ACQUISITIONS (Tables)

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Schedule of Purchase Price and Corresponding Shares Issued

The following table reflects the acquisition date fair value of the consideration transferred with respect to the Zyla Merger:

Total number of Company ordinary shares issued	25,478,539
Assertio share price as of May 20, 2020	$	0.90
Fair value of common shares issued (in thousands)	$	22,931
Fair value of warrants and stock options issued (in thousands) (1)	11,626
Taxes paid by the Company on behalf of Zyla (in thousands)	529
Total purchase consideration (in thousands)	$	35,086

(1) Represents 4,972,365 of Zyla warrants outstanding as of May 20, 2020 at the Exchange Ratio or 12,430,913 Company warrants.     The Company’s warrants were valued using the Company’s share price of $0.90 as of May 20,2020. As these shares are exercisable at any time at an exercise price of $0.0004 per share and Assertio will issue replacement awards for these shares, these shares have been determined to represent consideration transferred. In addition represents merger consideration portion of the fair value of Zyla outstanding stock options as of May 20, 2020 which were converted to Company stock options at the Exchange Ratio.

Schedule of Purchase Price Allocation

The following table reflects the initial and adjusted estimated preliminary fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):

	Initial Preliminary Purchase Price Allocation to Fair Value		Adjustments to Purchase Price Allocation to Fair Value		Adjusted Preliminary Purchase Price Allocation to Fair Value
Cash	$	7,585	$	—	$	7,585
Accounts receivable	23,133		—		23,133
Inventories	26,742		(12,481)		14,261
Property and equipment	4,512		(3,016)		1,496
Intangible assets	160,900		32,500		193,400
Other assets	9,629		(1,964)		7,665
Total identifiable assets acquired	$	232,501	$	15,039	$	247,540
Accounts payable	21,574		—		21,574
Accrued rebates, returns and discounts	33,254		—		33,254
Other accrued liabilities	15,434		—		15,434
Contingent consideration (a)	29,400		10,500		39,900
Debt (b)	111,900		(600)		111,300
Total liabilities assumed	$	211,562	$	9,900	$	221,462
Net identifiable assets acquired	20,939		5,139		26,078
Goodwill (c)	14,147		(5,139)		9,008
Net assets acquired	$	35,086	$	—	$	35,086

(a) Contingent consideration was recognized and measured at an estimated fair value as of the acquisition date. The contingent consideration liability assumed is the result of Zyla’s previous acquisition of INDOCIN. The liability assumed included contingent consideration related to royalties payable in the form of an earnout provision based on INDOCIN product revenue estimates and a probability assessment with respect to the likelihood of achieving the level of net sales that would trigger the contingent payment. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in fair value measurement accounting. The key assumptions in determining the fair value are the discount rate and the probability assigned to the potential milestones being achieved. At each reporting date, the Company will subsequently re-measure the contingent consideration obligation to estimated fair value. Any changes in the fair value of contingent consideration will be recognized in operating expenses until the contingent consideration arrangement is settled.

(b) The fair value of acquired debt is comprised of the following (in thousands):

13% Senior Secured Note due 2024	$	95,000
Royalty rights obligation	3,300
Promissory note	3,000
Credit agreement	10,000
	$	111,300

Upon the Zyla Merger, the Company assumed and immediately paid off a $3.0 million promissory note. The promissory note was scheduled to mature on July 31, 2020. Additionally upon the Zyla Merger, the Company assumed and immediately paid off a $10.0 million credit agreement. The credit agreement was recognized by Zyla as a related party transaction as the lenders were also holders of a portion of the Zyla’s 13% Notes that were issued on January 31, 2019. The Credit Agreement was scheduled to mature on March 20, 2022. See Note 9, Debt, for further information regarding assumed Debt.

(c) The Company recognized $9.0 million of goodwill which represents the fair value of assets net of the fair value of liabilities assumed in excess of consideration paid. Goodwill arising from the Zyla Merger is not expected to be deductible for tax purposes and is subject to material revision as the purchase price allocation is completed. The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of Zyla.

Schedule of Pro Forma Financial Information

The following table reflects the pro forma consolidated total revenues and net loss for the periods presented, as if the acquisition of Zyla had occurred on January 1, 2019.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Total revenues	$	33,965	$	61,390	$	101,492	$	184,949
Net loss	$	(11,122)	$	(23,102)	$	(36,053)	$	(120,254)