Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 12, 2017 | |
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 | 2,427,743 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 3,763 | $ 3,928 |
Accounts receivable, net of allowance for doubtful accounts of $131 and $135, respectively | 3,288 | 3,390 |
Inventories | 2,670 | 2,817 |
Prepaid expenses and other current assets | 804 | 617 |
Total current assets | 10,525 | 10,752 |
Property and equipment, net | 9,975 | 10,180 |
Intangible assets, net | 13,858 | 13,412 |
Goodwill | 8,803 | 8,803 |
Other assets | 46 | 46 |
Total assets | 43,207 | 43,193 |
Current liabilities: | ||
Note payable | 239 | 339 |
Current portion of long-term debt | 2,571 | 1,714 |
Accounts payable | 2,206 | 1,853 |
Other accrued liabilities | 2,214 | 1,992 |
Deferred revenues | 334 | 235 |
Total current liabilities | 7,564 | 6,133 |
Long-term liabilities: | ||
Long-term debt, net | 8,948 | 9,752 |
Senior secured convertible debentures, net | 12,695 | 12,028 |
Warrant liability | 237 | 105 |
Deferred tax liability | 419 | 359 |
Other liabilities | 752 | 97 |
Total liabilities | 30,615 | 28,474 |
Commitment and contingencies | ||
Stockholders' equity: | ||
Preferred Stock, $.10 par value, 10,000,000 shares authorized; 6,000 shares issued and outstanding | 1 | 1 |
Common Stock, $.001 par value, 150,000,000 shares authorized; 2,181,898 and 2,166,898 shares issued and outstanding, respectively | 2 | 2 |
Additional paid-in capital | 225,397 | 225,289 |
Accumulated deficit | (212,810) | (210,575) |
Accumulated other comprehensive income | 2 | 2 |
Total stockholders' equity | 12,592 | 14,719 |
Total liabilities and stockholders' equity | $ 43,207 | $ 43,193 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Allowance for doubtful accounts, current | $ 131 | $ 135 |
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) | 6,000 | 6,000 |
Preferred stock, shares outstanding (in shares) | 6,000 | 6,000 |
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) | 2,181,898 | 2,166,898 |
Common stock, shares outstanding (in shares) | 2,181,898 | 2,166,898 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) [Abstract] | ||
Revenues | $ 7,272 | $ 7,620 |
Cost of revenues | 2,733 | 3,422 |
Gross profit | 4,539 | 4,198 |
Operating expenses: | ||
Engineering and product development | 475 | 525 |
Selling and marketing | 3,150 | 3,710 |
General and administrative | 1,601 | 2,101 |
Total operating expenses | 5,226 | 6,336 |
Operating loss before other income (expense), net | (687) | (2,138) |
Other income (expense), net: | ||
Interest expense, net | (1,346) | (1,218) |
Change in fair value of warrant liability | (132) | 1,985 |
Other income (expense), net | (1,478) | 767 |
Loss before income taxes | (2,165) | (1,371) |
Income tax expense | (70) | (66) |
Net loss | $ (2,235) | $ (1,437) |
Net loss per share: | ||
Basic (in dollars per share) | $ (1.03) | $ (0.70) |
Diluted (in dollars per share) | $ (1.03) | $ (1.30) |
Shares used in computing net loss per share: | ||
Basic (in shares) | 2,176,731 | 2,067,931 |
Diluted (in shares) | 2,176,731 | 2,661,585 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) - 3 months ended Mar. 31, 2017 - USD ($) $ in Thousands | Preferred Stock [Member]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, 2016 | $ 1 | $ 2 | $ 225,289 | $ (210,575) | $ 2 | $ 14,719 |
Beginning balance (in shares) at Dec. 31, 2016 | 6,000 | 2,166,898 | ||||
Stock-based compensation | $ 0 | $ 0 | 52 | 0 | 0 | 52 |
Conversion of senior secured convertible debentures | $ 0 | $ 0 | 56 | 0 | 0 | 56 |
Conversion of senior secured convertible debentures (in shares) | 0 | 15,000 | ||||
Net loss | $ 0 | $ 0 | 0 | (2,235) | 0 | (2,235) |
Ending balance at Mar. 31, 2017 | $ 1 | $ 2 | $ 225,397 | $ (212,810) | $ 2 | $ 12,592 |
Ending balance (in shares) at Mar. 31, 2017 | 6,000 | 2,181,898 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (2,235) | $ (1,437) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 1,543 | 1,684 |
Provision for doubtful accounts | 0 | 40 |
Stock-based compensation | 52 | 170 |
Deferred tax provision | 60 | 60 |
Amortization of debt discount | 723 | 639 |
Amortization of deferred financing costs | 54 | 48 |
Change in fair value of warrant liability | 132 | (1,985) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 102 | 782 |
Inventories | 147 | (24) |
Prepaid expenses and other assets | (188) | 88 |
Accounts payable | 354 | (955) |
Other accrued liabilities | (61) | (523) |
Other liabilities | 36 | (35) |
Deferred revenues | 99 | 52 |
Net cash provided by (used in) operating activities | 818 | (1,396) |
Cash Flows From Investing Activities: | ||
Lasers placed-in-service, net | (683) | (197) |
Purchases of property and equipment, net | (200) | 0 |
Restricted cash | 0 | 15 |
Net cash used in investing activities | (883) | (182) |
Cash Flows From Financing Activities: | ||
Proceeds from long-term debt | 0 | 1,500 |
Payments on notes payable | (100) | (105) |
Net cash (used in ) provided by financing activities | (100) | 1,395 |
Net decrease in cash and cash equivalents | (165) | (183) |
Cash and cash equivalents, beginning of period | 3,928 | 3,303 |
Cash and cash equivalents, end of period | 3,763 | 3,120 |
Supplemental information: | ||
Cash paid for interest | 540 | 442 |
Supplemental information of non-cash investing and financing activities: | ||
Conversion of senior secured convertible debentures into common stock | 56 | 165 |
Recognition of warrants issued as debt discount | 0 | 47 |
Acquisition of distributor rights asset and license liability | $ 900 | $ 0 |
The Company
The Company | 3 Months Ended |
Mar. 31, 2017 | |
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 focused on the therapeutic and aesthetic dermatology market. STRATA sales include the following products: XTRAC ® ® 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, 2017, there were 791 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. Effective March 1, 2017, the Company entered into an agreement to license the exclusive US distribution rights for the Ellipse family of products from Ellipse USA ("Ellipse") through December 31, 2019 (the "Initial Term"). If certain sales targets are met, the agreement will automatically be extended for two additional years. Under the terms of the agreement, the Company will be the exclusive distributor of Ellipse lasers. The Company has agreed to minimum inventory purchases and to pay a monthly license fee of approximately $33, in addition to commissions for each system sold. As part of the transaction, the majority of sales and marketing professionals from Ellipse USA are now employees of STRATA. The license fee amounts to approximately $1.1 million over the Initial Term. Effective February 1, 2017, the Company entered into an exclusive OEM distribution agreement with Esthetic Education, LLC to be the exclusive marketer and seller of private label versions of the SkinStylus MicroSystem and associated parts under the name of STRATAPen. This three-year agreement allows for two one year extensions. Effective April 6, 2017, the Company completed a reverse stock split of its common stock at a ratio of 1-for-5 shares. The Company has retroactively applied the reverse stock split for all periods presented. See Note 17 Liquidity As of March 31, 2017, the Company had an accumulated deficit of $212,810 and until 2016 had 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. Management believes that its cash and cash equivalents as of March 31, 2017 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, payments of the current portion of long-term debt and other liquidity requirements associated with its existing operations through the next twelve months following the filing of this Form 10-Q. 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. Unaudited interim consolidated financial statements The accompanying interim consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC") for interim financial reporting. These consolidated statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to state fairly the consolidated balance sheets, consolidated statements of comprehensive income, consolidated statements of cash flows and consolidated statements of stockholders' equity, for the periods presented in accordance with accounting principles generally accepted in the United States ("GAAP"). The consolidated balance sheet at December 31, 2016, has been derived from the audited consolidated financial statements at that date. Operating results and cash flows for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2017, or any other future period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted in accordance with the rules and regulations for interim reporting of the SEC. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016, and other forms filed with the SEC from time to time. 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. Significant Accounting Policies The significant accounting policies used in preparation of these condensed consolidated financial statements are disclosed in our 2016 Form 10-K, and there have been no changes to the Company's significant account policies during the three months ended March 31, 2017. 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, 2017, the more significant estimates include (1) revenue recognition, in regards to 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, (5) the valuation allowance related to deferred tax assets and (6) the fair value of financial instruments, including derivative instruments. 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, 2017 and December 31, 2016 are as follows: Fair Value as of March 31, 2017 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 8) $ 237 $ - $ - $ 237 Fair Value as of December 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 8) $ 105 $ - $ - $ 105 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 $20,525 as of March 31, 2017. As of December 31, 2016 the fair value of total debt approximated the recorded value of $20,082. Several of the warrants outstanding as of March 31, 2017 and 2016 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 8, Warrants 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, 2017, 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. 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 2,067,931 Dilutive effect of warrants 593,654 Diluted number of common and common stock equivalent shares outstanding 2,661,585 Potential common stock equivalents outstanding as of March 31, 2017 and 2016 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, 2017 2016 Common stock equivalents of convertible debentures 9,201,146 9,243,027 Common stock purchase warrants 2,406,625 3,365,690 Common stock equivalents of convertible preferred stock 467,836 507,173 Common stock options 894,890 533,870 Total 12,970,497 13,649,760 Adoption of New Accounting Standards In January 2017, the Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") Clarifying the Definition of a Business Note 5 In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting The adoption of this ASU did not have a significant impact on the condensed consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes, Balance Sheet Classification of Deferred Taxes the adoption of this ASU did not have a significant impact on the condensed consolidated financial statements. In July 2015, The FASB issued Accounting Standards Update No. 2015-11 , Simplifying the Measurement of Inventory (Topic 330) ("ASU 2015-11"). ASU 2015-11 outlines that inventory within the scope of its guidance be measured at the lower of cost and net realizable value. Inventory measured using last-in, first-out (LIFO) are not impacted by the new guidance. Prior to the issuance of ASU 2015-11, inventory was measured at the lower of cost or market (where market was defined as replacement cost, with a ceiling of net realizable value and floor of net realizable value less a normal profit margin). For a public entity, the amendments in ASU 2015-11 are effective, in a prospective manner, for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period (the first quarter of fiscal year 2017 for the Company). Recently Issued Accounting Standards In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment that simplifies the subsequent measurement of goodwill. The new guidance eliminated Step 2 from the goodwill impairment test which was required in computing the implied fair value of goodwill. Instead, under the new amendments, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. If applicable, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. The amendments in this guidance are effective for public business entities for annual and interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019 with early adoption permitted after January 1, 2017. The Company is currently evaluating the impact of this guidance on the Company's condensed consolidated financial statements. The Company expects this guidance to simplify its goodwill impairment analysis. 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 May 2014, The FASB issued Accounting Standards Update No. 2014-09 , Revenue from Contracts with Customers (Topic 606) |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2017 | |
Inventories [Abstract] | |
Inventories | Note 2 Inventories: March 31 , December 31, 2016 (unaudited) Raw materials and work in progress $ 2,416 $ 2,440 Finished goods 254 377 Total inventories $ 2,670 $ 2,817 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, 2017 | |
Property and Equipment, net [Abstract] | |
Property and Equipment, net | Note 3 Property and Equipment, net: March 31, 2017 December 31, 2016 (unaudited) Lasers placed-in-service $ 17,354 $ 16,712 Equipment, computer hardware and software 361 160 Furniture and fixtures 111 111 Leasehold improvements 25 25 17,851 17,008 Accumulated depreciation and amortization (7,876 ) (6,828 ) Property and equipment, net $ 9,975 $ 10,180 Depreciation and related amortization expense was $1,089 and $1,230 for the three months ended March 31, 2017 and 2016, respectively. |
Intangibles, net
Intangibles, net | 3 Months Ended |
Mar. 31, 2017 | |
Intangibles, net [Abstract] | |
Intangibles, net | Note 4 Intangibles, net: Set forth below is a detailed listing of definite-lived intangible assets: March 31, 2017 December 31, 2016 (unaudited) Core technology $ 5,974 $ 5,974 Product technology 2,000 2,000 Customer relationships 6,900 6,900 Tradenames 1,500 1,500 Distribution rights 900 - 17,274 16,374 Accumulated amortization (3,416 ) (2,962 ) Patents and licensed technologies, net $ 13,858 $ 13,412 Related amortization expense was $454 for each of the three months ended March 31, 2017 and 2016. Estimated amortization expense for amortizable patents and licensed technologies assets for the future periods is as follows: Remaining 2017 $ 1,626 2018 2,133 2019 2,132 2020 1,615 2021 1,415 Thereafter 4,937 Total $ 13,858 As discussed in Note 1 |
Other Accrued Liabilities
Other Accrued Liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Other Accrued Liabilities [Abstract] | |
Other Accrued Liabilities | Note 5 Other Accrued Liabilities: March 31, 2017 December 31, 2016 (unaudited) Accrued warranty, current $ 91 $ 102 Accrued compensation, including commissions and vacation 1,201 1,177 Accrued sales and other taxes 458 439 License liability – current 283 - Accrued professional fees and other accrued liabilities 181 274 Total other accrued liabilities $ 2,214 $ 1,992 |
Convertible Debentures
Convertible Debentures | 3 Months Ended |
Mar. 31, 2017 | |
Convertible Debentures [Abstract] | |
Convertible Debentures | Note 6 Convertible Debentures: In the following table is a summary of the Company's convertible debentures. March 31, 2017 December 31, 2016 (unaudited) Senior secured 2.25% convertible debentures, net of unamortized debt discount of $23,742 and $24,314, respectively; and deferred financing costs of $512 and $524, respectively $ 7,702 $ 7,174 Senior secured 4% convertible debentures, net of unamortized debt discount of $3,343 and $3,469, respectively; and deferred financing costs of $378 and $392, respectively 4,993 4,854 Total convertible debt $ 12,695 $ 12,028 The Company issued $32,500 aggregate principal amount of Debentures (the "June 2015 Debentures") that, subject to certain ownership limitations and stockholder approval conditions, will be convertible into 8,666,668 shares of Company common stock at an initial conversion price of $3.75 per share (post reverse split). 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 $3.75 from $6.90, 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 1,239,769 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 1,169,595 shares of common stock at an initial conversion price of $12.825 per share (post reverse split). 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 8, 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 $56 into 15,000 shares of common stock (post reverse split) for the June 2015 note. The debt discount and deferred financing cost adjustment resulting from the conversions increased interest expense by $43 for the three months ended March 31, 2017. As a condition of the new note facility (See Note 7 Long-term Debt As of March 31, 2017, the total outstanding amount of Debentures was $40,671. |
Long-term Debt
Long-term Debt | 3 Months Ended |
Mar. 31, 2017 | |
Long-term Debt [Abstract] | |
Long-term Debt | Note 7 Long-term Debt: March 31, 2017 December 31, 2016 (unaudited) Term note, net of debt discount of $232 and $258, respectively; and deferred financing cost of $248 and $276, respectively $ 11,519 $ 11,466 Less: current portion (2,571 ) (1,714 ) Total long-term debt $ 8,948 $ 9,752 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, 2017. Interest rate on the credit facility is one month LIBOR plus 8.25%, subject to a LIBOR floor of 0.5% or 9.03% as of March 31, 2017. 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, 2017 the net balance of long-term debt is $11,519. The following table summarizes the future payments that the Company expects to make for long-term debt for the years ended December 31,: Remaining in 2017 $ 1,714 2018 3,429 2019 3,429 2020 3,428 $ 12,000 |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2017 | |
Warrants [Abstract] | |
Warrants | Note 8 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, 2017 and December 31, 2016 is as follows (post reverse split): March 31, 2017 December 31, 2016 Number of shares underlying the warrants 403,090 403,090 Stock price $ 3.05 $ 2.20 Volatility 47.00 % 47.00 % Risk-free interest rate 1.22 % 1.22 % Expected dividend yield 0 % 0 % Expected warrant life 1.87 – 2.10 years 2.12 – 2.35 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, 2017 and 2016, for all financial liabilities categorized as Level 3 as of March 31, 2017 and March 31, 2016, respectively. Fair Value Measurements Using Significant Unobservable Inputs (Level 3): Issuance Date December 31, 2016 Increase in Fair Value March 31, 2017 10/31/2013 $ 39 $ 46 $ 85 2/5/2014 66 86 152 Total $ 105 $ 132 $ 237 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 2,415 (621 ) 1,794 7/24/2014 Series B 1,726 (638 ) 1,088 6/22/2015 1,807 (440 ) 1,367 Total $ 7,042 $ (1,985 ) $ 5,057 Number of Warrants Subject to Remeasurement (post reverse split): Issuance Date March 31, 2017 10/31/2013 137,143 2/5/2014 265,947 Total 403,090 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | Note 9 Stockholders' Equity: Common Stock and Warrants Outstanding common stock warrants consist at March 31, 2017 of the following (post reverse split): Issue Date Expiration Date Total Warrants Exercise Price 4/26/2013 4/26/2018 13,865 $ 55.90 10/31/2013 4/30/2019 137,143 $ 3.75 2/5/2014 2/5/2019 265,947 $ 3.75 7/24/2014 7/24/2019 1,239,769 $ 3.75 - $ 12.25 6/22/2015 6/22/2020 600,000 $ 3.75 12/30/2015 12/30/2020 130,089 $ 5.65 1/29/2016 1/29/2021 19,812 $ 5.30 2,406,625 |
Stock-based compensation
Stock-based compensation | 3 Months Ended |
Mar. 31, 2017 | |
Stock-based compensation [Abstract] | |
Stock-based compensation | Note 10 Stock-based compensation: At March 31, 2017, the Company had 894,890 options outstanding with a weighted-average exercise price of $5.12 (post reverse split). 444,067 options are vested and exercisable. Stock-based compensation expense, primarily included in general and administration, for the three months ended March 31, 2017 and 2016 was $52 and $170, respectively. As of March 31, 2017 there was $310 in unrecognized compensation expense, which will be recognized over a weighted average period of 3.0 years. |
Income taxes
Income taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income taxes [Abstract] | |
Income taxes | Note 11 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 $70 and $66 for the three months ended March 31, 2017 and 2016, respectively, 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. |
Business Segments and Geographi
Business Segments and Geographic Data | 3 Months Ended |
Mar. 31, 2017 | |
Business Segments and Geographic Data [Abstract] | |
Business Segments and Geographic Data | Note 12 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 generated revenues from the sale and usage of imaging devices. The Company has announced that it will no longer support the imaging devices effective September 30, 2017 thus there will be minimal continuing revenues for this segment. Management reviews financial information presented on an operating segment basis for the purposes of making certain operating decisions and assessing financial performance. 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, 2017 (unaudited) Dermatology Recurring Procedures Dermatology Procedures Equipment Dermatology Imaging TOTAL Revenues $ 5,731 $ 1,537 $ 4 $ 7,272 Costs of revenues 2,042 691 - 2,733 Gross profit 3,689 846 4 4,539 Gross profit % 64.4 % 55.0 % 100.0 % 62.4 % Allocated operating expenses: Engineering and product development 416 58 1 475 Selling and marketing expenses 2,948 202 - 3,150 Unallocated operating expenses - - - 1,601 3,364 260 1 5,226 Income (loss) from operations 325 586 3 (687 ) Interest expense, net - - - (1,346 ) Change in fair value of warrant liability - - - (132 ) Income (loss) before income taxes $ 325 $ 586 $ 3 $ (2,165 ) 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 Loss from operations (597 ) 869 (309 ) (2,138 ) Interest expense, net - - - (1,218 ) Change in fair value of warrant liability - - - 1,985 Net loss $ (597 ) $ 869 $ (309 ) $ (1,371 ) For the three months ended March 31, 2017 and 2016 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, 2017 2016 Domestic $ 6, 189 $ 5,622 Foreign 1, 083 1,998 $ 7,272 $ 7,620 Long-lived assets were 100% located in domestic markets as of March 31, 2017 and December 31, 2016. |
Significant Customer Concentrat
Significant Customer Concentration | 3 Months Ended |
Mar. 31, 2017 | |
Significant Customer Concentration [Abstract] | |
Significant Customer Concentration | Note 13 Significant Customer Concentration: For the three months ended March 31, 2017, revenues from sales to the Company's international master distributor (GlobalMed Technologies) were $1,078, or 14.8%, of total revenues for such period. At March 31, 2017, the accounts receivable balance from GlobalMed Technologies was $467, or 15.6%, of total net accounts receivable. 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, 2017 and 2016. No other customer represented more than 10% of total accounts receivable as of March 31, 2017 and 2016. |
Related Parties
Related Parties | 3 Months Ended |
Mar. 31, 2017 | |
Related Parties [Abstract] | |
Related Parties | Note 14 Related Parties: On June 22, 2015, the Company entered into a securities purchase agreement with the Purchasers, including certain funds managed by Sabby Management, LLC and Broadfin Capital LLC (existing Company shareholders), in connection with a private placement. We sold $10.0 million aggregate principal amount of Notes bearing interest at 9% per year, with a maturity date of the earlier of 30 days after the Company obtains stockholder approval of stock issuances under the Debentures and the Warrants or November 30, 2015. The Purchasers of the Notes were issued Warrants to purchase an aggregate of 3.0 million shares of common stock, having an exercise price of $0.75 per share. We also issued $32.5 million aggregate principal amount of Debentures that, subject to certain ownership limitations and stockholder approval conditions, will be convertible into 43,333,334 shares of 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. Our obligations under the Debt Securities are secured by a first priority lien on all of our assets, except for a second lien on our intellectual property. As a condition of the new term note facility (See Note 7 Long-term Debt In connection with this financing, the Company also granted to the Purchasers resale registration rights with respect to the shares of common stock underlying the Debentures and the Warrants pursuant to the terms of the Registration Rights Agreement. In addition to the registration rights, the Selling Stockholders are entitled to receive liquidated damages upon the occurrence of a number of events relating to filing, becoming effective and maintaining an effective registration statement covering the shares underlying the Debentures and the Warrants. The liquidated damages will be payable upon the occurrence of each of those events and each monthly anniversary thereof until cured. The amount of liquidated damages payable is equal to 2.0% of the aggregate purchase price paid by each Purchaser, provided, however, the maximum aggregate liquidated damages payable to a Purchaser shall be 12% of the aggregate subscription amount paid by such Purchaser pursuant to the Purchase Agreement. The liquidated damages shall accrue interest at a rate of 12% per annum (or such lesser maximum amount that is permitted to be paid by applicable law), accruing on a daily basis for each event until such event is cured. The Registration Rights Agreement requires the Company to file one or more registration statements for all of the securities that may be issued upon conversion of the Debentures and exercise of the Warrants issued to the Purchasers. Pursuant to the applicable transaction documents, however, certain Purchasers may not exercise their conversion/exercise rights for that number of shares of common stock which, together with all other shares owned by that Purchaser and its affiliates would result in more than 9.99% of our issued and outstanding shares of common stock calculated on the basis of the then outstanding shares. On November 4, 2015, the Company entered into consulting agreements with two of its directors, Jeffrey F. O'Donnell, Sr. and Samuel E. Navarro, the terms of which are the same. Under the terms of their respective agreements, each director agrees to provide strategic support, advice and guidance to the Company and its management team in connection with the integration and operation of the expanded business, investor relations and internal and external business development activities. The consultant will make himself available to the Company's President and Chief Executive Officer and the management team on request at mutually convenient times and will report to the Board of Directors quarterly and otherwise when requested by the Board. The initial term of the agreement was from November 4, 2015 through June 30, 2016. The directors are each to be paid an up-front fee of $40,000 for advice and services rendered prior to the date of the agreement, a retainer of $10,000 per month, commencing November 10, 2015 and continuing on the tenth day of each month through June 10, 2016, and reimbursement of pre-approved, out-of-pocket expenses. The agreements have been extended through June 30, 2017. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 15 Subsequent Events: On April 6, 2017, the Company completed the reverse split of its common stock in the ratio of 1-for-5. The Company has retroactively applied the reverse split to all periods presented. Note 9, Convertible Debentures On May 11, 2017, investors converted series A preferred stock amounting to $3,072 into 239,500 shares of common stock. |
The Company (Policies)
The Company (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
The Company [Abstract] | |
Liquidity | Liquidity As of March 31, 2017, the Company had an accumulated deficit of $212,810 and until 2016 had 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. Management believes that its cash and cash equivalents as of March 31, 2017 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, payments of the current portion of long-term debt and other liquidity requirements associated with its existing operations through the next twelve months following the filing of this Form 10-Q. |
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. |
Unaudited interim consolidated financial statements | Unaudited interim consolidated financial statements The accompanying interim consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC") for interim financial reporting. These consolidated statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to state fairly the consolidated balance sheets, consolidated statements of comprehensive income, consolidated statements of cash flows and consolidated statements of stockholders' equity, for the periods presented in accordance with accounting principles generally accepted in the United States ("GAAP"). The consolidated balance sheet at December 31, 2016, has been derived from the audited consolidated financial statements at that date. Operating results and cash flows for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2017, or any other future period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted in accordance with the rules and regulations for interim reporting of the SEC. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016, and other forms filed with the SEC from time to time. |
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. |
Significant Accounting Policies | Significant Accounting Policies The significant accounting policies used in preparation of these condensed consolidated financial statements are disclosed in our 2016 Form 10-K, and there have been no changes to the Company's significant account policies during the three months ended March 31, 2017. |
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, 2017, the more significant estimates include (1) revenue recognition, in regards to 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, (5) the valuation allowance related to deferred tax assets and (6) the fair value of financial instruments, including derivative instruments. |
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, 2017 and December 31, 2016 are as follows: Fair Value as of March 31, 2017 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 8) $ 237 $ - $ - $ 237 Fair Value as of December 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 8) $ 105 $ - $ - $ 105 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 $20,525 as of March 31, 2017. As of December 31, 2016 the fair value of total debt approximated the recorded value of $20,082. Several of the warrants outstanding as of March 31, 2017 and 2016 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 8, Warrants |
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, 2017, 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. 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 2,067,931 Dilutive effect of warrants 593,654 Diluted number of common and common stock equivalent shares outstanding 2,661,585 Potential common stock equivalents outstanding as of March 31, 2017 and 2016 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, 2017 2016 Common stock equivalents of convertible debentures 9,201,146 9,243,027 Common stock purchase warrants 2,406,625 3,365,690 Common stock equivalents of convertible preferred stock 467,836 507,173 Common stock options 894,890 533,870 Total 12,970,497 13,649,760 |
Adoption of New Accounting Standards | Adoption of New Accounting Standards In January 2017, the Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") Clarifying the Definition of a Business Note 5 In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting The adoption of this ASU did not have a significant impact on the condensed consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes, Balance Sheet Classification of Deferred Taxes the adoption of this ASU did not have a significant impact on the condensed consolidated financial statements. In July 2015, The FASB issued Accounting Standards Update No. 2015-11 , Simplifying the Measurement of Inventory (Topic 330) ("ASU 2015-11"). ASU 2015-11 outlines that inventory within the scope of its guidance be measured at the lower of cost and net realizable value. Inventory measured using last-in, first-out (LIFO) are not impacted by the new guidance. Prior to the issuance of ASU 2015-11, inventory was measured at the lower of cost or market (where market was defined as replacement cost, with a ceiling of net realizable value and floor of net realizable value less a normal profit margin). For a public entity, the amendments in ASU 2015-11 are effective, in a prospective manner, for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period (the first quarter of fiscal year 2017 for the Company). |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment that simplifies the subsequent measurement of goodwill. The new guidance eliminated Step 2 from the goodwill impairment test which was required in computing the implied fair value of goodwill. Instead, under the new amendments, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. If applicable, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. The amendments in this guidance are effective for public business entities for annual and interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019 with early adoption permitted after January 1, 2017. The Company is currently evaluating the impact of this guidance on the Company's condensed consolidated financial statements. The Company expects this guidance to simplify its goodwill impairment analysis. 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 May 2014, The FASB issued Accounting Standards Update No. 2014-09 , Revenue from Contracts with Customers (Topic 606) |
The Company (Tables)
The Company (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
The Company [Abstract] | |
Fair Value Measurements on Recurring Basis | The Company's recurring fair value measurements at March 31, 2017 and December 31, 2016 are as follows: Fair Value as of March 31, 2017 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 8) $ 237 $ - $ - $ 237 Fair Value as of December 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 8) $ 105 $ - $ - $ 105 |
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 2,067,931 Dilutive effect of warrants 593,654 Diluted number of common and common stock equivalent shares outstanding 2,661,585 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Potential common stock equivalents outstanding as of March 31, 2017 and 2016 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, 2017 2016 Common stock equivalents of convertible debentures 9,201,146 9,243,027 Common stock purchase warrants 2,406,625 3,365,690 Common stock equivalents of convertible preferred stock 467,836 507,173 Common stock options 894,890 533,870 Total 12,970,497 13,649,760 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Inventories [Abstract] | |
Schedule of Inventory | March 31 , December 31, 2016 (unaudited) Raw materials and work in progress $ 2,416 $ 2,440 Finished goods 254 377 Total inventories $ 2,670 $ 2,817 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property and Equipment, net [Abstract] | |
Summary of Property and Equipment, Net | March 31, 2017 December 31, 2016 (unaudited) Lasers placed-in-service $ 17,354 $ 16,712 Equipment, computer hardware and software 361 160 Furniture and fixtures 111 111 Leasehold improvements 25 25 17,851 17,008 Accumulated depreciation and amortization (7,876 ) (6,828 ) Property and equipment, net $ 9,975 $ 10,180 |
Intangibles, net (Tables)
Intangibles, net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Intangibles, net [Abstract] | |
Schedule of Definite-lived Intangible Assets | March 31, 2017 December 31, 2016 (unaudited) Core technology $ 5,974 $ 5,974 Product technology 2,000 2,000 Customer relationships 6,900 6,900 Tradenames 1,500 1,500 Distribution rights 900 - 17,274 16,374 Accumulated amortization (3,416 ) (2,962 ) Patents and licensed technologies, net $ 13,858 $ 13,412 |
Finite-lived Intangible Assets Amortization Expense | Estimated amortization expense for amortizable patents and licensed technologies assets for the future periods is as follows: Remaining 2017 $ 1,626 2018 2,133 2019 2,132 2020 1,615 2021 1,415 Thereafter 4,937 Total $ 13,858 |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Other Accrued Liabilities [Abstract] | |
Schedule of Other Accrued Liabilities | March 31, 2017 December 31, 2016 (unaudited) Accrued warranty, current $ 91 $ 102 Accrued compensation, including commissions and vacation 1,201 1,177 Accrued sales and other taxes 458 439 License liability – current 283 - Accrued professional fees and other accrued liabilities 181 274 Total other accrued liabilities $ 2,214 $ 1,992 |
Convertible Debentures (Tables)
Convertible Debentures (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Convertible Debentures [Abstract] | |
Summary of Convertible Debentures | In the following table is a summary of the Company's convertible debentures. March 31, 2017 December 31, 2016 (unaudited) Senior secured 2.25% convertible debentures, net of unamortized debt discount of $23,742 and $24,314, respectively; and deferred financing costs of $512 and $524, respectively $ 7,702 $ 7,174 Senior secured 4% convertible debentures, net of unamortized debt discount of $3,343 and $3,469, respectively; and deferred financing costs of $378 and $392, respectively 4,993 4,854 Total convertible debt $ 12,695 $ 12,028 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Long-term Debt [Abstract] | |
Long-term Debt | March 31, 2017 December 31, 2016 (unaudited) Term note, net of debt discount of $232 and $258, respectively; and deferred financing cost of $248 and $276, respectively $ 11,519 $ 11,466 Less: current portion (2,571 ) (1,714 ) Total long-term debt $ 8,948 $ 9,752 |
Summary of Maturities of Long-term Debt | The following table summarizes the future payments that the Company expects to make for long-term debt for the years ended December 31,: Remaining in 2017 $ 1,714 2018 3,429 2019 3,429 2020 3,428 $ 12,000 |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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, 2017 and December 31, 2016 is as follows (post reverse split): March 31, 2017 December 31, 2016 Number of shares underlying the warrants 403,090 403,090 Stock price $ 3.05 $ 2.20 Volatility 47.00 % 47.00 % Risk-free interest rate 1.22 % 1.22 % Expected dividend yield 0 % 0 % Expected warrant life 1.87 – 2.10 years 2.12 – 2.35 years |
Schedule of Derivative Warrant Liabilities | Fair Value Measurements Using Significant Unobservable Inputs (Level 3): Issuance Date December 31, 2016 Increase in Fair Value March 31, 2017 10/31/2013 $ 39 $ 46 $ 85 2/5/2014 66 86 152 Total $ 105 $ 132 $ 237 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 2,415 (621 ) 1,794 7/24/2014 Series B 1,726 (638 ) 1,088 6/22/2015 1,807 (440 ) 1,367 Total $ 7,042 $ (1,985 ) $ 5,057 |
Schedule of Warrants Subject to Remeasurement | Number of Warrants Subject to Remeasurement (post reverse split): Issuance Date March 31, 2017 10/31/2013 137,143 2/5/2014 265,947 Total 403,090 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity [Abstract] | |
Summary of Outstanding Common Stock Warrants | Outstanding common stock warrants consist at March 31, 2017 of the following (post reverse split): Issue Date Expiration Date Total Warrants Exercise Price 4/26/2013 4/26/2018 13,865 $ 55.90 10/31/2013 4/30/2019 137,143 $ 3.75 2/5/2014 2/5/2019 265,947 $ 3.75 7/24/2014 7/24/2019 1,239,769 $ 3.75 - $ 12.25 6/22/2015 6/22/2020 600,000 $ 3.75 12/30/2015 12/30/2020 130,089 $ 5.65 1/29/2016 1/29/2021 19,812 $ 5.30 2,406,625 |
Business Segments and Geograp32
Business Segments and Geographic Data (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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, 2017 (unaudited) Dermatology Recurring Procedures Dermatology Procedures Equipment Dermatology Imaging TOTAL Revenues $ 5,731 $ 1,537 $ 4 $ 7,272 Costs of revenues 2,042 691 - 2,733 Gross profit 3,689 846 4 4,539 Gross profit % 64.4 % 55.0 % 100.0 % 62.4 % Allocated operating expenses: Engineering and product development 416 58 1 475 Selling and marketing expenses 2,948 202 - 3,150 Unallocated operating expenses - - - 1,601 3,364 260 1 5,226 Income (loss) from operations 325 586 3 (687 ) Interest expense, net - - - (1,346 ) Change in fair value of warrant liability - - - (132 ) Income (loss) before income taxes $ 325 $ 586 $ 3 $ (2,165 ) 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 Loss from operations (597 ) 869 (309 ) (2,138 ) Interest expense, net - - - (1,218 ) Change in fair value of warrant liability - - - 1,985 Net loss $ (597 ) $ 869 $ (309 ) $ (1,371 ) |
Schedule of Net Revenues by Geographic Areas | For the three months ended March 31, 2017 and 2016 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, 2017 2016 Domestic $ 6, 189 $ 5,622 Foreign 1, 083 1,998 $ 7,272 $ 7,620 |
The Company (Details)
The Company (Details) $ in Thousands | Apr. 06, 2017 | Mar. 31, 2017USD ($)SystemsExtensionshares | Mar. 31, 2016USD ($)shares | Dec. 31, 2016USD ($) |
Liquidity [Abstract] | ||||
Accumulated deficit | $ (212,810) | $ (210,575) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of debt | 20,525 | 20,082 | ||
Earnings Per Share [Abstract] | ||||
Net loss | $ (1,437) | |||
Gain on the change in fair value of the warrant liability | $ 132 | (1,985) | ||
Diluted earnings | $ (3,422) | |||
Weighted average number of common and common equivalent shares outstanding [Abstract] | ||||
Basic number of common shares outstanding (in shares) | shares | 2,176,731 | 2,067,931 | ||
Dilutive effect of warrants (in shares) | shares | 593,654 | |||
Diluted number of common and common stock equivalent shares outstanding (in shares) | shares | 2,176,731 | 2,661,585 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common stock equivalents (in shares) | shares | 12,970,497 | 13,649,760 | ||
Subsequent Event [Member] | ||||
Business Acquisition [Line Items] | ||||
Reverse stock-split ratio | 0.20 | |||
Ellipse [Member] | ||||
Business Acquisition [Line Items] | ||||
License agreement, number of additional years automatically extended | 2 years | |||
Monthly license fee | $ 33 | |||
License fee for initial term | $ 1,100 | |||
Esthetic Education, LLC [Member] | ||||
Business Acquisition [Line Items] | ||||
Agreement period | 3 years | |||
Number of extensions allowed | Extension | 2 | |||
Period of extension | 1 year | |||
Fair Value, Measurements, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Warrant liability (Note 8) | $ 237 | 105 | ||
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 8) | 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 8) | 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 8) | $ 237 | $ 105 | ||
XTRAC [Member] | ||||
Business Acquisition [Line Items] | ||||
Number of systems placed in dermatologists offices | Systems | 791 | |||
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 | 9,201,146 | 9,243,027 | ||
Common Stock Purchase Warrants [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common stock equivalents (in shares) | shares | 2,406,625 | 3,365,690 | ||
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 | 467,836 | 507,173 | ||
Common Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common stock equivalents (in shares) | shares | 894,890 | 533,870 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Schedule of inventory [Abstract] | ||
Raw materials and work in progress | $ 2,416 | $ 2,440 |
Finished goods | 254 | 377 |
Total inventories | $ 2,670 | $ 2,817 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 17,851 | $ 17,008 | |
Accumulated depreciation and amortization | (7,876) | (6,828) | |
Property and equipment, net | 9,975 | 10,180 | |
Depreciation and related amortization expense | 1,089 | $ 1,230 | |
Lasers Placed-In-Service [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 17,354 | 16,712 | |
Equipment, Computer Hardware and Software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 361 | 160 | |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 111 | 111 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 25 | $ 25 |
Intangibles, net (Details)
Intangibles, net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||
Patents and licensed technologies, gross | $ 17,274 | $ 16,374 | |
Accumulated amortization | (3,416) | (2,962) | |
Patents and licensed technologies, net | 13,858 | 13,412 | |
Estimated amortization expense [Abstract] | |||
Patents and licensed technologies, net | 13,858 | 13,412 | |
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 | |
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Patents and licensed technologies, gross | 6,900 | 6,900 | |
Tradenames [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Patents and licensed technologies, gross | 1,500 | 1,500 | |
Distribution Rights [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Patents and licensed technologies, gross | 900 | $ 0 | |
Customer Relationships and Tradenames [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Patents and licensed technologies, net | 13,858 | ||
Amortization expense of intangible assets | 454 | $ 454 | |
Estimated amortization expense [Abstract] | |||
Remaining 2,017 | 1,626 | ||
2,018 | 2,133 | ||
2,019 | 2,132 | ||
2,020 | 1,615 | ||
2,021 | 1,415 | ||
Thereafter | 4,937 | ||
Patents and licensed technologies, net | $ 13,858 |
Other Accrued Liabilities (Deta
Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Other Accrued Liabilities [Abstract] | ||
Accrued warranty, current | $ 91 | $ 102 |
Accrued compensation, including commissions and vacation | 1,201 | 1,177 |
Accrued sales and other taxes | 458 | 439 |
License liability - current | 283 | 0 |
Accrued professional fees and other accrued liabilities | 181 | 274 |
Total other accrued liabilities | $ 2,214 | $ 1,992 |
Convertible Debentures (Details
Convertible Debentures (Details) $ / shares in Units, $ in Thousands | Apr. 07, 2016USD ($)shares | Jul. 21, 2014USD ($)shares$ / shares | Mar. 31, 2017USD ($)shares$ / shares | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($)$ / shares |
Debt Instrument [Line Items] | |||||
Total convertible debt | $ 12,695 | $ 12,028 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |||
Fair value of warrants adjustment (income) expense | $ 132 | $ (1,985) | |||
Debentures converted in shares of common stock, value | $ 19 | 56 | $ 165 | ||
Debt conversion, converted instrument, issued (in shares) | shares | 5,000 | ||||
Debentures outstanding amount | $ 40,671 | ||||
Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Discounted cash flow change | 10.00% | ||||
Senior Secured 2.25% Convertible Debentures [Member] | |||||
Debt Instrument [Line Items] | |||||
Total convertible debt | $ 7,702 | $ 7,174 | |||
Debt instrument, unamortized discount | 23,742 | 24,314 | |||
Deferred financing costs | $ 512 | 524 | |||
Senior secured convertible debentures interest rate | 2.25% | ||||
Aggregate principal amount of debt | $ 32,500 | ||||
Number of shares debt convertible (in shares) | shares | 8,666,668 | ||||
Senior secured convertible debentures conversion price (in dollars per share) | $ / shares | $ 3.75 | ||||
Maturity period | 5 years | ||||
Maturity date | Jun. 22, 2020 | ||||
Debt instrument, convertible, beneficial conversion feature | $ 27,300 | ||||
Senior Secured 2.25% Convertible Debentures [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior secured convertible debentures conversion price (in dollars per share) | $ / shares | $ 6.90 | ||||
Senior Secured 2.25% Convertible Debentures [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior secured convertible debentures conversion price (in dollars per share) | $ / shares | $ 3.75 | ||||
Senior Secured 4% Convertible Debentures [Member] | |||||
Debt Instrument [Line Items] | |||||
Total convertible debt | $ 4,993 | 4,854 | |||
Debt instrument, unamortized discount | $ 10,353 | 3,343 | 3,469 | ||
Deferred financing costs | $ 378 | $ 392 | |||
Senior secured convertible debentures interest rate | 4.00% | ||||
Aggregate principal amount of debt | $ 15,000 | $ 15,000 | |||
Number of shares debt convertible (in shares) | shares | 1,169,595 | 1,169,595 | |||
Senior secured convertible debentures conversion price (in dollars per share) | $ / shares | $ 12.825 | ||||
Maturity period | 5 years | ||||
Maturity date | Jun. 30, 2021 | ||||
Fair value of warrants | $ 5,296 | ||||
Debt instrument, convertible, beneficial conversion feature | 4,565 | ||||
Fair value of warrants adjustment (income) expense | 491 | ||||
Debt instrument initial carrying amount | $ 4,647 | ||||
Debentures converted in shares of common stock, value | $ 56 | ||||
Debt conversion, converted instrument, issued (in shares) | shares | 15,000 | ||||
Interest expense on debt | $ 43 | ||||
Senior Secured 4% Convertible Debentures [Member] | Series A Warrants [Member] | |||||
Debt Instrument [Line Items] | |||||
Number of warrants to purchase common stock (in shares) | shares | 1,239,769 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | ||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 2.45 | ||||
Warrants expiration date | Jul. 31, 2019 |
Long-term Debt (Details)
Long-term Debt (Details) $ in Thousands | Jan. 29, 2016USD ($) | Dec. 30, 2015USD ($) | Mar. 31, 2017USD ($)Tranche | Dec. 31, 2016USD ($) |
Long-term Debt [Abstract] | ||||
Term note, net of debt discount of $232 and $258, respectively; and deferred financing cost of $248 and $276, respectively | $ 40,671 | |||
Less: current portion | (2,571) | $ (1,714) | ||
Long-term debt | 8,948 | 9,752 | ||
Term-Note Credit Facility [Member] | ||||
Long-term Debt [Abstract] | ||||
Term note, net of debt discount of $232 and $258, respectively; and deferred financing cost of $248 and $276, respectively | 11,519 | 11,466 | ||
Less: current portion | (2,571) | (1,714) | ||
Long-term debt | 8,948 | 9,752 | ||
Maturities of Long-term Debt [Abstract] | ||||
2,017 | 1,714 | |||
2,018 | 3,429 | |||
2,019 | 3,429 | |||
2,020 | 3,428 | |||
Total long-term debt | 12,000 | |||
Unamortized discount on the long term debt | 232 | 258 | ||
Deferred financing costs | 248 | $ 276 | ||
MidCap Financial Trust [Member] | Term-Note Credit Facility [Member] | ||||
Long-term Debt [Abstract] | ||||
Long-term debt | 11,519 | |||
Maturities of Long-term Debt [Abstract] | ||||
Maximum borrowing capacity under the agreement | $ 12,000 | |||
Number of tranches | Tranche | 2 | |||
MidCap Financial Trust [Member] | Term-Note Credit Facility [Member] | LIBOR [Member] | ||||
Maturities of Long-term Debt [Abstract] | ||||
Interest rate on credit facility | 8.25% | |||
Debt instrument term of variable rate | 1 month | |||
MidCap Financial Trust [Member] | Term-Note Credit Facility [Member] | LIBOR [Member] | Minimum [Member] | ||||
Maturities of Long-term Debt [Abstract] | ||||
LIBOR floor Rate | 0.50% | |||
MidCap Financial Trust [Member] | Term-Note Credit Facility [Member] | LIBOR [Member] | Maximum [Member] | ||||
Maturities of Long-term Debt [Abstract] | ||||
LIBOR floor Rate | 9.03% | |||
MidCap Financial Trust [Member] | Term-Note Credit Facility [Member] | First Tranche [Member] | ||||
Maturities of Long-term Debt [Abstract] | ||||
Proceeds from credit facility | $ 10,500 | |||
Repayment of debt | $ (10,000) | |||
MidCap Financial Trust [Member] | Term-Note Credit Facility [Member] | Second Tranche [Member] | ||||
Maturities of Long-term Debt [Abstract] | ||||
Proceeds from credit facility | $ 1,500 |
Warrants (Details)
Warrants (Details) - Warrant [Member] - Level 3 [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Fair Value Assumptions [Abstract] | |||
Number of shares underlying the warrants (in shares) | 403,090 | 403,090 | |
Stock price (in dollars per share) | $ 3.05 | $ 2.20 | |
Volatility | 47.00% | 47.00% | |
Risk-free interest rate | 1.22% | 1.22% | |
Expected dividend yield | 0.00% | 0.00% | |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Abstract] | |||
Balance as beginning of period | $ 105 | $ 7,042 | $ 7,042 |
Increase (decrease) in fair value | 132 | (1,985) | |
Balance as end of period | $ 237 | 5,057 | $ 105 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | |||
Number of warrants to purchase common stock (in shares) | 403,090 | ||
Minimum [Member] | |||
Fair Value Assumptions [Abstract] | |||
Expected warrant life | 1 year 10 months 13 days | 2 years 1 month 13 days | |
Maximum [Member] | |||
Fair Value Assumptions [Abstract] | |||
Expected warrant life | 2 years 1 month 6 days | 2 years 4 months 6 days | |
10/31/2013 [Member] | |||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Abstract] | |||
Balance as beginning of period | $ 39 | 379 | $ 379 |
Increase (decrease) in fair value | 46 | (99) | |
Balance as end of period | $ 85 | 280 | 39 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | |||
Number of warrants to purchase common stock (in shares) | 137,143 | ||
2/5/2014 [Member] | |||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Abstract] | |||
Balance as beginning of period | $ 66 | 715 | 715 |
Increase (decrease) in fair value | 86 | (187) | |
Balance as end of period | $ 152 | 528 | 66 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | |||
Number of warrants to purchase common stock (in shares) | 265,947 | ||
7/24/2014 Series A [Member] | |||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Abstract] | |||
Balance as beginning of period | 2,415 | 2,415 | |
Increase (decrease) in fair value | (621) | ||
Balance as end of period | 1,794 | ||
7/24/2014 Series B [Member] | |||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Abstract] | |||
Balance as beginning of period | 1,726 | 1,726 | |
Increase (decrease) in fair value | (638) | ||
Balance as end of period | 1,088 | ||
6/22/2015 [Member] | |||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Abstract] | |||
Balance as beginning of period | 1,807 | $ 1,807 | |
Increase (decrease) in fair value | (440) | ||
Balance as end of period | $ 1,367 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Class of Warrant or Right [Line Items] | |
Total Warrants (in shares) | shares | 2,406,625 |
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) | shares | 13,865 |
Exercise price (in dollars per share) | $ / shares | $ 55.90 |
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) | shares | 137,143 |
Exercise price (in dollars per share) | $ / shares | $ 3.75 |
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) | shares | 265,947 |
Exercise price (in dollars per share) | $ / shares | $ 3.75 |
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) | shares | 1,239,769 |
Common Stock Warrant Four [Member] | Minimum [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 3.75 |
Common Stock Warrant Four [Member] | Maximum [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 12.25 |
Common Stock Warrant Five [Member] | |
Class of Warrant or Right [Line Items] | |
Issue Date | Jun. 22, 2015 |
Expiration Date | Jun. 22, 2020 |
Total Warrants (in shares) | shares | 600,000 |
Exercise price (in dollars per share) | $ / shares | $ 3.75 |
Common Stock Warrant Six [Member] | |
Class of Warrant or Right [Line Items] | |
Issue Date | Dec. 30, 2015 |
Expiration Date | Dec. 30, 2020 |
Total Warrants (in shares) | shares | 130,089 |
Exercise price (in dollars per share) | $ / shares | $ 5.65 |
Common Stock Warrant Seven [Member] | |
Class of Warrant or Right [Line Items] | |
Issue Date | Jan. 29, 2016 |
Expiration Date | Jan. 29, 2021 |
Total Warrants (in shares) | shares | 19,812 |
Exercise price (in dollars per share) | $ / shares | $ 5.30 |
Stock-based compensation (Detai
Stock-based compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Number of Stock Options [Roll Forward] | ||
Stock-based compensation expense | $ 52 | $ 170 |
Unrecognized compensation expense | $ 310 | |
Unrecognized compensation expense, weighted average period | 3 years | |
Stock Options [Member] | ||
Number of Stock Options [Roll Forward] | ||
Stock based compensation options outstanding (in shares) | 894,890 | |
Stock based compensation weighted average exercise price (in dollars per share) | $ 5.12 | |
Stock based compensation vested (in shares) | 444,067 | |
Stock based compensation exercisable (in shares) | 444,067 |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income taxes [Abstract] | ||
Income tax expense change in deferred tax liability related to goodwill | $ 70 | $ 66 |
Business Segments and Geograp44
Business Segments and Geographic Data (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017USD ($)Segment | Mar. 31, 2016USD ($) | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | Segment | 3 | ||
Results of Operations from Business Segments [Abstract] | |||
Revenues | $ 7,272 | $ 7,620 | |
Cost of revenues | 2,733 | 3,422 | |
Gross profit | $ 4,539 | $ 4,198 | |
Gross profit % | 62.40% | 55.10% | |
Allocated operating expenses [Abstract] | |||
Engineering and product development | $ 475 | $ 525 | |
Selling and marketing expenses | 3,150 | 3,710 | |
Unallocated operating expenses | 1,601 | 2,101 | |
Total operating expenses | 5,226 | 6,336 | |
Operating loss before other income (expense), net | (687) | (2,138) | |
Interest expense, net | (1,346) | (1,218) | |
Change in fair value of warrant liability | (132) | 1,985 | |
Income (loss) before income taxes | $ (2,165) | (1,371) | |
Long Lived Assets [Member] | Geographic Concentration Risk [Member] | Domestic [Member] | |||
Allocated operating expenses [Abstract] | |||
Concentration risk percentage | 100.00% | 100.00% | |
Operating Segments [Member] | Dermatology Recurring Procedures [Member] | |||
Results of Operations from Business Segments [Abstract] | |||
Revenues | $ 5,731 | 5,528 | |
Cost of revenues | 2,042 | 2,304 | |
Gross profit | $ 3,689 | $ 3,224 | |
Gross profit % | 64.40% | 58.30% | |
Allocated operating expenses [Abstract] | |||
Engineering and product development | $ 416 | $ 311 | |
Selling and marketing expenses | 2,948 | 3,510 | |
Unallocated operating expenses | 0 | 0 | |
Total operating expenses | 3,364 | 3,821 | |
Operating loss before other income (expense), net | 325 | (597) | |
Interest expense, net | 0 | 0 | |
Change in fair value of warrant liability | 0 | 0 | |
Income (loss) before income taxes | 325 | (597) | |
Operating Segments [Member] | Dermatology Procedures Equipment [Member] | |||
Results of Operations from Business Segments [Abstract] | |||
Revenues | 1,537 | 1,990 | |
Cost of revenues | 691 | 951 | |
Gross profit | $ 846 | $ 1,039 | |
Gross profit % | 55.00% | 52.20% | |
Allocated operating expenses [Abstract] | |||
Engineering and product development | $ 58 | $ 62 | |
Selling and marketing expenses | 202 | 108 | |
Unallocated operating expenses | 0 | 0 | |
Total operating expenses | 260 | 170 | |
Operating loss before other income (expense), net | 586 | 869 | |
Interest expense, net | 0 | 0 | |
Change in fair value of warrant liability | 0 | 0 | |
Income (loss) before income taxes | 586 | 869 | |
Operating Segments [Member] | Dermatology Imaging [Member] | |||
Results of Operations from Business Segments [Abstract] | |||
Revenues | 4 | 102 | |
Cost of revenues | 0 | 167 | |
Gross profit | $ 4 | $ (65) | |
Gross profit % | 100.00% | (63.70%) | |
Allocated operating expenses [Abstract] | |||
Engineering and product development | $ 1 | $ 152 | |
Selling and marketing expenses | 0 | 92 | |
Unallocated operating expenses | 0 | 0 | |
Total operating expenses | 1 | 244 | |
Operating loss before other income (expense), net | 3 | (309) | |
Interest expense, net | 0 | 0 | |
Change in fair value of warrant liability | 0 | 0 | |
Income (loss) before income taxes | 3 | (309) | |
Reportable Geographical Components [Member] | Domestic [Member] | |||
Results of Operations from Business Segments [Abstract] | |||
Revenues | 6,189 | 5,622 | |
Reportable Geographical Components [Member] | Foreign [Member] | |||
Results of Operations from Business Segments [Abstract] | |||
Revenues | $ 1,083 | $ 1,998 |
Significant Customer Concentr45
Significant Customer Concentration (Details) - Customer Concentration Risk [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenue [Member] | ||
Product Information [Line Items] | ||
Revenues | $ 1,078 | $ 1,686 |
Concentration risk percentage | 14.80% | 22.10% |
Accounts Receivable [Member] | ||
Product Information [Line Items] | ||
Accounts receivable | $ 467 | $ 443 |
Concentration risk percentage | 15.60% | 13.60% |
Related Parties (Details)
Related Parties (Details) $ / shares in Units, $ in Thousands | Nov. 04, 2015USD ($) | Mar. 31, 2017USD ($)sharesDirector$ / shares |
Related Party Transaction [Line Items] | ||
Number of Directors | Director | 2 | |
Senior Secured 2.25% Convertible Debentures [Member] | ||
Related Party Transaction [Line Items] | ||
Aggregate principal amount of debt | $ 32,500 | |
Interest rate | 2.25% | |
Number of shares debt convertible (in shares) | shares | 8,666,668 | |
Initial conversion price (in dollars per share) | $ / shares | $ 3.75 | |
Maturity period | 5 years | |
Maturity date | Jun. 22, 2020 | |
Sabby Management LLC and Broadfin LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Number of shares underlying warrants (in shares) | shares | 3,000,000 | |
Exercise price of warrants (in dollars per share) | $ / shares | $ 0.75 | |
Percentage of liquidated damages payable | 2.00% | |
Percentage of aggregate liquidated damages payable | 12.00% | |
Interest rate payable on liquidated damages | 12.00% | |
Percentage of issued and outstanding common stock payable upon conversion | 9.99% | |
Sabby Management LLC and Broadfin LLC [Member] | Senior Secured 2.25% Convertible Debentures [Member] | ||
Related Party Transaction [Line Items] | ||
Aggregate principal amount of debt | $ 32,500 | |
Interest rate | 2.25% | |
Number of shares debt convertible (in shares) | shares | 43,333,334 | |
Initial conversion price (in dollars per share) | $ / shares | $ 0.75 | |
Maturity period | 5 years | |
Maturity date | Jun. 30, 2021 | |
Sabby Management LLC and Broadfin LLC [Member] | Senior Secured Notes Payable [Member] | ||
Related Party Transaction [Line Items] | ||
Aggregate principal amount of debt | $ 10,000 | |
Number of days for stockholders approval considered for maturity date | 30 days | |
Interest rate | 9.00% | |
Two Board Directors [Member] | ||
Related Party Transaction [Line Items] | ||
Up-front fee paid | $ 40,000 | |
Monthly retainer fee | $ 10,000 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Thousands | May 11, 2017USD ($)shares | Apr. 06, 2017 | Apr. 07, 2016USD ($)shares | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) |
Subsequent Events [Line Items] | |||||
Debentures converted in shares of common stock, value | $ | $ 19 | $ 56 | $ 165 | ||
Debentures stock converted in shares of common stock (in shares) | shares | 5,000 | ||||
Subsequent Event [Member] | |||||
Subsequent Events [Line Items] | |||||
Reverse stock split, ratio | 0.20 | ||||
Series A Preferred stock converted in shares of common stock, value | $ | $ 3,072 | ||||
Series A Preferred stock converted in shares of common stock (in shares) | shares | 239,500 |