Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 13, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | STRATA Skin Sciences, Inc. | |
Entity Central Index Key | 1,051,514 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 10,587,804 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 3,120 | $ 3,303 |
Restricted cash | 0 | 15 |
Accounts receivable, net of allowance for doubtful accounts of $80 and $45, respectively | 3,247 | 4,068 |
Inventories, net | 4,152 | 4,128 |
Prepaid expenses and other current assets | 377 | 465 |
Total current assets | 10,896 | 11,979 |
Property and equipment, net | 12,818 | 13,851 |
Patents and licensed technologies, net | 7,003 | 7,247 |
Other intangible assets, net | 7,770 | 7,980 |
Goodwill | 8,928 | 8,928 |
Other assets | 94 | 94 |
Total assets | 47,509 | 50,079 |
Current liabilities: | ||
Note payable | 195 | 299 |
Accounts payable | 3,503 | 4,446 |
Other accrued liabilities | 1,639 | 2,161 |
Deferred revenues | 225 | 173 |
Total current liabilities | 5,562 | 7,079 |
Long-term liabilities: | ||
Long-term debt, net | 11,344 | 9,851 |
Senior secured convertible debentures, net | 10,308 | 9,839 |
Warrant liability | 5,057 | 7,042 |
Deferred tax liability | 179 | 119 |
Other liabilities | 27 | 62 |
Total liabilities | $ 32,477 | $ 33,992 |
Commitment and contingencies | ||
Stockholders' equity: | ||
Preferred Stock, $.10 par value, 10,000,000 shares authorized; 6,505 shares issued and outstanding | $ 1 | $ 1 |
Common Stock, $.001 par value, 150,000,000 shares authorized; 10,503,393 and 10,283,393 shares issued and outstanding, respectively | 11 | 10 |
Additional paid-in capital | 223,696 | 223,315 |
Accumulated deficit | (208,677) | (207,240) |
Accumulated other comprehensive income | 1 | 1 |
Total stockholders' equity | 15,032 | 16,087 |
Total liabilities and stockholders' equity | $ 47,509 | $ 50,079 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Allowance for doubtful accounts, current | $ 80 | $ 45 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 6,505 | 6,505 |
Preferred stock, shares outstanding (in shares) | 6,505 | 6,505 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 10,503,393 | 10,283,393 |
Common stock, shares outstanding (in shares) | 10,503,393 | 10,283,393 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) [Abstract] | ||
Revenues | $ 7,620 | $ 81 |
Cost of revenues | 3,422 | 711 |
Gross profit (loss) | 4,198 | (630) |
Operating expenses: | ||
Engineering and product development | 525 | 239 |
Selling and marketing | 3,710 | 1,027 |
General and administrative | 2,101 | 1,736 |
Total operating expenses | 6,336 | 3,002 |
Operating loss before other income (expense), net | (2,138) | (3,632) |
Other income (expense), net: | ||
Interest expense, net | (1,218) | (2,324) |
Change in fair value of warrant liability | 1,985 | (1,334) |
Other income, net | 0 | 18 |
Other income (expense), net | 767 | (3,640) |
Loss before income taxes | (1,371) | (7,272) |
Income tax expense | (66) | 0 |
Net loss | $ (1,437) | $ (7,272) |
Net loss per share: | ||
Basic (in dollars per share) | $ (0.14) | $ (1.12) |
Diluted (in dollars per share) | $ (0.26) | $ (1.12) |
Shares used in computing net loss per share: | ||
Basic (in shares) | 10,339,657 | 6,471,906 |
Diluted (in shares) | 13,307,923 | 6,471,906 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands | Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Total |
Beginning balance at Dec. 31, 2015 | $ 1 | $ 10 | $ 223,315 | $ (207,240) | $ 1 | $ 16,087 |
Beginning balance (in shares) at Dec. 31, 2015 | 6,505 | 10,283,393 | ||||
Stock-based compensation | $ 0 | $ 0 | 170 | 0 | 0 | 170 |
Conversion of senior secured convertible debentures | $ 0 | $ 1 | 164 | 0 | 0 | 165 |
Conversion of senior secured convertible debentures (in shares) | 0 | 220,000 | ||||
Warrants issued in connection with debt | $ 0 | $ 0 | 47 | 0 | 0 | 47 |
Net loss for the three months ended March 31, 2016 | 0 | 0 | 0 | (1,437) | 0 | (1,437) |
Ending balance at Mar. 31, 2016 | $ 1 | $ 11 | $ 223,696 | $ (208,677) | $ 1 | $ 15,032 |
Ending balance (in shares) at Mar. 31, 2016 | 6,505 | 10,503,393 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (1,437) | $ (7,272) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,684 | 316 |
Provision for doubtful accounts | 40 | 1 |
Stock-based compensation | 170 | 230 |
Deferred tax provision | 60 | 0 |
Amortization of debt discount | 639 | 2,015 |
Amortization of deferred financing costs | 48 | 180 |
Change in fair value of warrant liability | (1,985) | 1,334 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 782 | 214 |
Inventories | (24) | 113 |
Prepaid expenses and other assets | 88 | (76) |
Accounts payable and accrued expenses | (955) | (110) |
Other accrued liabilities | (523) | (8) |
Other liabilities | (35) | (10) |
Deferred revenues | 52 | (28) |
Net cash used in operating activities | (1,396) | (3,101) |
Cash Flows From Investing Activities: | ||
Lasers placed-in-service, net | (197) | 0 |
Restricted cash | 15 | (100) |
Net cash used in investing activities | (182) | (100) |
Cash Flows From Financing Activities: | ||
Proceeds from long-term debt | 1,500 | 0 |
Payments on notes payable | (105) | 0 |
Net cash provided by financing activities | 1,395 | 0 |
Net decrease in cash and cash equivalents | (183) | (3,201) |
Cash and cash equivalents, beginning of period | 3,303 | 11,434 |
Cash and cash equivalents, end of period | 3,120 | 8,233 |
Supplemental information: | ||
Cash paid for interest | 442 | 139 |
Supplemental information of non-cash investing and financing activities: | ||
Conversion of senior secured convertible debentures into common stock | 165 | 2,308 |
Conversion of convertible preferred stock into common stock | 0 | 1,508 |
Reclassification of property and equipment to inventory, net | 0 | 26 |
Recognition of warrants issued as debt discount | $ 47 | $ 0 |
The Company
The Company | 3 Months Ended |
Mar. 31, 2016 | |
The Company [Abstract] | |
The Company | Note 1 The Company: Background STRATA Skin Sciences, Inc. (and its subsidiary) ("STRATA" or "we" or the "Company") is a medical technology company dedicated to developing and commercializing innovative products for the diagnosis and treatment of serious dermatological disorders. In June 2015 the Company completed the acquisition of the XTRAC Excimer Laser and the VTRAC excimer lamp businesses from PhotoMedex, Inc. which included a subsidiary in India, PhotoMedex India Ltd. The XTRAC® and VTRAC® products are FDA cleared devices for the treatment of psoriasis, vitiligo and other skin disorders. The purchase price was $42,500 plus the assumption of certain business-related liabilities. Management believes that the cash flow generated by these businesses will be sufficient to finance the Company's operations for the foreseeable future. (See Note 2 , Acquisition .) The XTRAC is an ultraviolet light excimer laser system utilized to treat psoriasis, vitiligo and other skin diseases. The XTRAC received FDA clearance in 2000 and has since become a recognized treatment among dermatologists. The system delivers targeted 308um ultraviolet light to affected areas of the skin, leading to psoriasis clearing and vitiligo repigmentation, following a series of treatments. As of March 31, 2016, there were 730 XTRAC systems placed in dermatologists' offices in the United States under the Company's recurring revenue business model. The XTRAC systems employed under the recurring revenue model generate revenue on a per procedure basis. The per-procedure charge is inclusive of the use of the system and the services provided by the Company to the customer which includes system maintenance, reimbursement support service and participation in the direct to patient marketing programs employed by the Company. The XTRAC system's use for psoriasis is covered by nearly all major insurance companies, including Medicare. The VTRAC Excimer Lamp system, offered in addition to the XTRAC system internationally, provides targeted therapeutic efficacy demonstrated by excimer technology with the simplicity of design and reliability of a lamp system. Liquidity As of March 31, 2016, the Company had an accumulated deficit of $208,677 and has incurred losses and negative cash flows from operations since inception. To date, the Company has dedicated most of its financial resources to research and development, sales and marketing, and general and administrative expenses. The Company has been dependent on raising capital from the sale of securities in order to continue to operate and to meet its obligations in the ordinary course of business. Management believes that its cash and cash equivalents as of March 31, 2016 combined with the anticipated revenues from the sale of the Company's products will be sufficient to satisfy its working capital needs, capital asset purchases, outstanding commitments and other liquidity requirements associated with its existing operations through the second quarter of 2017. Basis of Presentation Accounting Principles The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. Quarterly Financial Information and Results of Operations The condensed consolidated financial statements as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 are unaudited and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position as of March 31, 2016, the results of operations for the three months ended March 31, 2016 and 2015, the statement of stockholders' equity for the three months ended March 31, 2016 and the statement of cash flows for the three months ended March 31, 2016 and 2015. The results of operations and cash flows for the three months ended March 31, 2016 are not necessarily indicative of the results to be expected for the entire year. The condensed consolidated balance sheet as of December 31, 2015 was derived from audited financial statements as of December 31, 2015. While management of the Company believes that the disclosures presented are adequate to make the information not misleading, these condensed consolidated financial statements should be read in conjunction with audited consolidated financial statements and the footnotes thereto, together with Management's Discussion and Analysis of Financial Condition and Results of Operations, contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. Reclassification Certain reclassifications from the prior year presentation have been made to conform to the current year presentation. These reclassifications did not have a material impact on the Company's equity, net assets, results of operations or cash flows. Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the US requires management to make estimates and assumptions that affect amounts reported of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates and be based on events different from those assumptions. As of March 31, 2016, the more significant estimates include (1) revenue recognition, including deferred revenues and valuation allowances of accounts receivable, (2) the fair value of assets acquired and liabilities assumed in the business combination, (3) the estimated useful lives of intangible assets and property and equipment, (4) the inputs used in determining the fair value of equity-based awards and (5) the valuation allowance related to deferred tax assets. Fair Value Measurements The Company measures and discloses fair value in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification 820, Fair Value Measurements and Disclosures • Level 1 – unadjusted quoted prices are available in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. • Level 2 – pricing inputs are other than quoted prices in active markets that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. • Level 3 – pricing inputs are unobservable for the non-financial asset or liability and only used when there is little, if any, market activity for the non-financial asset or liability at the measurement date. The inputs into the determination of fair value require significant management judgment or estimation. Fair value is determined using comparable market transactions and other valuation methodologies, adjusted as appropriate for liquidity, credit, market and/or other risk factors This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The Company's recurring fair value measurements at March 31, 2016 and December 31, 2015 are as follows: Fair Value as of March 31, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Warrant liability (Note 10) $ 5,057 $ - $ - $ 5,057 Fair Value as of December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Warrant liability (Note 10) $ 7,042 $ - $ - $ 7,042 The fair value of cash and cash equivalents are based on their respective demand value, which are equal to the carrying value. The fair value of derivative warrant liabilities is estimated using option pricing models that are based on the individual characteristics of the Company's warrants, preferred and common stock, the derivative warrant liability on the valuation date as well as assumptions for volatility, remaining expected life, risk-free interest rate and, in some cases, credit spread. The derivative warrant liabilities are the only recurring Level 3 fair value measures. The carrying value of all other short-term monetary assets and liabilities is estimated to be approximate to their fair value due to the short-term nature of these instruments. The Company assessed its convertible debentures and long-term debt and determined that the fair value of total debt was $18,251 as of March 31, 2016. As of December 31, 2015 the fair value of total debt approximated the recorded value of $15,958. Several of the warrants have non-standard terms as they relate to a fundamental transaction and require a net-cash settlement upon change in control of the Company and other warrants contain full ratchet provisions that reduce the exercise price of the warrants in the event of a transaction resulting in the issuance of equity below the current price of the warrants. Therefore these warrants are classified as derivatives. These warrants have been recorded at their fair value using a binomial option pricing model and will be recorded at their respective fair value at each subsequent balance sheet date. See Note 10, Warrants Accrued Warranty Costs The Company offers a standard warranty on product sales generally for a one to two-year period The Company provides for the estimated cost of the future warranty claims on the date the product is sold. Total accrued warranty is included in Other Accrued Liabilities Other liabilities March 31, 2016 (unaudited) Accrual at beginning of year $ 226 Additions charged to warranty expense 72 Expiring warranties/claimed satisfied (119 ) Total 179 Less: current portion (155 ) $ 24 Earnings Per Share Basic net loss per common share excludes dilution for potentially dilutive securities and is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share gives effect to dilutive options, warrants and other potential common shares outstanding during the period and their potential diluted effect is considered using the treasury method. For the three months ended March 31, 2016 diluted earnings per common share are computed by the numerator effected by the gain on the change in fair value of the warrant liability and the denominator is increased to include the number of additional potential common shares from the warrants underlying the warrant liability. Diluted earnings per common share were calculated using the following net loss and weighted average shares outstanding for the three months ended March 31, 2016: March 31, 2016 Net loss $ (1,437 ) Gain on the change in fair value of the warrant liability (1,985 ) Diluted earnings $ (3,422 ) Weighted average number of common and common equivalent shares outstanding: Basic number of common shares outstanding 10,339,657 Dilutive effect of warrants 2,968,266 Diluted number of common and common stock equivalent shares outstanding 13,307,923 For the three months ended March 31, 2015, diluted net loss per common share is equal to the basic net loss per common share since all potentially dilutive securities are anti-dilutive. The loss on the change in fair value of the warrant liability would be considered in the diluted earnings per share calculation and was deemed to be antidilutive. Potential common stock equivalents outstanding as of March 31, 2016 and 2015 consist of common stock equivalents of common stock purchase warrants, senior secured convertible debentures, convertible preferred stock and common stock options, which are summarized as follows: March 31, 2016 2015 Common stock equivalents of convertible debentures 46,215,126 4,328,466 Common stock purchase warrants 16,729,362 13,078,920 Common stock equivalents of convertible preferred stock 2,535,866 4,007,406 Common stock options 2,669,352 1,293,701 Total 68,149,706 22,708,493 Adoption of New Accounting Standards In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-03, " Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30) (See Note 8 , Convertible Debentures .) In September 2015, the FASB issued ASU No. 2015-16, " Business Combinations (Topic 805): Simplifying the Accounting for Measurement - Period Adjustments. Recently Issued Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases, This statement requires lessees to present right-of-use assets and lease liabilities on the balance sheet. The standard is effective for public companies for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the effect the guidance will have on its financial condition and results of operations. In November 2015, the FASB issued ASU 2015-17, Income Taxes, Balance Sheet Classification of Deferred Taxes topic of the Codification. This standard requires all deferred tax assets and liabilities to be classified as non-current on the balance sheet instead of separating deferred taxes into current and non-current amounts. In addition, valuation allowance allocations between current and non-current deferred tax assets are no longer required because those allowances also will be classified as non-current. This standard is effective for public companies for annual periods beginning after December 15, 2016 and March 31, 2016. The Company's deferred tax assets is provided with full valuation allowance as of December 31, 2015. As such, the Company does not expect that this standard will have a significant impact on its consolidated financial statements and disclosures upon adoption. In July, 2015, The FASB issued Accounting Standards Update No. 2015-11 , Simplifying the Measurement of Inventory (Topic 330) In May 2014, The FASB issued Accounting Standards Update No. 2014-09 , Revenue from Contracts with Customers (Topic 606) In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern |
Acquisition
Acquisition | 3 Months Ended |
Mar. 31, 2016 | |
Acquisition [Abstract] | |
Acquisition | Note 2 Acquisition: On June 22, 2015, the Company entered into an asset purchase agreement (the "Asset Purchase Agreement") with PhotoMedex Inc. and PhotoMedex Technology, Inc. pursuant to which the Company has purchased the XTRAC and VTRAC laser businesses from PhotoMedex, Inc. (the "Asset Purchase") for $42,528 in cash and assumed certain business-related liabilities. The purchased assets include all of the accounts receivable, inventory and fixed and intangible assets of the business. The fair value of the assets acquired and liabilities assumed were based on management. The significant intangible assets to be recognized in the valuation are core and product technologies, tradenames and customer relationships. The estimated useful lives over which these assets will be amortized, utilizing the straight line method, are five years for product technologies and ten years for core technologies, tradenames and customer relationships. The following allocation of the aggregate fair value is subject to adjustment based on the fair value of the assets acquired and the liabilities assumed. Fair Value Current assets $ 7,233 Property, plant and equipment 14,340 Identifiable intangible assets 16,100 Other assets 45 Total assets assumed 37,718 Current liabilities (3,945 ) Note payable (57 ) Other long term liabilities (116 ) Total liabilities assumed (4,118 ) Net assets acquired $ 33,600 The purchase price exceeded the fair value of the net assets acquired by $8,928, which was recorded as goodwill. The consolidated results of operations do not include any revenues or expenses related to XTRAC and VTRAC businesses on or prior to June 22, 2015, the date of the asset purchase. The Company's unaudited pro-forma results for the three months ended March 31, 2015 summarize the combined results in the following table, assuming the asset purchase had occurred on January 1, 2015 and after giving effect to the acquisition adjustments, including amortization of the tangible and long-lived intangible assets acquired in the transaction Three Months Ended March 31,2015 (unaudited) Net revenues $ 7,557 Net loss $ (10,157 ) Net loss per basic and diluted share: $ (1.57 ) Shares used in calculating net loss per basic and diluted share: 6,471,906 These unaudited pro-forma results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations which would have actually resulted had the acquisition occurred on January 1, 2014, nor to be indicative of future results of operations. |
Inventories, net
Inventories, net | 3 Months Ended |
Mar. 31, 2016 | |
Inventories, net [Abstract] | |
Inventories, net | Note 3 Inventories, net: March 31 , December 31, 2015 (unaudited) Raw materials and work in progress $ 3,792 $ 3,706 Finished goods 360 422 Total inventories $ 4,152 $ 4,128 Work-in-process is immaterial, given the Company's typically short manufacturing cycle, and therefore is disclosed in conjunction with raw materials. |
Property and Equipment, net
Property and Equipment, net | 3 Months Ended |
Mar. 31, 2016 | |
Property and Equipment, net [Abstract] | |
Property and Equipment, net | Note 4 Property and Equipment, net: March 31, 2016 December 31, 2015 (unaudited) Lasers placed-in-service $ 15,966 $ 15,782 Equipment, computer hardware and software 1,244 1,219 Furniture and fixtures 2,054 2,080 Leasehold improvements 931 931 20,195 20,012 Accumulated depreciation and amortization (7,377 ) (6,161 ) Property and equipment, net $ 12,818 $ 13,851 Depreciation and related amortization expense was $1,230 and $41 for the three months ended March 31, 2016 and 2015, respectively. Note 5 |
Patents and Licensed Technologi
Patents and Licensed Technologies, net | 3 Months Ended |
Mar. 31, 2016 | |
Patents and Licensed Technologies, net [Abstract] | |
Patents and Licensed Technologies, net | Note 5 Patents and Licensed Technologies, net: March 31, 2016 December 31, 2015 (unaudited) Core technology $ 5,974 $ 5,974 Product technology 2,000 2,000 7,974 7,974 Accumulated amortization (971 ) (727 ) Patents and licensed technologies, net $ 7,003 $ 7,247 Related amortization expense was $244 and $1 for each of the three month ended March 31, 2016 and 2015. Estimated amortization expense for amortizable patents and licensed technologies assets for the future periods is as follows: Remaining 2016 $ 731 2017 975 2018 975 2019 975 2020 775 Thereafter 2,572 Total $ 7,003 |
Other Intangible Assets
Other Intangible Assets | 3 Months Ended |
Mar. 31, 2016 | |
Other Intangible Assets [Abstract] | |
Other Intangible Assets | Note 6 Other Intangible Assets: Set forth below is a detailed listing of other definite-lived intangible assets: March 31, 2016 December 31, 2015 (unaudited) Customer relationships $ 6,900 $ 6,900 Tradenames 1,500 1,500 8,400 8,400 Accumulated amortization (630 ) (420 ) Other intangible assets, net $ 7,770 $ 7,980 Related amortization expense was $210 and $ 0 for the three months ended March 31, 2016 and 2015, respectively. Estimated amortization expense for the above amortizable intangible assets for the future periods is as follows: Remaining 2016 $ 630 2017 840 2018 840 2019 840 2020 840 Thereafter 3,780 Total $ 7,770 |
Other Accrued Liabilities
Other Accrued Liabilities | 3 Months Ended |
Mar. 31, 2016 | |
Other Accrued Liabilities [Abstract] | |
Other Accrued Liabilities | Note 7 Other Accrued Liabilities: March 31, 2016 December 31, 2015 (unaudited) Accrued warranty, current, see Note 1 $ 155 $ 168 Accrued compensation, including commissions and vacation 921 1,336 Accrued sales and other taxes 375 349 Accrued professional fees 175 265 Other accrued liabilities 13 43 Total other accrued liabilities $ 1,639 $ 2,161 |
Convertible Debentures
Convertible Debentures | 3 Months Ended |
Mar. 31, 2016 | |
Convertible Debentures [Abstract] | |
Convertible Debentures | Note 8 Convertible Debentures: In the following table is a summary of the Company's convertible debentures. March 31, 2016 December 31, 2015 (unaudited) Senior secured 2.25% convertible debentures, net of unamortized debt discount of $25,718 and $26,267, respectively; and deferred financing costs of $554 and $522, respectively $ 5,841 $ 5,489 Senior secured 4% convertible debentures, net of unamortized debt discount of $3,816 and $3,922, respectively; and deferred financing costs of $432 and $443, respectively 4,467 4,350 Total convertible debt $ 10,308 $ 9,839 The Company issued $32,500 aggregate principal amount of Debentures (June 2015 Debentures) that, subject to certain ownership limitations and stockholder approval conditions, will be convertible into 43,333,334 shares of Company common stock at an initial conversion price of $0.75 per share. The Debentures bear interest at the rate of 2.25% per year, and, unless previously converted, will mature on the five-year anniversary of the date of issuance, June 22, 2020. The June 2015 Debentures include a beneficial conversion feature valued at $27,300 that was recorded as a discount to the debentures. On the date of issuance the beneficial conversion feature value was calculated as the difference resulting from subtracting the conversion price of $0.75 from $1.38, the opening market value of the Company's common stock following the announcement of the transaction, multiplied by the number of common shares into which the June 2015 Debentures are convertible. On July 21, 2014, the Company entered into a definitive Securities Purchase Agreement (the "Purchase Agreement") with institutional investors (the "Investors") providing for the issuance of Senior Secured Convertible Debentures in the aggregate principal amount of $15,000, due, subject to the terms therein, in July 2019 (the "July 2014 Debentures"), and warrants (the "July 2014 Series A Warrants") to purchase up to an aggregate of 6,198,832 shares of common stock, $0.001 par value per share, at an exercise price of $2.45 per share expiring in July 2019. The July 2014 Debentures bear interest at an annual rate of 4%, payable quarterly or upon conversion into shares of common stock. The Debentures are convertible at any time into an aggregate of 5,847,955 shares of common stock at an initial conversion price of $2.565 per share. The Company's obligations under the July 2014 Debentures are secured by a first priority lien on all of the Company's intellectual property pursuant to the terms of a security agreement ("Security Agreement") dated July 21, 2014 among the Company and the Investors. In connection with the Purchase Agreement, the Company entered into a Registration Rights Agreement with the Investors pursuant to which the Company was obligated to file a registration statement to register for resale the shares of Common Stock issuable upon conversion of the Series B Preferred Stock (See Note 10, Warrants For financial reporting purposes, the $15,000 funded by the Investors on July 21, 2014 was allocated first to the fair value of the obligation to issue the Warrants, amounting to $5,296, then to the intrinsic value of the beneficial conversion feature on the July 2014 Debentures of $4,565. The balance was further reduced by the fair value of warrants issued to the placement agent for services rendered of $491, resulting in an initial carrying value of the Debentures of $4,647. The initial debt discount on the July 2014 Debentures totaled $10,353 and is being amortized using the effective interest method over the five year life of the July 2014 Debentures. During the three months ended March 31, 2016, the investors converted debentures amounting to $165 into 220,000 shares of common stock for the June 2015 note. The debt discount and deferred financing cost adjustment resulting from the conversions increased interest expense by $136 for the three months ended March 31, 2016. As a condition of the new note facility (See Note 9 Long-term Debt As of March 31, 2016, the total outstanding amount of Debentures was $40,828. |
Long-term Debt
Long-term Debt | 3 Months Ended |
Mar. 31, 2016 | |
Long-term Debt [Abstract] | |
Long-term Debt | Note 9 Long-term Debt: Term-Note Credit Facility On December 30, 2015, the Company entered into a $12,000 credit facility pursuant to a Credit and Security Agreement (the "Agreement") and related financing documents with MidCap Financial Trust ("MidCap") and the lenders listed therein. Under the Agreement, the credit facility may be drawn down in two tranches, the first of which was drawn for $10,500 on December 30, 2015. The proceeds of this first tranche were used to repay $10,000 principal amount of short-term senior secured promissory notes, plus associated interest, loan fees and expenses. The second tranche was drawn for $1,500 on January 29, 2016. The Company's obligations under the credit facility are secured by a first priority lien on all of the Company's assets. This credit facility includes both financial and non-financial covenants, including a minimum net revenue covenant, beginning in January 2016. The Company is in compliance with these covenants as of March 31, 2016. Interest rate on the credit facility is one month LIBOR plus 8.25%, subject to a LIBOR floor of 0.5%. The Company's existing debentures from its 2014 and 2015 financings were amended as a condition of this new term note facility, including subordination agreements and maturity extensions. As of March 31, 2016 the net balance of long-term debt is $11,344. In connection with the issuance of the Term Note the Company issued MidCap (and the lenders), on December 30, 2015, a warrant to purchase 650,442 shares of the Company's common stock for an exercise price of $1.13. Additionally, the Company issued MidCap (and the lenders), on January 29, 2016, a warrant to purchase 99,057 shares of the Company's common stock for an exercise price of $1.06. The warrants are exercisable at any time on or prior to the fifth anniversary of its issue date. The warrants are treated as a discount to the debt and are accreted under the effective interest method over the repayment term of 60 months. The Company has accounted for these warrants as equity instruments since there is no option for cash or net-cash settlement when the warrants are exercised and since they are indexed to the Company's common stock. The Company computed the value of the warrants using the Black-Scholes method. The key assumptions used to value the warrants are as follows: December 31, 2015 January 29, 2016 Number of shares underlying warrants 650,442 99,057 Exercise price $ 1.13 $ 1.06 Stock price on date of issuance $ 1.11 $ 1.05 Fair value of warrants $ 321 $ 47 Volatility 50.0 % 50.0 % Risk-free interest rate 1.8 % 1.8 % Expected dividend yield 0 % 0 % Expected warrant life 5 years 5 years |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2016 | |
Warrants [Abstract] | |
Warrants | Note 10 Warrants: The Company accounts for warrants that have provisions that protect holders from a decline in the issue price of its common stock (or "down-round" provisions) as liabilities instead of equity. Down-round provisions reduce the exercise or conversion price of a warrant or convertible instrument if a company either issues equity shares for a price that is lower than the exercise or conversion price of those instruments or issues new warrants or convertible instruments that have a lower exercise or conversion price. Net settlement provisions allow the holder of the warrant to surrender shares underlying the warrant equal to the exercise price as payment of its exercise price, instead of physically exercising the warrant by paying cash. The Company evaluated whether warrants to acquire its common stock contain provisions that protect holders from declines in the stock price or otherwise could result in modification of the exercise price and/or shares to be issued under the respective warrant agreements based on a variable that is not an input to the fair value of a "fixed-for-fixed" option. The Company recognizes such warrants as liabilities at the fair value on each reporting date. The Company computed the value of the warrants using the binomial method. A summary of quantitative information with respect to the valuation methodology and significant unobservable inputs used for the Company's warrant liabilities that are categorized within Level 3 of the fair value hierarchy as of March 31, 2016 and December 31, 2015 is as follows: March 31, 2016 December 31, 2015 Number of shares underlying the warrants 14,099,267 14,099,267 Stock price $ 0.95 $ 1.11 Volatility 50.00 % 35.90 – 50.00 % Risk-free interest rate 0.26% – 1.07 % 0.02% - 1.63 % Expected dividend yield 0 % 0 % Expected warrant life 0.32 – 4.23 years 0.07 – 4.48 years Recurring Level 3 Activity and Reconciliation The tables below provide a reconciliation of the beginning and ending balances for the liability measured at fair value using significant unobservable inputs (Level 3). The table reflects gains and losses for the three month periods ended March 31, 2016 and 2015, for all financial liabilities categorized as Level 3 as of March 31, 2016 and March 31, 2015, respectively. Fair Value Measurements Using Significant Unobservable Inputs (Level 3): Issuance Date December 31, 2015 Decrease in Fair Value March 31, 2016 10/31/2013 $ 379 $ (99 ) $ 280 2/5/2014 715 (187 ) 528 7/24/2014 Series A (1) 2,415 (621 ) 1,794 7/24/2014 Series B (1) 1,726 (638 ) 1,088 6/22/2015 1,807 (440 ) 1,367 Total $ 7,042 $ (1,985 ) $ 5,057 (1) These warrants were modified on September 30, 2015 and as a result of the modification these warrants met the definition of a derivative and were reclassified to a warrant liability. Issuance Date December 31, 2014 Increase in Fair Value March 31, 2015 10/31/2013 $ 233 $ 377 $ 610 2/5/2014 266 957 1,223 Total $ 499 $ 1,334 $ 1,833 Number of Warrants Subject to Remeasurement: Issuance Date December 31, 2015 Additions Reductions March 31, 2016 10/31/2013 685,715 - - 685,715 2/5/2014 1,329,731 - - 1,329,731 7/24/2014 Series A 4,288,500 - - 4,288,500 7/24/2014 Series B 4,795,321 - - 4,795,321 6/22/2015 3,000,000 - - 3,000,000 Total 14,099,267 - - 14,099,267 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | Note 11 Stockholders' Equity: Common Stock and Warrants Outstanding common stock warrants consist at March 31, 2016 of the following: Issue Date Expiration Date Total Warrants Exercise Price 4/26/2013 4/26/2018 69,321 $ 11.18 10/31/2013 4/30/2019 685,715 $ 0.75 2/5/2014 2/5/2019 1,329,731 $ 0.75 7/24/2014 7/24/2019 6,198,832 $ 0.75 - $ 2.45 7/24/2014 7/24/2016 4,795,321 $ 0.75 6/22/2015 6/22/2020 3,000,000 $ 0.75 12/30/2015 12/30/2020 650,442 $ 1.13 16,729,362 |
Stock-based compensation
Stock-based compensation | 3 Months Ended |
Mar. 31, 2016 | |
Stock-based compensation [Abstract] | |
Stock-based compensation | Note 12 Stock-based compensation: At March 31, 2016, the Company had 2,614,600 options outstanding with a weighted-average exercise price of $1.51. 1,664,600 options are vested and exercisable. Stock-based compensation expense, primarily included in general and administration, for the three months ended March 31, 2016 and 2015 was $170 and $230, respectively. As of March 31, 2016 there was $488 in unrecognized compensation expense, which will be recognized over a weighted average period of 1.15 years. |
Income taxes
Income taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income taxes [Abstract] | |
Income taxes | Note 13 Income taxes: The Company accounts for income taxes using the asset and liability method for deferred income taxes. The provision for income taxes includes federal, state and local income taxes currently payable and deferred taxes resulting from temporary differences between the financial statement and tax bases of assets and liabilities. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Income tax expense of $66 for the three months ended March 31, 2016 was comprised of the change in deferred tax liability related to goodwill. Goodwill is an amortizing asset according to tax regulations. This generates a deferred tax liability that is not used to offset deferred tax assets for valuation allowance considerations. There was no such expense for the three months ended March 31, 2015. |
Business Segments and Geographi
Business Segments and Geographic Data | 3 Months Ended |
Mar. 31, 2016 | |
Business Segments and Geographic Data [Abstract] | |
Business Segments and Geographic Data | Note 14 Business Segments and Geographic Data: The Company organized its business into three operating segments to better align its organization based upon the Company's management structure, products and services offered, markets served and types of customers, as follows: The Dermatology Recurring Procedures segment derives its revenues from the XTRAC procedures performed by dermatologists. The Dermatology Procedures Equipment segment generates revenues from the sale of equipment, such as lasers and lamp products. The Dermatology Imaging segment generates revenues from the sale and usage of imaging devices. Management reviews financial information presented on an operating segment basis for the purposes of making certain operating decisions and assessing financial performance. On June 22, 2015, the Company acquired the XTRAC and VTRAC businesses and has classified the revenues and expenses of this business to the two Dermatology Procedures segments. There are no corresponding revenues for the three months ended March 31, 2015. Unallocated operating expenses include costs that are not specific to a particular segment but are general to the group; included are expenses incurred for administrative and accounting staff, general liability and other insurance, professional fees and other similar corporate expenses. Interest and other financing income (expense), net is also not allocated to the operating segments. The following tables reflect results of operations from our business segments for the periods indicated below: Three Months Ended March 31, 2016 (unaudited) Dermatology Recurring Procedures Dermatology Procedures Equipment Dermatology Imaging TOTAL Revenues $ 5,528 $ 1,990 $ 102 $ 7,620 Costs of revenues 2,304 951 167 3,422 Gross profit 3,224 1,039 ( 65 ) 4,198 Gross profit % 58.3 % 52.2 % (63.7 %) 55.1 % Allocated operating expenses: Engineering and product development 311 62 152 525 Selling and marketing expenses 3,510 108 92 3,710 Unallocated operating expenses - - - 2,101 3,821 170 244 6,336 Income (loss) from operations (597 ) 869 (309 ) (2,138 ) Interest expense, net - - - (1,218 ) Change in fair value of warrant liability - - - 1,985 Other income (expense), net - - - - Income (loss) before income taxes $ (597 ) $ 869 $ (309 ) $ (1,371 ) Three Months Ended March 31, 2015 (unaudited) Dermatology Recurring Procedures Dermatology Procedures Equipment Dermatology Imaging TOTAL Revenues $ - $ - $ 81 $ 81 Costs of revenues - - 711 711 Gross profit - - (630 ) (630 ) Gross profit % 0.0 % 0.0 % (777.8 %) (777.8 %) Allocated operating expenses: Engineering and product development - - 239 239 Selling and marketing expenses - - 1,027 1,027 Unallocated operating expenses - - - 1,736 - - 1,266 3,002 Loss from operations - - (1,896 ) (3,632 ) Interest expense, net - - (2,324 ) Change in fair value of warrant liability - - - (1,334 ) Other income (expense), net - - - 18 Net loss $ - $ - $ (1,896 ) $ (7,272 ) For the three months ended March 31, 2016 and 2015 there were no material net revenues attributable to any individual foreign country. Net revenues by geographic area were, as follows: Three Months Ended March 31, 2016 2015 Domestic $ 5,622 $ 38 Foreign 1,998 43 $ 7,620 $ 81 |
Significant Customer Concentrat
Significant Customer Concentration | 3 Months Ended |
Mar. 31, 2016 | |
Significant Customer Concentration [Abstract] | |
Significant Customer Concentration | Note 15 Significant Customer Concentration: For the three months ended March 31, 2016, revenues from sales to the Company's international master distributor (GlobalMed Technologies) were $1,686, or 22.1%, of total revenues for such period. At March 31, 2016, the accounts receivable balance from GlobalMed Technologies was $443, or 13.6%, of total net accounts receivable. No other customer represented more than 10% of total company revenues for the three months ended March 31, 2016 and 2015. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 16 Subsequent Events: On April 5, 2016, investors converted debentures amounting to $63 into 84,411 shares of common stock. See Note 8, Convertible Debentures |
The Company (Policies)
The Company (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
The Company [Abstract] | |
Liquidity | Liquidity As of March 31, 2016, the Company had an accumulated deficit of $208,677 and has incurred losses and negative cash flows from operations since inception. To date, the Company has dedicated most of its financial resources to research and development, sales and marketing, and general and administrative expenses. The Company has been dependent on raising capital from the sale of securities in order to continue to operate and to meet its obligations in the ordinary course of business. Management believes that its cash and cash equivalents as of March 31, 2016 combined with the anticipated revenues from the sale of the Company's products will be sufficient to satisfy its working capital needs, capital asset purchases, outstanding commitments and other liquidity requirements associated with its existing operations through the second quarter of 2017. |
Accounting Principles | Accounting Principles The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. |
Quarterly Financial Information and Results of Operations | Quarterly Financial Information and Results of Operations The condensed consolidated financial statements as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 are unaudited and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position as of March 31, 2016, the results of operations for the three months ended March 31, 2016 and 2015, the statement of stockholders' equity for the three months ended March 31, 2016 and the statement of cash flows for the three months ended March 31, 2016 and 2015. The results of operations and cash flows for the three months ended March 31, 2016 are not necessarily indicative of the results to be expected for the entire year. The condensed consolidated balance sheet as of December 31, 2015 was derived from audited financial statements as of December 31, 2015. While management of the Company believes that the disclosures presented are adequate to make the information not misleading, these condensed consolidated financial statements should be read in conjunction with audited consolidated financial statements and the footnotes thereto, together with Management's Discussion and Analysis of Financial Condition and Results of Operations, contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. |
Reclassification | Reclassification Certain reclassifications from the prior year presentation have been made to conform to the current year presentation. These reclassifications did not have a material impact on the Company's equity, net assets, results of operations or cash flows. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the US requires management to make estimates and assumptions that affect amounts reported of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates and be based on events different from those assumptions. As of March 31, 2016, the more significant estimates include (1) revenue recognition, including deferred revenues and valuation allowances of accounts receivable, (2) the fair value of assets acquired and liabilities assumed in the business combination, (3) the estimated useful lives of intangible assets and property and equipment, (4) the inputs used in determining the fair value of equity-based awards and (5) the valuation allowance related to deferred tax assets. |
Fair Value Measurements | Fair Value Measurements The Company measures and discloses fair value in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification 820, Fair Value Measurements and Disclosures • Level 1 – unadjusted quoted prices are available in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. • Level 2 – pricing inputs are other than quoted prices in active markets that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. • Level 3 – pricing inputs are unobservable for the non-financial asset or liability and only used when there is little, if any, market activity for the non-financial asset or liability at the measurement date. The inputs into the determination of fair value require significant management judgment or estimation. Fair value is determined using comparable market transactions and other valuation methodologies, adjusted as appropriate for liquidity, credit, market and/or other risk factors This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The Company's recurring fair value measurements at March 31, 2016 and December 31, 2015 are as follows: Fair Value as of March 31, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Warrant liability (Note 10) $ 5,057 $ - $ - $ 5,057 Fair Value as of December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Warrant liability (Note 10) $ 7,042 $ - $ - $ 7,042 The fair value of cash and cash equivalents are based on their respective demand value, which are equal to the carrying value. The fair value of derivative warrant liabilities is estimated using option pricing models that are based on the individual characteristics of the Company's warrants, preferred and common stock, the derivative warrant liability on the valuation date as well as assumptions for volatility, remaining expected life, risk-free interest rate and, in some cases, credit spread. The derivative warrant liabilities are the only recurring Level 3 fair value measures. The carrying value of all other short-term monetary assets and liabilities is estimated to be approximate to their fair value due to the short-term nature of these instruments. The Company assessed its convertible debentures and long-term debt and determined that the fair value of total debt was $18,251 as of March 31, 2016. As of December 31, 2015 the fair value of total debt approximated the recorded value of $15,958. Several of the warrants have non-standard terms as they relate to a fundamental transaction and require a net-cash settlement upon change in control of the Company and other warrants contain full ratchet provisions that reduce the exercise price of the warrants in the event of a transaction resulting in the issuance of equity below the current price of the warrants. Therefore these warrants are classified as derivatives. These warrants have been recorded at their fair value using a binomial option pricing model and will be recorded at their respective fair value at each subsequent balance sheet date. See Note 10, Warrants |
Accrued Warranty Costs | Accrued Warranty Costs The Company offers a standard warranty on product sales generally for a one to two-year period The Company provides for the estimated cost of the future warranty claims on the date the product is sold. Total accrued warranty is included in Other Accrued Liabilities Other liabilities March 31, 2016 (unaudited) Accrual at beginning of year $ 226 Additions charged to warranty expense 72 Expiring warranties/claimed satisfied (119 ) Total 179 Less: current portion (155 ) $ 24 |
Earnings Per Share | Earnings Per Share Basic net loss per common share excludes dilution for potentially dilutive securities and is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share gives effect to dilutive options, warrants and other potential common shares outstanding during the period and their potential diluted effect is considered using the treasury method. For the three months ended March 31, 2016 diluted earnings per common share are computed by the numerator effected by the gain on the change in fair value of the warrant liability and the denominator is increased to include the number of additional potential common shares from the warrants underlying the warrant liability. Diluted earnings per common share were calculated using the following net loss and weighted average shares outstanding for the three months ended March 31, 2016: March 31, 2016 Net loss $ (1,437 ) Gain on the change in fair value of the warrant liability (1,985 ) Diluted earnings $ (3,422 ) Weighted average number of common and common equivalent shares outstanding: Basic number of common shares outstanding 10,339,657 Dilutive effect of warrants 2,968,266 Diluted number of common and common stock equivalent shares outstanding 13,307,923 For the three months ended March 31, 2015, diluted net loss per common share is equal to the basic net loss per common share since all potentially dilutive securities are anti-dilutive. The loss on the change in fair value of the warrant liability would be considered in the diluted earnings per share calculation and was deemed to be antidilutive. Potential common stock equivalents outstanding as of March 31, 2016 and 2015 consist of common stock equivalents of common stock purchase warrants, senior secured convertible debentures, convertible preferred stock and common stock options, which are summarized as follows: March 31, 2016 2015 Common stock equivalents of convertible debentures 46,215,126 4,328,466 Common stock purchase warrants 16,729,362 13,078,920 Common stock equivalents of convertible preferred stock 2,535,866 4,007,406 Common stock options 2,669,352 1,293,701 Total 68,149,706 22,708,493 |
Adoption of New Accounting Standards | Adoption of New Accounting Standards In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-03, " Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30) (See Note 8 , Convertible Debentures .) In September 2015, the FASB issued ASU No. 2015-16, " Business Combinations (Topic 805): Simplifying the Accounting for Measurement - Period Adjustments. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases, This statement requires lessees to present right-of-use assets and lease liabilities on the balance sheet. The standard is effective for public companies for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the effect the guidance will have on its financial condition and results of operations. In November 2015, the FASB issued ASU 2015-17, Income Taxes, Balance Sheet Classification of Deferred Taxes topic of the Codification. This standard requires all deferred tax assets and liabilities to be classified as non-current on the balance sheet instead of separating deferred taxes into current and non-current amounts. In addition, valuation allowance allocations between current and non-current deferred tax assets are no longer required because those allowances also will be classified as non-current. This standard is effective for public companies for annual periods beginning after December 15, 2016 and March 31, 2016. The Company's deferred tax assets is provided with full valuation allowance as of December 31, 2015. As such, the Company does not expect that this standard will have a significant impact on its consolidated financial statements and disclosures upon adoption. In July, 2015, The FASB issued Accounting Standards Update No. 2015-11 , Simplifying the Measurement of Inventory (Topic 330) In May 2014, The FASB issued Accounting Standards Update No. 2014-09 , Revenue from Contracts with Customers (Topic 606) In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern |
The Company (Tables)
The Company (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
The Company [Abstract] | |
Fair Value Measurements on Recurring Basis | The Company's recurring fair value measurements at March 31, 2016 and December 31, 2015 are as follows: Fair Value as of March 31, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Warrant liability (Note 10) $ 5,057 $ - $ - $ 5,057 Fair Value as of December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Warrant liability (Note 10) $ 7,042 $ - $ - $ 7,042 |
Accrued Warranty Costs Activity | The activity in the warranty accrual during the three months ended March 31, 2016 is summarized as follows: March 31, 2016 (unaudited) Accrual at beginning of year $ 226 Additions charged to warranty expense 72 Expiring warranties/claimed satisfied (119 ) Total 179 Less: current portion (155 ) $ 24 |
Diluted Earnings Per Common Share Calculated using Net Loss And Weighted Average Shares Outstanding | Diluted earnings per common share were calculated using the following net loss and weighted average shares outstanding for the three months ended March 31, 2016: March 31, 2016 Net loss $ (1,437 ) Gain on the change in fair value of the warrant liability (1,985 ) Diluted earnings $ (3,422 ) Weighted average number of common and common equivalent shares outstanding: Basic number of common shares outstanding 10,339,657 Dilutive effect of warrants 2,968,266 Diluted number of common and common stock equivalent shares outstanding 13,307,923 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Potential common stock equivalents outstanding as of March 31, 2016 and 2015 consist of common stock equivalents of common stock purchase warrants, senior secured convertible debentures, convertible preferred stock and common stock options, which are summarized as follows: March 31, 2016 2015 Common stock equivalents of convertible debentures 46,215,126 4,328,466 Common stock purchase warrants 16,729,362 13,078,920 Common stock equivalents of convertible preferred stock 2,535,866 4,007,406 Common stock options 2,669,352 1,293,701 Total 68,149,706 22,708,493 |
Acquisition (Tables)
Acquisition (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Acquisition [Abstract] | |
Estimated Fair Value of Assets Acquired and Liabilities Assumed | The fair value of the Company's remaining fixed assets was estimated based on the cost approach which estimated the cost to replace. Fair Value Current assets $ 7,233 Property, plant and equipment 14,340 Identifiable intangible assets 16,100 Other assets 45 Total assets assumed 37,718 Current liabilities (3,945 ) Note payable (57 ) Other long term liabilities (116 ) Total liabilities assumed (4,118 ) Net assets acquired $ 33,600 |
Unaudited Pro-forma Results | The Company's unaudited pro-forma results for the three months ended March 31, 2015 summarize the combined results in the following table, assuming the asset purchase had occurred on January 1, 2015 and after giving effect to the acquisition adjustments, including amortization of the tangible and long-lived intangible assets acquired in the transaction: Three Months Ended March 31,2015 (unaudited) Net revenues $ 7,557 Net loss $ (10,157 ) Net loss per basic and diluted share: $ (1.57 ) Shares used in calculating net loss per basic and diluted share: 6,471,906 |
Inventories, net (Tables)
Inventories, net (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventories, net [Abstract] | |
Schedule of Inventory | Inventories, net: March 31 , December 31, 2015 (unaudited) Raw materials and work in progress $ 3,792 $ 3,706 Finished goods 360 422 Total inventories $ 4,152 $ 4,128 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Property and Equipment, net [Abstract] | |
Summary of Property and Equipment, Net | Property and Equipment, net: March 31, 2016 December 31, 2015 (unaudited) Lasers placed-in-service $ 15,966 $ 15,782 Equipment, computer hardware and software 1,244 1,219 Furniture and fixtures 2,054 2,080 Leasehold improvements 931 931 20,195 20,012 Accumulated depreciation and amortization (7,377 ) (6,161 ) Property and equipment, net $ 12,818 $ 13,851 |
Patents and Licensed Technolo28
Patents and Licensed Technologies, net (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Patents and Licensed Technologies, net [Abstract] | |
Schedule of Patents and Licensed Technologies, Net | Patents and Licensed Technologies, net: March 31, 2016 December 31, 2015 (unaudited) Core technology $ 5,974 $ 5,974 Product technology 2,000 2,000 7,974 7,974 Accumulated amortization (971 ) (727 ) Patents and licensed technologies, net $ 7,003 $ 7,247 |
Estimated Amortization Expense for Amortizable Patents and Licensed Technologies Assets | Estimated amortization expense for amortizable patents and licensed technologies assets for the future periods is as follows: Remaining 2016 $ 731 2017 975 2018 975 2019 975 2020 775 Thereafter 2,572 Total $ 7,003 |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Other Intangible Assets [Abstract] | |
Schedule of Other Definite-lived Intangible Assets | Set forth below is a detailed listing of other definite-lived intangible assets: March 31, 2016 December 31, 2015 (unaudited) Customer relationships $ 6,900 $ 6,900 Tradenames 1,500 1,500 8,400 8,400 Accumulated amortization (630 ) (420 ) Other intangible assets, net $ 7,770 $ 7,980 |
Finite-lived Intangible Assets Amortization Expense | Estimated amortization expense for the above amortizable intangible assets for the future periods is as follows: Remaining 2016 $ 630 2017 840 2018 840 2019 840 2020 840 Thereafter 3,780 Total $ 7,770 |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Other Accrued Liabilities [Abstract] | |
Schedule of Other Accrued Liabilities | Other Accrued Liabilities: March 31, 2016 December 31, 2015 (unaudited) Accrued warranty, current, see Note 1 $ 155 $ 168 Accrued compensation, including commissions and vacation 921 1,336 Accrued sales and other taxes 375 349 Accrued professional fees 175 265 Other accrued liabilities 13 43 Total other accrued liabilities $ 1,639 $ 2,161 |
Convertible Debentures (Tables)
Convertible Debentures (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Convertible Debentures [Abstract] | |
Summary of Convertible Debentures | In the following table is a summary of the Company's convertible debentures. March 31, 2016 December 31, 2015 (unaudited) Senior secured 2.25% convertible debentures, net of unamortized debt discount of $25,718 and $26,267, respectively; and deferred financing costs of $554 and $522, respectively $ 5,841 $ 5,489 Senior secured 4% convertible debentures, net of unamortized debt discount of $3,816 and $3,922, respectively; and deferred financing costs of $432 and $443, respectively 4,467 4,350 Total convertible debt $ 10,308 $ 9,839 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Long-term Debt [Abstract] | |
Key Assumptions Used to Value the Warrants under Long-term Debt | The key assumptions used to value the warrants are as follows: December 31, 2015 January 29, 2016 Number of shares underlying warrants 650,442 99,057 Exercise price $ 1.13 $ 1.06 Stock price on date of issuance $ 1.11 $ 1.05 Fair value of warrants $ 321 $ 47 Volatility 50.0 % 50.0 % Risk-free interest rate 1.8 % 1.8 % Expected dividend yield 0 % 0 % Expected warrant life 5 years 5 years |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Warrants [Abstract] | |
Warrants Fair Value Assumptions | A summary of quantitative information with respect to the valuation methodology and significant unobservable inputs used for the Company's warrant liabilities that are categorized within Level 3 of the fair value hierarchy as of March 31, 2016 and December 31, 2015 is as follows: March 31, 2016 December 31, 2015 Number of shares underlying the warrants 14,099,267 14,099,267 Stock price $ 0.95 $ 1.11 Volatility 50.00 % 35.90 – 50.00 % Risk-free interest rate 0.26% – 1.07 % 0.02% - 1.63 % Expected dividend yield 0 % 0 % Expected warrant life 0.32 – 4.23 years 0.07 – 4.48 years |
Schedule of Derivative Warrant Liabilities | Fair Value Measurements Using Significant Unobservable Inputs (Level 3): Issuance Date December 31, 2015 Decrease in Fair Value March 31, 2016 10/31/2013 $ 379 $ (99 ) $ 280 2/5/2014 715 (187 ) 528 7/24/2014 Series A (1) 2,415 (621 ) 1,794 7/24/2014 Series B (1) 1,726 (638 ) 1,088 6/22/2015 1,807 (440 ) 1,367 Total $ 7,042 $ (1,985 ) $ 5,057 (1) These warrants were modified on September 30, 2015 and as a result of the modification these warrants met the definition of a derivative and were reclassified to a warrant liability. Issuance Date December 31, 2014 Increase in Fair Value March 31, 2015 10/31/2013 $ 233 $ 377 $ 610 2/5/2014 266 957 1,223 Total $ 499 $ 1,334 $ 1,833 |
Schedule of Warrants Subject to Remeasurement | Number of Warrants Subject to Remeasurement: Issuance Date December 31, 2015 Additions Reductions March 31, 2016 10/31/2013 685,715 - - 685,715 2/5/2014 1,329,731 - - 1,329,731 7/24/2014 Series A 4,288,500 - - 4,288,500 7/24/2014 Series B 4,795,321 - - 4,795,321 6/22/2015 3,000,000 - - 3,000,000 Total 14,099,267 - - 14,099,267 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity [Abstract] | |
Summary of Outstanding Common Stock Warrants | Outstanding common stock warrants consist at March 31, 2016 of the following: Issue Date Expiration Date Total Warrants Exercise Price 4/26/2013 4/26/2018 69,321 $ 11.18 10/31/2013 4/30/2019 685,715 $ 0.75 2/5/2014 2/5/2019 1,329,731 $ 0.75 7/24/2014 7/24/2019 6,198,832 $ 0.75 - $ 2.45 7/24/2014 7/24/2016 4,795,321 $ 0.75 6/22/2015 6/22/2020 3,000,000 $ 0.75 12/30/2015 12/30/2020 650,442 $ 1.13 16,729,362 |
Business Segments and Geograp35
Business Segments and Geographic Data (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Business Segments and Geographic Data [Abstract] | |
Schedule of Segment Reporting Information by Segment | The following tables reflect results of operations from our business segments for the periods indicated below: Three Months Ended March 31, 2016 (unaudited) Dermatology Recurring Procedures Dermatology Procedures Equipment Dermatology Imaging TOTAL Revenues $ 5,528 $ 1,990 $ 102 $ 7,620 Costs of revenues 2,304 951 167 3,422 Gross profit 3,224 1,039 ( 65 ) 4,198 Gross profit % 58.3 % 52.2 % (63.7 %) 55.1 % Allocated operating expenses: Engineering and product development 311 62 152 525 Selling and marketing expenses 3,510 108 92 3,710 Unallocated operating expenses - - - 2,101 3,821 170 244 6,336 Income (loss) from operations (597 ) 869 (309 ) (2,138 ) Interest expense, net - - - (1,218 ) Change in fair value of warrant liability - - - 1,985 Other income (expense), net - - - - Income (loss) before income taxes $ (597 ) $ 869 $ (309 ) $ (1,371 ) Three Months Ended March 31, 2015 (unaudited) Dermatology Recurring Procedures Dermatology Procedures Equipment Dermatology Imaging TOTAL Revenues $ - $ - $ 81 $ 81 Costs of revenues - - 711 711 Gross profit - - (630 ) (630 ) Gross profit % 0.0 % 0.0 % (777.8 %) (777.8 %) Allocated operating expenses: Engineering and product development - - 239 239 Selling and marketing expenses - - 1,027 1,027 Unallocated operating expenses - - - 1,736 - - 1,266 3,002 Loss from operations - - (1,896 ) (3,632 ) Interest expense, net - - (2,324 ) Change in fair value of warrant liability - - - (1,334 ) Other income (expense), net - - - 18 Net loss $ - $ - $ (1,896 ) $ (7,272 ) |
Schedule of Net Revenues by Geographic Areas | For the three months ended March 31, 2016 and 2015 there were no material net revenues attributable to any individual foreign country. Net revenues by geographic area were, as follows: Three Months Ended March 31, 2016 2015 Domestic $ 5,622 $ 38 Foreign 1,998 43 $ 7,620 $ 81 |
The Company (Details)
The Company (Details) $ in Thousands | Jun. 22, 2015USD ($) | Mar. 31, 2016USD ($)Systemsshares | Mar. 31, 2015USD ($)shares | Dec. 31, 2015USD ($) |
Liquidity [Abstract] | ||||
Accumulated deficit | $ (208,677) | $ (207,240) | ||
Fair Value Assets And Liabilities, Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Fair value of debt | 18,251 | 15,958 | ||
Product Warranty Accrual [Roll Forward] | ||||
Accrual at beginning of year | 226 | |||
Additions charged to warranty expense | 72 | |||
Expiring warranties/claimed satisfied | (119) | |||
Total | 179 | |||
Less: current portion | (155) | (168) | ||
Accrued warranty, non-current portion | 24 | |||
Earnings Per Share [Abstract] | ||||
Net loss | (1,437) | |||
Change in fair value of warrant liability | (1,985) | $ 1,334 | ||
Diluted earnings | $ (3,422) | |||
Weighted average number of common and common equivalent shares outstanding: | ||||
Basic number of common shares outstanding (in shares) | shares | 10,339,657 | 6,471,906 | ||
Dilutive effect of warrants (in shares) | shares | 2,968,266 | |||
Diluted number of common and common stock equivalent shares outstanding (in shares) | shares | 13,307,923 | 6,471,906 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common stock equivalents (in shares) | shares | 68,149,706 | 22,708,493 | ||
Minimum [Member] | ||||
Product Warranty Liability [Line Items] | ||||
Standard warranty period | 1 year | |||
Maximum [Member] | ||||
Product Warranty Liability [Line Items] | ||||
Standard warranty period | 2 years | |||
Fair Value, Measurements, Recurring [Member] | ||||
Fair Value Assets And Liabilities, Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Warrant liability (Note 10) | $ 5,057 | 7,042 | ||
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||||
Fair Value Assets And Liabilities, Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Warrant liability (Note 10) | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Significant other Observable Inputs (Level 2) [Member] | ||||
Fair Value Assets And Liabilities, Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Warrant liability (Note 10) | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||||
Fair Value Assets And Liabilities, Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Warrant liability (Note 10) | $ 5,057 | $ 7,042 | ||
XTRAC and VTRAC [Member] | ||||
Business Acquisition [Line Items] | ||||
Acquisition price | $ 42,528 | |||
XTRAC [Member] | ||||
Business Acquisition [Line Items] | ||||
Number of systems placed in dermatologists offices | Systems | 730 | |||
Common Stock Equivalents of Convertible Debentures [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common stock equivalents (in shares) | shares | 46,215,126 | 4,328,466 | ||
Common Stock Purchase Warrants [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common stock equivalents (in shares) | shares | 16,729,362 | 13,078,920 | ||
Common Stock Equivalents of Convertible Preferred Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common stock equivalents (in shares) | shares | 2,535,866 | 4,007,406 | ||
Common Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common stock equivalents (in shares) | shares | 2,669,352 | 1,293,701 |
Acquisition (Details)
Acquisition (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 22, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 |
Aggregate Fair Value of Assets Acquired and the Liabilities Assumed [Abstract] | ||||
Goodwill | $ 8,928 | $ 8,928 | ||
Unaudited Pro-forma Results [Abstract] | ||||
Net revenues | $ 7,557 | |||
Net loss | $ (10,157) | |||
Net loss per basic and diluted share: (in dollars per share) | $ (1.57) | |||
Shares used in calculating net loss per basic and diluted share: (in shares) | 6,471,906 | |||
Core Technology [Member] | ||||
Business Acquisition [Line Items] | ||||
Estimated useful life | 10 years | |||
Product Technology [Member] | ||||
Business Acquisition [Line Items] | ||||
Estimated useful life | 5 years | |||
Trade Names [Member] | ||||
Business Acquisition [Line Items] | ||||
Estimated useful life | 10 years | |||
Customer Relationships [Member] | ||||
Business Acquisition [Line Items] | ||||
Estimated useful life | 10 years | |||
XTRAC and VTRAC [Member] | ||||
Business Acquisition [Line Items] | ||||
Acquisition price | $ 42,528 | |||
Aggregate Fair Value of Assets Acquired and the Liabilities Assumed [Abstract] | ||||
Current assets | 7,233 | |||
Property, plant and equipment | 14,340 | |||
Identifiable intangible assets | 16,100 | |||
Other assets | 45 | |||
Total assets assumed | 37,718 | |||
Current liabilities | (3,945) | |||
Note payable | (57) | |||
Other long term liabilities | (116) | |||
Total liabilities assumed | (4,118) | |||
Net assets acquired | $ 33,600 | |||
Goodwill | $ 8,928 |
Inventories, net (Details)
Inventories, net (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Mar. 31, 2015 |
Schedule of inventory [Abstract] | ||
Raw materials and work in progress | $ 3,792 | $ 3,706 |
Finished goods | 360 | 422 |
Total inventories | $ 4,152 | $ 4,128 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 20,195 | $ 20,012 | |
Accumulated depreciation and amortization | (7,377) | (6,161) | |
Property and equipment, net | 12,818 | 13,851 | |
Depreciation and related amortization expense | 1,230 | $ 41 | |
Lasers Placed-In-Service [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 15,966 | 15,782 | |
Equipment, Computer Hardware and Software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 1,244 | 1,219 | |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 2,054 | 2,080 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 931 | $ 931 |
Patents and Licensed Technolo40
Patents and Licensed Technologies, net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Patents and licensed technologies, net | $ 7,003 | $ 7,247 | |
Estimated amortization expense [Abstract] | |||
Patents and licensed technologies, net | 7,003 | 7,247 | |
Core Technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Patents and licensed technologies, gross | 5,974 | 5,974 | |
Product Technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Patents and licensed technologies, gross | 2,000 | 2,000 | |
Patents and Licensed Technologies [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Patents and licensed technologies, gross | 7,974 | 7,974 | |
Accumulated amortization | (971) | (727) | |
Patents and licensed technologies, net | 7,003 | 7,247 | |
Amortization expense | 244 | $ 1 | |
Estimated amortization expense [Abstract] | |||
Remaining 2,016 | 731 | ||
2,017 | 975 | ||
2,018 | 975 | ||
2,019 | 975 | ||
2,020 | 775 | ||
Thereafter | 2,572 | ||
Patents and licensed technologies, net | $ 7,003 | $ 7,247 |
Other Intangible Assets (Detail
Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Other intangible assets, net | $ 7,770 | $ 7,980 | |
Estimated amortization expense [Abstract] | |||
Other intangible assets, net | 7,770 | 7,980 | |
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Other intangible assets, gross | 6,900 | 6,900 | |
Tradenames [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Other intangible assets, gross | 1,500 | 1,500 | |
Customer Relationships and Tradenames [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Other intangible assets, gross | 8,400 | 8,400 | |
Accumulated amortization | (630) | (420) | |
Other intangible assets, net | 7,770 | 7,980 | |
Amortization expense of other intangible assets | 210 | $ 0 | |
Estimated amortization expense [Abstract] | |||
Remaining 2,016 | 630 | ||
2,017 | 840 | ||
2,018 | 840 | ||
2,019 | 840 | ||
2,020 | 840 | ||
Thereafter | 3,780 | ||
Other intangible assets, net | $ 7,770 | $ 7,980 |
Other Accrued Liabilities (Deta
Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Other Accrued Liabilities [Abstract] | ||
Accrued warranty, current, see Note 1 | $ 155 | $ 168 |
Accrued compensation, including commissions and vacation | 921 | 1,336 |
Accrued sales and other taxes | 375 | 349 |
Accrued professional fees | 175 | 265 |
Other accrued liabilities | 13 | 43 |
Total other accrued liabilities | $ 1,639 | $ 2,161 |
Convertible Debentures (Details
Convertible Debentures (Details) $ / shares in Units, $ in Thousands | Jul. 21, 2014USD ($)shares$ / shares | Mar. 31, 2016USD ($)shares$ / shares | Jan. 29, 2016USD ($)$ / shares | Dec. 31, 2015USD ($)$ / shares |
Debt Instrument [Line Items] | ||||
Total convertible debt | $ 10,308 | $ 9,839 | ||
Exercise price of warrants (in dollars per share) | $ / shares | $ 1.06 | $ 1.13 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Fair value of warrants | $ 47 | $ 321 | ||
Debentures outstanding amount | $ 40,828 | |||
Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Discounted cash flow change | 10.00% | |||
Series A Warrants [Member] | ||||
Debt Instrument [Line Items] | ||||
Number of warrants to purchase common stock (in shares) | shares | 6,198,832 | |||
Exercise price of warrants (in dollars per share) | $ / shares | $ 2.45 | |||
Warrants expiration date | Jul. 1, 2019 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||
Senior Secured 2.25% Convertible Debentures [Member] | ||||
Debt Instrument [Line Items] | ||||
Total convertible debt | $ 5,841 | 5,489 | ||
Debt instrument, unamortized discount | 25,718 | 26,267 | ||
Deferred financing costs | $ 554 | 522 | ||
Senior secured convertible debentures interest rate | 2.25% | |||
Aggregate principal amount of debt | $ 32,500 | |||
Number of shares debt convertible (in shares) | shares | 43,333,334 | |||
Senior secured convertible debentures conversion price (in dollars per share) | $ / shares | $ 0.75 | |||
Debt instrument, maturity period | 5 years | |||
Debt instrument, convertible, beneficial conversion feature | $ 27,300 | |||
Maturity date | Jun. 30, 2021 | |||
Senior Secured 2.25% Convertible Debentures [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior secured convertible debentures conversion price (in dollars per share) | $ / shares | $ 1.38 | |||
Senior Secured 2.25% Convertible Debentures [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior secured convertible debentures conversion price (in dollars per share) | $ / shares | $ 0.75 | |||
Senior Secured 4% Convertible Debentures [Member] | ||||
Debt Instrument [Line Items] | ||||
Total convertible debt | $ 4,467 | 4,350 | ||
Debt instrument, unamortized discount | $ 10,353 | 3,816 | 3,922 | |
Deferred financing costs | $ 432 | $ 443 | ||
Senior secured convertible debentures interest rate | 4.00% | |||
Aggregate principal amount of debt | $ 15,000 | |||
Number of shares debt convertible (in shares) | shares | 5,847,955 | |||
Senior secured convertible debentures conversion price (in dollars per share) | $ / shares | $ 2.565 | |||
Debt instrument, maturity period | 5 years | |||
Debt instrument, convertible, beneficial conversion feature | $ 4,565 | |||
Maturity date | Jun. 30, 2021 | |||
Fair value of warrants | 5,296 | |||
Fair value of warrants adjustment (income) expense | 491 | |||
Debt instrument initial carrying amount | $ 4,647 | |||
June 2015 Note [Member] | ||||
Debt Instrument [Line Items] | ||||
Debentures converted in shares of common stock, value | $ 165 | |||
Debt conversion, converted instrument, issued (in shares) | shares | 220,000 | |||
Interest expense on debt | $ 136 |
Long-term Debt (Details)
Long-term Debt (Details) $ / shares in Units, $ in Thousands | Jan. 29, 2016USD ($)$ / sharesshares | Dec. 30, 2015USD ($)Tranche | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($)$ / sharesshares |
Line of Credit Facility [Line Items] | ||||
Outstanding long term debt | $ 11,344 | $ 9,851 | ||
Assumptions used to value the warrants [Abstract] | ||||
Number of shares underlying warrants (in shares) | shares | 99,057 | 650,442 | ||
Exercise price (in dollars per share) | $ / shares | $ 1.06 | $ 1.13 | ||
Stock price on date of issuance (in dollars per share) | $ / shares | $ 1.05 | $ 1.11 | ||
Fair value of warrants | $ 47 | $ 321 | ||
Volatility | 50.00% | 50.00% | ||
Risk-free interest rate | 1.80% | 1.80% | ||
Expected dividend yield | 0.00% | 0.00% | ||
Expected warrant life | 5 years | 5 years | ||
Term-Note Credit Facility [Member] | LIBOR [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate on credit facility | 8.25% | |||
MidCap Financial Trust [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Repayment term | 60 months | |||
MidCap Financial Trust [Member] | Term-Note Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity under the agreement | $ 12,000 | |||
Number of tranches | Tranche | 2 | |||
Outstanding long term debt | $ 11,344 | |||
MidCap Financial Trust [Member] | Term-Note Credit Facility [Member] | LIBOR [Member] | ||||
Line of Credit Facility [Line Items] | ||||
LIBOR floor Rate | 0.50% | |||
MidCap Financial Trust [Member] | Term-Note Credit Facility [Member] | First Tranche [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Proceeds from credit facility | $ 10,500 | |||
Repayment of debt | $ (10,000) | |||
MidCap Financial Trust [Member] | Term-Note Credit Facility [Member] | Second Tranche [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Proceeds from credit facility | $ 1,500 |
Warrants (Details)
Warrants (Details) $ / shares in Units, $ in Thousands | Jan. 29, 2016$ / sharesshares | Mar. 31, 2016USD ($)Warrant$ / sharesshares | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($)Warrant$ / sharesshares | |
Fair Value Assumptions [Abstract] | |||||
Number of shares underlying the warrants | shares | 99,057 | 650,442 | |||
Stock price (in dollars per share) | $ / shares | $ 1.05 | $ 1.11 | |||
Volatility | 50.00% | 50.00% | |||
Risk-free interest rate | 1.80% | 1.80% | |||
Expected dividend yield | 0.00% | 0.00% | |||
Expected warrant life | 5 years | 5 years | |||
Warrant [Member] | |||||
Fair Value Assumptions [Abstract] | |||||
Number of shares underlying the warrants | shares | 14,099,267 | 14,099,267 | |||
Stock price (in dollars per share) | $ / shares | $ 0.95 | $ 1.11 | |||
Volatility | 50.00% | ||||
Expected dividend yield | 0.00% | 0.00% | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | |||||
Number of warrants, beginning of period | 14,099,267 | ||||
Additions | 0 | ||||
Reductions | 0 | ||||
Balance as end of period | 14,099,267 | 14,099,267 | |||
Warrant [Member] | Minimum [Member] | |||||
Fair Value Assumptions [Abstract] | |||||
Volatility | 35.90% | ||||
Risk-free interest rate | 0.26% | 0.02% | |||
Expected warrant life | 3 months 25 days | 25 days | |||
Warrant [Member] | Maximum [Member] | |||||
Fair Value Assumptions [Abstract] | |||||
Volatility | 50.00% | ||||
Risk-free interest rate | 1.07% | 1.63% | |||
Expected warrant life | 4 years 2 months 23 days | 4 years 5 months 23 days | |||
Warrant [Member] | 10/31/2013 [Member] | |||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | |||||
Number of warrants, beginning of period | 685,715 | ||||
Additions | 0 | ||||
Reductions | 0 | ||||
Balance as end of period | 685,715 | 685,715 | |||
Warrant [Member] | 2/5/2014 [Member] | |||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | |||||
Number of warrants, beginning of period | 1,329,731 | ||||
Additions | 0 | ||||
Reductions | 0 | ||||
Balance as end of period | 1,329,731 | 1,329,731 | |||
Warrant [Member] | 7/24/2014 Series A [Member] | |||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | |||||
Number of warrants, beginning of period | 4,288,500 | ||||
Additions | 0 | ||||
Reductions | 0 | ||||
Balance as end of period | 4,288,500 | 4,288,500 | |||
Warrant [Member] | 7/24/2014 Series B [Member] | |||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | |||||
Number of warrants, beginning of period | 4,795,321 | ||||
Additions | 0 | ||||
Reductions | 0 | ||||
Balance as end of period | 4,795,321 | 4,795,321 | |||
Warrant [Member] | 6/22/2015 [Member] | |||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | |||||
Number of warrants, beginning of period | 3,000,000 | ||||
Additions | 0 | ||||
Reductions | 0 | ||||
Balance as end of period | 3,000,000 | 3,000,000 | |||
Warrant [Member] | Level 3 [Member] | |||||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Abstract] | |||||
Balance as beginning of period | $ | $ 7,042 | $ 499 | $ 499 | ||
Increase (decrease) in fair value | $ | (1,985) | 1,334 | |||
Balance as end of period | $ | 5,057 | 1,833 | 7,042 | ||
Warrant [Member] | Level 3 [Member] | 10/31/2013 [Member] | |||||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Abstract] | |||||
Balance as beginning of period | $ | 379 | 233 | 233 | ||
Increase (decrease) in fair value | $ | (99) | 377 | |||
Balance as end of period | $ | 280 | 610 | 379 | ||
Warrant [Member] | Level 3 [Member] | 2/5/2014 [Member] | |||||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Abstract] | |||||
Balance as beginning of period | $ | 715 | 266 | 266 | ||
Increase (decrease) in fair value | $ | (187) | 957 | |||
Balance as end of period | $ | 528 | $ 1,223 | 715 | ||
Warrant [Member] | Level 3 [Member] | 7/24/2014 Series A [Member] | |||||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Abstract] | |||||
Balance as beginning of period | $ | [1] | 2,415 | |||
Increase (decrease) in fair value | $ | [1] | (621) | |||
Balance as end of period | $ | [1] | 1,794 | 2,415 | ||
Warrant [Member] | Level 3 [Member] | 7/24/2014 Series B [Member] | |||||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Abstract] | |||||
Balance as beginning of period | $ | [1] | 1,726 | |||
Increase (decrease) in fair value | $ | [1] | (638) | |||
Balance as end of period | $ | [1] | 1,088 | 1,726 | ||
Warrant [Member] | Level 3 [Member] | 6/22/2015 [Member] | |||||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Abstract] | |||||
Balance as beginning of period | $ | 1,807 | ||||
Increase (decrease) in fair value | $ | (440) | ||||
Balance as end of period | $ | $ 1,367 | $ 1,807 | |||
[1] | These warrants were modified on September 30, 2015 and as a result of the modification these warrants met the definition of a derivative and were reclassified to a warrant liability. |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - $ / shares | 3 Months Ended | |||
Mar. 31, 2016 | Jan. 29, 2016 | Dec. 31, 2015 | Jul. 21, 2014 | |
Class of Warrant or Right [Line Items] | ||||
Total Warrants (in shares) | 16,729,362 | |||
Exercise price (in dollars per share) | $ 1.06 | $ 1.13 | ||
Series A Warrants [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Exercise price (in dollars per share) | $ 2.45 | |||
Common Stock Warrant One [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Issue Date | Apr. 26, 2013 | |||
Expiration Date | Apr. 26, 2018 | |||
Total Warrants (in shares) | 69,321 | |||
Exercise price (in dollars per share) | $ 11.18 | |||
Common Stock Warrant Two [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Issue Date | Oct. 31, 2013 | |||
Expiration Date | Apr. 30, 2019 | |||
Total Warrants (in shares) | 685,715 | |||
Exercise price (in dollars per share) | $ 0.75 | |||
Common Stock Warrant Three [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Issue Date | Feb. 5, 2014 | |||
Expiration Date | Feb. 5, 2019 | |||
Total Warrants (in shares) | 1,329,731 | |||
Exercise price (in dollars per share) | $ 0.75 | |||
Common Stock Warrant Four [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Issue Date | Jul. 24, 2014 | |||
Expiration Date | Jul. 24, 2019 | |||
Total Warrants (in shares) | 6,198,832 | |||
Common Stock Warrant Four [Member] | Minimum [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Exercise price (in dollars per share) | $ 0.75 | |||
Common Stock Warrant Four [Member] | Maximum [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Exercise price (in dollars per share) | $ 2.45 | |||
Common Stock Warrant Five [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Issue Date | Jul. 24, 2014 | |||
Expiration Date | Jul. 24, 2016 | |||
Total Warrants (in shares) | 4,795,321 | |||
Exercise price (in dollars per share) | $ 0.75 | |||
Common Stock Warrant Six [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Issue Date | Jun. 22, 2015 | |||
Expiration Date | Jun. 22, 2020 | |||
Total Warrants (in shares) | 3,000,000 | |||
Exercise price (in dollars per share) | $ 0.75 | |||
Common Stock Warrant Seven [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Issue Date | Dec. 30, 2015 | |||
Expiration Date | Dec. 30, 2020 | |||
Total Warrants (in shares) | 650,442 | |||
Exercise price (in dollars per share) | $ 1.13 |
Stock-based compensation (Detai
Stock-based compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Number of Stock Options [Roll Forward] | ||
Stock-based compensation expense | $ 170 | $ 230 |
Unrecognized compensation expense | $ 488 | |
Unrecognized compensation expense, weighted average period | 1 year 1 month 24 days | |
Stock Options [Member] | ||
Number of Stock Options [Roll Forward] | ||
Stock based compensation options outstanding (in shares) | 2,614,600 | |
Stock based compensation weighted average exercise price (in dollars per share) | $ 1.51 | |
Stock based compensation vested (in shares) | 1,664,600 | |
Stock based compensation exercisable (in shares) | 1,664,600 |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income taxes [Abstract] | ||
Income tax expense change in deferred tax liability related to goodwill | $ 66 | $ 0 |
Business Segments and Geograp49
Business Segments and Geographic Data (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016USD ($)Segment | Mar. 31, 2015USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | Segment | 3 | |
Number of dermatology procedures segments | Segment | 2 | |
Results of Operations from Business Segments [Abstract] | ||
Revenues | $ 7,620 | $ 81 |
Cost of revenues | 3,422 | 711 |
Gross profit | $ 4,198 | $ (630) |
Gross profit % | 55.10% | (777.80%) |
Allocated operating expenses [Abstract] | ||
Engineering and product development | $ 525 | $ 239 |
Selling and marketing expenses | 3,710 | 1,027 |
Unallocated operating expenses | 2,101 | 1,736 |
Total operating expenses | 6,336 | 3,002 |
Income (loss) from operations | (2,138) | (3,632) |
Interest expense, net | (1,218) | (2,324) |
Change in fair value of warrant liability | 1,985 | (1,334) |
Other income (expense), net | 0 | 18 |
Income (loss) before income taxes | (1,371) | (7,272) |
Dermatology Recurring Procedures [Member] | ||
Results of Operations from Business Segments [Abstract] | ||
Revenues | 0 | |
Operating Segments [Member] | Dermatology Recurring Procedures [Member] | ||
Results of Operations from Business Segments [Abstract] | ||
Revenues | 5,528 | 0 |
Cost of revenues | 2,304 | 0 |
Gross profit | $ 3,224 | $ 0 |
Gross profit % | 58.30% | 0.00% |
Allocated operating expenses [Abstract] | ||
Engineering and product development | $ 311 | $ 0 |
Selling and marketing expenses | 3,510 | 0 |
Unallocated operating expenses | 0 | 0 |
Total operating expenses | 3,821 | 0 |
Income (loss) from operations | (597) | 0 |
Interest expense, net | 0 | 0 |
Change in fair value of warrant liability | 0 | 0 |
Other income (expense), net | 0 | 0 |
Income (loss) before income taxes | (597) | 0 |
Operating Segments [Member] | Dermatology Procedures Equipment [Member] | ||
Results of Operations from Business Segments [Abstract] | ||
Revenues | 1,990 | 0 |
Cost of revenues | 951 | 0 |
Gross profit | $ 1,039 | $ 0 |
Gross profit % | 52.20% | 0.00% |
Allocated operating expenses [Abstract] | ||
Engineering and product development | $ 62 | $ 0 |
Selling and marketing expenses | 108 | 0 |
Unallocated operating expenses | 0 | 0 |
Total operating expenses | 170 | 0 |
Income (loss) from operations | 869 | 0 |
Interest expense, net | 0 | 0 |
Change in fair value of warrant liability | 0 | 0 |
Other income (expense), net | 0 | 0 |
Income (loss) before income taxes | 869 | 0 |
Operating Segments [Member] | Dermatology Imaging [Member] | ||
Results of Operations from Business Segments [Abstract] | ||
Revenues | 102 | 81 |
Cost of revenues | 167 | 711 |
Gross profit | $ (65) | $ (630) |
Gross profit % | (63.70%) | (777.80%) |
Allocated operating expenses [Abstract] | ||
Engineering and product development | $ 152 | $ 239 |
Selling and marketing expenses | 92 | 1,027 |
Unallocated operating expenses | 0 | 0 |
Total operating expenses | 244 | 1,266 |
Income (loss) from operations | (309) | (1,896) |
Interest expense, net | 0 | |
Change in fair value of warrant liability | 0 | 0 |
Other income (expense), net | 0 | 0 |
Income (loss) before income taxes | (309) | (1,896) |
Reportable Geographical Components [Member] | Domestic [Member] | ||
Results of Operations from Business Segments [Abstract] | ||
Revenues | 5,622 | 38 |
Reportable Geographical Components [Member] | Foreign [Member] | ||
Results of Operations from Business Segments [Abstract] | ||
Revenues | $ 1,998 | $ 43 |
Significant Customer Concentr50
Significant Customer Concentration (Details) - Customer Concentration Risk [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Product Information [Line Items] | |
Revenues | $ 1,686 |
Accounts receivable | $ 443 |
Revenue [Member] | |
Product Information [Line Items] | |
Concentration risk percentage | 22.10% |
Accounts Receivable [Member] | |
Product Information [Line Items] | |
Concentration risk percentage | 13.60% |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] $ in Thousands | Apr. 05, 2016USD ($)shares |
Subsequent Events [Line Items] | |
Debentures converted in shares of common stock, value | $ | $ 63 |
Debentures converted in shares of common stock (in shares) | shares | 84,411 |