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Note 6 - Realignment of Goals and Objectives and New Development Focus
12 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
Restructuring and Related Activities Disclosure [Text Block]
6.
     
Realignment of Goals and Objectives and New Development Focus
 
Following the approval of SUSTOL and consistent with our transition into a commercial-stage biotechnology company, we realigned our goals and objectives and refocused our development efforts to the area of post-operative pain management. On
October
18,
2016,
we entered into a lease agreement for new office and laboratory space in San Diego, California (see Note
5)
which became our corporate headquarters in
December
2016.
On
September
30,
2016,
the board of directors accepted the resignations of
three
executive officers, and these executive officers and other employees directly affected by the realignment and refocusing will be provided with
one
-time severance payments upon termination, continued benefits for a specified period of time and outplacement assistance.
 
We expect to incur total expenses of
$10.4
million,
$6.4
million of which is primarily for severance, and
$4.0
million of which is for non-cash, stock-based compensation expense. For the year ended
December
31,
2016,
total expenses were
$7.8
million, with
$6.7
million included in research and development expense,
$1.0
million in general and administrative expense and
$0.1
million in sales and marketing expense. The remaining
$2.6
million of total anticipated expenses relate to employees who are being retained until the
fourth
quarter of
2017
and are being recognized on a straight-line basis over the retention period. The Company expects to make the final payment resulting from the realignment of our goals and objectives and new development focus in the
second
quarter of
2018.
As of
December
31,
2016,
we have paid
$2.2
million of the total
$6.4
million cash charges, and
$2.7
million of the cash charges were included in accrued payroll and employee liabilities.
 
 
The expenses we expect to incur are subject to a number of assumptions, and actual results
may
materially differ. We
may
also incur other material expenses not currently contemplated due to events that
may
be associated with, or result from, the realignment of our goals and objectives and new development focus. We have accounted for these expenses in accordance with Accounting Standard Codification No.
420,
Exit or Disposal Cost Obligations
.