cash balance will not be sufficient to satisfy the Company’s operations for the next 12 months from September 30, 2016 or maintain its liquidity covenant, which raises substantial doubt about the Company’s ability to continue as a going concern. The Company estimates that the cash balance will be sufficient to satisfy the Company’s operations into mid-first quarter of 2017.

The Company expects that its actual sales performance and the resulting operating income or loss, as well as the status of each of its new product development programs, will significantly impact their cash management. The Company intends to maintain compliance with the liquidity covenant and fund future operations by raising additional capital. There can be no assurances that financing will be available on terms acceptable to the Company, or at all. If the Company is unable to raise capital prior to achieving sustained profitability from operations, there could be a material adverse effect on our business, results of operations and financial condition.