Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Oct. 31, 2019 | |
Cover [Abstract] | ||
Entity Registrant Name | STRATA Skin Sciences, Inc. | |
Entity Central Index Key | 0001051514 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | No | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 32,903,287 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Document Transition Report | false | |
Entity Address, State or Province | PA |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 16,389 | $ 16,487 |
Accounts receivable, net of allowance for doubtful accounts of $134 and $141, respectively | 3,575 | 3,393 |
Inventories | 3,121 | 2,794 |
Prepaid expenses and other current assets | 430 | 536 |
Total current assets | 23,515 | 23,210 |
Property and equipment, net | 4,962 | 5,301 |
Operating lease right-of-use assets, net | 755 | 0 |
Intangible assets, net | 9,312 | 9,765 |
Goodwill | 8,803 | 8,803 |
Other assets | 392 | 428 |
Total assets | 47,739 | 47,507 |
Current liabilities: | ||
Current portion of long-term debt | 1,010 | 252 |
Accounts payable | 2,045 | 1,764 |
Other accrued liabilities | 4,724 | 4,500 |
Current portion of operating lease liabilities | 293 | 0 |
Deferred revenues | 2,063 | 2,099 |
Total current liabilities | 10,135 | 8,615 |
Long-term liabilities: | ||
Long-term debt, net | 6,421 | 7,145 |
Deferred tax liability | 69 | 111 |
Long-term operating lease liabilities, net | 479 | 0 |
Other liabilities | 397 | 388 |
Total liabilities | 17,501 | 16,259 |
Commitments and contingencies (see Note 15) | ||
Stockholders' equity: | ||
Common Stock, $.001 par value, 150,000,000 shares authorized; 31,120,608 and 29,943,086 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | 31 | 30 |
Additional paid-in capital | 242,310 | 241,988 |
Accumulated deficit | (212,104) | (210,771) |
Total stockholders' equity | 30,238 | 31,248 |
Total liabilities and stockholders' equity | 47,739 | 47,507 |
Series C Convertible Preferred Stock [Member] | ||
Stockholders' equity: | ||
Series C Convertible Preferred Stock, $.10 par value, 10,000,000 shares authorized; 6,878 and 9,968 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | $ 1 | $ 1 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Allowance for doubtful accounts | $ 134 | $ 141 |
Stockholders' equity: | ||
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 on exercise of options (in shares) | 31,120,608 | 29,943,086 |
Common stock, shares outstanding (in shares) | 31,120,608 | 29,943,086 |
Series C Convertible Preferred Stock [Member] | ||
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) | 6,878 | 9,968 |
Preferred stock, shares outstanding (in shares) | 6,878 | 9,968 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ||
Revenues, net | $ 7,483 | $ 6,738 |
Cost of revenues | 2,874 | 3,345 |
Gross profit | 4,609 | 3,393 |
Operating expenses: | ||
Engineering and product development | 304 | 338 |
Selling and marketing | 3,066 | 2,871 |
General and administrative | 2,480 | 1,884 |
Total operating expenses | 5,850 | 5,093 |
Income (loss) from operations | (1,241) | (1,700) |
Other (expense) income, net: | ||
Interest expense, net | (135) | (363) |
Change in fair value of warrant liability (see Note 1) | 0 | 1 |
Other income, net | 0 | 21 |
Total other (expense) income, net | (135) | (341) |
Income (loss) before income taxes | (1,376) | (2,041) |
Income tax benefit (expense) | 43 | (40) |
Net loss | (1,333) | (2,081) |
Loss attributable to common shares | (1,216) | (512) |
Loss attributable to Preferred Series C shares | $ (117) | $ (1,569) |
Loss per common share: | ||
Basic (in dollars per share) | $ (0.04) | $ (0.12) |
Diluted (in dollars per share) | $ (0.04) | $ (0.12) |
Shares used in computing loss per common share: | ||
Basic (in shares) | 30,703,501 | 4,371,369 |
Diluted (in shares) | 30,703,501 | 4,371,369 |
Loss per Preferred Series C share basic and diluted (in dollars per share) | $ (14.72) | $ (43.57) |
Shares used in computing loss per basic and diluted Preferred Series C Shares (in shares) | 7,944 | 36,002 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Preferred Stock [Member]Convertible Preferred Stock - Series C [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total | Convertible Preferred Stock - Series C [Member] |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative accounting adjustment from adoption of new standard net of tax | ASU 2014-09 [Member] | $ 0 | $ 0 | $ 0 | $ (234) | $ (234) | |
Cumulative accounting adjustment from adoption of new standard net of tax | ASU 2017-11 [Member] | 2,614 | (2,547) | 67 | |||
Beginning balance at Dec. 31, 2017 | $ 4 | $ 4 | 223,829 | (203,957) | 19,880 | |
Beginning balance (in shares) at Dec. 31, 2017 | 36,182 | 4,304,425 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | $ 0 | $ 0 | 19 | 0 | 19 | |
Conversion of convertible preferred stock into common stock | $ 0 | $ 0 | 0 | 0 | 0 | |
Conversion of convertible preferred stock into common stock (in shares) | (202) | 75,000 | ||||
Net loss | $ 0 | $ (512) | 0 | (2,081) | (2,081) | $ (1,569) |
Ending balance at Mar. 31, 2018 | $ 4 | $ 4 | 226,462 | (208,819) | 17,651 | |
Ending balance (in shares) at Mar. 31, 2018 | 35,980 | 4,379,425 | ||||
Beginning balance at Dec. 31, 2018 | $ 1 | $ 30 | 241,988 | (210,771) | 31,248 | |
Beginning balance (in shares) at Dec. 31, 2018 | 9,968 | 29,943,086 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | $ 0 | $ 0 | 323 | 0 | 323 | |
Conversion of convertible preferred stock into common stock | $ 0 | $ 1 | (1) | 0 | 0 | |
Conversion of convertible preferred stock into common stock (in shares) | (3,090) | 1,148,698 | ||||
Exercise of options | $ 0 | $ 0 | 0 | 0 | 0 | |
Exercise of options (in shares) | 0 | 28,824 | ||||
Net loss | $ 0 | $ (1,216) | 0 | (1,333) | (1,333) | $ (117) |
Ending balance at Mar. 31, 2019 | $ 1 | $ 31 | $ 242,310 | $ (212,104) | $ 30,238 | |
Ending balance (in shares) at Mar. 31, 2019 | 6,878 | 31,120,608 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (1,333) | $ (2,081) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 1,204 | 1,463 |
Amortization of right of use asset | 93 | 0 |
Provision for doubtful accounts | (7) | 0 |
Loss on disposal of property and equipment and lasers placed in service | 22 | 182 |
Loss on intangible assets from cancellation of distributor rights agreements | 0 | 226 |
Stock-based compensation | 323 | 19 |
Deferred taxes | (42) | 40 |
Amortization of debt discount | 7 | 19 |
Amortization of deferred financing costs | 27 | 20 |
Change in fair value of warrant liability | 0 | (1) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (175) | 650 |
Inventories | (327) | (20) |
Prepaid expenses and other assets | 142 | (669) |
Accounts payable | 281 | 381 |
Other accrued liabilities | 224 | (16) |
Other liabilities | 9 | 227 |
Operating lease liabilities | (76) | 0 |
Deferred revenues | (36) | (380) |
Net cash provided by operating activities | 336 | 60 |
Cash Flows From Investing Activities: | ||
Lasers placed-in-service | (434) | (375) |
Purchases of property and equipment | 0 | (6) |
Payments on distributor rights liability | 0 | (24) |
Net cash used in investing activities | (434) | (405) |
Cash Flows From Financing Activities: | ||
Advance fees related to equity financing | 0 | (202) |
Payments on notes payable | 0 | (105) |
Net cash used in financing activities | 0 | (307) |
Net decrease in cash and cash equivalents | (98) | (652) |
Cash and cash equivalents, beginning of period | 16,487 | 4,069 |
Cash and cash equivalents, end of period | 16,389 | 3,417 |
Supplemental information of cash and non-cash transactions: | ||
Cash paid for interest | 201 | 276 |
Lease liabilities arising from obtaining right-of-use assets | $ 848 | $ 0 |
The Company
The Company | 3 Months Ended |
Mar. 31, 2019 | |
The Company [Abstract] | |
The Company | Note 1 The Company: Background STRATA Skin Sciences (the “Company”) is a medical technology company in Dermatology and Plastic Surgery dedicated to developing, commercializing and marketing innovative products for the treatment of dermatologic conditions. Its products include the XTRAC® excimer laser and VTRAC® lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions; and the STRATAPEN® MicroSystem, marketed specifically for the intended use of micropigmentation. The XTRAC is an ultraviolet light excimer laser system utilized to treat psoriasis, vitiligo and other skin diseases. The XTRAC excimer laser system received clearance from the United States Food and Drug Administration (the “FDA”) in 2000. As of March 31, 2019, there were 754 XTRAC systems placed in dermatologists' offices in the United States under the Company's recurring revenue business model. The XTRAC systems deployed under the recurring revenue model generate revenue on a per procedure basis or include a fixed payment over an agreed upon period with a capped number of treatments, which if exceeded would incur additional fees. 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, and other services. The VTRAC Excimer Lamp system, offered in addition to the XTRAC system internationally, provides targeted therapeutic efficacy demonstrated by excimer technology with a lamp system. 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 has minimum annual sales requirements for renewal. The Company does not expect to meet the criteria for renewal. Basis of Presentation Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary in India. All significant intercompany balances and transactions have been eliminated in consolidation. In 2019 and 2018, there are no operations in the subsidiary in India. Unaudited Interim Condensed Consolidated Financial Statements The accompanying unaudited interim condensed 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 condensed consolidated statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to fairly present the results of the interim periods. The condensed consolidated balance sheet at December 31, 2018 has been derived from the audited consolidated financial statements at that date. Operating results and cash flows for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2019, or any other future period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP) have been omitted in accordance with the rules and regulations for interim reporting of the SEC. These interim condensed 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, 2018 (the “2018 Form 10-K”), and other forms filed with the SEC from time to time. Dollar amounts included herein are in thousands, except per share data. Reclassifications 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, 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 Annual Report on Form 10-K for the year ended December 31, 2018, and there have been no changes to the Company’s significant account policies during the three months ended March 31, 2019, except for the adoption of the new leasing standard as discussed under Accounting Pronouncements Recently Adopted Note 1 Use of Estimates The preparation of the condensed consolidated financial statements in conformity with US GAAP 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, 2019, the more significant estimates include (1) revenue recognition, in regards to deferred revenues and the contract term and valuation allowances of accounts receivable, (2) the inputs used in the impairment analyses of intangible assets and goodwill, (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, (6) the fair value of financial instruments, including derivative instruments and warrants, (7) the inventory reserves, (8) state sales and use tax accruals and (9) warranty claims. 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 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 liability is estimated using option pricing models that are based on the fair value of the Company’s common stock as well as assumptions for volatility, remaining expected life, and the risk-free interest rate. The derivative warrant liability is the only recurring Level 3 fair value measure. 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. As of March 31, 2019 and December 31, 2018, the Company assessed its long-term debt (including the current portion) and determined that the fair value of total debt approximated its book value as the interest rate on the debt approximates market rates. Several of the warrants outstanding as of March 31, 2019 and December 31, 2018 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 are classified as derivative liabilities. In addition, other warrants had a “down round” provision. These warrants were classified as derivatives prior to the adoption of Accounting Standards Update (“ASU”) No. 2017-11 on October 1, 2018 under the modified retrospective method with a cumulative effect adjustment recorded as of January 1, 2018. The Company’s warrant liabilities are recorded at their fair value using the Black Scholes option pricing model and continue to be recorded at their respective fair value at each subsequent balance sheet date until such terms expire. See Note 9, Recurring level 3 Activity and Recalculation The table below provides a reconciliation of the beginning and ending balance for the liability measured at fair value using significant unobservable inputs (Level 3). Issuance Date December 31, 2018 Increase in Fair Value March 31, 2019 October 31, 2013 $ - $ - $ - $ - $ - $ - Issuance Date January 1, 2018 Decrease in Fair Value March 31, 2018 October 31, 2013 $ 2 $ (1 ) $ 1 February 5, 2014 1 - 1 $ 3 $ (1 ) $ 2 Earnings Per Share The Company calculates loss per common share and Preferred Series C share in accordance with ASC 260, Earnings per Share The Company's Series C Convertible Preferred Stock are subordinate to all other securities at the same subordination level as common stock and they participate in all dividends and distributions declared or paid with respect to common stock of the Company, on an as-converted basis. Therefore, the Series C Convertible Preferred Shares meet the definition of common stock under ASC 260. Earnings per share is presented for each class of security meeting the definition of common stock. The loss is allocated to each class of security meeting the definition of common stock based on their contractual terms. The following table presents the calculation of basic and diluted loss per share by each class of security for the three months ended March 31, 2019 and 2018: Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Common Stock Series C Convertible Preferred Stock Common Stock Series C Convertible Preferred Stock Loss attributable to each class $ (1,216 ) $ (117 ) $ (512 ) $ (1,569 ) Weighted average number of shares outstanding during the period 30,703,501 7,944 4,371,369 36,002 Basic and Diluted loss per share $ (0.04 ) $ (14.72 ) $ (0.12 ) $ (43.57 ) The Company considers Series C Convertible Preferred Stock and 137,143 warrants issued on October 31, 2013 to be participating securities in presentation of earnings per share. However the warrants are excluded from the calculation of earnings per share in periods of losses as the warrant holders do not have an obligation to fund such losses. The above referenced warrants expired on April 30, 2019. For the three months ended March 31, 2019 and 2018, diluted loss per common share and Series C Convertible Preferred Stock share is equal to the basic loss per common share and Series C Convertible Preferred Stock share, respectively, since all potentially dilutive securities are anti-dilutive. The weighted average of potential common stock equivalents outstanding during the three months ended March 31, 2019 and 2018 have been excluded from the loss per share calculation as their inclusion would have been anti-dilutive: Three Months Ended March 31, 2019 2018 Common stock purchase warrants 2,233,192 2,406,625 Restricted stock units 129,576 - Common stock options 4,321,932 876,127 Total 6,684,700 3,282,752 Accounting Pronouncements Recently Adopted In February 2016 the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, “Leases” (Topic 842) (“ASU 2016-02”), which will require lessees to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current US GAAP, the recognition, measurement and presentation of expenses and cash flows arising from a lease primarily will depend on its classification as a finance or operating lease. However, unlike current US GAAP, which requires only capital leases to be recognized on the balance sheet, the new guidance will require both types of leases to be recognized on the balance sheet. The ASU is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. In August 2018 the FASB issued ASU No. 2018-11, “Leases (Topic 842: Targeted Improvements”) which permits adoption of the guidance in ASU 2016-02 using either a modified retrospective transition, requiring application at the beginning of the earliest comparative period presented or a transition method whereby companies could continue to apply existing lease guidance during the comparative periods and apply the new lease requirements through a cumulative-effect adjustment in the period of adoption rather than in the earliest period presented without adjusting historical financial statements. The Company used the modified retrospective transition approach to ASU No. 2018-11 and applied the new lease requirements through a cumulative-effect adjustment in the period of adoption. The new standard provides a number of optional practical expedients in transition. We elected the package of practical expedients, which permits us not to reassess, under the new standard, our prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. This accounting standard did not have a material impact on our debt covenants. The Company has completed an evaluation of ASU 2016-02, including a review of our leases and other contracts for potential embedded leasing arrangements and has recognized approximately $848 in right-of-use assets and lease liabilities in the balance sheet as of January 1, 2019. There was no impact on the Company’s revenue recognition under ASC 842. In July 2017 the FASB issued a two-part ASU 2017-11, “(Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception.” For public business entities the amendments in Part I of ASU 2017-11 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. The Company previously adopted this ASU on October 1, 2018, and recorded an adjustment for the adoption of a new accounting pronouncement of $67 as an adjustment to warrant liability, $2,547 as an adjustment to accumulated deficit and $2,614 as an adjustment to additional paid-in-capital as of the beginning fiscal year in the year of adoption on January 1, 2018. The impact from adopting ASU 2017-11 on the Company’s unaudited condensed balance sheets and consolidated statements of operations and as of and for the following period is as follows: For the Three Months Ended March 31, 2018 Balances prior to Adoption of ASU 2017-11 Balances after the Adoption of ASU 2017-11 Effect of Adoption Higher/(Lower) Statement of Operations Change in fair value of warrant liability gain (loss) $ 40 $ 1 $ (39 ) Balance Sheet Fair value of warrant liability $ 24 $ 2 $ (22 ) In June 2018 the FASB issued ASU No. 2018-07, “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,” with the objective of simplifying several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The provisions of this update are effective for fiscal years beginning after December 15, 2018, including interim periods within that year. The adoption of ASU No. 2018-07 on January 1, 2019, did not have a material effect on the Company’s condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted In January 2017 the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. 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 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. As the Company has not identified a goodwill impairment loss, currently this guidance does not have an impact on the Company’s condensed consolidated financial statements, but could have an impact in the event of a goodwill impairment. In August 2018 the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The new guidance improves and clarifies the fair value measurement disclosure requirement of ASC 820. The new disclosure requirements include the changes in unrealized gains or losses included in other comprehensive income for recurring Level 3 fair value measurement held at the end of the reporting period and the explicit requirement to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The other provisions of ASU 2018-13 also include eliminated and modified disclosure requirements. The guidance is effective for fiscal years beginning after December 15, 2019, with early adoption permitted, including in an interim period for which financial statements have not been issued or made available for issuance. The Company has evaluated the impact of early adoption of this ASU and determined that it will have no significant impact on its condensed consolidated financial statements. |
Equity Financing and Liquidity
Equity Financing and Liquidity | 3 Months Ended |
Mar. 31, 2019 | |
Equity Financing and Liquidity [Abstract] | |
Equity Financing and Liquidity | Note 2 Equity Financing and Liquidity Equity Financing On March 30, 2018, the Company entered into multiple agreements in order to obtain $17,000 of equity financing (the “Financing”) from the following sources: • On March 30, 2018 the Company entered into a Stock Purchase Agreement (the “Accelmed SPA”) and a Registration Rights Agreement with Accelmed Growth Partners L.P. (“Accelmed”) investing $13,000 into the Company at a price per share of $1.08; upon closing Accelmed received 12,037,037 shares of its common stock. • In connection with the Accelmed investment, the Company entered into two separate stock purchase agreements, each for approximately $1,000 with its then current shareholders, Broadfin Capital (“Broadfin”) and Sabby Management (“Sabby”). Upon closing of these transactions, each of Sabby and Broadfin received 925,926 shares of the Company’s common stock at a price per share of $1.08. • Two separate subscription agreements were also executed on in connection with the Accelmed investment: (i) a subscription agreement with Gohan Investments, Ltd. for $1,000 to purchase 925,926 shares of the Company’s common stock at $1.08 per share; and (ii) a subscription agreement with Dr. Dolev Rafaeli, the CEO of the Company effective May 29, 2018, for $1,000 to purchase 925,926 shares of the Company’s common stock at $1.08 per share. The Company incurred $2,336 of costs related to the equity financing during the year ended December 31, 2018. Liquidity The Company has experienced recurring operating losses and prior to 2017 negative cash flow from operations. Historically, the Company has been dependent on raising capital from the sale of securities in order to continue to operate and to meet our obligations in the ordinary course of business. Management believes that the Company’s cash and cash equivalents, combined with the anticipated revenues from the sale of the Company’s products, will be sufficient to satisfy our working capital needs, capital asset purchases, outstanding commitments and other liquidity requirements associated with our existing operations through the next 12 months following the issuance of the condensed consolidated financial statements. In the Company’s debt modification with MidCap in the prior year, MidCap reduced the restrictive covenants. However, if the Company fails to meet the monthly revenue covenants per the MidCap loan agreement, the Company may be declared in breach of the credit facility agreement and MidCap will have the option to call the loan balance. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2019 | |
Revenue [Abstract] | |
Revenue | Note 3 Revenue: In the Dermatology Recurring Procedures Segment the Company has two types of arrangements for its phototherapy treatment equipment as follows: (i) the Company places its lasers in a physician’s office at no charge to the physician, and generally charges the physician a fee for an agreed upon number of treatments; or (ii) the Company places its lasers in a physician’s office and charges the physician a fixed fee for a specified period of time not to exceed an agreed upon number of treatments; if that number is exceeded additional fees will have to be paid. For the purposes of US GAAP only, these two types of arrangements are treated under the guidance of ASC 842, Leases. While these are not contractually operating leases, the Company sells the physician access codes in order to operate the treatment equipment, these are similar to operating leases for accounting purposes since in these arrangements the Company provides the customers limited rights to use the treatment equipment and the treatment equipment resides in the physician’s office while the Company may exercise the right to remove the equipment upon notice, while the physician controls the utility and output of such equipment during the term of the arrangement as it pertains to the use of access codes to treat the patients. The terms of the arrangements are generally 36 months with automatic one-year renewals and include a termination clause that can be affected at any time by either party with 60 day notice. Amounts paid are generally nonrefundable. For the first type of arrangement, sales of access codes are considered variable lease payments and are recognized as revenue over estimated usage period of the agreed upon number of treatments. For the second type of arrangement, customers purchase access codes and revenue is recognized ratably on a straight line basis as the lasers are being used over the term period specified in the agreement. Variable lease payments that will be paid only if the customer exceeds the agreed upon number of treatments are recognized only when such treatments are being exceeded and used. Pre-paid amounts are recorded in deferred revenue and recognized as revenue over the lease term in the patterns described above. Under both methods, pricing is fixed with the customer. With respect to lease and non-lease components, the Company adopted the practical expedient to account for the arrangement as a single lease component. In the Dermatology Procedures Equipment segment the Company sells its products internationally through a distributor, and domestically directly to a physician. For the product sales, the Company recognizes revenues when control of the promised products is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products (the transaction price). Control transfers to the customer at a point in time. To indicate the transfer of control, the Company must have a present right to payment and legal title must have passed to the customer. The Company ships most of its products FOB shipping point, and as such, the Company primarily transfers control and records revenue upon shipment. From time to time the Company will grant certain customers, for example governmental customers, FOB destination terms, and the transfer of control for revenue recognition occurs upon receipt. The Company has elected to recognize the cost of freight and shipping activities as fulfillment costs. Amounts billed to customers for shipping and handling are included as part of the transaction price and recognized as revenue when control of the underlying goods are transferred to the customer. The related shipping and freights charges incurred by the Company are included in cost of revenues. Remaining performance obligations related to ASC 606 represent the aggregate transaction price allocated to performance obligations with an original contract term greater than one year which are fully or partially unsatisfied at the end of the period. Remaining performance obligations include the potential obligation to perform under extended warranties, but excludes any equipment accounted for as leases. As of March 31, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was $423, and the Company expects to recognize $169 of the remaining performance obligations within one year and the remainder over one to three years. Contract assets primarily relate to the Company’s rights to consideration for work completed in relation to its services performed but not billed at the reporting date. The contract assets are transferred to receivables when the rights become unconditional. Currently, the Company does not have any contract assets which have not transferred to a receivable. Contract liabilities primarily relate to extended warranties where we have received payments, but we have not yet satisfied the related performance obligations. The advance consideration received from customers for the services is a contract liability until services are provided to the customer. The $169 of short-term contract liabilities is presented as deferred revenues and the $254 of long-term contract liabilities is presented within Other Liabilities on the March 31, 2019 Condensed Consolidated Balance Sheet. For the three months ended March 31, 2019, the Company recognized $39 as revenue from amounts classified as contract liabilities (i.e. deferred revenue) as of December 31, 2018. With respect to contract acquisition costs, the Company applied the practical expedient and expenses these costs immediately. The Company records co-pay reimbursements made to patients receiving laser treatments as a reduction of revenue. For the three months ended March 31, 2019 and 2018, the Company recorded such reimbursements in the amounts of $155 and $126, respectively. The following tables present the Company’s revenue disaggregated by geographical region for the three months ended March 31, 2019 and 2018, respectively. Domestic refers to revenue from customers based in the United States, and substantially all foreign revenue is derived from dermatology procedures equipment sales to the Company’s international master distributor for physicians based primarily in Asia. Three Months Ended March 31, 2019 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Domestic $ 5,312 $ 324 $ 5,636 Foreign - 1,847 1,847 Total $ 5,312 $ 2,171 $ 7,483 Three Months Ended March 31, 2018 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Domestic $ 4,770 $ 657 $ 5,427 Foreign - 1,311 1,311 Total $ 4,770 $ 1,968 $ 6,738 |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2019 | |
Inventories [Abstract] | |
Inventories | Note 4 Inventories: Inventories consist of: March 31, 2019 December 31, 2018 Raw materials and work in progress $ 2,872 $ 2,442 Finished goods 249 352 Total inventories $ 3,121 $ 2,794 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, 2019 | |
Property and Equipment, net [Abstract] | |
Property and Equipment, net | Note 5 Property and Equipment, net: Property and equipment consist of: March 31, 2019 December 31, 2018 Lasers placed-in-service $ 18,822 $ 18,515 Equipment, computer hardware and software 141 168 Furniture and fixtures 124 124 Leasehold improvements 26 26 19,113 18,833 Accumulated depreciation and amortization (14,151 ) (13,532 ) Property and equipment, net $ 4,962 $ 5,301 Depreciation and related amortization expense was $751 and $986 for the three months ended March 31, 2019 and 2018, respectively. |
Intangible Assets, net
Intangible Assets, net | 3 Months Ended |
Mar. 31, 2019 | |
Intangible Assets, net [Abstract] | |
Intangible Assets, net | Note 6 Intangible Assets, net: Set forth below is a detailed listing of definite-lived intangible assets as of March 31, 2019: Balance Accumulated Amortization Intangible assets, net Core technology $ 5,700 $ (2,138 ) $ 3,562 Product technology 2,000 (1,500 ) 500 Customer relationships 6,900 (2,587 ) 4,313 Tradenames 1,500 (563 ) 937 $ 16,100 $ (6,788 ) $ 9,312 Related amortization expense was $453 and $477 for the three months ended March 31, 2019 and 2018, respectively. Definite-lived intangible assets are tested for impairment when events or changes in circumstances indicate that the carrying value of the asset group may not be recoverable. The Company recognizes an impairment loss when and to the extent that the recoverable amount of an asset group is less than its carrying value. There were no impairment charges for the three months ended March 31, 2019. During the three months ended March 31, 2018, the Company wrote off distribution rights of $286 and accumulated amortization of $60 related to the discontinuance of the Nordlys product line. The net value written off of $226 was recorded in selling and marketing expense. Estimated amortization expense for the above amortizable intangible assets for future periods is as follows: Remaining 2019 $ 1,357 2020 1,610 2021 1,410 2022 1,410 2023 1,410 Thereafter 2,115 Total $ 9,312 |
Other Accrued Liabilities
Other Accrued Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Other Accrued Liabilities [Abstract] | |
Other Accrued Liabilities | Note 7 Other Accrued Liabilities: Other accrued liabilities consist of: March 31, 2019 December 31, 2018 Accrued warranty, current $ 183 $ 156 Accrued compensation, including commissions and vacation 1,017 1,275 Accrued state sales, use and other taxes 2,840 2,719 Accrued professional fees and other accrued liabilities 684 350 Total other accrued liabilities $ 4,724 $ 4,500 Accrued State Sales and Use Tax In the ordinary course of business, the Company is, from time to time, subject to audits performed by state taxing authorities. These actions and proceedings are generally based on the position that the arrangements entered into by the Company are subject to sales and use tax rather than exempt from tax under applicable law. The Company uses estimates when accruing its sales and use tax liability. All of the Company’s tax positions are subject to audit. One state has assessed the Company an amount of $801 for the period from March 2014 through August 2017. The Company has declined an informal offer to settle at a substantially lower amount and is currently in that jurisdiction’s administrative process of appeal. A second jurisdiction is also conducting an audit and has not made an assessment. If there is a determination that the Company’s recurring revenue model is not exempt from sales taxes and is not a prescription medicine or the Company does not have other defenses where the Company does not prevail, the Company may be subject to sales taxes in those particular states for previous years and in the future, plus potential interest and penalties for failure to pay such taxes. The Company believes its state sales and use tax accruals have properly recognized that if the Company’s arrangements with its customers are deemed to be subject to sales tax in a particular state are more likely than not the basis for measurement of the sales and use tax would be in accordance with ASC 405, Liabilities, as a transaction tax. If and when the Company is successful in defending itself in settling the sales tax obligation for a lessor amount, the reversal of this liability is to be recorded in the period settlement is reached. However, the precise scope, timing and time period at issue, as well as the final outcome of any audit and actual settlement remains uncertain. The Company records state sales tax collected and remitted for its customers on equipment sales on a net basis, excluded from revenue. The Company’s sales tax expense that is not presently being collected and remitted for the recurring revenue business are recorded in general and administrative expenses on the statement of operations. Accrued Warranty Costs The Company offers a standard warranty on product sales generally for a one to two-year period, however, the Company has offered longer warranty periods, ranging from three to four years, in order to meet competition or meet customer demands. The Company provides for the estimated cost of the future warranty claims on the date the product is sold. Total accrued warranty is included in other accrued liabilities and other liabilities on the condensed consolidated balance sheet. The activity in the warranty accrual during the three months ended March 31, 2019 and 2018, is summarized as follows: March 31, 2019 2018 Accrual at beginning of year $ 238 $ 178 Additions charged to warranty expense 68 63 Expiring warranties/claimed satisfied (34 ) (46 ) Total 272 195 Less: current portion (183 ) (120 ) Total long-term accrued warranty costs $ 89 $ 75 |
Long-term Debt
Long-term Debt | 3 Months Ended |
Mar. 31, 2019 | |
Long-term Debt [Abstract] | |
Long-term Debt | Note 8 Long-term Debt: The following summarizes the Company’s long-term debt: March 31, 2019 December 31, 2018 Term note, net of debt discount of $103 and $110 respectively; and deferred financing cost of $37 and $64, respectively $ 7,431 $ 7,397 Less: current portion (1,010 ) (252 ) Total long-term debt $ 6,421 $ 7,145 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 "Credit Agreement") and related financing documents with MidCap Financial Trust ("MidCap") and the lenders listed therein. Under the Credit 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 maturity date of the credit facility is December 1, 2020. The Company's obligations under the credit facility are secured by a first priority lien on all the Company's assets. This credit facility had an interest rate of one month LIBOR plus 8.25% and included both financial and non-financial covenants, including a minimum net revenue covenant. On November 10, 2017, the minimum net revenue covenant was amended prospectively and there was an increase to the exit fee. Additionally, on November 10, 2017, the Company entered into an amendment to modify the principal payments including a period of six months where there are no principal payments due. On March 26, 2018, the Company entered into a Third Amendment to the Credit Agreement with MidCap. For the period beginning on the closing date of the loan and ending on January 31, 2018, the gross revenue in accordance with US GAAP for the twelve-month period ending on the last day of the most recently completed calendar month was amended to be less than the minimum amount on the Covenant Schedule, as defined in the Credit Agreement. This amendment waived the event of default related to the revenue covenant for the period ending February 2018. This amendment also amended the monthly net revenue covenant. On May 29, 2018, the Company entered into a Fourth Amendment to Credit Agreement, pursuant to which the Company repaid $3,000 in principal of the existing $10,571 credit facility established with MidCap in 2015. The terms of the Credit Agreement were amended to impose less restrictive covenants, lower prepayment fees for the Company and extended the maturity date to May 2022. This amendment modified the principal payments including a period of 18 months where there are no principal payments due. The interest rate on the credit facility is one-month LIBOR plus 7.25%. Principal payments begin December 2019. Principal payments beginning December 2019 are $252 plus interest per month. The Company was in compliance with all covenants as of March 31, 2019. On April 30, July 15, August 26 and October 15, 2019, the Company received waivers from MidCap as administrative agent for the lenders who are party to the Agreement, wherein the lenders waived the Company’s compliance with the obligation to deliver audited financial statements within 120 days of year-end pursuant to the Credit Agreement. The waivers were effective through November 7, 2019. The Company delivered the audited financial statements on or about October 29, 2019 and is currently in compliance with this covenant. The following table summarizes the future payments that the Company is obligated to make for the long-term debt for the future periods: For the Year ending December 31, Remaining in 2019 $ 252 2020 3,028 2021 3,028 2022 1,263 $ 7,571 |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2019 | |
Warrants [Abstract] | |
Warrants | Note 9 Warrants: The Company accounts for warrants that require net cash settlement upon change of control of the Company as liabilities instead of equity. During the three months ended March 31, 2019, warrants to purchase 265,947 and 137,143 shares of common stock each with an exercise price of $3.75 per share were accounted for as derivatives. These warrants expired on February 5, 2019 and April 30, 2019, respectively. These derivatives had deminimus fair values as of March 31, 2019 and December 31, 2018, respectively. There was no change in fair value of these derivatives for the three months ended March 31, 2019. Outstanding common stock warrants at March 31, 2019, consist of the following: Issue Date Expiration Date Total Warrants Exercise Price October 31, 2013* 4/30/2019 137,143 $ 3.75 July 24, 2014 7/24/2019 1,239,769 $ 3.75 - $ 12.25 June 22, 2015 6/22/2020 600,000 $ 3.75 December 30, 2015 12/30/2020 130,089 $ 5.65 January 29, 2016 1/29/2021 19,812 $ 5.30 2,126,813 *These warrants are classified as liabilities. |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Stock-based Compensation [Abstract] | |
Stock-based Compensation | Note 10 Stock-based Compensation: As of March 31, 2019, the Company had options to purchase 4,271,515 shares of common stock outstanding with a weighted-average exercise price of $2.02. As of March 31, 2019, options to purchase 1,009,097 shares are vested and exercisable. During the three months ended March 31, 2019, 71,250 in options were exercised at a weighted-average exercise price of $1.83 which resulted in the issuance of 28,824 shares of common stock. There are 1,142,210 options available for issuance as of March 31, 2019. In connection with the closing of the Financing, there were changes to the board of directors and the Company issued equity grants to new members as well as equity grants to all members as compensation. In total, in 2018, the Company granted 140,097 restricted stock units to the board members at a fair value of $2.07. Restricted stock units of 19,324 issued to the Chairman were cancelled in January 2019. The restricted stock units vest quarterly over twelve months. The aggregate fair value of the restricted stock units granted was $290. Stock-based compensation expense, which is included in general and administrative expense, for the three months ended March 31, 2019 and 2018 was $323 and $19, respectively. As of March 31, 2019, there was $2,189 in unrecognized compensation expense, which will be recognized over a weighted average period of 1.16 years. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
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 benefit of $43 for the three months ended March 31, 2019 and an expense of $40 for the three months ended March 31, 2018, respectively, was comprised primarily of the change in deferred tax liability related to goodwill. Goodwill is an amortizing asset according to tax regulations. The Company has experienced certain ownership changes, which under the provisions of Section 382 of the Internal Revenue Code of 1986, as amended, result in annual limitations on the Company's ability to utilize its net operating losses in the future. The February 2014, July 2014, June 2015 and May 2018 equity raises by the Company, will limit the annual use of these net operating loss carryforwards. Although the Company has not performed a Section 382 study, any limitation of its pre-change net operating loss carryforwards that would result in a reduction of its deferred tax asset would also have an equal and offsetting adjustment to the valuation allowance. |
Business Segments
Business Segments | 3 Months Ended |
Mar. 31, 2019 | |
Business Segments [Abstract] | |
Business Segments | Note 12 Business Segments: The Company has organized its business into two operating segments to present 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 usage of its equipment by dermatologists to perform XTRAC procedures. The Dermatology Procedures Equipment segment generates revenues from the sale of equipment, such as lasers and lamp products. 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 expense and other income (expense), net, are 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, 2019 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Revenues $ 5,312 $ 2,171 $ 7,483 Costs of revenues 1,793 1,081 2,874 Gross profit 3,519 1,090 4,609 Gross profit % 66.2 % 50.2 % 61.6 % Allocated operating expenses: Engineering and product development 242 62 304 Selling and marketing expenses 2,768 298 3,066 Unallocated operating expenses - - 2,480 3,010 360 5,850 Income (loss) from operations 509 730 (1,241 ) Interest expense, net - - (135 ) Income (loss) before income taxes $ 509 $ 730 $ (1,376 ) Three Months Ended March 31, 2018 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Revenues $ 4,770 $ 1,968 $ 6,738 Costs of revenues 1,989 1,356 3,345 Gross profit 2,781 612 3,393 Gross profit % 58.3 % 31.1 % 50.4 % Allocated operating expenses: Engineering and product development 274 64 338 Selling and marketing expenses 2,216 655 2,871 Unallocated operating expenses - - 1,884 2,490 719 5,093 Income (loss) from operations 291 (107 ) (1,700 ) Interest expense, net - - (363 ) Change in fair value of warrants - - 1 Other income, net - - 21 Income (loss) before income taxes $ 291 $ (107 ) $ (2,041 ) |
Significant Customer Concentrat
Significant Customer Concentration | 3 Months Ended |
Mar. 31, 2019 | |
Significant Customer Concentration [Abstract] | |
Significant Customer Concentration | Note 13 Significant Customer Concentration: For the three months ended March 31, 2019, revenues from sales to the Company’s international master distributor (GlobalMed Technologies) were $1,990, or 26.6%, of total revenues for such period. At March 31, 2019, the accounts receivable balance from GlobalMed Technologies was $578, or 16.2%, of total net accounts receivable. For the three months ended March 31, 2018, revenues from sales to the Company’s international master distributor (GlobalMed Technologies) were $1,311, or 19.5%, of total revenues for such period. No other customer represented more than 10% of total company revenues for the three months ended March 31, 2019 and 2018. No other customer represented more than 10% of total accounts receivable as of March 31, 2019. |
Related Parties
Related Parties | 3 Months Ended |
Mar. 31, 2019 | |
Related Parties [Abstract] | |
Related Parties | Note 14 Related Parties: On March 30, 2018, in connection with the Financing, the Company entered into the securities purchase agreements, each for approximately $1,000, with our then current shareholders, Broadfin and Sabby. Upon closing of the Financing, each of Sabby and Broadfin received 925,926 shares of our common stock at a price per share of $1.08. In addition, the Company also entered into a subscription agreement with Dr. Dolev Rafaeli, our Chief Executive Officer and Director for $1,000, to purchase 925,926 shares of our common stock at $1.08 per share. See Note 2 for more information on the Financing. During the first quarter of 2018, the Company had an agreement with a relative of a former Board member for advertising and incurred $13 and no longer uses the service. |
Commitments
Commitments | 3 Months Ended |
Mar. 31, 2019 | |
Commitments [Abstract] | |
Commitments | Note 15 Commitments: Leases The Company recognizes right-of-use assets (“ROU Assets”) and operating lease liabilities (“Lease Liabilities”) Operating lease costs were $111 for the three months ended March 31, 2019. Cash paid for amounts included in the measurement of operating lease liabilities was $94 for the three months ended March 31, 2019. As of March 31, 2019, the incremental borrowing rate was 9.76% and the weighted average remaining lease term was 3.4 years. The following table summarizes the Company’s operating lease maturities as of March 31, 2019: For the year ending December 31, Amount Remaining in 2019 $ 293 2020 234 2021 229 2022 134 Total remaining lease payments 890 Less: imputed interest (118 ) Total lease liabilities $ 772 Contingencies: In the ordinary course of business, the Company is routinely defendants in or parties to pending and threatened legal actions and proceedings, including actions brought on behalf of various classes of claimants. These actions and proceedings are generally based on alleged violations of employment, contract and other laws. In some of these actions and proceedings, claims for substantial monetary damages are asserted against the Company. In the ordinary course of business, the Company is also subject to regulatory and governmental examinations, information gathering requests, inquiries, investigations, and threatened legal actions and proceedings. In connection with formal and informal inquiries by federal, state, local and foreign agencies, the Company receives numerous requests, subpoenas and orders for documents, testimony and information in connection with various aspects of its activities. |
Subsequent events
Subsequent events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent events [Abstract] | |
Subsequent events | Note 16 Subsequent events: Series C Convertible Preferred Stock Conversion During June 2019, investors converted shares of Series C Convertible Preferred Stock into 1,775,093 shares of common stock. Expiration of Warrants In April 2019, 137,143 warrants with an exercise price of $3.75 expired. In July 2019, 1, 239,769 warrants with an exercise prices ranging from $3.75 to $12.25 expired. Exercise of options In May 2019, 15,000 stock options, with an exercise price of $1.29, were net exercised and the Company issued 7,586 shares of common stock. Lease Agreement On May 1, 2019, the Company entered into the Fifth Amendment to the Standard Industrial/Commercial Multi-Tenant Lease with FR National Life, LLC for its Carlsbad California facility. The term of the lease commences on October 1, 2019, and expires on September 30, 2024. The Company’s Carlsbad facility houses the manufacturing and development operations for our excimer laser business, as well as the patient call center and reimbursement center. The total lease payments to be made over the term is $1,107. |
The Company (Policies)
The Company (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
The Company [Abstract] | |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary in India. All significant intercompany balances and transactions have been eliminated in consolidation. In 2019 and 2018, there are no operations in the subsidiary in India. |
Unaudited Interim Condensed Consolidated Financial Statements | Unaudited Interim Condensed Consolidated Financial Statements The accompanying unaudited interim condensed 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 condensed consolidated statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to fairly present the results of the interim periods. The condensed consolidated balance sheet at December 31, 2018 has been derived from the audited consolidated financial statements at that date. Operating results and cash flows for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2019, or any other future period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP) have been omitted in accordance with the rules and regulations for interim reporting of the SEC. These interim condensed 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, 2018 (the “2018 Form 10-K”), and other forms filed with the SEC from time to time. Dollar amounts included herein are in thousands, except per share data. |
Reclassifications | Reclassifications 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, 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 Annual Report on Form 10-K for the year ended December 31, 2018, and there have been no changes to the Company’s significant account policies during the three months ended March 31, 2019, except for the adoption of the new leasing standard as discussed under Accounting Pronouncements Recently Adopted Note 1 |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with US GAAP 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, 2019, the more significant estimates include (1) revenue recognition, in regards to deferred revenues and the contract term and valuation allowances of accounts receivable, (2) the inputs used in the impairment analyses of intangible assets and goodwill, (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, (6) the fair value of financial instruments, including derivative instruments and warrants, (7) the inventory reserves, (8) state sales and use tax accruals and (9) warranty claims. |
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 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 liability is estimated using option pricing models that are based on the fair value of the Company’s common stock as well as assumptions for volatility, remaining expected life, and the risk-free interest rate. The derivative warrant liability is the only recurring Level 3 fair value measure. 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. As of March 31, 2019 and December 31, 2018, the Company assessed its long-term debt (including the current portion) and determined that the fair value of total debt approximated its book value as the interest rate on the debt approximates market rates. Several of the warrants outstanding as of March 31, 2019 and December 31, 2018 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 are classified as derivative liabilities. In addition, other warrants had a “down round” provision. These warrants were classified as derivatives prior to the adoption of Accounting Standards Update (“ASU”) No. 2017-11 on October 1, 2018 under the modified retrospective method with a cumulative effect adjustment recorded as of January 1, 2018. The Company’s warrant liabilities are recorded at their fair value using the Black Scholes option pricing model and continue to be recorded at their respective fair value at each subsequent balance sheet date until such terms expire. See Note 9, Recurring level 3 Activity and Recalculation The table below provides a reconciliation of the beginning and ending balance for the liability measured at fair value using significant unobservable inputs (Level 3). Issuance Date December 31, 2018 Increase in Fair Value March 31, 2019 October 31, 2013 $ - $ - $ - $ - $ - $ - Issuance Date January 1, 2018 Decrease in Fair Value March 31, 2018 October 31, 2013 $ 2 $ (1 ) $ 1 February 5, 2014 1 - 1 $ 3 $ (1 ) $ 2 |
Earnings Per Share | Earnings Per Share The Company calculates loss per common share and Preferred Series C share in accordance with ASC 260, Earnings per Share The Company's Series C Convertible Preferred Stock are subordinate to all other securities at the same subordination level as common stock and they participate in all dividends and distributions declared or paid with respect to common stock of the Company, on an as-converted basis. Therefore, the Series C Convertible Preferred Shares meet the definition of common stock under ASC 260. Earnings per share is presented for each class of security meeting the definition of common stock. The loss is allocated to each class of security meeting the definition of common stock based on their contractual terms. The following table presents the calculation of basic and diluted loss per share by each class of security for the three months ended March 31, 2019 and 2018: Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Common Stock Series C Convertible Preferred Stock Common Stock Series C Convertible Preferred Stock Loss attributable to each class $ (1,216 ) $ (117 ) $ (512 ) $ (1,569 ) Weighted average number of shares outstanding during the period 30,703,501 7,944 4,371,369 36,002 Basic and Diluted loss per share $ (0.04 ) $ (14.72 ) $ (0.12 ) $ (43.57 ) The Company considers Series C Convertible Preferred Stock and 137,143 warrants issued on October 31, 2013 to be participating securities in presentation of earnings per share. However the warrants are excluded from the calculation of earnings per share in periods of losses as the warrant holders do not have an obligation to fund such losses. The above referenced warrants expired on April 30, 2019. For the three months ended March 31, 2019 and 2018, diluted loss per common share and Series C Convertible Preferred Stock share is equal to the basic loss per common share and Series C Convertible Preferred Stock share, respectively, since all potentially dilutive securities are anti-dilutive. The weighted average of potential common stock equivalents outstanding during the three months ended March 31, 2019 and 2018 have been excluded from the loss per share calculation as their inclusion would have been anti-dilutive: Three Months Ended March 31, 2019 2018 Common stock purchase warrants 2,233,192 2,406,625 Restricted stock units 129,576 - Common stock options 4,321,932 876,127 Total 6,684,700 3,282,752 |
Accounting Pronouncements Recently Adopted | Accounting Pronouncements Recently Adopted In February 2016 the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, “Leases” (Topic 842) (“ASU 2016-02”), which will require lessees to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current US GAAP, the recognition, measurement and presentation of expenses and cash flows arising from a lease primarily will depend on its classification as a finance or operating lease. However, unlike current US GAAP, which requires only capital leases to be recognized on the balance sheet, the new guidance will require both types of leases to be recognized on the balance sheet. The ASU is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. In August 2018 the FASB issued ASU No. 2018-11, “Leases (Topic 842: Targeted Improvements”) which permits adoption of the guidance in ASU 2016-02 using either a modified retrospective transition, requiring application at the beginning of the earliest comparative period presented or a transition method whereby companies could continue to apply existing lease guidance during the comparative periods and apply the new lease requirements through a cumulative-effect adjustment in the period of adoption rather than in the earliest period presented without adjusting historical financial statements. The Company used the modified retrospective transition approach to ASU No. 2018-11 and applied the new lease requirements through a cumulative-effect adjustment in the period of adoption. The new standard provides a number of optional practical expedients in transition. We elected the package of practical expedients, which permits us not to reassess, under the new standard, our prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. This accounting standard did not have a material impact on our debt covenants. The Company has completed an evaluation of ASU 2016-02, including a review of our leases and other contracts for potential embedded leasing arrangements and has recognized approximately $848 in right-of-use assets and lease liabilities in the balance sheet as of January 1, 2019. There was no impact on the Company’s revenue recognition under ASC 842. In July 2017 the FASB issued a two-part ASU 2017-11, “(Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception.” For public business entities the amendments in Part I of ASU 2017-11 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. The Company previously adopted this ASU on October 1, 2018, and recorded an adjustment for the adoption of a new accounting pronouncement of $67 as an adjustment to warrant liability, $2,547 as an adjustment to accumulated deficit and $2,614 as an adjustment to additional paid-in-capital as of the beginning fiscal year in the year of adoption on January 1, 2018. The impact from adopting ASU 2017-11 on the Company’s unaudited condensed balance sheets and consolidated statements of operations and as of and for the following period is as follows: For the Three Months Ended March 31, 2018 Balances prior to Adoption of ASU 2017-11 Balances after the Adoption of ASU 2017-11 Effect of Adoption Higher/(Lower) Statement of Operations Change in fair value of warrant liability gain (loss) $ 40 $ 1 $ (39 ) Balance Sheet Fair value of warrant liability $ 24 $ 2 $ (22 ) In June 2018 the FASB issued ASU No. 2018-07, “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,” with the objective of simplifying several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The provisions of this update are effective for fiscal years beginning after December 15, 2018, including interim periods within that year. The adoption of ASU No. 2018-07 on January 1, 2019, did not have a material effect on the Company’s condensed consolidated financial statements. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In January 2017 the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. 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 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. As the Company has not identified a goodwill impairment loss, currently this guidance does not have an impact on the Company’s condensed consolidated financial statements, but could have an impact in the event of a goodwill impairment. In August 2018 the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The new guidance improves and clarifies the fair value measurement disclosure requirement of ASC 820. The new disclosure requirements include the changes in unrealized gains or losses included in other comprehensive income for recurring Level 3 fair value measurement held at the end of the reporting period and the explicit requirement to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The other provisions of ASU 2018-13 also include eliminated and modified disclosure requirements. The guidance is effective for fiscal years beginning after December 15, 2019, with early adoption permitted, including in an interim period for which financial statements have not been issued or made available for issuance. The Company has evaluated the impact of early adoption of this ASU and determined that it will have no significant impact on its condensed consolidated financial statements. |
The Company (Tables)
The Company (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
The Company [Abstract] | |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | The following table presents the calculation of basic and diluted loss per share by each class of security for the three months ended March 31, 2019 and 2018: Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Common Stock Series C Convertible Preferred Stock Common Stock Series C Convertible Preferred Stock Loss attributable to each class $ (1,216 ) $ (117 ) $ (512 ) $ (1,569 ) Weighted average number of shares outstanding during the period 30,703,501 7,944 4,371,369 36,002 Basic and Diluted loss per share $ (0.04 ) $ (14.72 ) $ (0.12 ) $ (43.57 ) |
Calculation of Basic and Diluted Loss Per Share by Class of Security | The weighted average of potential common stock equivalents outstanding during the three months ended March 31, 2019 and 2018 have been excluded from the loss per share calculation as their inclusion would have been anti-dilutive: Three Months Ended March 31, 2019 2018 Common stock purchase warrants 2,233,192 2,406,625 Restricted stock units 129,576 - Common stock options 4,321,932 876,127 Total 6,684,700 3,282,752 |
Antidilutive Securities Excluded from Computation of Earnings Per Share | The impact from adopting ASU 2017-11 on the Company’s unaudited condensed balance sheets and consolidated statements of operations and as of and for the following period is as follows: For the Three Months Ended March 31, 2018 Balances prior to Adoption of ASU 2017-11 Balances after the Adoption of ASU 2017-11 Effect of Adoption Higher/(Lower) Statement of Operations Change in fair value of warrant liability gain (loss) $ 40 $ 1 $ (39 ) Balance Sheet Fair value of warrant liability $ 24 $ 2 $ (22 ) |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue [Abstract] | |
Disaggregation of Revenue | The following tables present the Company’s revenue disaggregated by geographical region for the three months ended March 31, 2019 and 2018, respectively. Domestic refers to revenue from customers based in the United States, and substantially all foreign revenue is derived from dermatology procedures equipment sales to the Company’s international master distributor for physicians based primarily in Asia. Three Months Ended March 31, 2019 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Domestic $ 5,312 $ 324 $ 5,636 Foreign - 1,847 1,847 Total $ 5,312 $ 2,171 $ 7,483 Three Months Ended March 31, 2018 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Domestic $ 4,770 $ 657 $ 5,427 Foreign - 1,311 1,311 Total $ 4,770 $ 1,968 $ 6,738 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventories [Abstract] | |
Inventories | Inventories consist of: March 31, 2019 December 31, 2018 Raw materials and work in progress $ 2,872 $ 2,442 Finished goods 249 352 Total inventories $ 3,121 $ 2,794 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property and Equipment, net [Abstract] | |
Property and Equipment, Net | Property and equipment consist of: March 31, 2019 December 31, 2018 Lasers placed-in-service $ 18,822 $ 18,515 Equipment, computer hardware and software 141 168 Furniture and fixtures 124 124 Leasehold improvements 26 26 19,113 18,833 Accumulated depreciation and amortization (14,151 ) (13,532 ) Property and equipment, net $ 4,962 $ 5,301 |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Intangible Assets, net [Abstract] | |
Definite-lived Intangible Assets | Set forth below is a detailed listing of definite-lived intangible assets as of March 31, 2019: Balance Accumulated Amortization Intangible assets, net Core technology $ 5,700 $ (2,138 ) $ 3,562 Product technology 2,000 (1,500 ) 500 Customer relationships 6,900 (2,587 ) 4,313 Tradenames 1,500 (563 ) 937 $ 16,100 $ (6,788 ) $ 9,312 |
Finite-lived Intangible Assets Amortization Expense | Estimated amortization expense for the above amortizable intangible assets for future periods is as follows: Remaining 2019 $ 1,357 2020 1,610 2021 1,410 2022 1,410 2023 1,410 Thereafter 2,115 Total $ 9,312 |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Other Accrued Liabilities [Abstract] | |
Other Accrued Liabilities | Other accrued liabilities consist of: March 31, 2019 December 31, 2018 Accrued warranty, current $ 183 $ 156 Accrued compensation, including commissions and vacation 1,017 1,275 Accrued state sales, use and other taxes 2,840 2,719 Accrued professional fees and other accrued liabilities 684 350 Total other accrued liabilities $ 4,724 $ 4,500 |
Accrued Warranty Costs Activity | The activity in the warranty accrual during the three months ended March 31, 2019 and 2018, is summarized as follows: March 31, 2019 2018 Accrual at beginning of year $ 238 $ 178 Additions charged to warranty expense 68 63 Expiring warranties/claimed satisfied (34 ) (46 ) Total 272 195 Less: current portion (183 ) (120 ) Total long-term accrued warranty costs $ 89 $ 75 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Long-term Debt [Abstract] | |
Long-term Debt | The following summarizes the Company’s long-term debt: March 31, 2019 December 31, 2018 Term note, net of debt discount of $103 and $110 respectively; and deferred financing cost of $37 and $64, respectively $ 7,431 $ 7,397 Less: current portion (1,010 ) (252 ) Total long-term debt $ 6,421 $ 7,145 |
Maturities of Long-term Debt | The following table summarizes the future payments that the Company is obligated to make for the long-term debt for the future periods: For the Year ending December 31, Remaining in 2019 $ 252 2020 3,028 2021 3,028 2022 1,263 $ 7,571 |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Warrants [Abstract] | |
Outstanding Common Stock Warrants | Outstanding common stock warrants at March 31, 2019, consist of the following: Issue Date Expiration Date Total Warrants Exercise Price October 31, 2013* 4/30/2019 137,143 $ 3.75 July 24, 2014 7/24/2019 1,239,769 $ 3.75 - $ 12.25 June 22, 2015 6/22/2020 600,000 $ 3.75 December 30, 2015 12/30/2020 130,089 $ 5.65 January 29, 2016 1/29/2021 19,812 $ 5.30 2,126,813 *These warrants are classified as liabilities. |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Business Segments [Abstract] | |
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, 2019 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Revenues $ 5,312 $ 2,171 $ 7,483 Costs of revenues 1,793 1,081 2,874 Gross profit 3,519 1,090 4,609 Gross profit % 66.2 % 50.2 % 61.6 % Allocated operating expenses: Engineering and product development 242 62 304 Selling and marketing expenses 2,768 298 3,066 Unallocated operating expenses - - 2,480 3,010 360 5,850 Income (loss) from operations 509 730 (1,241 ) Interest expense, net - - (135 ) Income (loss) before income taxes $ 509 $ 730 $ (1,376 ) Three Months Ended March 31, 2018 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Revenues $ 4,770 $ 1,968 $ 6,738 Costs of revenues 1,989 1,356 3,345 Gross profit 2,781 612 3,393 Gross profit % 58.3 % 31.1 % 50.4 % Allocated operating expenses: Engineering and product development 274 64 338 Selling and marketing expenses 2,216 655 2,871 Unallocated operating expenses - - 1,884 2,490 719 5,093 Income (loss) from operations 291 (107 ) (1,700 ) Interest expense, net - - (363 ) Change in fair value of warrants - - 1 Other income, net - - 21 Income (loss) before income taxes $ 291 $ (107 ) $ (2,041 ) |
Commitments (Tables)
Commitments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments [Abstract] | |
Operating Leases Maturities | The following table summarizes the Company’s operating lease maturities as of March 31, 2019: For the year ending December 31, Amount Remaining in 2019 $ 293 2020 234 2021 229 2022 134 Total remaining lease payments 890 Less: imputed interest (118 ) Total lease liabilities $ 772 |
The Company, Background (Detail
The Company, Background (Details) | 3 Months Ended |
Mar. 31, 2019Systems | |
Esthetic Education, LLC [Member] | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Agreement period | 3 years |
XTRAC [Member] | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Number of systems placed in dermatologists offices | 754 |
The Company, Fair Value Measure
The Company, Fair Value Measurements (Details) - Level 3 [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Roll Forward] | ||
Beginning balance | $ 0 | $ 3 |
Increase (decrease) in fair value | 0 | (1) |
Ending balance | 0 | 2 |
October 31, 2013 - Warrants [Member] | ||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Roll Forward] | ||
Beginning balance | 0 | 2 |
Increase (decrease) in fair value | 0 | (1) |
Ending balance | $ 0 | 1 |
February 5, 2014 - Warrants [Member] | ||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Roll Forward] | ||
Beginning balance | 1 | |
Increase (decrease) in fair value | 0 | |
Ending balance | $ 1 |
The Company, Earnings Per Share
The Company, Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (1,333) | $ (2,081) |
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract] | ||
Potential common stock equivalents (in shares) | 6,684,700 | 3,282,752 |
Warrants [Member] | ||
Earnings Per Share [Abstract] | ||
Number of warrants to purchase common stock (in shares) | 137,143 | |
Series C Preferred Stock [Member] | ||
Earnings Per Share [Abstract] | ||
Net loss | $ (117) | $ (1,569) |
Weighted average number of shares outstanding during the period (in shares) | 7,944 | 36,002 |
Basic and Diluted loss per share (in dollars per share) | $ (14.72) | $ (43.57) |
Common Stock [Member] | ||
Earnings Per Share [Abstract] | ||
Net loss | $ (1,216) | $ (512) |
Weighted average number of shares outstanding during the period (in shares) | 30,703,501 | 4,371,369 |
Basic and Diluted loss per share (in dollars per share) | $ (0.04) | $ (0.12) |
Common Stock Purchase Warrants [Member] | ||
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract] | ||
Potential common stock equivalents (in shares) | 2,233,192 | 2,406,625 |
Restricted Stock Units [Member] | ||
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract] | ||
Potential common stock equivalents (in shares) | 129,576 | 0 |
Common Stock Options [Member] | ||
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract] | ||
Potential common stock equivalents (in shares) | 4,321,932 | 876,127 |
The Company, Accounting Pronoun
The Company, Accounting Pronouncements Recently Adopted (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Assets and Liabilities, Lessee [Abstract] | ||||
Right-of-use assets | $ 755 | $ 0 | ||
Lease liabilities | 772 | |||
Statement of Operations [Abstract] | ||||
Change in fair value of warrant liability gain (loss) | $ 0 | $ (1) | ||
ASU 2016-02 [Member] | ||||
Assets and Liabilities, Lessee [Abstract] | ||||
Right-of-use assets | 848 | |||
Lease liabilities | $ 848 | |||
ASU 2017-11 [Member] | ||||
Net Assets, Adjusted Balance [Abstract] | ||||
Cumulative accounting adjustment from adoption of new standard, net of tax | $ 67 | |||
Statement of Operations [Abstract] | ||||
Change in fair value of warrant liability gain (loss) | 1 | |||
Balance Sheet [Abstract] | ||||
Fair value of warrant liability | 2 | |||
ASU 2017-11 [Member] | Balances prior to Adoption of ASU 2017-11 | ||||
Statement of Operations [Abstract] | ||||
Change in fair value of warrant liability gain (loss) | 40 | |||
Balance Sheet [Abstract] | ||||
Fair value of warrant liability | 24 | |||
ASU 2017-11 [Member] | Effect of Adoption Higher / (Lower) [Member] | ||||
Statement of Operations [Abstract] | ||||
Change in fair value of warrant liability gain (loss) | (39) | |||
Balance Sheet [Abstract] | ||||
Fair value of warrant liability | $ (22) | |||
ASU 2017-11 [Member] | Accumulated Deficit [Member] | ||||
Net Assets, Adjusted Balance [Abstract] | ||||
Cumulative accounting adjustment from adoption of new standard, net of tax | (2,547) | |||
ASU 2017-11 [Member] | Additional Paid-In Capital [Member] | ||||
Net Assets, Adjusted Balance [Abstract] | ||||
Cumulative accounting adjustment from adoption of new standard, net of tax | $ 2,614 |
Equity Financing and Liquidity
Equity Financing and Liquidity (Details) - USD ($) $ / shares in Units, $ in Thousands | May 29, 2018 | Mar. 30, 2018 | Dec. 31, 2018 |
Equity Financing [Abstract] | |||
Expected equity financing investment | $ 17,000 | ||
Equity financing cost | $ 2,336 | ||
Accelmed Stock Purchase Agreement [Member] | Accelmed Growth Partners L.P. [Member] | |||
Equity Financing [Abstract] | |||
Sale of common stock, net of offering costs | $ 13,000 | ||
Share price (in dollars per share) | $ 1.08 | ||
Sale of common stock, net of expenses (in shares) | 12,037,037 | ||
Broadfin Capital and Sabby Management Stock Purchase Agreements [Member] | Broadfin Capital [Member] | |||
Equity Financing [Abstract] | |||
Sale of common stock, net of offering costs | $ 1,000 | ||
Share price (in dollars per share) | $ 1.08 | ||
Sale of common stock, net of expenses (in shares) | 925,926 | ||
Broadfin Capital and Sabby Management Stock Purchase Agreements [Member] | Sabby Management [Member] | |||
Equity Financing [Abstract] | |||
Sale of common stock, net of offering costs | $ 1,000 | ||
Share price (in dollars per share) | $ 1.08 | ||
Sale of common stock, net of expenses (in shares) | 925,926 | ||
Subscription Agreement [Member] | Gohan Investments, Ltd [Member] | |||
Equity Financing [Abstract] | |||
Sale of common stock, net of offering costs | $ 1,000 | ||
Share price (in dollars per share) | $ 1.08 | ||
Sale of common stock, net of expenses (in shares) | 925,926 | ||
Subscription Agreement [Member] | Dr. Dolev Rafaeli [Member] | |||
Equity Financing [Abstract] | |||
Sale of common stock, net of offering costs | $ 1,000 | $ 1,000 | |
Share price (in dollars per share) | $ 1.08 | $ 1.08 | |
Sale of common stock, net of expenses (in shares) | 925,926 | 925,926 |
Revenue, Remaining Performance
Revenue, Remaining Performance Obligation (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Remaining Performance Obligation [Abstract] | |
Remaining performance obligations | $ 423 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | |
Remaining Performance Obligation [Abstract] | |
Remaining performance obligations | $ 169 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | Minimum [Member] | |
Remaining Performance Obligation [Abstract] | |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | Maximum [Member] | |
Remaining Performance Obligation [Abstract] | |
Expected timing of satisfaction period | 3 years |
Revenue, Contract Liabilities (
Revenue, Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue [Abstract] | ||
Lease term | 36 months | |
Notice period to cancel contract agreement | 60 days | |
Contract with Customer, Liability [Abstract] | ||
Short-term contract liabilities | $ 169 | |
Long-term contract liabilities | 254 | |
Change in Contract with Customer, Liability [Abstract] | ||
Contract liabilities recognized as revenue | 39 | |
Co-pay reimbursements recorded as reduction of revenue | $ (155) | $ (126) |
Revenue, Disaggregation of Reve
Revenue, Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Abstract] | ||
Revenues, net | $ 7,483 | $ 6,738 |
Dermatology Recurring Procedures [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenues, net | 5,312 | 4,770 |
Dermatology Procedures Equipment [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenues, net | 2,171 | 1,968 |
Domestic [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenues, net | 5,636 | 5,427 |
Domestic [Member] | Dermatology Recurring Procedures [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenues, net | 5,312 | 4,770 |
Domestic [Member] | Dermatology Procedures Equipment [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenues, net | 324 | 657 |
Foreign [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenues, net | 1,847 | 1,311 |
Foreign [Member] | Dermatology Recurring Procedures [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenues, net | 0 | 0 |
Foreign [Member] | Dermatology Procedures Equipment [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenues, net | $ 1,847 | $ 1,311 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Schedule of inventory [Abstract] | ||
Raw materials and work in progress | $ 2,872 | $ 2,442 |
Finished goods | 249 | 352 |
Total inventories | $ 3,121 | $ 2,794 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment, Net [Abstract] | |||
Property and equipment, gross | $ 19,113 | $ 18,833 | |
Accumulated depreciation and amortization | (14,151) | (13,532) | |
Property and equipment, net | 4,962 | 5,301 | |
Depreciation and related amortization expense | 751 | $ 986 | |
Lasers Placed-In-Service [Member] | |||
Property, Plant and Equipment, Net [Abstract] | |||
Property and equipment, gross | 18,822 | 18,515 | |
Equipment, Computer Hardware and Software [Member] | |||
Property, Plant and Equipment, Net [Abstract] | |||
Property and equipment, gross | 141 | 168 | |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment, Net [Abstract] | |||
Property and equipment, gross | 124 | 124 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment, Net [Abstract] | |||
Property and equipment, gross | $ 26 | $ 26 |
Intangible Assets, net (Details
Intangible Assets, net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Balance | $ 16,100 | |
Accumulated amortization | (6,788) | |
Intangible assets, net | 9,312 | |
Amortization expense of intangible assets | 453 | $ 477 |
Impairment of intangible assets | 0 | |
Estimated amortization expense [Abstract] | ||
Remaining 2019 | 1,357 | |
2020 | 1,610 | |
2021 | 1,410 | |
2022 | 1,410 | |
2023 | 1,410 | |
Thereafter | 2,115 | |
Intangible assets, net | 9,312 | |
Core Technology [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Balance | 5,700 | |
Accumulated amortization | (2,138) | |
Intangible assets, net | 3,562 | |
Estimated amortization expense [Abstract] | ||
Intangible assets, net | 3,562 | |
Product Technology [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Balance | 2,000 | |
Accumulated amortization | (1,500) | |
Intangible assets, net | 500 | |
Estimated amortization expense [Abstract] | ||
Intangible assets, net | 500 | |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Balance | 6,900 | |
Accumulated amortization | (2,587) | |
Intangible assets, net | 4,313 | |
Estimated amortization expense [Abstract] | ||
Intangible assets, net | 4,313 | |
Tradenames [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Balance | 1,500 | |
Accumulated amortization | (563) | |
Intangible assets, net | 937 | |
Estimated amortization expense [Abstract] | ||
Intangible assets, net | $ 937 | |
Distribution Rights [Member] | Selling and Marketing Expense [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Write-off of Intangible Assets, Finite-lived | 226 | |
Distribution Rights [Member] | Nordlys Product [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Finite lived intangible assets, gross, write-off | 286 | |
Finite lived intangible assets, accumulated Amortization, write-off | $ 60 |
Other Accrued Liabilities (Deta
Other Accrued Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | |
Other Accrued Liabilities [Abstract] | |||
Accrued warranty, current | $ 183 | $ 156 | $ 120 |
Accrued compensation, including commissions and vacation | 1,017 | 1,275 | |
Accrued state sales, use and other taxes | 2,840 | 2,719 | |
Accrued professional fees and other accrued liabilities | 684 | 350 | |
Total other accrued liabilities | 4,724 | $ 4,500 | |
Income Tax Examination, Penalties and Interest Accrued [Abstract] | |||
Estimated tax positions subject to audit | $ 801 |
Other Accrued Liabilities, Accr
Other Accrued Liabilities, Accrued Warranty Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | |
Product Warranty Accrual [Roll Forward] | |||||
Accrual at beginning of period | $ 238 | $ 178 | |||
Additions charged to warranty expense | 68 | 63 | |||
Expiring warranties/claimed satisfied | (34) | (46) | |||
Total | $ 238 | $ 178 | $ 272 | $ 238 | $ 195 |
Less: current portion | (183) | $ (156) | (120) | ||
Total long-term accrued warranty costs | $ 89 | $ 75 | |||
Minimum [Member] | |||||
Accrued warranty costs [Abstract] | |||||
Standard warranty period | 1 year | ||||
Offered warranty period | 3 years | ||||
Maximum [Member] | |||||
Accrued warranty costs [Abstract] | |||||
Standard warranty period | 2 years | ||||
Offered warranty period | 4 years |
Long-term Debt (Details)
Long-term Debt (Details) $ in Thousands | May 29, 2018USD ($) | Jan. 29, 2016USD ($) | Dec. 30, 2015USD ($) | Mar. 31, 2019USD ($)Tranche | Dec. 31, 2018USD ($) |
Long-term Debt [Abstract] | |||||
Less: current portion | $ (1,010) | $ (252) | |||
Total long-term debt | 6,421 | 7,145 | |||
Term-Note Credit Facility [Member] | |||||
Long-term Debt [Abstract] | |||||
Term note, net of debt discount and deferred financing cost | 7,431 | 7,397 | |||
Less: current portion | (1,010) | (252) | |||
Total long-term debt | 6,421 | 7,145 | |||
Unamortized discount on the long term debt | 103 | 110 | |||
Deferred financing costs | 37 | 64 | |||
Maturities of Long-term Debt [Abstract] | |||||
Remaining in 2019 | 252 | ||||
2020 | 3,028 | ||||
2021 | 3,028 | ||||
2022 | 1,263 | ||||
Total long-term debt | $ 7,571 | ||||
MidCap Financial Trust [Member] | Term-Note Credit Facility [Member] | |||||
Long-term Debt [Abstract] | |||||
Maximum borrowing capacity under the agreement | $ 12,000 | ||||
Number of tranches | Tranche | 2 | ||||
Repayment of debt | $ (3,000) | ||||
Maturity date | May 31, 2022 | ||||
Credit facility amount outstanding | $ 10,571 | ||||
Period without debt principal payments due | 18 months | ||||
Monthly payment, principal | $ 252 | ||||
MidCap Financial Trust [Member] | Term-Note Credit Facility [Member] | LIBOR [Member] | |||||
Long-term Debt [Abstract] | |||||
Debt instrument term of variable rate | 1 month | 1 month | |||
Debt instrument variable rate | 8.25% | 7.25% | |||
MidCap Financial Trust [Member] | Term-Note Credit Facility [Member] | First Tranche [Member] | |||||
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] | |||||
Long-term Debt [Abstract] | |||||
Proceeds from credit facility | $ 1,500 |
Warrants (Details)
Warrants (Details) | 3 Months Ended | |
Mar. 31, 2019$ / sharesshares | ||
Warrants and Rights [Abstract] | ||
Total Warrants (in shares) | shares | 2,126,813 | |
Expiration Date, April 30, 2019 [Member] | ||
Warrants and Rights [Abstract] | ||
Issue Date | Oct. 31, 2013 | [1] |
Expiration date | Apr. 30, 2019 | [1] |
Total Warrants (in shares) | shares | 137,143 | [1] |
Exercise price (in dollars per share) | $ / shares | $ 3.75 | [1] |
Expiration Date, July 24, 2019 [Member] | ||
Warrants and Rights [Abstract] | ||
Issue Date | Jul. 24, 2014 | |
Expiration date | Jul. 24, 2019 | |
Total Warrants (in shares) | shares | 1,239,769 | |
Expiration Date, July 24, 2019 [Member] | Minimum [Member] | ||
Warrants and Rights [Abstract] | ||
Exercise price (in dollars per share) | $ / shares | $ 3.75 | |
Expiration Date, July 24, 2019 [Member] | Maximum [Member] | ||
Warrants and Rights [Abstract] | ||
Exercise price (in dollars per share) | $ / shares | $ 12.25 | |
Expiration Date, June 22, 2020 [Member] | ||
Warrants and Rights [Abstract] | ||
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 | |
Expiration Date, December 30, 2020 [Member] | ||
Warrants and Rights [Abstract] | ||
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 | |
Expiration Date, January 29, 2021 [Member] | ||
Warrants and Rights [Abstract] | ||
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 | |
Expiration Date, February 5, 2019 [Member] | ||
Warrants and Rights [Abstract] | ||
Number of shares underlying warrants (in shares) | shares | 265,947 | |
Exercise price (in dollars per share) | $ / shares | $ 3.75 | |
[1] | These warrants are classified as liabilities. |
Stock-based Compensation (Detai
Stock-based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Jan. 31, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Additional General Disclosures [Abstract] | ||||
Stock-based compensation expense | $ 323 | $ 19 | ||
Compensation Cost Not yet Recognized [Abstract] | ||||
Unrecognized compensation expense | $ 2,189 | |||
Weighted average period of recognition | 1 year 1 month 28 days | |||
Stock Options [Member] | ||||
Number of Stock Options [Abstract] | ||||
Options outstanding (in shares) | 4,271,515 | |||
Weighted average exercise price, outstanding (in dollars per share) | $ 2.02 | |||
Vested (in shares) | 1,009,097 | |||
Exercisable (in shares) | 1,009,097 | |||
Exercised (in shares) | (71,250) | |||
Weighted average exercise price, exercised (in dollars per share) | $ 1.83 | |||
Issuance of common stock (in shares) | 28,824 | |||
Number of shares available for issuance (in shares) | 1,142,210 | |||
Restricted Stock Units [Member] | New Members of the Board of Directors [Member] | ||||
Restricted Stock Units [Abstract] | ||||
Granted (in shares) | 140,097 | |||
Fair market value (in dollars per share) | $ 2.07 | |||
Restricted stock cancelled (in shares) | (19,324) | |||
Term of vesting | 12 months | |||
Aggregate grant date fair value | $ 290 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Taxes [Abstract] | ||
Income tax expense (benefit) | $ (43) | $ 40 |
Business Segments (Details)
Business Segments (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)Segment | Mar. 31, 2018USD ($) | |
Segment Reporting, Disclosure of Other Information about Entity's Reportable Segments [Abstract] | ||
Number of operating segments | Segment | 2 | |
Results of Operations from Business Segments [Abstract] | ||
Revenues | $ 7,483 | $ 6,738 |
Cost of revenues | 2,874 | 3,345 |
Gross profit | $ 4,609 | $ 3,393 |
Gross profit % | 61.60% | 50.40% |
Allocated operating expenses [Abstract] | ||
Engineering and product development | $ 304 | $ 338 |
Selling and marketing expenses | 3,066 | 2,871 |
Unallocated operating expenses | 2,480 | 1,884 |
Total operating expenses | 5,850 | 5,093 |
Income (loss) from operations | (1,241) | (1,700) |
Interest expense, net | (135) | (363) |
Change in fair value of warrant liability (see Note 1) | 0 | 1 |
Other income ,net | 0 | 21 |
Income (loss) before income taxes | (1,376) | (2,041) |
Dermatology Recurring Procedures [Member] | ||
Results of Operations from Business Segments [Abstract] | ||
Revenues | 5,312 | 4,770 |
Dermatology Procedures Equipment [Member] | ||
Results of Operations from Business Segments [Abstract] | ||
Revenues | 2,171 | 1,968 |
Operating Segments [Member] | Dermatology Recurring Procedures [Member] | ||
Results of Operations from Business Segments [Abstract] | ||
Revenues | 5,312 | 4,770 |
Cost of revenues | 1,793 | 1,989 |
Gross profit | $ 3,519 | $ 2,781 |
Gross profit % | 66.20% | 58.30% |
Allocated operating expenses [Abstract] | ||
Engineering and product development | $ 242 | $ 274 |
Selling and marketing expenses | 2,768 | 2,216 |
Unallocated operating expenses | 0 | 0 |
Total operating expenses | 3,010 | 2,490 |
Income (loss) from operations | 509 | 291 |
Interest expense, net | 0 | 0 |
Change in fair value of warrant liability (see Note 1) | 0 | |
Other income ,net | 0 | |
Income (loss) before income taxes | 509 | 291 |
Operating Segments [Member] | Dermatology Procedures Equipment [Member] | ||
Results of Operations from Business Segments [Abstract] | ||
Revenues | 2,171 | 1,968 |
Cost of revenues | 1,081 | 1,356 |
Gross profit | $ 1,090 | $ 612 |
Gross profit % | 50.20% | 31.10% |
Allocated operating expenses [Abstract] | ||
Engineering and product development | $ 62 | $ 64 |
Selling and marketing expenses | 298 | 655 |
Unallocated operating expenses | 0 | 0 |
Total operating expenses | 360 | 719 |
Income (loss) from operations | 730 | (107) |
Interest expense, net | 0 | 0 |
Change in fair value of warrant liability (see Note 1) | 0 | |
Other income ,net | 0 | |
Income (loss) before income taxes | $ 730 | $ (107) |
Significant Customer Concentr_2
Significant Customer Concentration (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Concentration Risk Percentage [Abstract] | ||
Revenues, net | $ 7,483 | $ 6,738 |
Revenue [Member] | Customer Concentration Risk [Member] | ||
Concentration Risk Percentage [Abstract] | ||
Revenues, net | $ 1,990 | $ 1,311 |
Concentration risk percentage | 26.60% | 19.50% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||
Concentration Risk Percentage [Abstract] | ||
Accounts receivable | $ 578 | |
Concentration risk percentage | 16.20% |
Related Parties (Details)
Related Parties (Details) - USD ($) $ / shares in Units, $ in Thousands | May 29, 2018 | Mar. 30, 2018 | Mar. 31, 2018 |
Relative of Former Board Member [Member] | |||
Related Party Transaction [Abstract] | |||
Related party expense | $ 13 | ||
Broadfin Capital and Sabby Management Stock Purchase Agreements [Member] | Broadfin Capital [Member] | |||
Related Party Transaction [Abstract] | |||
Sale of common stock, net of offering costs | $ 1,000 | ||
Sale of common stock, net of offering costs (in shares) | 925,926 | ||
Share price (in dollars per share) | $ 1.08 | ||
Broadfin Capital and Sabby Management Stock Purchase Agreements [Member] | Sabby Management LLC and Broadfin LLC [Member] | |||
Related Party Transaction [Abstract] | |||
Sale of common stock, net of offering costs | $ 1,000 | ||
Sale of common stock, net of offering costs (in shares) | 925,926 | ||
Share price (in dollars per share) | $ 1.08 | ||
Subscription Agreement [Member] | Dr. Dolev Rafaeli [Member] | |||
Related Party Transaction [Abstract] | |||
Sale of common stock, net of offering costs | $ 1,000 | $ 1,000 | |
Sale of common stock, net of offering costs (in shares) | 925,926 | 925,926 | |
Share price (in dollars per share) | $ 1.08 | $ 1.08 |
Commitments (Details)
Commitments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Lessee, Operating Lease, Description [Abstract] | ||
Renewal term | 2 years | |
Amortization of right-of-use asset | $ 93 | $ 0 |
Operating lease costs | 111 | |
Cash paid for amounts included in measurement of operating lease liabilities | $ 94 | |
Incremental borrowing rate | 9.76% | |
Weighted average remaining lease term | 3 years 4 months 24 days | |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
Remaining in 2019 | $ 293 | |
2020 | 234 | |
2021 | 229 | |
2022 | 134 | |
Total remaining lease payments | 890 | |
Less: imputed interest | (118) | |
Total lease liabilities | $ 772 | |
Minimum [Member] | ||
Lessee, Operating Lease, Description [Abstract] | ||
Remaining lease term | 1 year | |
Maximum [Member] | ||
Lessee, Operating Lease, Description [Abstract] | ||
Remaining lease term | 4 years |
Subsequent events (Details)
Subsequent events (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 24, 2019 | Jun. 30, 2019 | May 31, 2019 | Apr. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2019 | |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |||||||
Total remaining lease payments | $ 890 | ||||||
Stock Options [Member] | |||||||
Number of Stock Options [Abstract] | |||||||
Options, exercised (in shares) | (71,250) | ||||||
Expiration Date, April 2019 [Member] | |||||||
Warrants and Rights [Abstract] | |||||||
Expiration date | [1] | Apr. 30, 2019 | |||||
Exercise price (in dollars per share) | [1] | $ 3.75 | |||||
Expiration Date, July 2019 [Member] | |||||||
Warrants and Rights [Abstract] | |||||||
Expiration date | Jul. 24, 2019 | ||||||
Expiration Date, July 2019 [Member] | Minimum [Member] | |||||||
Warrants and Rights [Abstract] | |||||||
Exercise price (in dollars per share) | $ 3.75 | ||||||
Expiration Date, July 2019 [Member] | Maximum [Member] | |||||||
Warrants and Rights [Abstract] | |||||||
Exercise price (in dollars per share) | $ 12.25 | ||||||
Subsequent Event [Member] | |||||||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |||||||
Total remaining lease payments | $ 1,107 | ||||||
Subsequent Event [Member] | Stock Options [Member] | |||||||
Number of Stock Options [Abstract] | |||||||
Options, exercised (in shares) | (15,000) | ||||||
Options, Exercise price (in dollars per share) | $ 1.29 | ||||||
Common stock shares issued on exercise of options (in shares) | 7,586 | ||||||
Subsequent Event [Member] | Expiration Date, April 2019 [Member] | |||||||
Warrants and Rights [Abstract] | |||||||
Expiration date | Apr. 30, 2019 | ||||||
Warrants expired (in shares) | (137,143) | ||||||
Exercise price (in dollars per share) | $ 3.75 | ||||||
Subsequent Event [Member] | Expiration Date, July 2019 [Member] | |||||||
Warrants and Rights [Abstract] | |||||||
Expiration date | Jul. 24, 2019 | ||||||
Warrants expired (in shares) | (1,239,769) | ||||||
Subsequent Event [Member] | Expiration Date, July 2019 [Member] | Minimum [Member] | |||||||
Warrants and Rights [Abstract] | |||||||
Exercise price (in dollars per share) | $ 3.75 | ||||||
Subsequent Event [Member] | Expiration Date, July 2019 [Member] | Maximum [Member] | |||||||
Warrants and Rights [Abstract] | |||||||
Exercise price (in dollars per share) | $ 12.25 | ||||||
Subsequent Event [Member] | Series C Convertible Preferred Stock [Member] | |||||||
Subsequent Events [Abstract] | |||||||
Number of common shares issued on conversion of preferred stock (in shares) | 1,775,093 | ||||||
[1] | These warrants are classified as liabilities. |