Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2018	Mar. 08, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	Aquestive Therapeutics, Inc.
Entity Central Index Key	0001398733
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Public Float		$ 101.0
Entity Common Stock, Shares Outstanding		24,975,007
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 60,599	$ 17,379
Trade and other receivables, net	6,481	6,179
Inventories	5,441	4,014
Prepaid expenses and other current assets	1,680	591
Total current assets	74,201	28,163
Property and equipment, net	12,207	13,460
Intangible assets, net	204	254
Other assets	239	1,239
Total assets	86,851	43,116
Current liabilities:
Accounts payable	20,436	9,601
Accrued expenses	7,195	4,402
Deferred revenue	721	1,347
Loans payable, current	4,600	0
Total current liabilities	32,952	15,350
Loans payable, net	42,603	45,507
Warrant liability	0	7,673
Asset retirement obligations	1,216	1,081
Total liabilities	76,771	69,611
Commitments and Contingencies
Shareholders/members equity/(deficit):
Common interests, no par value. Authorized 500,000,000 units; 121,228,353 units issued and outstanding at December 31, 2017	0	12,727
Common stock, $.001 par value. Authorized 250,000,000 shares; 24,957,309 shares issued and outstanding at December 31, 2018	25	0
Additional paid-in capital	71,431	0
Accumulated deficit	(61,376)	(120,093)
Total shareholders equity/members (deficit)	10,080	(68,596)
Total liabilities and shareholders equity/ members deficit	86,851	43,116
Series A-3 Preferred Stock [Member]
Current liabilities:
Redeemable preferred interests and accrued dividends	0	5,896
Series A-2 Preferred Stock [Member]
Current liabilities:
Redeemable preferred interests and accrued dividends	0	36,205
Series A Preferred Stock [Member]
Shareholders/members equity/(deficit):
Preferred interests	0	16,887
Total shareholders equity/members (deficit)	0	16,887
Series A-1 Preferred Stock [Member]
Shareholders/members equity/(deficit):
Preferred interests	0	21,883
Total shareholders equity/members (deficit)	$ 0	$ 21,883

Consolidated Balance Sheets (Parenthetical)	Dec. 31, 2017 $ / shares shares
Shareholders/members equity/(deficit):
Common interests, par value (in dollars per share) \| $ / shares	$ 0
Common interests, units authorized (in shares)	500,000,000
Common interests, units issued (in shares)	121,228,353
Common interests, units outstanding (in shares)	121,228,353
Series A Preferred Stock [Member]
Shareholders/members equity/(deficit):
Preferred interests, par value (in dollars per share) \| $ / shares	$ 0
Preferred interests, units authorized (in shares)	100,000,000
Preferred interests, units issued (in shares)	16,886,750
Preferred interests, units outstanding (in shares)	16,886,750
Series A-1 Preferred Stock [Member]
Shareholders/members equity/(deficit):
Preferred interests, par value (in dollars per share) \| $ / shares	$ 0
Preferred interests, units authorized (in shares)	100,000,000
Preferred interests, units issued (in shares)	21,526,850
Preferred interests, units outstanding (in shares)	21,526,850

Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Consolidated Statements of Operations and Comprehensive Loss [Abstract]
Revenues	$ 67,430	$ 66,918
Cost and expenses:
Manufacture and supply	20,988	19,820
Research and development	23,112	22,133
Selling, general and administrative	72,264	25,078
Total costs and expenses	116,364	67,031
Loss from operations	(48,934)	(113)
Other income (expenses):
Interest expense	(7,711)	(7,707)
Interest income	552	0
Change in fair value of warrant	(5,278)	(1,123)
Other expense	(5)	0
Net loss before income taxes	(61,376)	(8,943)
Income taxes	0	0
Net loss	(61,376)	(8,943)
Dividends on redeemable preferred interests	0	(2,480)
Net loss attributable to common shares/ members' interests	(61,376)	(11,423)
Comprehensive loss	$ (61,376)	$ (11,423)
Net loss per share - basic and diluted (in dollars per share)	$ (2.96)
Weighted-average number of common shares outstanding - basic and diluted (in shares)	20,725,526

Consolidated Statements of Changes in Shareholders' Equity/Members' Deficit - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Total	Preferred A Interests Units [Member]	Preferred A-1 Interests Units [Member]	Common Interests [Member]
Balance at Dec. 31, 2016	$ 0	$ 1,460	$ (108,670)	$ (57,197)	$ 16,887	$ 21,883	$ 11,243
Balance (in shares) at Dec. 31, 2016	0				16,886,750	21,526,850	118,785,104
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends on preferred interests	$ 0	0	(2,480)	(2,480)	$ 0	$ 0	$ 0
Issuance of common interests upon exercise of warrants	$ 0	(1,460)	0	24	$ 0	$ 0	$ 1,484
Issuance of common interests upon exercise of warrants (in shares)	0				0	0	2,443,249
Net loss	$ 0	0	(8,943)	(8,943)	$ 0	$ 0	$ 0
Balance at Dec. 31, 2017	$ 0	0	(120,093)	(68,596)	$ 16,887	$ 21,883	$ 12,727
Balance (in shares) at Dec. 31, 2017	0				16,886,750	21,526,850	121,228,353
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Reorganization to C-Corporation	$ 0	(26,495)	120,093	42,101	$ (16,887)	$ (21,883)	$ (12,727)
Reorganization to C-Corporation (in shares)	5,000				(16,886,750)	(21,526,850)	(121,228,353)
Effect of Stock Split	$ 15	(15)	0	0	$ 0	$ 0	$ 0
Effect of Stock Split (in shares)	15,072,647				0	0	0
Common Stock issued to performance unit plan participants	$ 5	19,118	0	19,123	$ 0	$ 0	$ 0
Common Stock issued to performance unit plan participants (in shares)	4,922,353				0	0	0
Reclassification of warrant liability to equity	$ 0	12,952	0	12,952	$ 0	$ 0	$ 0
Cash received for warrant exercise	0	116	0	116	0	0	0
Common Stock issued related to initial public offering	$ 5	68,709	0	68,714	$ 0	$ 0	$ 0
Common Stock issued related to initial public offering (in shares)	4,925,727				0	0	0
Issuance costs related to initial public offering	$ 0	(5,232)	0	(5,232)	$ 0	$ 0	$ 0
Issuance costs related to initial public offering (in shares)	0				0	0	0
Share-based compensation	$ 0	2,278	0	2,278	$ 0	$ 0	$ 0
Share-based compensation (in shares)	31,582
Net loss	$ 0	0	(61,376)	(61,376)	0	0	0
Balance at Dec. 31, 2018	$ 25	$ 71,431	$ (61,376)	$ 10,080	$ 0	$ 0	$ 0
Balance (in shares) at Dec. 31, 2018	24,957,309				0	0	0

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities:
Net loss	$ (61,376)	$ (8,943)
Adjustments to reconcile net loss to net cash (used for) provided by operating activities:
Depreciation and amortization	3,186	3,750
Change in fair value of warrant	5,278	1,123
Share-based compensation	29,940	0
Asset retirement obligation accretion	130	122
Amortization of intangible	50	51
Amortization of debt issuance costs and discounts	1,696	1,860
Non-cash interest expense	0	33
Bad debt provision	3
Bad debt (recovery)	0	(53)
Other, net	104	0
Changes in operating assets and liabilities:
Trade receivables and other receivables	(409)	4,691
Inventories, net	(1,427)	(1,128)
Prepaid expenses and other current assets	(1,140)	(171)
Accounts payable	11,319	2,943
Accrued expenses	281	1,001
Deferred revenue	(626)	545
Net cash (used for) provided by operating activities	(12,991)	5,824
Cash flows from investing activities:
Capital expenditures	(1,824)	(2,068)
Net cash (used for) investing activities	(1,824)	(2,068)
Cash flows from financing activities:
Proceeds from initial offering of common stock	68,714	0
Proceeds from warrant exercise	116	24
Proceeds from issuance of debt	0	5,000
Payments for deferred financing costs	(4,768)	(610)
Payments for taxes on share-based compensation	(6,027)	0
Net cash provided by financing activities	58,035	4,414
Net increase in cash and cash equivalents	43,220	8,170
Cash and cash equivalents:
Beginning of period	17,379	9,209
End of period	60,599	17,379
Supplemental disclosures of cash flow information:
Cash payments for interest	6,049	5,814
Net increase in capital expenditures included in accounts payable and accrued expenses:	104	20
Net (decrease) increase in offering costs included in accounts payable and accrued expenses	(588)	588
Accrued Series A-2 and A-3 preferred dividends	0	2,480
Accrued withholding tax for share based compensation	2,515	0
Deferred financing costs charged to additional paid in capital	5,232	0
Noncash component of warrants exercised	$ 12,591	$ 0

Corporate Organization and Company Overview

12 Months Ended

Dec. 31, 2018

Corporate Organization and Company Overview [Abstract]

Corporate Organization and Company Overview

Note 1. Corporate Organization and Company Overview

(A) Company Overview

Aquestive Therapeutics, Inc. (“Aquestive” or the “Company”) was formed effective on January 1, 2018 via the conversion of MonoSol Rx, LLC to a Delaware corporation and a simultaneous name change. Prior to that date, the business operated as MonoSol Rx, LLC, a Delaware limited liability company. The financial statement information presented from periods prior to January 1, 2018 are that of MonoSol Rx, LLC.

Aquestive is a specialty pharmaceutical company focused on identifying, developing and commercializing differentiated products to address unmet medical needs and solve critical healthcare challenges. The Company has a late-stage proprietary product pipeline focused on the treatment of diseases of the central nervous system, or CNS, and is developing orally administered complex molecules as alternatives to more invasive therapies. Aquestive is pursuing its business objectives through both in-licensing and out-licensing arrangements, as well as the commercialization of its own products. The Company’s major customer and primary commercialization partner has global operations headquartered in the United Kingdom with principal operations in the United States; other customers are principally located in the United States.

The Company conducts its production activities at facilities located in Portage, Indiana, and maintains its headquarters, sales and commercialization operations and its primary research laboratory in Warren, New Jersey.

Aquestive is subject to risks common to companies in similar industries and stages of development, including, but not limited to, competition from larger companies, reliance on revenue from one product, reliance on a single manufacturing site, new technological innovations, dependence on key personnel, reliance on third-party service providers and sole source suppliers, protection of proprietary technology, compliance with government regulations, dependency on the clinical and commercial success of its drug candidates, ability to obtain regulatory approval of its drug candidates, and uncertainty of broad adoption of its approved products, if any, by physicians and consumers, and significant competition and untested manufacturing capabilities.

(B) Corporate Conversion, Reorganization, Stock Splits and IPO

Corporate Conversion

MonoSol Rx, LLC was originally formed in Delaware in January 2004 and until December 31, 2017, the Company conducted its business through MonoSol Rx, LLC, a Delaware limited liability company, or MonoSol. On January 1, 2018, MonoSol converted from a Delaware LLC into a Delaware corporation pursuant to a statutory conversion and changed its name to Aquestive Therapeutics, Inc.

Reorganization

In a corporate reorganization conducted following the conversion of MonoSol into a Delaware corporation, the holders of membership units of MonoSol contributed their interests in MonoSol to Aquestive Partners, LLC, or APL, in exchange for identical interests in APL. As a result of the exchange, APL was issued 5,000 shares of voting common stock in the Company and became the parent and sole stockholder of the Company.

The table below depicts the number of redeemable and non-redeemable interests outstanding for each series of membership interests at December 31, 2017, which were converted to identical interests in APL on a 1:1 basis effective January 1, 2018.

	December 31, 2017
Redeemable Preferred A-3 Interests		5,055,000
Redeemable Preferred A-2 Interests		82,071,200
Nonredeemable A-1 interests		21,526,850
Nonredeemable A interests		16,886,750
Common Interests		121,228,353
		246,768,153

Stock Splits

In April 2018, the Board approved an amendment to the Certificate of Incorporation of the Company to:

(i)

increase the authorized number of capital stock from 25,000 to 350,000,000 shares,

(ii)

authorize the Non-Voting Common Stock, and

(iii)

affect a stock split of the Company’s common stock, par value $0.001 per share, such that each share be subdivided and reclassified into 37,212 shares of Voting Common Stock, par value $0.001 per share.

In July 2018, the Board approved an additional amendment to the Certificates of Incorporation of the Company to affect a reverse stock split of the Company’s common stock, par value $0.001 per share, such that each 12.34 shares outstanding converted into one share of common stock, par value $0.001 per share.

For purposes of these financial statements, the net effect of these stock splits has been presented as if they had occurred on January 1, 2018.

Initial Public Offering of Common Stock and Authorized Number of Capital Stock

On July 27, 2018, the Company closed the initial public offering (“IPO”) of 4,500,000 shares of common stock at an offering price of $15.00 per share. The Company received net proceeds of approximately $57,543 after deducting underwriting discounts, commissions, and offering related transaction costs of approximately $9,957. On August 15, 2018, the Company was informed that the underwriters exercised their over-allotment option and the Company issued 425,727 additional common shares at $15.00 per share. Upon the closing of such exercise, the Company received additional net proceeds of approximately $5,939, after deducting underwriter discounts of approximately $447. The IPO and overallotment option resulted in total net proceeds of $63,482. Immediately prior to the consummation of the IPO, all of the Company’s outstanding shares of non-voting common stock was automatically converted to 4,922,353 shares of voting common stock.

On July 27, 2018, the Board approved an amendment to the Certificate of Incorporation of the Company to decrease the authorized number of capital stock from 350,000,000 to 250,000,000 shares.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 3. Summary of Significant Accounting Policies

(A) Principles of Consolidation

On January 1, 2018 MonoSol Rx, LLC (which previously consolidated MonoSol Rx, Inc. in 2017) was converted from a Delaware LLC into a Delaware corporation pursuant to a statutory conversion under the laws of the State of Delaware. The resulting entity is Aquestive Therapeutics, Inc. into which is consolidated its wholly-owned subsidiary MonoSol Rx, Inc.

These consolidated financial statements presented for periods earlier than January 1, 2018 include the accounts of the MonoSol Rx, LLC. and its wholly owned subsidiary, MonoSol Rx, Inc. Other than corporate formation activities, MonoSol Rx, Inc. has conducted no commercial, developmental or operational activities and has no customers or vendors.

(B) Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, including disclosure of contingent assets and contingent liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to estimates and assumptions include allowances for rebates from proprietary product sales, the allowance for sales returns, the useful lives of fixed assets, valuation of share-based compensation, and contingencies.

The Company considers all short-term, highly liquid investments purchased with original maturities of three months or less to be cash equivalents. These investments are carried at cost, which approximates fair value. At December 31, 2018 and 2017, the Company had no cash equivalents.

(D) Concentration of Credit Risk

Cash and cash equivalents are maintained at one federally insured financial institution. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to any credit risk due to the financial position of the banking institution.

(E) Trade Accounts Receivable

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company grants credit to customers in the normal course of business, but generally does not require collateral or any other security to support its receivables. The Company’s credit terms generally range from 30 to 60 days, however some credit terms may reach 105 days, depending on the customer and type of invoice.

The Company evaluates the collectability of accounts receivable based on a combination of factors. In circumstances where a specific customer is unable to meet its financial obligations to the Company, a provision to the allowances for doubtful accounts is recorded against amounts due in order to reduce the net recognized receivable to the amount that is reasonably expected to be collected. For all other customers, a provision to the allowances for doubtful accounts is recorded based on factors including the length of time the receivables are past due, the current business environment and the Company’s historical experience. Provisions to the allowances for doubtful accounts are recorded to selling, general and administrative expenses. Account balances are charged off against the allowance when it is probable that the receivable will not be recovered. The allowance for doubtful accounts, associated with recoverability of accounts receivable, was $58 and $55 as of December 31, 2018 and 2017, respectively.

(F) Inventories

Inventories, consisting of purchased materials, direct labor and manufacturing overhead, are stated at the lower of cost, determined by the first-in, first-out method, or net realizable value, in accordance with ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. The Company regularly reviews its inventories for impairment and reserves are established when necessary.

At each balance sheet date, the Company evaluates inventories for excess quantities, obsolescence or shelf life expiration. This evaluation includes analysis of historical sales levels by product, projections of future demand, the risk of competitive obsolescence for products, general market conditions, and a review of the shelf life expiration dates for products. To the extent that management determines there are excess or obsolete inventory or quantities with a shelf life that is too near its expiration for the Company to reasonably expect that it can sell those products, or use them in production, prior to their expiration, the Company will adjust the carrying value to estimated net realizable value as necessary.

(G) Property and Equipment

Property and equipment are stated at cost. Depreciation and amortization is computed by the straight line method based on the estimated useful lives of the respective assets, as discussed below. Leasehold improvements are amortized over the lesser of the lease terms or the estimated useful lives of the assets. Maintenance and repair costs are charged to expense as incurred, and expenditures for major renewals and improvements are capitalized. Upon disposition of property and equipment, the related cost and accumulated depreciation and amortization are removed from the accounts, and any gain or loss is reflected in the accompanying Consolidated Statements of Operations and Comprehensive Loss.

(H) Intangible Assets

Intangible assets include the costs of acquired composition and process technologies and the costs of purchased patents used in the manufacture of orally soluble film. The Company amortizes these assets using the straight-line method over the shorter of their legal lives or estimated useful lives.

(I) Impairment of Long-Lived Assets

Long lived assets, such as property, plant, and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

(J) Revenue Recognition

Pursuant to FASB ASC Topic 605, Revenue Recognition, revenue is recognized when there is persuasive evidence of an agreement, title has been transferred or delivery has occurred, the price is fixed and determinable, and collection is reasonably assured.

Manufacture and Supply Revenue – The Company records revenues when products are shipped and title passes to the customers.

Co-development and Research Fees – Co-development and research fees are earned through performance of specific tasks, activities or completion of stages of development defined within a contractual arrangement with a customer. The nature of these performance obligations, broadly referred to as milestones or deliverables, are usually dependent on the scope and structure of the project as contracted, as well as the complexity of the product and the specific regulatory approval path necessary for that product. Accordingly, the duration of the Company’s research and development projects may range from several months to approximately three years. Although each contractual arrangement is unique, common milestones included in these arrangements include those for the performance of efficacy and other tests, reports of findings, formulation of initial prototypes, production of stability clinical and/or scale-up batches, and stability testing of those batches. Additional milestones may be established and linked to clinical results of the product submission and/or approval of the product by the FDA and the commercial launch of the product. Co-development and research fees are recognized when related milestones are completed and delivered and, in some cases, accepted by the customer.

License and Royalty Revenue – License revenue is recognized in accordance with the terms of the license agreement. The Company’s license revenues most commonly are non-refundable once collected and are typically recognized as revenue at the time that the transferred licensed rights can be utilized for the benefit of the licensee, subject to determinable pricing, performance contingencies and collectability assessments. In the event that a licensing agreement requires the Company to meet ongoing or future performance objectives that are other than inconsequential or perfunctory, licensing revenue may be recognized ratably, or in conjunction with its performance obligations, during the initial term of the license agreement. If a performance obligation, milestone, or contingency exists, revenue is deferred until such time that the contingencies are satisfied, or obligations are met. Payments received in excess of amounts earned are classified as deferred revenue until performance obligations are satisfied. Royalty revenue is recognized in accordance with contractual rates when they can be reasonably estimated based on reported sales data and when collection is reasonably assured. In the event that reasonable sales data is unavailable, revenue is recognized when royalty reports are received.

Collaborative Arrangements – A contractual arrangement falls within the scope of FASB ASC Subtopic 808-10, Collaborative Arrangements, if the arrangement requires the parties to be active participants and the arrangement exposes the parties to significant risks that are tied to the commercial success of the endeavor. Costs incurred and revenues generated on sales to third parties are reported in the Consolidated Statement of Operations based on the guidance in FASB ASC Subtopic 605-45, Revenue Recognition – Principal Agent Considerations. Revenue earned from collaboration partners as of December 31, 2018 and 2017 was not material.

Proprietary Product sales - Revenues from proprietary product sales are recorded when the goods are shipped and title passes to the customer, typically at time of delivery. At the time of sale, estimates for several revenue deductions are recorded. When estimating the impact of these revenue deductions from gross sales for a reporting period, knowledge of historical trends and judgmental estimates are required for each deduction. For sales of Sympazan, returns allowances and prompt pay discounts are estimated based on historical return rates if available, as well as on contractual terms, and these estimates are recorded as a reduction of receivables. Estimates affecting accrued liabilities include those related to wholesaler service fees, co-pay card redemption costs as well as Medicare, Medicaid and other rebates which are similarly based on historical results and contract terms.

Total reductions of proprietary product sales for these various estimated allowances in 2018 were $591, of which $104 affected Accounts receivable and $487 affected Accrued expenses at December 31, 2018. There were no related allowances and accruals at December 31, 2017, as Sympazan was launched in December 2018.

(K) Research and Development

Costs incurred in connection with research and development activities are expensed as incurred. Research and development expenses include (i) employee-related expenses, including salaries, benefits, travel and share-based compensation expense, (ii) external research and development expenses incurred under arrangements with third parties, such as contract research and contract manufacturing organizations, investigational sites and consultants, (iii) the cost of acquiring, developing and manufacturing clinical study materials, and (iv) costs associated with preclinical and clinical activities and regulatory operations. Non-refundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made, in accordance with ASC 730, Research and Development.

(L) Income Taxes

From its founding through October 31, 2017, the Company was a limited liability company (“LLC”) treated as a partnership for income tax purposes. From November 1, 2017 through December 31, 2017, the LLC elected to be taxed as a C corporation. On January 1, 2018, the LLC was converted into a Delaware corporation and incorporated as Aquestive Therapeutics, Inc.

Income taxes are recorded in accordance with FASB ASC Topic 740 Income Taxes, or ASC 740, which provides for deferred taxes using an asset and liability approach. Income taxes have been calculated on a separate tax return basis. Certain activities and costs have been included in the tax returns filed by our predecessor company, MonoSol Rx, LLC. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Tax benefits are recognized when it is more likely than not that a tax position will be sustained during an audit. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Uncertain tax positions are accounted for in accordance with the provision of ASC 740. When uncertain tax positions exist, the tax benefit is recognized to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. To date, the Company has not had any significant uncertain tax positions.

(M) Share-Based Compensation

The Company records share-based compensation expenses for awards of stock options and restricted stock units (RSUs) under ASC 718, Compensation — Stock Compensation, and ASC 505-50, Equity-based Payments to Non-Employees. This standard establishes guidance for the recognition of expenses arising from the issuance of stock-based compensation awards at their fair value at the grant date. Stock-based compensation expense for stock option awards granted after January 1, 2018 is based on their fair value on the grant date using the Black-Scholes-Merton model. Key inputs and assumptions include the stock price at the grant date, exercise price, both the contractual and estimated expected term of the option, and estimates of stock price volatility, expected dividends and a risk-free interest rate. These assumptions require estimates and judgements and changes in those inputs could impact the amount of expenses that are charged to earnings. The Company recognizes compensation expense for the fair value of restricted stock unit and stock option awards over the requisite service period of the award. All excess tax benefits, taxes and tax deficiencies from stock-based compensation are included in the provision for income taxes in the Consolidated Statement of Operations.

For issuances of share-based compensation prior to the Company’s conversion from an LLC to a C Corporation, the Company recorded expenses arising from awards of performance units, also based on ASC 718, Compensation – Stock Compensation. Prior to 2018, the Company issued share-based payments under the terms of its Performance Unit Plans (the “PUP Plans”). The cost of employee services received in exchange for equity-based awards was also based on the grant-date fair value of the awards, and expense measurement was determinable based on the increase of the fair value from the date of grant to the date of settlement. However, unlike the 2018 awards of stock options and RSUs, expense recognition for awards granted under the Company’s PUP Plans was required to be delayed until achievement of specified performance conditions could be considered probable. None of these performance conditions were met, or could be considered probable as of December 31, 2017 and, accordingly, no expenses were recognizable as of that date.

Subsequent to the Company’s conversion from an LLC to a C Corp, on April 16, 2018, these Performance Unit Plans were formally terminated through actions of both the Board of Directors and the required approvals of certain plan participants. As a result, vesting of any then-unvested performance units was accelerated and the Company issued non-voting common shares to compensate the performance unit holders. In accordance with ASC 718, Compensation — Stock Compensation, the Company recorded a total charge to earnings representing the cost of this compensation totaling $27,298, consisting of $19,123 which relates to the estimated fair market value at the issuance date of the 4,922,353 non-voting common shares and $8,175 related to withholding taxes which the Company committed to pay on behalf of the performance unit holders. This compensation expense was estimated using an independent third-party valuation prepared in accordance with the American Institute of Certified Public Accountants Practice Aide, Valuation of Privately-Held Company Equity Securities Issued as Compensation. Key assumptions inherent in this valuation included a 34% discount for lack of marketability, 90% volatility, a weighted average cost of capital of 27.5%. If we had made different assumptions in determinations of fair value at either the initial grant dates of the performance units or at the time of issuance of the non-voting common shares issued in settlement of those grants, our equity-based compensation expense, net loss and net loss per share of common stock could have been significantly different. Immediately prior to the consummation of the IPO, all of the Company’s outstanding shares of non-voting common stock that had been issued in April 2018 were automatically converted to 4,922,353 shares of the voting common stock of the Company.

(N) Per Share Data

Basic net loss per common share is computed by dividing the net loss attributable to common shareholders by the weighted average number of shares of common stock outstanding during the period.

Diluted net income per common share is calculated by dividing net income available to common shareholders as adjusted for the effect of dilutive securities, if any, by the weighted average number of shares of common stock and dilutive common stock outstanding during the period. Potentially dilutive common shares include the shares of common stock issuable upon the exercise of outstanding stock options and warrants, the shares of issued but unvested RSUs and the purchase of shares from the Company’s employee stock purchase plan (using the treasury stock method). For all periods presented, potential common shares have been excluded from the calculation of EPS because their effect would be anti-dilutive.

(O) Comprehensive Loss

Comprehensive loss includes net loss as well as other changes in shareholders’ equity that may result from transactions and economic events other than those with shareholders. For December 31, 2017, the change in members’ (deficit) was from transactions and other events and circumstances other than those resulting from investments by members and distributions to members.

(P) Fair Value Measurements

Certain assets and liabilities are reported on a recurring basis at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

Level 1 — Quoted prices in active markets for identical assets or liabilities. Cash and cash equivalents consisted of cash in bank checking and savings accounts and money market funds which are all Level 1 assets.

Level 2 — 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. The Company currently has no Level 2 assets or liabilities.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. As of December 31, 2018, the Company has no level 3 assets or liabilities.

The Company’s Level 3 liabilities at December 31, 2017 consisted of warrants totaling $7,673. The Company’s warrant liability was stated at fair value based primarily on an independent third-party appraisal prepared as of the reported balance sheet dates consistent with generally-accepted valuation methods of the Uniform Standards of Professional Appraisal Practice, the American Society of Appraisers and the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held Company Equity Securities Issued as Compensation. See Note 12 for further information on the Company’s warrants.

The carrying amounts reported in the balance sheets for trade and other receivables, prepaid and other current assets, accounts payable, accrued expenses and deferred revenue approximate fair value based on the short-term maturity of these assets and liabilities.

(Q) Segment Information

Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company manages its operations as a single segment for purposes of assessing performance and making operating decisions.

(R) Deferred Offering Costs

Deferred Offering costs, consisting primarily of direct incremental legal, accounting and other fees relating to the IPO, were capitalized as incurred. As of December 31, 2017, deferred offering costs of $1,050 were included as a component of Other Assets. Upon completion of the Company’s IPO in July 2018, deferred offering costs of $5,232 were reclassified from Other Assets to Additional Paid in Capital in the accompanying balance sheet.

(S) Recent Accounting Pronouncements

As a public emerging growth company, the Company has elected to take advantage of the extended transition period afforded by Jumpstart Our Business Startups Act for the implementation of new or revised accounting standards and, as a result, the Company will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for public emerging growth companies.

From time to time, new accounting pronouncements are issued by the FASB and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

Recently Adopted Accounting Pronouncements:

In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This guidance simplifies aspects of accounting for employee share-based payments, including income tax consequences, classification of awards as either equity or liabilities, and classifications within the statement of cash flows. This guidance was effective for annual periods beginning after December 15, 2017, with early adoption permitted. Under the Company’s now-terminated Performance Unit Plans (Note 14), vested grants were unable to be exercised prior to either a change in control of the Company or completion of an IPO, and as a result, expense recognition related to the settlement of these awards was deferred until the plans were formally terminated in April 2018 (Notes 3.(M) and 14).Because the Company is in a net operating loss position that requires provision of a full valuation allowance, there was no financial statement impact of adopting the ASU 2016-09 provisions regarding recognition of tax effects associated with share-based compensation.

Recent Accounting Pronouncements Not Adopted as of December 31, 2018:

In May 2014, the FASB issued Accounting Standards Update No 2014-09,“Revenue from Contracts with Customers” (ASU 2014-09) and has subsequently issued a number of amendments to ASU 2014-09. The new standard, as amended, provides a single comprehensive model to be used in the accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry specific guidance. The standard’s stated core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, ASU 2014-09, includes provisions within a five-step model that includes (1) identifying the contract with a customer, (2) identifying the performance obligation in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations, and (5) recognizing when, or as, an entity satisfies a performance obligation. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

The new standard will be effective for us beginning January 1, 2019 and permits two methods of adoption: the full retrospective method, which requires the standard to be applied to each prior period presented, or the modified retrospective method, which requires the cumulative effect adoption to be recognized as an adjustment to opening retained earnings in the period of adoption. The Company will adopt the standard using the modified retrospective method.

The Company has completed an analysis of existing contracts with its customers and assessed the differences in accounting for such contracts under ASU 2014-09 compared with the current revenue accounting standards.

The Company concluded that the implementation of ASU 2014-09 will accelerate the timing of revenue recognition of its manufacturing and supply product sales, however, these changes are not expected to be material to the Company’s consolidated financial statements.

In addition, the Company further analyzed its existing collaborative licensing contracts and determined that for certain arrangements the identified performance obligation under the new standard will be satisfied over time as opposed to a point in time revenue recognition dictated by the current standard. The cumulative effect of initially applying the new revenue standard approximates $3,700 and will be recorded as an adjustment to the opening balance of retained earnings.

In January 2016, the FASB issued revised guidance governing accounting and reporting of financial instruments (ASU 2016-01) and in 2018 issued technical corrections (ASU 2018-03). This guidance requires that equity investments with readily determinable fair values that are classified as available-for-sale be measured at fair value with changes in value reflected in current earnings. This guidance also simplifies the impairment testing of equity investments without readily determinable fair values and alters certain disclosure requirements. ASU No. 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, also provides guidance as to classification of the change in fair value of financial liabilities. These revised standards are effective for the Company for annual periods in fiscal years beginning after December 15, 2018. Adoption of this standard is not expected to have a material impact on the financial statements considering the lack of any such equity investments at the present time.

In February 2016, the FASB issued ASU No. 2016-02,Leases (Topic 842) which establishes a comprehensive new lease accounting model. The new standard: (i) clarifies the definition of a lease; (ii) requires a dual approach to lease classification similar to current lease classifications; and (iii) causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease-term of more than twelve months. The new standard is effective for the Company for fiscal years and interim periods beginning after December 15, 2019 and requires modified retrospective application. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2016-02 will have on its consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), amending existing guidance on the accounting for credit losses on financial instruments within its scope. The guidance introduces an expected loss model for estimating credit losses, replacing the incurred loss model. The new guidance also changes the impairment model for available-for-sale debt securities, requiring the use of an allowance to record estimated credit losses (and subsequent recoveries). The new guidance is effective for the Company beginning after December 15, 2020. The Company is currently evaluating the impact of adoption on its consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, providing guidance on the classification of certain cash receipts and payments in the statement of cash flows intended to reduce diversity in practice, including cash flows related to debt prepayment or extinguishment costs and contingent consideration that may be paid following a business combination. The guidance is effective for the Company for fiscal years beginning after December 31, 2019. Early adoption is permitted. The Company is currently evaluating the effect of the standard on its Consolidated Statement of Cash Flows.

In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which aligns accounting for share-based payments issued to nonemployees to that of employees under the existing guidance of Topic 718, with certain exceptions. This update supersedes previous guidance for equity-based payments to nonemployees under Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company does not expect ASU 2018-07 to have a material impact on its financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework. The purpose of the update is to improve the effectiveness of the fair value measurement disclosures that allows for clear communication of information that is most important to the users of financial statements. There were certain required disclosures that have been removed or modified. In addition, the update added the following disclosures: (i) changes in unrealized gains and losses for the period included in other comprehensive income (loss) for recurring Level 3 fair value measurements held at the end of the reporting period and (ii) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The standard will become effective for the Company for its periods beginning after December 15, 2019; early adoption is permitted. The Company is currently evaluating the impact of ASU 2018-13 on its consolidated financial statements.

Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or not significant to the consolidated financial statements of the Company.

Risks and Uncertainties	12 Months Ended
Risks and Uncertainties	Dec. 31, 2018
Risks and Uncertainties [Abstract]
Risks and Uncertainties	Note 4. Risks and Uncertainties The Company’s cash requirements for 2019 and beyond include expenses related to continuing development and clinical evaluation of its products, costs of regulatory filings, patent prosecution expenses and litigation expenses, expenses related to commercialization of our products, as well as costs to comply with the requirements of being a public company. As of December 31, 2018, we had working capital of $41,249. On July 27 and August 15, 2018, the Company closed the IPO of 4,500,000 and overallotment exercise of 425,727 shares of common stock, respectively, at a price of $15.00 per share raising total net proceeds of $63,482, net of underwriting discounts, legal and accounting professional services and other offering expenses. The Company believes that its revenues from partnered products, cash on hand and the funds received from the IPO are adequate to meet its operating, investing, and financing needs for at least the next twelve months. To the extent additional funds are necessary to meet long-term liquidity needs as the Company continues to execute its business strategy, the Company anticipates that these additional funding requirements will be obtained through monetization of certain royalty streams or through additional, debt or, equity financings or a combination of these potential sources of funds, although the Company can provide no assurance that these sources of funding will be available on reasonable terms, if at all.

Revenues and Trade Receivables, Net

12 Months Ended

Dec. 31, 2018

Revenues and Trade Receivables, Net [Roll Forward]

Revenues and Trade Receivables, Net

Note 5. Revenues and Trade Receivables, Net

The Company’s revenue was comprised of the following:

	Year Ended December 31,
	2018		2017
Manufacture and supply revenue	$	37,319	$	40,092
License and royalty revenue		24,699		23,133
Co-development and research fees		5,184		3,693
Proprietary product sales, net		228		—
Revenues	$	67,430	$	66,918

Disaggregation of Revenue

The following table provides disaggregated net revenue by geographic area:

	Year Ended December 31,
	2018		2017
United States	$	64,565	$	63,710
Ex-United States		2,865		3,208
Revenues	$	67,430	$	66,918

Ex-United States revenues is derived primarily from products manufactured for the Australian and Malaysian markets.

Accounts receivable, net consist of the following:

	December 31,
	2018			2017
Accounts receivable	$	6,610		$	6,156
Other receivables		33			78
Less: allowance for bad debt		(58	)		(55	)
Less: sales-related allowances		(104	)		—
Trade and other receivables, net	$	6,481		$	6,179

Other receivables totaled $33 and $78 as of December 31, 2018 and 2017, respectively, consisting primarily of reimbursable costs incurred on behalf of a customer. Sales allowances in 2018 are estimated in relation to revenues recognized for sales of Sympazan beginning with the launch of this product in December 2018.

The following table presents the changes in the allowance for bad debt:

	December 31,
	2018			2017
Allowance for doubtful accounts at beginning of year	$	55		$	108
Additions charged to bad debt expense		53			—
Write-downs charged against the allowance		(50	)		—
Recoveries of amounts previously reserved		—			(53	)
Allowance for doubtful accounts at end of year	$	58		$	55

The following table presents the changes in sales-related allowances:

	December 31,
	2018		2017
Balance at December 31, 2017	$	—	$	—
Provision related to sales in 2018		104		—
Credits and payments		—		—
Balance at December 31, 2018	$	104	$	—

Concentration of Major Customers

Customers are considered major customers when sales exceed 10% of total net sales for the period or outstanding receivable balances exceed 10% of total receivables. For the years ended December 31, 2018, and 2017, Indivior, Inc. (“Indivior”) represented 89% and 88% of the total revenues for each period, respectively. As of December 31, 2018 and 2017, the Company’s outstanding receivable balance from Indivior represented approximately 78% and 93% of gross receivables, respectively.

Material Agreements	12 Months Ended
Material Agreements	Dec. 31, 2018
Material Agreements [Abstract]
Material Agreements	Note 6. Material Agreements Commercial Exploitation Agreement with Indivior In August 2008, the Company entered into a Commercial Exploitation Agreement with Reckitt Benckiser Pharmaceuticals, Inc. (the “Indivior License Agreement”). Reckitt Benckiser Pharmaceuticals, Inc. was later succeeded to in interest by Indivior, Inc. Pursuant to the Indivior License Agreement, the Company agreed to manufacture and supply Indivior’s requirements for Suboxone, a sublingual film formulation, both inside and outside the United States on an exclusive basis. Under the terms of the Indivior License Agreement, the Company is required to manufacture Suboxone in accordance with current Good Manufacturing Practice standards and according to the specifications and processes set forth in the related quality agreements the Company entered into with Indivior. Additionally, the Company is required to obtain Active Pharmaceutical Ingredients (“API”) for the manufacture of Suboxone directly from Indivior. The Indivior License Agreement specifies a minimum annual threshold quantity of Suboxone that the Company is obligated to fill and requires Indivior to provide the Company with a forecast of its requirements at various specified times throughout the year. The Indivior License Agreement provides for payment by Indivior of a purchase price per unit that is subject to adjustment based on our ability to satisfy minimum product thresholds. Additionally, in the event Indivior purchases certain large quantities of Suboxone during a specified period, Indivior will be entitled to scaled rebates on its purchases. In addition to the purchase price for the Suboxone supplied, Indivior is required to make certain single digit percentage royalty payments tied to net sales value (as provided for in the Indivior License Agreement) in each of the United States and in the rest of the world subject to annual maximum amounts and limited to the life of the related United States or international patents. Indivior exercised its right to buy out its future royalty obligations in the United States under this agreement in 2012. Indivior remains obligated to pay royalties for all sales outside the United States. The Indivior License Agreement contains customary contractual termination provisions, including those for breach, a filing for bankruptcy or corporate dissolution, an invalidation of the intellectual property surrounding Suboxone, or commission of a material breach of the Indivior License Agreement by either party. Additionally, Indivior may terminate if the U.S. Food and Drug Administration (“FDA”) or other applicable regulatory authority declares the Company’s manufacturing site to no longer be suitable for the manufacture of Suboxone or Suboxone is no longer suitable to be manufactured due to health or safety reasons. The initial term of the Indivior License Agreement was seven years from the commencement date. Thereafter, the Indivior License Agreement automatically renews for successive one-year periods, unless Indivior provides the Company with written notice of its intent not to renew at least one year prior to the expiration of the initial or renewal term. Supplemental Agreement with Indivior On September 24, 2017, the Company entered into an agreement with Indivior, or the Indivior Supplemental Agreement. Pursuant to the Indivior Supplemental Agreement, the Company conveyed to Indivior all of our existing and future rights in the settlement of various ongoing patent enforcement legal actions and disputes related to the Suboxone product. The Company also conveyed to Indivior the right to sublicense manufacturing and marketing capabilities to enable an Indivior licensed generic buprenorphine product to be produced and sold by parties unrelated to Indivior or us. Under the Indivior Supplemental Agreement, the Company is entitled to receive certain payments from Indivior commencing on the date of the agreement through January 1, 2023. Once paid, all payments made under the Indivior Supplemental Agreement are non-refundable. Through February 20, 2019, the date of launch of the competing generics of Dr. Reddy’s Labs and Alvogen, the Company received an aggregate of $40,750 from Indivior under the Indivior Supplemental Agreement. Further payments under this agreement are suspended until adjudication of related patent infringement litigation occurs. If such litigation is successful, in addition to the amounts already received as described in the foregoing, the Company may receive up to an additional $34,250, consisting of (i) up to $33,000 in the aggregate from any combination of (a) performance or event-based milestone payments and (b) single digit percentage royalties on net revenue earned by Indivior on sales of Suboxone and (ii) an additional $1,250 that was earned through the issuance of additional process patent rights to the Company. The aggregate payments under this Indivior Supplemental Agreement are capped at $75,000. All payments made by Indivior to the Company pursuant to the Indivior Supplemental Agreement are in addition to, and not in place of, any amounts owed by Indivior to the Company pursuant to the Indivior License Agreement. Indivior’s payment obligations under the Indivior Supplemental Agreement are subject to certain factors affecting the market for Suboxone and may terminate prior to January 1, 2023 in the event certain contingencies relating to such market occur. License Agreement with Sunovion Pharmaceuticals, Inc. In April 2016, the Company entered into a license agreement with Cynapsus Therapeutics Inc. (which was later succeeded to in interest by Sunovion), referred to as the Sunovion License Agreement, pursuant to which the Company granted Sunovion an exclusive, worldwide license (with the right to sub-license) to certain intellectual property, including existing and future patents and patent applications, covering all oral films containing APL-130277 (apomorphine) for the treatment of off episodes in Parkinson’s disease patients, as well as two other fields. The Company’s licensee, Sunovion, as sponsor of APL-130277, submitted an NDA to the FDA on March 29, 2018; following the January 2019 PDUFA date, Sunovion received a CRL that requires additional data, but does not require additional clinical studies. In consideration for the rights granted to Sunovion under the Sunovion License Agreement, the Company received aggregate payments totaling $18,000 to date. In addition to the upfront payment of $5,000, the Company has also earned an aggregate of $13,000 in connection with specified regulatory and development milestones in the United States and Europe (the “Initial Milestone Payments”), all of which of which has been received to date. The Company is also entitled to receive certain contingent one-time milestone payments related to product availability and regulatory approval in the United States and Europe, certain one-time milestone payments based on the achievement of specific annual net sales thresholds of APL-130277, and ongoing mid-single digit percentage royalty payments related to the net sales of APL-130277 (subject to reduction to low-single digit percentage royalty payments in certain circumstances), subject to certain minimum payments. The maximum aggregate milestone payments that may be paid to the Company pursuant to the Sunovion License Agreement is equal to $45,000. With the exception of the Initial Milestone Payments, there can be no guarantee that any such milestones will in fact be met or payable. This Sunovion License Agreement will continue until terminated by the Company or Sunovion in accordance with the termination provisions of the Sunovion License Agreement. Absent early termination, the Sunovion License Agreement continues (on a country-by-country basis) until the expiration of all applicable licensed patents. Upon termination, all rights to intellectual property granted to Sunovion to develop and commercialize products will revert to the Company and Sunovion must continue to pay royalties to the Company on each sale of their remaining inventory of products commercialized by Sunovion which include apomorphine as their API. Agreement to Terminate CLA with KemPharm In March 2012, the Company entered into an agreement with KemPharm, Inc. (“KemPharm”), to terminate a Collaboration and License Agreement entered into in April 2011. Under this termination arrangement, the Company has the right to participate in any and all value that KemPharm may derive from the commercialization or any other monetization of KP 415 and KP 484 compounds or their derivatives. Among these monetization transactions are those related to any business combinations involving KemPharm and collaborations, royalty arrangements, or other transactions from which KemPharm may realize value from these compounds. The Company has not received payments under this arrangement during the years ended December 31, 2018 and 2017.

Loans Payable	12 Months Ended
Loans Payable	Dec. 31, 2018
Loans Payable [Abstract]
Loans Payable	Note 11. Loans Payable On August 16, 2016, the Company entered into a Loan Agreement and Guaranty with Perceptive Credit Opportunities Fund, LP (“Perceptive”). At closing, the Company borrowed $45,000 from Perceptive and was permitted to borrow up to an additional $5,000 within one year of the closing date based upon achievement of a defined milestone. In March 2017, the Company met its performance obligations under the terms of the credit agreement with Perceptive and drew down the remaining $5,000 of its $50,000 credit facility. The loan proceeds were used to pay the existing debt obligation of $37,500 due to White Oak Global Advisors, LLC, with the balance available for general business purposes. On May 21, 2018, the Company and Perceptive agreed to make certain amendments to the loan agreement then in effect. In the event that a qualified IPO could be consummated on or before December 31, 2018, the Company and Perceptive agreed to postpone the initial loan principal payments, delay the loan maturity date to December 16, 2020 and retain interest rate terms, payable monthly, at one-month LIBOR or approximately 2% plus 9.75%, subject to a minimum rate of 11.75%. Accordingly, commencing on May 31, 2019, seven monthly loan principal payments are due in the amount of $550. Thereafter, monthly principal payments in the amount of $750 are due through the maturity date, December 16, 2020, at which time the full amount of the remaining outstanding loan balance is due. At December 31, 2018, $4,600 was classified as current debt. The Company’s tangible and intangible assets are subject to first priority liens to the extent of the outstanding debt. Further, under the Loan Agreement, as amended, the Company is permitted, subject to Perceptive’s consent, to monetize the royalty and fees derived from sales of certain apomorphine products and, in connection with such monetization Perceptive has agreed to release liens related to these royalties and fees. Other significant terms include financial covenants, change of control triggers and limitations on additional indebtedness, asset sales, acquisitions and dividend payments. Financial covenant requirements include (1) minimum liquidity under which a $4,000 minimum cash balance must be maintained at all times and (2) a minimum revenue requirement under which minimum revenues for the trailing twelve consecutive months, measured at the end of each calendar quarter, must also be met. As of December 31, 2018, the Company was in compliance with all financial covenants. Also, as of that date, the carrying value of the Company’s loan payable approximated its market value. At closing, Perceptive received a warrant to purchase senior common equity interests representing 4.5% of the fully diluted common units of the Company on an as converted basis, which was automatically exercised in full at the time of the IPO (see also Notes 3 and 12). The Company capitalizes legal and other third-party costs incurred in connection with obtaining debt as deferred debt issuance costs and applies the unamortized portion as a reduction of the outstanding face amount of the related loan in accordance with ASU 2015-03, Interest – Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs. Similarly, the Company amortizes debt discounts, such as those represented by warrants issued to its lenders, and offsets those as a direct reduction of its outstanding debt. Amortization expense arising from deferred debt issuance costs and debt discounts for the years ended December 31, 2018 and 2017 were $1,696 and $1,860, respectively. Unamortized deferred debt issuance costs and deferred debt discounts totaled $2,797 as of December 31, 2018 and $4,493 as of December 31, 2017.

Warrants

12 Months Ended

Dec. 31, 2018

Warrants [Abstract]

Warrants

Note 12. Warrants

The warrant issued to Perceptive in connection with the August 16, 2016 Loan Agreement was, by its terms, to expire on August 16, 2023 and provided certain rights and preferences including anti-dilution adjustments so that, upon exercise, they would represent 4.5% of the Company’s fully diluted common stock on an as converted basis, subject to dilution for certain financing including the issuance of shares upon termination of our PUP Plans. The warrant also provided Perceptive with a put right which, if exercised under certain circumstances, would require the Company to purchase the warrant for $3,000 within the first year of the loan or $5,000 thereafter. Because these re-purchase terms could have required net-cash settlement, the appraised value of this warrant at the time of issuance of $5,800 was classified as a liability, rather than as a component of equity, and was treated as a debt discount, with the unamortized portion applied to reduce the face amount of the loan in the accompanying Consolidated Balance Sheet.

The Company used a third-party valuation to assist in determining the fair value of these warrants due to the absence of available Level 1 and Level 2 inputs. The fair values at both the date of the issuance and the balance sheet date were based on unobservable Level 3 inputs. Fair value was based on the aggregate equity of the Company, which was estimated utilizing the income and market valuation approaches. A probability weighted return model was then utilized to allocate the resulting aggregate equity value of the Company to the underlying securities. Estimates and assumptions impacting the fair value measurement included the following factors: the then-current state of development of the Company’s pipeline product candidates, including status of clinical trials; the Company’s progress towards an IPO, including selection of investment bankers, assessment of the IPO marketplace and other funding alternatives; a discount rate of 26.5%, and a volatility rate of 90% for December 31, 2017.

Immediately prior to pricing of the Company’s initial public offering, Perceptive received 863,400 shares of common stock issuable pursuant to the automatic exercise of warrants at a total price of $116. As a result, the warrant liability of $12,951 was reclassified to additional paid in capital during the third quarter of 2018. A Level 1 market price of $15.00, the initial price at which the Company’s common stock was publicly offered, was used in determining fair value as of the warrants’ conversion date.

A roll-forward of warrant liability is as follows:

Balance as of December 31, 2016	$	6,550
Changes in fair value recognized		1,123
Balance as of December 31, 2017		7,673
Changes in fair value recognized		5,278
Exercise of warrants		(12,951	)
Balance as of December 31, 2018	$	—

Share-Based Compensation

12 Months Ended

Dec. 31, 2018

Share-Based Compensation [Abstract]

Share-Based Compensation

Note 15. Share-Based Compensation

The Company’s share-based incentive plan costs reflected in the Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2018 included those related to non-voting common shares, restricted stock unit awards (RSUs) and stock option grants. As further detailed below, non-voting common shares were issued in April 2018 to compensate participants in the Company’s previously-maintained Performance Unit Plans at the time that those incentive plans were terminated. Regarding RSUs and options, The Aquestive Therapeutics, Inc. 2018 Equity Incentive Plan was first adopted by the Board of Directors on June 15, 2018 and accordingly, no charges to earnings were recorded in 2017. The Company recognized share-based compensation in its Consolidated Statements of Operations during 2018 as follows:

Expense classification:	Year Ended December 31, 2018
Manufacturing and supply	$	414
Research and development		2,583
Selling, general and administrative		26,943
Total share-based compensation expenses	$	29,940

Share-based compensation from:
Non-voting common shares (A)	$	27,298
Restricted Stock Units (B)		1,085
Stock Options (B)		1,557
Total share-based compensation expenses	$	29,940

In addition to the plans noted above, the Company’s Board of Directors adopted the Aquestive Therapeutics, Inc. Employee Stock Purchase Plan in June 2018 and the Company began rollout of the plan in late 2018. Initial employee purchases under terms of this plan, as outlined below, are expected to be made in 2019.

(A) Non-Voting Common Share Issuance

The Company had two Performance Unit Plans, both of which fell within the scope of FASB ASC Subtopic 718-30, Compensation – Stock Compensation – Awards Classified as Liabilities. Pursuant to the Plans, vested grants were not exercisable prior to either a change in control of the Company or completion of an IPO. These performance conditions rendered the grants contingent and deferred expense recognition until either of the conditions were satisfied. Neither of these conditions were satisfied as of December 31, 2017, and accordingly, no compensation expense was recorded during that year.

On April 16, 2018, the Company terminated the Performance Unit Plans. The termination was executed in accordance with the provisions of the Plans’ termination, which required both Board of Directors and the certain plan participant approval. As a result, the Company accelerated the vesting of any unvested performance units and issued non-voting common shares to compensate the performance unit holders. Immediately prior to the consummation of the IPO, all of the Company’s outstanding shares of non-voting common stock were automatically converted to 4,922,353 shares of voting common stock.

In accordance with ASC 718, Compensation — Stock Compensation, the Company recorded a total charge to earnings of $27,298 comprised of $19,123 which relates to the fair market value of the non-voting shares at the date the shares were granted and $8,175 related to withholding taxes which the Company elected to pay on behalf of the performance unit holders to reflect the compensation cost associated with the issuance of to 4,922,353 non-voting common shares. The compensation expense was estimated using an independent third-party valuation prepared in accordance with the American Institute of Certified Public Accountants Practice Aide, Valuation of Privately-Held Company Equity Securities Issued as Compensation.

The assumptions for the determination of the fair value of are provided in the following table:

Valuation assumptions:
Discount for lack of marketability	34%
Volatility	90%
Weighted average cost of capital	27.5%

The discount for lack of marketability takes into consideration the illiquid nature of the security as well as other qualitative characteristics that would make it less marketable than the more senior securities. Volatility was based on that of comparable public companies. The weighted average cost of capital was also based on that of comparable public companies as well as market interest rate data.

(B) Share-Based Compensation Equity Awards

The Company provides certain employees, non-employee directors and consultants with performance incentives under The Aquestive Therapeutics, Inc. 2018 Equity Incentive Plan (the Plan), adopted by the Board of Directors on June 15, 2018. Under this Plan, the Company may grant restricted stock units, stock options or other stock-based awards in order to align the long-term financial interests of selected participants with those of its shareholders, strengthen the commitment of such persons to the Company, and attract and retain competent and dedicated persons whose efforts will enhance long-term growth, profitability and share value.

Restricted stock units and options that have been awarded in 2018 pursuant to terms of the Plan are subject to graded vesting over a service period, which is typically two or three years. Compensation cost is recognized for these awards on a pro-rata basis over the requisite service period for each award granted.

At December 31, 2018, there were approximately 2.9 million shares available for grant under the Plans.

Restricted stock unit awards (RSUs)

The following table summarizes the Company’s awards of restricted stock units for the year ended December 31, 2018.

	Number of Units			Weighted Average Grant Date Fair Value Per Share
	(In thousands)
Unvested at Plan adoption		—		$	—
Granted		265			14.83
Vested		(60	)		15.03
Unvested, December 31, 2018		205		$	14.77

The Company recognized a charge to 2018 earnings totaling $1,085 related to RSUs awarded during the period from plan adoption through December 31, 2018. The total grant date fair market value of shares vested in 2018 was $896.

As of December 31, 2018, there was approximately $2,568 of unrecognized compensation costs related to restricted stock units awarded during 2018. These costs are expected to be recognized over a weighted-average period of less than three years. The RSUs granted to senior management vest in equal quarterly installments over two years; the RSUs granted to key employees are subject to a three-year graduated vesting schedule. These RSUs are not subject to performance-based criteria other than continued employment. There were no RSU grants prior to the year ended December 31, 2018 and there were no forfeitures during the period.

Stock option awards

The following table summarizes the Company’s stock option activity for the period from Plan adoption in June 2018 through December 31, 2018:

(in 000s, except share price data)	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years		Aggregate Intrinsic Value
Outstanding at January 1, 2018		—
Granted		1,033	$	14.72		9.55	$	—
Exercised, Forfeited, Expired		—
Outstanding at December 31, 2018		1,033	$	14.72		9.55	$	—
Vested or expected to vest at December 31, 2018		962	$	14.72		9.55	$	—
Exercisable at December 31, 2018		87	$	15.02		9.56	$	—

The weighted average grant date fair value of stock options granted during 2018 was $10.83. The fair values of stock options granted were estimated using the Black-Scholes-Merton pricing model based on the following assumptions:

Expected dividend yield	0%
Expected volatility	90%
Expected term (years)	5.8 - 6.1
Risk-free interest rate	2.8 - 2.9%

Aquestive anticipates reinvesting earnings for the foreseeable future in product development and other avenues of share-value growth and accordingly anticipates no dividend payouts. Volatility was determined based on that of comparable public companies, given the lack of any meaningful history regarding its own now-publicly-traded common stock. The expected term of the award was calculated using the simplified method. A weighted average was utilized taking into account the two vesting periods to determine the expected term in years. The risk-free interest rates are derived from the U.S. Treasury yield curve in effect on the date of grant for instruments with a remaining term similar to the expected life of the options. During this year, options were granted with exercise prices ranging from $6.54 to $18.67 and accordingly, given Aquestive’s share price of $6.30 on December 31, 2018, these options provided no intrinsic value at that date.

As of December 31, 2018, $8,845 of total unrecognized compensation expenses related to non-vested stock options is expected to be recognized over a weighted average period of 2.6 years from the date of grant. These option grants provided a maximum contract term of 10 years from grant date, with a weighted average remaining contract life of 9.6 years. Options granted to senior management and Board members vest in equal quarterly or monthly increments over three years; options granted to key employees are subject to a three-year graduated vesting schedule. These stock options are not subject to performance-based criteria other than continued employment.

Employee stock purchase plan

As noted above, the Company’s Board of Directors adopted the Aquestive Therapeutics, Inc. Employee Stock Purchase Plan (ESPP) in June 2018, plan rollout began in late 2018, and initial employee purchases are expected to be made in 2019.

The purpose of the ESPP is to help retain and motivate current employees, to attract new talent, and to provide eligible employees of the Company a convenient manner of purchasing shares of common stock at a discounted price at periodic intervals by means of accumulated payroll deductions. Under the ESPP, a total of 250,000 shares of common stock are currently reserved for issuance. The Company may offer common stock purchase rights biannually under offerings that allow for the purchase of common stock at the lower of 85% of the fair value of shares on either the first or last day of the offering period. The offerings may, or may not, also provide tax advantages. Purchases made via a tax-advantaged offering are intended to qualify as purchases made within the meaning of Section 423 of the Internal Revenue Code. Offerings may run concurrently, or serially, and each offering will be treated as separate and distinct.

Income Taxes

12 Months Ended

Dec. 31, 2018

Income Taxes [Abstract]

Income Taxes

Note 17. Income Taxes

From the period January 1, 2017 through October 31, 2017, the Company was a limited liability company (“LLC”) that passed through income and losses to its members for U.S. federal and state income tax purposes. From November 1, 2017 through December 31, 2017, the LLC elected to be taxed as a C corporation. On January 1, 2018, the LLC was converted into a Delaware corporation and treated as a C corporation for tax purposes.

The tax effect of temporary differences between the tax bases of assets and liabilities and their financial reporting amounts that give rise to the deferred tax assets and deferred tax liabilities as of December 31, 2018 and 2017 are as follows:

	December 31,
	2018			2017
Deferred tax assets:
Accounts receivable	$	16		$	14
Inventory		120			49
Accrued expenses		15			12
NOL carryforwards		10,899			1,330
Interest limitation imposed by the TJCA		2,124			—
Stock Compensation		1,224			—
Other		260			319
Property and equipment		1,380			1,145
Orphan Drug and R&D Tax Credits		3,917			113
		19,955			2,982
Deferred tax liabilities:
Intangible assets		(39	)		(45	)
Prepaid expenses		(407	)		(148	)
		(446	)		(193
Valuation Allowance		(19,509	)		(2,789	)
Net deferred tax asset/(liability)	$	—		$	—

At December 31, 2018 and 2017, the Company had federal net operating loss carryforwards of approximately $39,172 and $5,222, respectively, a significant portion of which carryforward for an indefinite period. At December 31, 2018 and 2017, Company also had state net operating loss carryforwards of approximately $37,989 and $4,678, which will begin expiring in 2039 and 2038, respectively. The Company has determined, based upon available evidence, that is more likely than not that the net deferred tax asset will not be realized and accordingly, has provided a full valuation allowance against its net deferred tax assets. Valuation allowances of approximately $19,509, and $2,789 have been established at December 31, 2018 and 2017, respectively. The Company may also be subject to the net operating loss utilization provisions of Section 382 of the Internal Revenue Code. The effect of an ownership change would be the imposition of an annual limitation on the use of NOL carry forwards attributable to periods before the change. At December 31, 2018 the Company does not expect the utilization of the NOL’s to be limited.

Entities are also required to evaluate, measure, recognize and disclose any uncertain income tax provisions taken on their income tax returns. The Company has analyzed its tax positions and has concluded that there were no uncertain positions as of December 31, 2018 and 2017. The Company did not have any unrecognized tax benefits and has not accrued any interest or penalties for the years ended December 31, 2018 and 2017. The Company's U.S. federal and state net operating losses have occurred since its election to treat as a C Corporation in 2017 and as such, tax years subject to potential tax examination could apply from that date because the utilization of net operating losses from prior years opens the relevant year to audit by the IRS and/or state taxing authorities.

A reconciliation of income tax benefit and the amount computed by applying the statutory federal income tax rates of 21% and 34% to loss before taxes for the years ended December 31, 2018 and 2017, respectively, as follows:

	Year Ended December 31,
	2018			2017
Income taxes at statutory rate		21.00	%		34.00	%
Increase (decrease) resulting from:
State income tax		7.04			4.06
Permanent differences		(7.09	)		(8.90	)
Research & development credit		4.40			1.72
Return to provision		1.48			—
Effect of state rate change		0.41			—
Valuation allowance		(27.24	)		(13.54	)
Effect of the deferred rate change		—			(17.34	)
Effective tax rate		0.00	%		0.00	%

The Tax Cuts and Jobs Act (the “TCJA”) was signed into law on December 22, 2017. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP to situations in which an entity does not have the necessary information available, prepared or analyzed in reasonable detail to complete the accounting for certain income tax effects of the TCJA. That guidance specifies that, for income tax effects of the TCJA that can be reasonably estimated but for which the accounting and measurement analysis is not yet complete, entities should report provisional amounts in the reporting period that includes the enactment date and those provisional amounts can be adjusted for a measurement period not to exceed one year from the enactment date. Additionally, for income tax effects of the TCJA that cannot be reasonably estimated, entities should report provisional amounts for those income tax effects in the first reporting period in which a reasonable estimate can be determined, not to exceed one year from the enactment date.

We did not identify items for which the income tax effects of the 2017 TCJA have not been completed and could not be reasonably estimated as of December 31, 2017, and as such, our financial results reflect the income tax effects of the TCJA for which the accounting under ASC Topic 740 is complete.

On July 1, 2018, the New Jersey governor signed into law a bill which included significant changes to the New Jersey taxation of corporations. Chiefly, this legislation imposes a 2.5% surtax on taxpayers with allocated net income over $1 million for 2018 and 2019, and a 1.5% sur tax for taxpayers with allocated net income over $1 million for 2020 and 2021. In addition, the state is changing its filing requirements from separate entity reporting to combined reporting on a water's edge basis. Further, there are changes to the state's computation of its dividend received deduction and application of IRC section 163(j). The Company has considered these changes and does not believe this change in law will have a material impact due to availability of significant New Jersey NOL carryforwards to set off against future taxable income and a full valuation allowance against the net deferred tax assets.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 18. Commitments and Contingencies

(A) Operating Leases

The Company has entered into various lease agreements for production and research facilities and offices. Most leases contain renewal options. Certain leases contain purchase options and require the Company to pay for taxes, maintenance and operating expenses. All of the Company’s leases are classified as operating leases.

Production and Research Facilities, Portage, Indiana

The Company leases a 73,000-square-foot facility (Ameriplex) in Portage, Indiana, to house additional packaging, R&D and other operations. As amended, this lease has a term that extends through September 30, 2022 and contains a renewal option that could extend the lease through September 30, 2026.

The Company also leases its current 8,400-square-foot production facility (Melton) in Portage, Indiana, which houses certain research and development offices and current good manufacturing practices, or cGMP, manufacturing operations. The lease contains an option to purchase the facility at any time during the lease term along with a right of first refusal to purchase the facility. In October 2012, the Company entered into an additional five-year extension of the lease of this facility, through March 31, 2018, under the same terms and conditions. In October 2017, the Company extended its lease located in Portage, Indiana, which will expire during March 2023 under the same terms and conditions as its former lease.

Office and Laboratory Facilities, Warren, New Jersey

The Company leases its headquarters and principal laboratory facility in Warren, New Jersey. Pursuant to various amendments in February 2011, June 2012 and May 2013, the Company has secured additional space to provide for the growth of its laboratory facilities and corporate and administrative requirements. The lease included five two-year renewal options, one of which was exercised in July 2016 to extend this lease through August 31, 2018. During February 2018, the Company extended this lease by eighteen months through February 28, 2020.

Rent expense for all leased manufacturing facilities and sales, laboratory and office space were $1,393 and $1,344 for the years ended December 31, 2018 and 2017, respectively.

The following schedule presents future minimum lease payments under operating leases as of December 31, 2018, including those derived from renewal options that are deemed noncancelable under FASB ASC Section 840-10-35, Leases - Subsequent Measurement:

	Amount
2019	$	1,233
2020		881
2021		815
2022		681
2023		65
Thereafter		0
Total	$	3,675

(B) Litigation and Contingencies

From time to time, we have been and may again become involved in legal proceedings arising in the ordinary course of business.

Patent-Related Litigation

Beginning in August 2013, the Company was informed of ANDA filings in the United States by Watson Laboratories, Inc. (now Actavis Laboratories, Inc., or Actavis), Par Pharmaceutical, Inc., or Par, Alvogen Pine Brook, Inc., or Alvogen, Teva Pharmaceuticals USA, Inc., or Teva, Sandoz Inc., or Sandoz, and Mylan Technologies Inc. or Mylan, for the approval by the FDA of generic versions of Suboxone Sublingual Film in the United States. The Company filed patent infringement lawsuits against all six generic companies in the U.S. District Court for the District of Delaware. Of these, cases against three of the six generic companies have been resolved.

Sandoz. By court order in August 2016, our ANDA patent litigation case against Sandoz has been dismissed without prejudice for lack of subject matter jurisdiction because Sandoz is no longer pursuing a Paragraph IV certification for its proposed generic version of Suboxone Sublingual Film, and therefore is no longer challenging the validity or infringement of our Orange Book-listed patents.

Mylan. The case against Mylan was settled and the Court signed a Consent Judgment in September 2017 disposing of the entire case.

Par. All cases against Par were resolved pursuant to a May 2018 settlement agreement between Aquestive, Indivior, and Par and certain of its affiliates.

After the commencement of the above-mentioned ANDA patent litigation against Teva, Dr. Reddy’s Laboratories acquired the ANDA filings for Teva’s buprenorphine and naloxone sublingual film that are at issue in these trials.

Trials against Dr. Reddy’s, Actavis and Par in the lawsuits involving the Orange Book and process patents occurred in November-December of 2015 and November of 2016. On June 3, 2016, the Court issued its Trial Opinion finding that the asserted claims of U.S. Patent No. 8,603,514, or the ’514 patent, are valid and infringed by Actavis’s and Par’s ANDA Products. On August 31, 2017, the Court upheld U.S. Patent No. 8,900,497, or the ’497 patent, as valid but not infringed by Par’s, Actavis’s or Dr. Reddy’s proposed processes for making their ANDA Products. The Court also again upheld the validity of the ’514 patent but held it was not infringed by Dr. Reddy’s ANDA Products, and upheld the validity of U.S. Patent No. 8,017,150, or the ’150 patent, but held that it was not infringed by Dr. Reddy’s ANDA Products. All of these cases are consolidated on appeal to the Federal Circuit, except that the cases between Indivior and us and Par and certain affiliates have been resolved by a settlement agreement. Oral argument on the consolidated appeals is scheduled for April 1, 2019.

Trial against Alvogen was held in September 2017. The only issue raised at trial was whether Alvogen’s ANDA Products and processes infringe the ’514 and ’497 patents; Alvogen did not challenge the validity of the patents. In March 2018, the Court issued its opinion finding that Alvogen’s ANDA products and processes would not infringe the ’514 or ’497 patents. The Company and Indivior appealed the ruling, and the appeal is currently pending before the Federal Circuit, with oral argument scheduled for April 1, 2019.

Aquestive is also seeking to enforce our patent rights in multiple cases against BioDelivery Sciences International, Inc., or BDSI. Two cases are currently pending but stayed in the U.S. District Court for the Eastern District of North Carolina:

The first, a declaratory judgment action brought by BDSI against Indivior and Aquestive, seeks declarations of invalidity and non-infringement of U.S. Patents Nos. 7,897,080, or the ’080 patent, 8,652,378, or the ’378 patent, and 8,475,832, or the ’832 patent. This case stayed pending inter partes review of the ’832 patent and reexamination of the ’080 patent.

The second was filed by the Company and Indivior related to BDSI’s infringing Bunavail product, and alleges infringement of our patent, U.S. Patent No. 8,765,167, or the ’167 patent. This case was initially filed in September 2014 in the U.S. District Court for the District of New Jersey but was transferred to North Carolina. Shortly after the case was filed, BDSI filed an IPR challenging the asserted ’167 patent. On March 24, 2016, the Patent Trial and Appeal Board, or the PTAB, issued a final written decision finding the ’167 patent was not unpatentable. The case was stayed in May 2016 pending the final determination of the ’167 patent IPR proceedings. Following the PTAB’s February 7, 2019, decisions on remand denying institution (discussed further below), Aquestive and Indivior submitted a notice to the Court on February 15, 2019, notifying the Court that the stay should be lifted as result of the PTAB’s decisions. BDSI also sent a letter to the Court on February 13, 2019, indicating its intent to appeal the PTAB’s decisions. The parties are awaiting further action from the Court.

On January 13, 2017, the Company also sued BDSI asserting infringement of the ’167 patent by BDSI’s Belbuca product. The case was originally filed in the U.S. District Court for the District of New Jersey and was later transferred to the U.S. District Court for the District of Delaware by agreement of the parties. On October 16, 2018, the Delaware Court issued an order transferring the case to the U.S. Court District for the Eastern District of North Carolina. Upon transfer to the Eastern District of North Carolina, BDSI filed a motion to dismiss and a motion to stay the case pending the proceedings before the PTAB on the ’167 patent (described further below). Following the PTAB’s February 7, 2019, decisions on remand denying institution, the Company submitted a notice to the Court on February 15, 2019, notifying the Court that BDSI’s motion to stay should be denied as moot. BDSI also sent a letter to the Court on February 13, 2019, indicating its intent to appeal the PTAB’s decisions. The parties are awaiting further action from the Court.

On November 28, 2016, after the PTAB issued its final written decisions finding that the ’167 patent was not unpatentable in IPR2015-00165, IPR2015-00168 and IPR2015-00169, BDSI filed a notice of appeal of those decisions to the U.S. Court of Appeals for the Federal Circuit. The case was fully briefed, and the Court heard oral arguments on February 9, 2018. On June 19, 2018, BDSI filed a motion to terminate and remand the appeal, which the Company opposed. On July 31, 2018, the Federal Circuit granted the motion, vacating the PTAB’s decisions and remanding for further proceedings before the PTAB. On February 7, 2019, the PTAB denied BDSI’s petitions in their entirety and terminated the IPR proceedings.

In September 2017, Indivior brought suit against Alvogen for infringement of U.S. Patent No. 9,687,454, or the ’454 patent, based on the filing of an ANDA seeking approval for a generic version of Suboxone Sublingual Film, in the U.S. District Court for the District of New Jersey. In February 2018, Aquestive and Indivior amended the complaint, which added us as a plaintiff and a claim for infringement of U.S. Patent No. 9,855,221, or the ’221 patent.

Indivior brought suits against Dr. Reddy’s and Teva in September 2017, and against Par and certain affiliates in October 2017, for infringement of the ’454 patent, in the U.S. District Court for the District of New Jersey. Indivior also brought suit in September 2017 against Actavis Laboratories UT, Inc. for infringement of the ’454 patent, in the U.S. District Court for the District of Utah. On March 13, 2018, the Court granted transfer of this case to the U.S. District Court for the District of Delaware.

In February 2018, the Company and Indivior brought suit against Actavis, Dr. Reddy’s, Teva, and Par and certain affiliates for infringement of the ’221 patent. The suit against Actavis was filed in the U.S. District Court for the District of Utah, and the other three cases were filed in the U.S. District Court for the District of New Jersey.

In April 2018, the Company brought suit with Indivior against Actavis, Alvogen, Dr. Reddy’s, Teva, and Par and certain affiliates for infringement of U.S. Patent No. 9,931,305, or the ’305 patent. The cases against Alvogen, Dr. Reddy’s, Teva, and Par are pending in the U.S. District Court for the District of New Jersey, and they have each been consolidated with the actions asserting infringement of the ’454 and ’221 patents. Following transfer of the case asserting the ’454 patent from Utah to Delaware, and by agreement of the parties, the cases against Actavis asserting infringement of the ’454, ’221, and ’305 patents are consolidated in a single action pending in the U.S. District Court for the District of Delaware.

All matters involving Par were resolved on May 11, 2018, when Aquestive, Indivior, and Par and certain of its affiliates entered into a settlement agreement resolving patent litigation related to Suboxone (buprenorphine and Naloxone) Sublingual Film. As required by law, the parties submitted the settlement agreement to the U.S. Federal Trade Commission and the U.S. Department of Justice for review.

On June 14, 2018, Dr. Reddy’s notified the U.S. District Court for the District of New Jersey that the FDA had granted final approval of its ANDAs and that it had launched generic versions of Suboxone Sublingual Film. The Company and Indivior filed a motion for a preliminary injunction and a request for a temporary restraining order, and the Court granted the request on June 15, 2018 enjoining and restraining Dr. Reddy’s from offering for sale, selling or importing its generic versions of Suboxone Sublingual Film. On July 13, 2018, the Court granted the preliminary injunction, which enjoined Dr. Reddy’s from launching a generic version of Suboxone during the pendency of the litigation and until further order from the Court. Dr. Reddy’s appealed the preliminary injunction ruling to the Federal Circuit, and the Court heard oral argument on the appeal on October 4, 2018. On November 20, 2018, the Federal Circuit issued an opinion and judgment vacating the preliminary injunction. On February 4, 2019, the Federal Circuit denied our petition for panel rehearing and rehearing en banc. The mandate from the Federal Circuit issued on February 19, 2019, and the Judge in the District of New Jersey vacated the preliminary injunction against Dr. Reddy’s the same day.

On January 22, 2019, the Company and Indivior filed a motion for preliminary injunction and request for a temporary restraining order, seeking to prevent Alvogen from launching its generic versions of Suboxone Sublingual Film. The FDA granted final approval to Alvogen’s generic versions of Suboxone Sublingual Film on January 24, 2019. The Court entered a temporary restraining order on January 25, 2019, enjoining and restraining Alvogen from offering for sale, selling or importing its generic versions of Suboxone Sublingual Film. On February 2, 2019, the Court entered the parties’ stipulation enjoining Alvogen from offering for sale, selling or importing its generic versions of Suboxone Sublingual Film unless and until the dissolution or vacation of the injunction against Dr. Reddy’s. Following issuance of the mandate in the Dr. Reddy’s matter described above, on February 19, 2019, the Judge in the District of New Jersey also vacated the injunction against Alvogen.

The orders by the Judge in the District of New Jersey in the Dr. Reddy’s and Alvogen matters described above permit Dr. Reddy’s and Alvogen to launch their generic versions of Suboxone Sublingual Film prior to the expiration of the patents at issue in those matters. Accordingly, on February 19, 2019, Indivior launched the authorized generic version of Suboxone Sublingual Film, which we manufacture exclusively for sale and marketing by Sandoz Inc. as sub-licensee of Indivior. On February 20, 2019, both Dr. Reddy’s and Alvogen both announced that they had launched their generic versions of Suboxone Sublingual Film, and on February 22, 2019, Mylan Pharmaceuticals, Inc. also launched their generic version of Suboxone Sublingual Film. These launches are “at risk” because Dr. Reddy’s and Alvogen have launched their generic versions of Suboxone Sublingual Film even though they are the subject of ongoing patent infringement litigation.

Antitrust Litigation

On September 22, 2016, forty-one states and the District of Columbia, or the States, brought suit against Indivior and the Company in the U.S. District Court for the Eastern District of Pennsylvania, alleging violations of federal and state antitrust statutes and state unfair trade and consumer protection laws relating to Indivior’s launch of Suboxone Sublingual Film in 2010. After filing, the case was consolidated for pre-trial purposes with the In re Suboxone (Buprenorphine Hydrochloride and Naloxone) Antitrust Litigation, MDL No. 2445, or the Suboxone MDL, a multidistrict litigation relating to putative class actions on behalf of various private plaintiffs against Indivior relating to its launch of Suboxone Sublingual Film. While Aquestive was not named as a defendant in the original Suboxone MDL cases, the action brought by the States alleges that the Company participated in an antitrust conspiracy with Indivior in connection with Indivior’s launch of Suboxone Sublingual Film and engaged in related conduct in violation of federal and state antitrust law. A motion to dismiss the States’ conspiracy claims was filed, and by order dated October 30, 2017, the Court denied the Company’s motion to dismiss. In response, Aquestive filed an answer denying the States’ claims on November 20, 2017. The fact discovery period closed July 27, 2018, but the parties agreed to conduct certain fact depositions in August 2018. The case is currently in the expert discovery phase, which is scheduled to close May 30, 2019. The Company is not able to determine or predict the ultimate outcome of this proceeding or provide a reasonable estimate, or an estimated range of the possible outcome or loss, if any, in this matter.

Product Litigation

On December 27, 2016, Aquestive was named as a co-defendant in product liability suit brought by Laurence and Michelle Allen, as Co-Administrators of the Estate of John Bradley Allen, in the U.S. District Court for the Northern District of New York. This suit, which also named Indivior Inc. and Indivior PLC as defendants, asserts causes of action for negligence, strict liability, and failure to warn against the defendants in connection with the manufacture and sale of Suboxone Sublingual Film. Plaintiffs allege that John Bradley Allen’s use of Suboxone Sublingual Film was a substantial contributing cause of his mental anguish and death and seek $100 million in damages. All defendants moved to dismiss the complaint on April 10, 2017, and those motions were fully briefed on May 18, 2017. Aquestive was dismissed from the case on May 9, 2017, and the remainder of the case was closed on August 9, 2018, after the complaint was dismissed in favor of Indivior.

Quarterly Financial Data (unaudited)

12 Months Ended

Dec. 31, 2018

Quarterly Financial Data (unaudited) [Abstract]

Quarterly Financial Data (unaudited)

Note 19. Quarterly Financial Data (unaudited)

The following tables contain selected quarterly financial information from 2018 and 2017 (in thousands, except per share amounts). The Company believes that this information reflects all normal recurring adjustments necessary for a fair statement of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period.

	Three Months Ended
	March 31, 2018		June 30, 2018		September 30, 2018		December 31, 2018

Revenues	$	23,411	$	13,928	$	13,267	$	16,824
Manufacture and supply		5,636		4,973		5,592		4,787
Total costs and expenses		18,106		46,614		22,471		29,173
Net income (loss)		4,099		(36,493)		(15,038)		(13,944)
Basic and diluted net income (loss) per common share	$	0.27	$	(1.90)	$	(0.64)	$	(0.56)


	Three Months Ended
	March 31, 2017		June 30, 2017		September 30, 2017		December 31, 2017

Revenues	$	16,436	$	11,142	$	27,146	$	12,194
Manufacture and supply		4,184		5,141		4,880		5,615
Total costs and expenses		15,655		15,201		16,725		19,450
Net income (loss)		(1,457)		(5,897)		8,451		(10,040)

For periods in which the Company reported a net loss, potentially dilutive securities were excluded from the computation of per share amounts. For all 2017 periods, the Company operated as an LLC with an equity structure that was unlike that of the current year and accordingly, per share data for 2017 is not comparable to that of 2018 and has not been presented (Note 14).

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Summary of Significant Accounting Policies [Abstract]

Principles of Consolidation

(A) Principles of Consolidation

Use of Estimates

(B) Use of Estimates

Cash and Cash Equivalents

Concentration of Credit Risk

(D) Concentration of Credit Risk

Trade Accounts Receivable

(E) Trade Accounts Receivable

Inventories

(F) Inventories

Property and Equipment

(G) Property and Equipment

Intangible Assets

(H) Intangible Assets

Impairment of Long-Lived Assets

(I) Impairment of Long-Lived Assets

Revenue Recognition

(J) Revenue Recognition

Manufacture and Supply Revenue – The Company records revenues when products are shipped and title passes to the customers.

Research and Development

(K) Research and Development

Income Taxes

(L) Income Taxes

Share-Based Compensation

(M) Share-Based Compensation

Per Share Data

(N) Per Share Data

Basic net loss per common share is computed by dividing the net loss attributable to common shareholders by the weighted average number of shares of common stock outstanding during the period.

Comprehensive Loss

(O) Comprehensive Loss

Fair Value Measurements

(P) Fair Value Measurements

Segment Information

(Q) Segment Information

Deferred Offering Costs

(R) Deferred Offering Costs

Recent Accounting Pronouncements

(S) Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements:

Recent Accounting Pronouncements Not Adopted as of December 31, 2018:

Basis of Presentation	12 Months Ended
Basis of Presentation	Dec. 31, 2018
Basis of Presentation [Abstract]
Basis of Presentation	Note 2. Basis of Presentation The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, and in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC. The accounts of wholly owned subsidiaries are included in the consolidated financial statements. Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Employee Benefit Plans	12 Months Ended
Employee Benefit Plans	Dec. 31, 2018
Employee Benefit Plans [Abstract]
Employee Benefit Plans	Note 16. Employee Benefit Plans The Company sponsors a defined-contribution 401(k) plan covering all full-time employees and makes matching employer contributions as defined by the terms of that plan. The Company may also make discretionary contributions. Total contributions made to the plan by the Company for the years ended December 31, 2018 and 2017 were $837 and $616, respectively.

Basis of Presentation (Policies)	12 Months Ended
Basis of Presentation (Policies)	Dec. 31, 2018
Basis of Presentation [Abstract]
Basis of Presentation	The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, and in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC. The accounts of wholly owned subsidiaries are included in the consolidated financial statements. Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).