Quarterly report pursuant to Section 13 or 15(d)

Product Revenue

v3.21.2
Product Revenue
9 Months Ended
Sep. 30, 2021
Product Revenue  
Product Revenue

7. Product Revenue

Performance Obligation

The Company’s performance obligation is the supply of finished pharmaceutical products to its customers. The Company’s customers consist of major wholesale distributors. The Company’s customer contracts generally consist of both a master agreement, which is signed by the Company and its customer, and a customer submitted purchase order, which is governed by the terms and conditions of the master agreement.

Revenue is recognized when the Company transfers control of its products to the customer, which occurs at a point-in-time, upon delivery.

The Company offers standard payment terms to its customers and has elected the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing, since the period between when the Company transfers the product to the customer and when the customer pays for that product is one year or less. Taxes collected from customers relating to product revenue and remitted to governmental authorities are excluded from revenues. The consideration amounts due from customers as a result of product revenue are subject to variable consideration.

The Company offers standard product warranties which provide assurance that the product will function as expected and in accordance with specifications. Customers cannot purchase warranties separately and these warranties do not give rise to a separate performance obligation. The Company permits the return of product under certain circumstances, mainly upon at or near product expiration, instances of shipping errors or where product is damaged in transit. The Company accrues for the customer’s right to return as part of its variable consideration.

Concentration of Revenue

The Company’s three customers account for 100% of total product revenue for the nine months ended September 30, 2021.

Sales-Related Deductions

The following table presents a rollforward of the major categories of sales-related deductions included in trade receivable allowances for the nine months ended September 30, 2021 (in thousands):

    

Sales Discounts

    

Chargebacks

    

Fee for Service

Balance, January 1, 2021

$

2

$

5

$

10

Provision related to current period sales

22

37

74

Adjustment related to prior period sales

 

Credit or payments made during the period

(10)

(1)

(33)

Balance, September 30, 2021

$

14

$

41

$

51