Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 06, 2020 | Jun. 28, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 001-31932 | ||
Entity Registrant Name | CATASYS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 88-0464853 | ||
Entity Address, Address Line One | 2120 Colorado Ave. | ||
Entity Address, Address Line Two | Suite 230 | ||
Entity Address, City or Town | Santa Monica | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 90404 | ||
City Area Code | 310 | ||
Local Phone Number | 444-4300 | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Trading Symbol | CATS | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 140,851,867 | ||
Entity Common Stock, Shares Outstanding | 16,726,964 | ||
Documents Incorporated by Reference | Portions of the 2020 definitive Proxy Statement are incorporated by reference into Part III of this Form 10-K. | ||
Entity Central Index Key | 0001136174 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash, cash equivalents and restricted cash | $ 13,610 | $ 3,162 |
Receivables, net | 3,615 | 1,382 |
Unbilled receivables | 2,093 | 0 |
Prepaid expenses and other current assets | 1,074 | 1,108 |
Total current assets | 20,392 | 5,652 |
Long-term assets: | ||
Property and equipment, net | 150 | 263 |
Restricted cash, long-term | 408 | 408 |
Deferred commissions | 112 | 0 |
Right-of-use assets | 2,793 | |
Total assets | 23,855 | 6,323 |
Current liabilities: | ||
Accounts payable | 1,385 | 497 |
Accrued compensation and benefits | 3,640 | 1,537 |
Deferred revenue | 5,803 | 4,195 |
Current portion of lease liabilities | 519 | |
Other accrued liabilities | 2,060 | 1,501 |
Warrant liabilities | 691 | 86 |
Total current liabilities | 14,098 | 7,816 |
Long-term liabilities: | ||
Long-term debt, net | 31,597 | 7,472 |
Long-term lease liabilities | 2,069 | |
Total liabilities | 47,764 | 15,288 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Preferred stock, $0.0001 par value; 50,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $0.0001 par value, 500,000,000 shares authorized; 16,616,165 and 16,185,146 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively | 2 | 2 |
Additional paid in capital | 307,403 | 296,688 |
Accumulated deficit | (331,314) | (305,655) |
Total stockholders' deficit | (23,909) | (8,965) |
Total liabilities and stockholders' deficit | $ 23,855 | $ 6,323 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 16,616,165 | 16,185,146 |
Common stock, shares outstanding (in shares) | 16,616,165 | 16,185,146 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||
Revenue | $ 35,095 | $ 15,177 |
Cost of revenue | 20,408 | 11,119 |
Gross profit | 14,687 | 4,058 |
Operating expenses | 34,701 | 17,684 |
Operating loss | (20,014) | (13,626) |
Other income (expense) | (2,538) | 40 |
Interest expense | (3,047) | (570) |
Change in fair value of warrant liability | (60) | (56) |
Net loss | $ (25,659) | $ (14,212) |
Net loss per share, basic and diluted (in dollars per share) | $ (1.56) | $ (0.89) |
Weighted-average shares used to compute basic and diluted net loss per share (in shares) | 16,418 | 15,955 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit |
Beginning balance at Dec. 31, 2017 | $ 898 | $ 2 | $ 294,220 | $ (293,324) |
Beginning balance (in shares) at Dec. 31, 2017 | 15,889,171 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Common stock issued for services | 112 | 112 | ||
Common stock issued for outside services (in shares) | 24,000 | |||
Warrants issued for services | 86 | 86 | ||
Warrants issued in connection with A/R facility | 64 | 64 | ||
Cashless warrant exercise (in shares) | 241,975 | |||
Cash warrant exercise | 150 | 150 | ||
Cash warrant exercise (in shares) | 30,000 | |||
Stock compensation expense | 2,056 | 2,056 | ||
Net loss | (14,212) | (14,212) | ||
Ending balance at Dec. 31, 2018 | $ (8,965) | $ 2 | 296,688 | (305,655) |
Ending balance (in shares) at Dec. 31, 2018 | 16,185,146 | 16,185,146 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Warrants issued for services | $ 43 | 43 | ||
Warrants issued in connection with 2024 notes | 2,354 | 2,354 | ||
Cash warrant exercise | 1,128 | 1,128 | ||
Cash warrant exercise (in shares) | 232,461 | |||
Exercise of stock options | 1,894 | 1,894 | ||
Exercise of stock options (in shares) | 195,351 | |||
Stock compensation expense | 5,210 | 5,210 | ||
Stock compensation expense (in shares) | 3,207 | |||
Net loss | (25,659) | (25,659) | ||
Ending balance at Dec. 31, 2019 | $ (23,909) | $ 2 | $ 307,403 | $ (331,314) |
Ending balance (in shares) at Dec. 31, 2019 | 16,616,165 | 16,616,165 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows used in operating activities | ||
Net loss | $ (25,659) | $ (14,212) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 5,210 | 2,056 |
Write-off of debt issuance costs | 1,505 | 0 |
Depreciation | 133 | 288 |
Amortization | 696 | 187 |
Warrants issued for services | 43 | 86 |
Change in fair value of warrants | 60 | 56 |
Common stock issued for consulting services | 0 | 112 |
Loss on disposal of fixed asset | 0 | 70 |
Deferred rent | (26) | (91) |
Changes in operating assets and liabilities: | ||
Accounts payable | 888 | 893 |
Lease liabilities | 684 | 0 |
Other accrued liabilities | 2,529 | 0 |
Prepaid and other current assets | (246) | (311) |
Deferred revenue | 1,608 | 3,163 |
Receivables | (2,233) | (871) |
Unbilled receivables | (2,093) | 0 |
Net cash used in operating activities | (16,901) | (8,574) |
Cash flows provided by investing activities | ||
Purchases of property and equipment | 0 | (9) |
Deposits and other assets | 0 | 71 |
Net cash provided by investing activities | 0 | 62 |
Cash flows provided by financing activities | ||
Debt issuance costs | (2,813) | (317) |
Debt termination related fees | (1,956) | 0 |
Proceed from warrant exercise | 1,128 | 150 |
Proceed from options exercise | 1,894 | 0 |
Capital lease obligations | 69 | (30) |
Net cash provided by financing activities | 27,349 | 7,303 |
Net (decrease) increase in cash, cash equivalents and restricted cash | 10,448 | (1,209) |
Cash and restricted cash at beginning of period | 3,570 | 4,779 |
Cash and restricted cash at end of period | 14,018 | 3,570 |
Supplemental disclosure of cash flow information: | ||
Right of use asset obtained in exchange for lease obligation | 2,574 | |
Interest paid | 870 | 363 |
Non cash financing and investing activities: | ||
Reclassification of warrant liability to equity upon amendment of the loan agreement | 86 | 0 |
Warrant issued in connection with 2024 Note | 2,354 | 0 |
Secured Promissory Note | ||
Cash flows provided by financing activities | ||
Proceeds from debt | 0 | 7,500 |
Revolving Loan | ||
Cash flows provided by financing activities | ||
Proceeds from debt | 7,500 | 0 |
Repayments of debt | 15,000 | 0 |
A/R Facility | ||
Cash flows provided by financing activities | ||
Proceeds from debt | 1,938 | 0 |
Repayments of debt | 1,938 | 0 |
GS Loan | ||
Cash flows provided by financing activities | ||
Proceeds from debt | $ 36,527 | $ 0 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Company Overview Catasys, Inc. (“Catasys” or the “Company”) is technology-enabled healthcare company whose mission is to help improve the health and save the lives of as many people as possible. The Company’s platform, Catasys PRE TM (Predict-Recommend-Engage), organizes and automates healthcare data integration and analytics through application of machine intelligence to deliver analytic insights. The PRE Platform predicts people whose chronic disease will improve with behavior change, recommends effective care pathways that people are willing to follow, and engages people who are not receiving the care they need. By combining predictive analytics with human engagement, the Company delivers improved member health and validated outcomes and savings to healthcare payers. The Company’s integrated, technology-enabled On Trak solution, a critical component of the Catasys PRE platform, is designed to identify and treat members with behavioral conditions that cause or exacerbate chronic medical conditions such as diabetes, hypertension, coronary artery disease, chronic obstructive pulmonary disease, and congestive heart failure, which result in high medical costs. The Company has the ability to engage these members, who do not otherwise seek behavioral healthcare, leveraging proprietary enrollment capabilities built on deep insights into the drivers of care avoidance. On Trak integrates evidence-based psychosocial and medical interventions delivered either in-person or via telehealth, along with care coaching and in-market Community Care Coordinators who address the social and environmental determinants of health, including loneliness. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements include Catasys, Inc. and its variable interest entities (VIE's). The accompanying consolidated financial statements for Catasys, Inc. have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and instructions to Form 10-K and Article 10 of Regulation S-X. All intercompany balances and transactions have been eliminated in consolidation. At December 31, 2019, cash and cash equivalents was $13.6 million and the Company had a working capital of approximately $6.3 million. The Company could continue to incur negative cash flows and operating losses for the next twelve months. The Company expect its current cash resources to cover expenses through at least the next twelve months from the date of this report, however, delays in cash collections, revenue, or unforeseen expenditures could impact this estimate. The Company’s ability to fund ongoing operations is dependent on several factors. The Company aims to increase the number of members that are eligible for its solutions by signing new contracts and identifying more eligible members in existing contracts. Additionally, the Company’s funding is dependent upon the success of management’s plan to increase revenue and control expenses. The Company currently operates its On Trak solutions in twenty-seven states. The Company provide services to commercial (employer funded), managed Medicare Advantage, and managed Medicaid and dual eligible (Medicare and Medicaid) populations. The Company generates fees from its launched programs and expect to increase enrollment and fees in the near future. Certain prior year amounts have been reclassified for consistency with the current year presentation. Management’s Plans Historically, we have seen and continue to see net losses, net loss from operations, negative cash flow from operating activities, and historical working capital deficits as we continue through a period of rapid growth. The accompanying financial statements do not reflect any adjustments that might result if we were unable to continue as a going concern. We have alleviated substantial doubt by both entering into contracts for additional revenue-generating health plan customers and expanding our On Trak program within existing health plan customers. To support this increased demand for services, we invested and will continue to invest in additional headcount needed to support the anticipated growth. Additional management plans include increasing the outreach pool as well as improving our current enrollment rate. We will continue to explore ways to increase operational efficiencies resulting in increase in margins on both existing and new members. We have a growing customer base and believe we are able to fully scale our operations to service the contracts and future enrollment providing leverage in these investments that will generate positive cash flow in the near future. We believe we will have enough capital to cover expenses through the foreseeable future and we will continue to monitor liquidity. If we add more health plans than budgeted, increase the size of the outreach pool by more than we anticipate, decide to invest in new products or seek out additional growth opportunities, we would consider financing these options with either a debt or equity financing. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and disclosed in the accompanying notes. Significant areas requiring the use of management estimates include expense accruals, accounts receivable allowances, accrued claims payable, the useful life of amortizable assets, revenue recognition, the valuation of warrant liabilities, and shared-based compensation. Actual results could differ from those estimates. Revenue Recognition The Company generates healthcare service revenue from contracts with customers as it satisfies its performance obligations to customers and their members. The healthcare service is transferred to a customer when, or as, the customer obtains control of that service. A performance obligation may be satisfied over time or at a point in time. Revenue from a performance obligation satisfied over time is recognized by measuring progress in a manner that depicts the transfer of services to the customer. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time that the Company determines the customer obtains control over the promised service. The amount of revenue recognized reflects the consideration the Company expects to be entitled to in exchange for those promised services ( i.e. , the “transaction price”). In determining the transaction price, the Company considers multiple factors, including the effects of variable consideration. Variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainties with respect to the amount are resolved. In determining when to include variable consideration in the transaction price, the Company considers the range of possible outcomes, the predictive value of past experiences, the time period of when uncertainties expect to be resolved and the amount of consideration that is susceptible to factors outside the Company's influence, such as the judgment and actions of third parties. The Company's contracts are generally designed to provide cash fees to us on a monthly basis, an upfront case rate, or fee for service based on enrolled members. The Company’s performance obligation is satisfied over time as the On Trak service is provided continuously throughout the service period. The Company recognizes revenue evenly over the service period using a time-based measure because the Company is providing a continuous service to the customer. Contracts with minimum performance guarantees or price concessions include variable consideration and are subject to the revenue constraint. The Company uses an expected value method to estimate variable consideration for minimum performance guarantees and price concessions. The Company has constrained revenue for expected price concessions during the year ended December 31, 2019. Cost of Revenue Cost of revenue consists primarily of salaries related to care coaches, outreach specialists and other staff directly involved in member care, healthcare provider claims payments, and fees charged by third party administrators for processing these claims. Salaries and fees charged by third party administrators for processing claims are expensed when incurred and healthcare provider claims payments are recognized in the period in which an eligible member receives services. Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less from the date of purchase. The Company's cash balance does not contain any cash equivalents. Commissions Commissions paid to our sales force and engagement specialists are deferred as these amounts are incremental costs of obtaining a contract with a customer and are recoverable from future revenue that gave rise to the commissions. Commissions for initial contracts and member enrollments are deferred on the consolidated balance sheets and amortized on a straight-line basis over a period of benefit that has been determined to be six years and one year, respectively. Share-Based Compensation Stock Options – Employees and Directors Stock-based compensation for stock options granted is measured based on the grant-date fair value of the awards and recognized on a straight-line basis over the period during which the employee is required to perform services in exchange for the award (generally the vesting period of the award). The Company estimates the fair value of employee stock options using the Black-Scholes option-pricing model. Forfeitures are recognized as they occur. Stock Options and Warrants – Non-employees Stock-based compensation for stock options and warrants granted to non-employees is measured based on the grant-date fair value of the awards and recognized on a straight-line basis over the period during which the employee is required to perform services in exchange for the award (generally the vesting period of the award). The Company estimates the fair value of employee stock options using the Black-Scholes option-pricing model. For options and warrants issued as compensation to non-employees for services that are fully vested and non-forfeitable at the time of issuance, the estimated value is recorded in equity and expensed when the services are performed and benefit is received. For unvested shares, the change in fair value during the period is recognized in expense using the graded vesting method. Income Taxes The Company accounts for income taxes using the liability method, under which deferred tax assets and liabilities are determined based on the future tax consequences attributable to differences between the financial reporting carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards and net operating loss carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates that are expected to be in effect when the differences are expected to reverse. To date, no current income tax liability has been recorded due to the Company's accumulated net losses. The Company assesses the likelihood that deferred tax assets will be recovered from future taxable income, and a valuation allowance is established when necessary to reduce deferred tax assets to the amounts more likely than not expected to be realized. The Company's net deferred tax assets have been fully reserved by a valuation allowance. Basic and Diluted Loss per Share Basic loss per share is computed by dividing the net loss to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share is computed by dividing the loss for the period by the weighted average number of shares of common stock and dilutive common equivalent shares outstanding during the period. Common equivalent shares, consisting of approximately 5,557,326 and 5,370,274 of shares as of December 31, 2019 and 2018, respectively, issuable upon the exercise of stock options and warrants, have been excluded from the diluted earnings per share calculation because their effect is anti-dilutive. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure fair value. The fair value hierarchy distinguishes between (1)market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I) and the lowest priority to unobservable inputs (Level III). The three levels of the fair value hierarchy are described below: Level Input: Input Definition: Level I Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level II Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date. Level III Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The following tables summarize fair value measurements by level at December 31, 2019 and 2018, respectively, for assets and liabilities measured at fair value on a recurring basis (in thousands): Balance at December 31, 2019 Level I Level II Level III Total Letter of credit 1 $ 408 $ — $ — $ 408 Total assets $ 408 $ — $ — $ 408 Warrant liabilities $ — $ — $ 691 $ 691 Total liabilities $ — $ — $ 691 $ 691 1 $408,000 is included in restricted cash, long-term, on our balance sheet as of December 31, 2019. Balance at December 31, 2018 Level I Level II Level III Total Letter of credit 2 $ 479 $ — $ — $ 479 Total assets $ 479 $ — $ — $ 479 Warrant liabilities $ — $ — $ 86 $ 86 Total liabilities $ — $ — $ 86 $ 86 2 $71,000 is included in cash and restricted cash and $408,000 is included in restricted cash, long-term, on our balance sheet as of December 31, 2018. Financial instruments classified as Level III in the fair value hierarchy as of December 31, 2019, represent liabilities measured at market value on a recurring basis which include warrant liabilities. In accordance with current accounting rules, the warrant liabilities are being marked-to-market each quarter-end until they are completely settled or expire. The warrants are valued using the Black-Scholes option-pricing model, using both observable and unobservable inputs and assumptions consistent with those used in the estimate of fair value of employee stock options. See Warrant Liabilities below. The carrying value of the Senior Secured Notes is estimated to approximate their fair value as the variable interest rate of the Senior Secured Notes approximates the market rate for debt with similar terms and risk characteristics. The fair value measurements using significant Level III inputs, and changes therein, for the years ended December 31, 2019 and 2018 are as follows: Level III Balance as of December 31, 2017 $ 30 Issuance of warrants — Change in fair value 56 Balance as of December 31, 2018 $ 86 ASU Adoption APIC Reclassification (86) Issuance of warrants 631 Change in fair value 60 Balance as of December 31, 2019 $ 691 Capital Leases Assets held under capital leases include computer equipment, and are recorded at the lower of the net present value of the minimum lease payments or the fair value of the leased asset at the inception of the lease. Depreciation expense is computed using the straight-line method over the estimated useful lives of the assets. All lease agreements meet at least one of the five requirements of a capital lease in accordance with ASC 842 of the codification. Variable Interest Entities Generally, an entity is defined as a Variable Interest Entity (“VIE”) under current accounting rules if it either lacks sufficient equity to finance its activities without additional subordinated financial support, or it is structured such that the holders of the voting rights do not substantively participate in the gains and losses of the entity. When determining whether an entity that meets the definition of a business, qualifies for a scope exception from applying VIE guidance, the Company considers whether: (i) it has participated significantly in the design of the entity, (ii) it has provided more than half of the total financial support to the entity, and (iii) substantially all of the activities of the VIE are conducted on its behalf. A VIE is consolidated by its primary beneficiary, the party that has the power to direct the activities that most significantly affect the economics of the VIE and has the right to receive benefits or the obligation to absorb losses of the entity that could be potentially significant to the VIE. The primary beneficiary assessment must be re-evaluated on an ongoing basis. As discussed under the heading Management Services Agreement (“MSA”) below, the Company has an MSA with a Texas nonprofit health organization (“TIH”) and a California Professional Corporation (“CIH”). Under the MSA’s, the equity owners of TIH and CIH have only a nominal equity investment at risk, and the Company absorbs or receives a majority of the entity’s expected losses or benefits. The Company participates significantly in the design of these MSA’s. The Company also agrees to provide working capital loans to allow for TIH and CIH to fund their day to day obligations. Substantially all of the activities of TIH and CIH include its decision making, approval or are conducted for its benefit, as evidenced by the facts that (i) the operations of TIH and CIH are conducted primarily using the Company's licensed network of providers and (ii) under the MSA, the Company agrees to provide and perform all non-medical management and administrative services for the entities. Payment of the Company's management fee is subordinate to payments of the obligations of TIH and CIH, and repayment of the working capital loans is not guaranteed by the equity owner of the affiliated medical group or other third party. Creditors of TIH and CIH do not have recourse to the Company's general credit. Based on the design of the entity and the lack of sufficient equity to finance its activities without additional working capital loans the Company has determined that TIH and CIH are VIE’s. The Company is the primary beneficiary required to consolidate the entities as it has power and potentially significant interests in the entities. Accordingly, the Company is required to consolidate the assets, liabilities, revenues and expenses of the managed treatment centers. Management Services Agreement In April 2018, the Company executed an MSA with TIH and in July 2018, the Company executed an MSA with CIH. Under the MSA’s, the Company licenses to TIH and CIH the right to use its proprietary treatment programs and related trademarks and provide all required day-to-day business management services, including, but not limited to: • general administrative support services; • information systems; • recordkeeping; • billing and collection; • obtaining and maintaining all federal, state and local licenses, certifications and regulatory permits. All clinical matters relating to the operation of TIH and CIH and the performance of clinical services through the network of providers shall be the sole and exclusive responsibility of the TIH and CIH Board free of any control or direction from the Company. TIH pays the Company a monthly fee equal to the aggregate amount of (a) its costs of providing management services (including reasonable overhead allocated to the delivery of its services and including salaries, rent, equipment, and tenant improvements incurred for the benefit of the medical group, provided that any capitalized costs will be amortized over a five CIH pays the Company a monthly fee equal to the aggregate amount of (a) its costs of providing management services (including reasonable overhead allocated to the delivery of its services and including salaries, rent, equipment, and tenant improvements incurred for the benefit of the entity, provided that any capitalized costs will be amortized over a five The Company's consolidated balance sheets include the following assets and liabilities from its VIE's (in thousands): December 31, December 31, Cash and cash equivalents $ 379 $ 45 Accounts receivable 564 94 Prepaid and other current assets 26 29 Total assets $ 969 $ 168 Accounts payable $ 9 $ 7 Accrued liabilities 100 14 Deferred revenue 73 — Intercompany payable 685 147 Total liabilities $ 867 $ 168 Warrant Liabilities The assumptions used in the Black-Scholes option-pricing model are determined as follows: December 31, 2019 December 31, 2018 Volatility 98.04 % 102.90 % Risk-free interest rate 1.81 % 2.63 % Weighted average expected life (in years) 6.25 1.29 Dividend yield 0 % 0 % For the years ended December 31, 2019 and 2018, losses related to the revaluation of warrant liabilities were $0.1 million, respectively. Concentration of Credit Risk Financial instruments, which potentially subject us to a concentration of risk, include cash, restricted cash and accounts receivable. All of our customers are based in the United States at this time and we are not subject to exchange risk for accounts receivable. The Company maintains its cash in domestic financial institutions subject to insurance coverage issued by the Federal Deposit Insurance Corporation (FDIC). Under FDIC rules, the company is entitled to aggregate coverage as defined by the Federal regulation per account type per separate legal entity per financial institution. The Company has incurred no losses as a result of any credit risk exposures. For the year ended December 31, 2019, four customers accounted for approximately 85% of revenues and four customers accounted for approximately 89% of accounts receivable. For the year ended December 31, 2018, four customers accounted for approximately 76% of revenues and four customers accounted for approximately 88% of accounts receivable. Recently Adopted Accounting Standards Effective January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the consolidated balance sheet as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. For finance leases, interest on the lease liability and the amortization of the right-of-use asset results in front-loaded expense over the lease term. Variable lease expenses are recorded when incurred. In calculating the right-of-use asset and lease liability, the Company elected to combine lease and non-lease components. The Company also elected to exclude short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term. In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”), which supersedes ASC 505-50 and expands the scope of ASC 718 to include all share-based payments arrangements related to the acquisition of goods and services from both employees and nonemployees. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted, but no earlier than a company's adoption date of ASC 606. The adoption of this ASU 2018-07 on January 1, 2019 did not have a material impact on its financial statements. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception (“ASU 2017-11”). The amendments in this update are intended to simplify the accounting for certain equity linked financial instruments and embedded features with down round features that result in the strike price being reduced on the basis of the pricing of future equity offerings. Under the new guidance, a down round feature will no longer need to be considered when determining whether certain financial instruments or embedded features should be classified as liabilities or equity instruments. That is, a down round feature will no longer preclude equity classification when assessing whether an instrument or embedded feature is indexed to an entity's own stock. In addition, the amendments clarify existing disclosure requirements for equity-classified instruments. These amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The adoption of this ASU 2017-11 on January 1, 2019 did not have a material impact on its financial statements. Recently Issued Accounting Pronouncements In August 2018, the FASB issued Accounting Standard Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820) , which modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, including, among other changes, the consideration of costs and benefits when evaluating disclosure requirements. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted. We are currently assessing the impact that adopting this new accounting guidance will have on our financial statements and footnote disclosures. In December 2019, the FASB issued ASU No. 2019-12, "Simplifying the Accounting for Income Taxes" which enhances and simplifies various aspects of income tax accounting guidance. The guidance is effective for the Company in the first quarter of 2021, although early adoption is permitted. The Company is currently evaluating the impact of adoption of ASU 2019-12 on its consolidated financial statements and related footnote disclosures. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Common Stock | Common Stock Net loss per share Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, preferred stock and outstanding stock options and warrants, to the extent dilutive. Basic and diluted net loss per share was the same for each period presented as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive. Basic and diluted net loss per share (in thousands, except per share amounts) are as follows: December 31, December 31, 2019 2018 Net loss $ (25,659) $ (14,212) Weighted-average shares of common stock outstanding 16,418 15,955 Net loss per share - basic and diluted $ (1.56) $ (0.89) The following common equivalent shares as of December 31, 2019 and 2018, respectively, issuable upon the exercise of stock options and warrants have been excluded from the diluted earnings per share calculation as their effect is anti-dilutive: December 31, December 31, 2019 2018 Warrants to purchase common stock 1,550,975 1,608,996 Options to purchase 4,006,351 3,761,278 Total shares excluded from net loss per share 5,557,326 5,370,274 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt 2024 Notes In September 2019, the Company entered into a Note Agreement dated September 24, 2019 (the “Note Agreement”) with certain subsidiaries of the Company party thereto as guarantors, Goldman Sachs Specialty Lending Holdings, Inc. and any other purchasers party thereto from time to time (collectively, the “Holders”). Under the Note Agreement, the Company initially issued $35.0 million aggregate principal amount of senior secured notes (the "2024 Notes"), which bear interest at either a floating rate plus an applicable margin in the case of 2024 Notes subject to cash interest payments or a floating rate plus a slightly higher applicable margin in the case of 2024 Notes as to which current interest has been accrued during the period ending September 24, 2020, which resulted in interest rate of 15.75% for the year-ended December 31, 2019. The applicable margins are subject to stepdowns, in each case, following the achievement of certain financial ratios. The Company has elected for the $35 million in aggregate principal amount of 2024 Notes issued on the date of the Note Agreement that such interest shall be payable in cash. The Holder is obligated to purchase up to an additional $10.0 million in principal amount of 2024 Notes during the period from the date of the Note Agreement until the second anniversary thereof. The entire principal amount of the 2024 Notes is due and payable on the fifth anniversary of the Note Agreement unless earlier redeemed upon the occurrence of certain mandatory prepayment events, including with the proceeds of equity or debt issuances, 50% of excess cash flow, asset sales and the amount by which total debt exceeds an applicable leverage multiple. The Note Agreement contains customary covenants, including, among others, covenants that restrict the Company’s ability to incur debt, grant liens, make certain investments and acquisitions, pay dividends, repurchase equity interests, repay certain debt, amend certain contracts, enter into affiliate transactions and asset sales or make certain equity issuances, and covenants that require the Company to, among other things, provide annual, quarterly and monthly financial statements, together with related compliance certificates, maintain its property in good repair, maintain insurance and comply with applicable laws. The Note Agreement also includes covenants with respect to the Company’s maintenance of certain financial ratios, including a fixed charge coverage ratio, leverage ratio and consolidated liquidity as well as minimum levels of consolidated adjusted EBITDA and revenue. The Note Agreement also contains customary events of default, including, among others, payment default, bankruptcy events, cross-default, breaches of covenants and representations and warranties, change of control, judgment defaults and an ownership change within the meaning of Section 382 of the Internal Revenue Code. In the case of an event of default, the Holder may, among other remedies, accelerate the payment of all obligations under the 2024 Notes and all assets of the Company serves as collateral. Any prepayment of the 2024 Notes or reduction of the purchase commitments made on or prior to the second anniversary of the Closing Date must be accompanied by a yield maintenance premium and on or prior to the third anniversary of the Closing Date must be accompanied by a prepayment premium. In accounting for the issuance of the 2024 Notes, the Company separated the 2024 Notes into liability and equity components. The fair value of the liability component was estimated using an interest rate for debt with terms similar to the 2024 Notes. The carrying amount of the equity component was calculated by measuring the fair value based on the Black-Scholes model. The gross proceeds from the transaction was allocated between liability and equity based on the proportionate value. The debt discount is accreted to interest expense over the term of the 2024 Notes using the interest method. The equity component is not re-measured as long as it continues to meet the conditions for equity classification. The assumptions used in the Black-Scholes option-pricing model are determined as follows: December 31, 2019 Volatility 98.01 % Risk-free interest rate 1.58 % Expected life (in years) 7 Dividend yield 0 % The Company is in compliance with all debt covenants at December 31, 2019. 2022 Loan In June 2018, the Company entered into a venture loan and security agreement (the “2022 Loan”) with Horizon Technology Finance Corporation (“Horizon”), which provides for up to $7.5 million in loans to the Company. In addition, in June 2018, the Company entered into a loan and security agreement (the “A/R Facility”) in connection with a $2.5 million receivables financing facility with Corporate Finance, a division of Heritage Bank of Commerce (“Heritage”). The Company borrowed and subsequently repaid $1.9 million on the A/R Facility during the six months ended June 30, 2019. In March 2019, the Company entered into an amended and restated 2022 Loan with Horizon, which provides for up to $15.0 million in loans to the Company, including initial term loans in the amount of $7.5 million previously funded under the original agreement and an additional up to $7.5 million loan in three revolving tranches of $2.5 million in availability, subject to the Company's achievement of trailing three month billings exceeding $5.0 million, $7.0 million and $8.0 million, respectively (collectively, the “Billing Requirements”). An initial advance of $2.5 million was funded upon the execution and delivery of the Amended Loan Agreement, subject to repayment if the foregoing $5.0 million threshold is not reached by July 1, 2019. The Company concurrently entered into an amendment to the previously disclosed $2.5 million A/R Facility with Heritage intended primarily to reflect the amendment and restatement of the Amended Loan Agreement. The Company have met all three of the Billing Requirements and as a result have incurred the full $7.5 million under the Amended Loan Agreement. In connection with our entry into the Amended Loan Agreement, the Company issued Horizon 40,279 seven The 2022 Loan bears interest at a floating coupon rate of the amount by which one-month LIBOR exceeds 2.00% plus 9.75%. After September 30, 2020, upon the earlier of (i) payment in full of the principal balance of the 2022 Loan, (ii) an event of default and demand by Lender of payment in full or (iii) on the Loan Maturity Date (September 30, 2022), as applicable, the Company shall pay to Lender a payment equal to the greater of $150,000 or 6% of the outstanding principal balance on August 31, 2020. Upon the issuance of the 2024 Notes, the balance of the 2022 Loan was repaid and terminated. As part of the termination, the Company incurred $1.1 million of early termination costs and wrote off deferred debt issuance costs of $1.5 million, which has been recorded in other income/(expense) in the consolidated statement of operations. 2024 Notes and 2022 Loan The 2024 Notes and 2022 Loan consist of the following (in thousands): December 31, December 31, Liability component 2019 2018 Principal $ 36,502 $ 7,950 Less: debt discount (4,905) (478) Net carrying amount $ 31,597 $ 7,472 The following table sets forth total interest expense recognized related to the 2024 Notes and 2022 Loan (in thousands): December 31, December 31, 2019 2018 Contractual interest expense $ 2,653 $ 388 Accretion of debt discount 394 182 Total $ 3,047 $ 570 |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Based Compensation | Stock Based Compensation Our 2017 Stock Incentive Plan (the “2017 Plan”) and 2010 Stock Incentive Plan (the “2010 Plan”) provides for the issuance of 4,530,071 shares of our common stock. We have granted stock options to executive officers, employees, members of our board of directors, and certain outside consultants. The terms and conditions upon which options become exercisable vary among grants; however, option rights expire no later than ten years from the date of grant and employee and Board of Director awards generally vest over three Share-based compensation expense was approximately $5.2 million and $2.1 million for the years ended December 31, 2019 and 2018, respectively. The assumptions used in the Black-Scholes option-pricing model are determined as follows: December 31, 2019 December 31, 2018 Volatility 100.34 % 100.34% - 102.90 Risk-free interest rate 1.63%-2.60% 2.56% - 2.85% Expected life (in years) 2.85-6.08 2.4 - 6.08 Dividend yield 0 % 0 % The expected volatility assumptions have been based on the historical and expected volatility of our stock, measured over a period generally commensurate with the expected term. The weighted average expected option term for the year ended December 31, 2019, reflects the application of the simplified method prescribed in Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 107 (as amended by SAB 110), which defines the life as the average of the contractual term of the options and the weighted average vesting period for all option tranches. Stock Options – Employees and Directors A summary of stock option activity for employee and director grants is as follows: Number of Weighted- Balance, December 31, 2017 1,885,383 $ 11.46 Stock options granted 1,985,539 7.70 Stock options forfeited and canceled (109,644) 14.29 Balance, December 31, 2018 3,761,278 $ 9.44 Exercisable at December 31, 2018 721,766 $ 17.14 Stock options granted 1,459,289 14.18 Stock options exercised (195,351) 9.69 Stock options forfeited and canceled (1,068,865) 10.36 Balance at December 31, 2019 3,956,351 $ 10.93 Exercisable at December 31, 2019 1,062,178 $ 11.24 Share-based compensation expense relating to stock options granted to employees and directors was $5.1 million and $2.1 million for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, there was $18.0 million of unrecognized compensation costs related to non-vested share-based compensation arrangements granted to employees and directors under the Plan. These costs are expected to be recognized over a weighted-average period of 2.67 years. Stock Options and Warrants – Non-employees The Company issued 50,000 stock options to consultants as of December 31, 2019 at a weighted average exercise price of $9.93. Stock option expense related to consultants was $0.1 million for the year ended December 31, 2019. In addition to stock options granted under the Plan, we have also granted warrants to purchase common stock to certain non-employees that have been approved by our Board of Directors. A summary of warrants granted to non-employees outstanding as of December 31, 2019 and 2018 is as follows: Number of Weighted- Warrants issued in connection with debt agreements 224,440 $ 16.04 Warrants issued for services 4,167 13.82 Balance at December 31, 2019 228,607 $ 16.00 Number of Warrants Outstanding Weighted- Warrants issued in connection with debt agreements 9,720 $ 7.72 Warrants issued for services 24,000 4.68 Balance at December 31, 2018 33,720 $ 5.56 A summary of warrant activity for the years ended December 31, 2019 and 2018 is as follows: Number of Weighted- Balance at December 31, 2017 2,011,528 $ 4.85 Warrants granted 33,720 5.56 Warrants exercised (436,252) (4.70) Balance at December 31, 2018 1,608,996 $ 4.71 Warrants granted 228,607 16.00 Warrants exercised (232,461) (4.85) Warrants expired (54,167) (12.46) Balance at December 31, 2019 1,550,975 $ 6.08 Performance-Based and Market-Based Awards The Company’s Compensation Committee designed a compensation structure to align the compensation levels of certain executives to the performance of the Company through the issuance of performance-based and market-based stock options. The performance-based options vest upon the Company meeting certain revenue targets and the total amount of compensation expense recognized is based on the number of shares that the Company determines are probable of vesting. The market-based options vest upon the Company’s stock price reaching a certain price at a specific performance period and the total amount of compensation expense recognized is based on a Monte Carlo simulation that factors in the probability of the award vesting. Issuances under this structure are as follows: Grant Date Performance Measures Vesting Term Performance Period # of Shares Exercise Price December 2017 Weighted Average Price of our common stock is $15.00 for at least twenty trading days within a period of thirty consecutive trading days ending on the trading day prior to January 1, 2023. Fully vest on January 1, 2023 January 1, 2023 642,307 $ 7.50 August 2018 Weighted Average Price of our common stock is $15.00 for at least twenty trading days within a period of thirty consecutive trading days ending on the trading day prior to January 1, 2023. Fully vest on January 1, 2023 January 1, 2023 397,693 $ 7.50 April 2018 The Options will be divided into five equal tranches and Performance Targets to be established by Board of Directors for each tranche at the beginning of the fiscal year Amended and vested 115,950 options based on severance agreement Amended and vested 115,950 options based on severance agreement 115,950 $ 7.50 August 2018 The Options will be divided into five equal tranches and Performance Targets to be established by Board of Directors for each tranche at the beginning of the fiscal year Amended and fully forfeited based on severance agreement Amended and fully forfeited based on severance agreement — $ 7.50 During the quarter ended September 30, 2019, the Company determined that it is not probable to achieve its internal performance targets for the tranche issued for the fiscal year 2019, resulting the reversal of the compensation expense recognized previously for the shares that did not vest. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases Operating leases In September 2018, the Company signed an operating lease for the new corporate headquarters in Santa Monica, CA (“Santa Monica Headquarters”). The lease agreement includes 7,869 square feet for 60 months commencing in July 2019, which is 30 days following date the premises were ready for occupancy. The base annual rent is approximately $0.6 million subject to annual adjustments. The Company’s lease liability resulted from the lease of the Santa Monica Headquarters which expires in 2024. This lease does not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. The lease includes renewal options and escalation clauses; renewal options have not been included in the calculation of the lease liability and right-of-use asset as the Company is not reasonably certain to exercise the options. Variable expenses generally represent the Company’s share of the landlord’s operating expenses. The Company does not act as a lessor or have any leases classified as financing leases. The discount rate used in measuring the lease liability and right of use assets were determined by reviewing our incremental borrowing rate at the measurement date. As of December 31, 2019, the Company has an operating lease liability of approximately $2.2 million and right-of-use asset of approximately $2.4 million, which are included in the consolidated balance sheets. As of December 31, 2019, supplemental information related to operating leases was as follows (in thousands): Consolidated Statement of Operations Operating Operating lease expense $ 443 Short-term lease rent expense 58 Total rent expense $ 501 Consolidated Statements of Cash Flows Operating cash flows from operating leases $ 381 Right-of-use assets obtained in exchange for lease obligations $ 2,574 Other Information Weighted-average remaining lease term 4.5 years Weighted-average discount rate 10.15 % As of December 31, 2019, the future minimum lease payments under operating leases are as follows (in thousands): Operating 2020 $ 581 2021 603 2022 623 2023 644 2024 329 Total lease payments $ 2,780 Less: imputed interest (570) Present value of lease liabilities $ 2,210 Less: current portion (374) Lease liabilities, non-current $ 1,836 Total rent expense under operating leases was approximately $0.4 million and $0.3 million for the years ended December 31, 2019 and 2018, respectively. Capital leases The Company entered into agreements to lease computer equipment during the year ended December 31, 2019. The computer equipment under capital leases is included in right of use asset within the consolidated balance sheets and was $0.4 million as of December 31, 2019. Lease amortization at December 31, 2019 was approximately $0.1 million. As of December 31, 2019, the future minimum lease payments under capital leases are as follows (in thousands): Capital Total lease payments $ 406 Less: interest (28) Present value of lease liabilities $ 378 Less: current portion (145) Lease liabilities, non-current $ 233 |
Leases | Leases Operating leases In September 2018, the Company signed an operating lease for the new corporate headquarters in Santa Monica, CA (“Santa Monica Headquarters”). The lease agreement includes 7,869 square feet for 60 months commencing in July 2019, which is 30 days following date the premises were ready for occupancy. The base annual rent is approximately $0.6 million subject to annual adjustments. The Company’s lease liability resulted from the lease of the Santa Monica Headquarters which expires in 2024. This lease does not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. The lease includes renewal options and escalation clauses; renewal options have not been included in the calculation of the lease liability and right-of-use asset as the Company is not reasonably certain to exercise the options. Variable expenses generally represent the Company’s share of the landlord’s operating expenses. The Company does not act as a lessor or have any leases classified as financing leases. The discount rate used in measuring the lease liability and right of use assets were determined by reviewing our incremental borrowing rate at the measurement date. As of December 31, 2019, the Company has an operating lease liability of approximately $2.2 million and right-of-use asset of approximately $2.4 million, which are included in the consolidated balance sheets. As of December 31, 2019, supplemental information related to operating leases was as follows (in thousands): Consolidated Statement of Operations Operating Operating lease expense $ 443 Short-term lease rent expense 58 Total rent expense $ 501 Consolidated Statements of Cash Flows Operating cash flows from operating leases $ 381 Right-of-use assets obtained in exchange for lease obligations $ 2,574 Other Information Weighted-average remaining lease term 4.5 years Weighted-average discount rate 10.15 % As of December 31, 2019, the future minimum lease payments under operating leases are as follows (in thousands): Operating 2020 $ 581 2021 603 2022 623 2023 644 2024 329 Total lease payments $ 2,780 Less: imputed interest (570) Present value of lease liabilities $ 2,210 Less: current portion (374) Lease liabilities, non-current $ 1,836 Total rent expense under operating leases was approximately $0.4 million and $0.3 million for the years ended December 31, 2019 and 2018, respectively. Capital leases The Company entered into agreements to lease computer equipment during the year ended December 31, 2019. The computer equipment under capital leases is included in right of use asset within the consolidated balance sheets and was $0.4 million as of December 31, 2019. Lease amortization at December 31, 2019 was approximately $0.1 million. As of December 31, 2019, the future minimum lease payments under capital leases are as follows (in thousands): Capital Total lease payments $ 406 Less: interest (28) Present value of lease liabilities $ 378 Less: current portion (145) Lease liabilities, non-current $ 233 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes As of December 31, 2019, the Company had net federal operating loss carry forwards and state operating loss carry forwards of approximately $277 million and $39 million, respectively. The net federal operating loss carry forwards begin to expire in 2023, and net state operating loss carry forwards begin to expire in 2019. Due to such uncertainties surrounding the realization of the deferred tax assets, the Company maintains a valuation allowance of $70.1 million and $64.1 million against all of its deferred tax assets as of December 31, 2019 and 2018, respectively. For the years ended December 31, 2019 and 2018, the total change in valuation allowance was $6.0 million and $1.7 million, respectively. Realization of the deferred tax assets will be primarily dependent upon the Company's ability to generate sufficient taxable income. Net deferred tax assets and liabilities for the years ended December 31, 2019 and 2018 are as follows (in thousands): 2019 2018 Net operating losses $ 66,405 $ 62,800 Stock-based compensation 1,648 873 Interest expense 1,494 — Accrued liabilities and reserves 744 218 Fixed assets 51 72 Lease liability 658 — Other temporary differences 23 315 Prepaid expenses (186) (176) Right-of-use asset (710) — Valuation allowance (70,127) (64,102) Net deferred tax asset $ — $ — The Company has provided a valuation allowance in full on its net deferred tax assets in accordance with ASC 740 Income Taxes. Because of the Company's continued losses, management assessed the realizability of its net deferred tax assets as being less than the more-likely-than-not criteria set forth by ASC 740. Furthermore, certain portions of the Company's net operating loss carryforwards were acquired, and therefore subject to further limitation set forth under the federal tax code, which could further limit the Company's ability to realize its deferred tax assets. A reconciliation between the statutory federal income tax rate and the effective income tax rate for the years ended December 31, 2019 and 2018 is as follows: 2019 2018 Tax at federal statutory rate 21.0 % 21.0 % Stock-based compensation (1.2) % (29.3) % Deferred revenue — % (2.8) % Change in Foreign NOLS due to liquidation — % (8.3) % Other (0.2) % 3.3 % Change in federal valuation allowance (19.6) % 16.1 % Change in federal NOLs due to 382 study results — % — % Tax provision — % — % The Company has adopted guidance issued by the FASB that clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold of more likely than not and a measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In making this assessment, a company must determine whether it is more likely than not that a tax position will be sustained upon examination, based solely on the technical merits of the position and must assume that the tax position will be examined by taxing authorities. Our policy is to include interest and penalties related to unrecognized tax benefits in income tax expense. There were no interest and penalties for the years ended December 31, 2019 and 2018, respectively. The Company files income tax returns with the Internal Revenue Service (“IRS”) and various states with sufficient nexus. For jurisdictions in which tax filings are prepared, the Company is no longer subject to income tax examinations by state tax authorities for tax years prior to 2014, and by the IRS for tax years through 2016. The Company’s net operating loss carryforwards are subject to IRS examination until they are fully utilized and such tax years are closed. There are currently no income tax audits in any jurisdictions for open tax years and, as of December 31, 2019, there have been no material changes to our tax positions. Under Section 382 of the Internal Revenue Code of 1986, as amended, or the IRC, substantial changes in our ownership may limit the amount of net operating loss and research and development income tax credit carryforwards that could be utilized annually in the future to offset taxable income. Specifically, this limitation may arise in the event of a cumulative change in ownership of the company of more than 50% within a three-year testing period. Any such annual limitation may significantly reduce the utilization of the net operating loss carryforwards before they expire. Since the Company's formation, the Company has raised capital through the issuance of capital stock on several occasions which, may have resulted in such an ownership change, or could result in an ownership change in the future upon subsequent disposition. The Company intends to complete a study in the future to assess whether an ownership change has occurred or whether there have been multiple ownership changes since the Company's formation. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company has various non-cancelable operating leases for its offices and its managed hosting facilities and services. These leases expire at various times through 2025. Certain lease agreements contain renewal options, rent abatement and escalation clauses. The Company recognizes rent expense on a straight-line basis over the lease term, commencing when the Company takes possession of the property. Certain of the Company’s office leases entitle the Company to receive a tenant allowance from the landlord. The Company records tenant allowances as a deferred rent credit, which the Company amortizes on a straight-line basis, as a reduction of rent expense, over the term of the underlying lease. Total rent expense under operating leases was approximately $0.4 million and $0.3 million for the years ended December 31, 2019 and 2018, respectively. The Company entered into financing agreements for computer equipment for $0.4 million. Interest is expensed straight line over three years. Future minimum lease payments under capital leases and non-cancelable operating leases at December 31, 2019 are as follows (in thousands): Year Amount 2020 $ 737 2021 757 2022 717 2023 644 2024 328 $ 3,183 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsAccounts payable outstanding with Mr. Peizer for travel and expenses is approximately $0.4 million and $0.4 million as of December 31, 2019 and 2018, respectively. |
Restricted Cash
Restricted Cash | 12 Months Ended |
Dec. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Restricted Cash | Restricted Cash In September 2018, the Company entered into a lease agreement for the new corporate office space in Santa Monica, California which required a stand-by letter of credit as guarantee for future rent in the amount of $0.4 million. As of December 31, 2019, long-term restricted cash related to the Santa Monica lease totaled $0.4 million. The following table provides a reconciliation of cash, cash equivalents and restricted cash total as presented in the consolidated statement of cash flows for the years ended December 31, 2019 and 2018 (in thousands): 2019 2018 Cash and cash equivalents $ 13,610 $ 3,091 Restricted cash (current and long-term) 408 479 Total cash, cash equivalents and restricted cash $ 14,018 $ 3,570 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include Catasys, Inc. and its variable interest entities (VIE's). The accompanying consolidated financial statements for Catasys, Inc. have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and instructions to Form 10-K and Article 10 of Regulation S-X. All intercompany balances and transactions have been eliminated in consolidation. At December 31, 2019, cash and cash equivalents was $13.6 million and the Company had a working capital of approximately $6.3 million. The Company could continue to incur negative cash flows and operating losses for the next twelve months. The Company expect its current cash resources to cover expenses through at least the next twelve months from the date of this report, however, delays in cash collections, revenue, or unforeseen expenditures could impact this estimate. The Company’s ability to fund ongoing operations is dependent on several factors. The Company aims to increase the number of members that are eligible for its solutions by signing new contracts and identifying more eligible members in existing contracts. Additionally, the Company’s funding is dependent upon the success of management’s plan to increase revenue and control expenses. The Company currently operates its On Trak solutions in twenty-seven states. The Company provide services to commercial (employer funded), managed Medicare Advantage, and managed Medicaid and dual eligible (Medicare and Medicaid) populations. The Company generates fees from its launched programs and expect to increase enrollment and fees in the near future. Certain prior year amounts have been reclassified for consistency with the current year presentation. Management’s Plans Historically, we have seen and continue to see net losses, net loss from operations, negative cash flow from operating activities, and historical working capital deficits as we continue through a period of rapid growth. The accompanying financial statements do not reflect any adjustments that might result if we were unable to continue as a going concern. We have alleviated substantial doubt by both entering into contracts for additional revenue-generating health plan customers and expanding our On Trak program within existing health plan customers. To support this increased demand for services, we invested and will continue to invest in additional headcount needed to support the anticipated growth. Additional management plans include increasing the outreach pool as well as improving our current enrollment rate. We will continue to explore ways to increase operational efficiencies resulting in increase in margins on both existing and new members. We have a growing customer base and believe we are able to fully scale our operations to service the contracts and future enrollment providing leverage in these investments that will generate positive cash flow in the near future. We believe we will have enough capital to cover expenses through the foreseeable future and we will continue to monitor liquidity. If we add more health plans than budgeted, increase the size of the outreach pool by more than we anticipate, decide to invest in new products or seek out additional growth opportunities, we would consider financing these options with either a debt or equity financing. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and disclosed in the accompanying notes. Significant areas requiring the use of management estimates include expense accruals, accounts receivable allowances, accrued claims payable, the useful life of amortizable assets, revenue recognition, the valuation of warrant liabilities, and shared-based compensation. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition The Company generates healthcare service revenue from contracts with customers as it satisfies its performance obligations to customers and their members. The healthcare service is transferred to a customer when, or as, the customer obtains control of that service. A performance obligation may be satisfied over time or at a point in time. Revenue from a performance obligation satisfied over time is recognized by measuring progress in a manner that depicts the transfer of services to the customer. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time that the Company determines the customer obtains control over the promised service. The amount of revenue recognized reflects the consideration the Company expects to be entitled to in exchange for those promised services ( i.e. , the “transaction price”). In determining the transaction price, the Company considers multiple factors, including the effects of variable consideration. Variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainties with respect to the amount are resolved. In determining when to include variable consideration in the transaction price, the Company considers the range of possible outcomes, the predictive value of past experiences, the time period of when uncertainties expect to be resolved and the amount of consideration that is susceptible to factors outside the Company's influence, such as the judgment and actions of third parties. The Company's contracts are generally designed to provide cash fees to us on a monthly basis, an upfront case rate, or fee for service based on enrolled members. The Company’s performance obligation is satisfied over time as the On Trak service is provided continuously throughout the service period. The Company recognizes revenue evenly over the service period using a time-based measure because the Company is providing a continuous service to the customer. Contracts with minimum performance guarantees or price concessions include variable consideration and are subject to the revenue constraint. The Company uses an expected value method to estimate variable consideration for minimum performance guarantees and price concessions. The Company has constrained revenue for expected price concessions during the year ended December 31, 2019. |
Cost of Revenue | Cost of RevenueCost of revenue consists primarily of salaries related to care coaches, outreach specialists and other staff directly involved in member care, healthcare provider claims payments, and fees charged by third party administrators for processing these claims. Salaries and fees charged by third party administrators for processing claims are expensed when incurred and healthcare provider claims payments are recognized in the period in which an eligible member receives services. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less from the |
Commissions | Commissions Commissions paid to our sales force and engagement specialists are deferred as these amounts are incremental costs of obtaining a contract with a customer and are recoverable from future revenue that gave rise to the commissions. Commissions for |
Share-Based Compensation | Share-Based Compensation Stock Options – Employees and Directors Stock-based compensation for stock options granted is measured based on the grant-date fair value of the awards and recognized on a straight-line basis over the period during which the employee is required to perform services in exchange for the award (generally the vesting period of the award). The Company estimates the fair value of employee stock options using the Black-Scholes option-pricing model. Forfeitures are recognized as they occur. Stock Options and Warrants – Non-employees Stock-based compensation for stock options and warrants granted to non-employees is measured based on the grant-date fair value of the awards and recognized on a straight-line basis over the period during which the employee is required to perform services in exchange for the award (generally the vesting period of the award). The Company estimates the fair value of employee stock options using the Black-Scholes option-pricing model. For options and warrants issued as compensation to non-employees for services that are fully vested and non-forfeitable at the time of issuance, the estimated value is recorded in equity and expensed when the services are performed and benefit is received. For unvested shares, the change in fair value during the period is recognized in expense using the graded vesting method. |
Income Taxes | Income Taxes The Company accounts for income taxes using the liability method, under which deferred tax assets and liabilities are determined based on the future tax consequences attributable to differences between the financial reporting carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards and net operating loss carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates that are expected to be in effect when the differences are expected to reverse. To date, no current income tax liability has been recorded due to the Company's accumulated net losses. The Company assesses the likelihood that deferred tax assets will be recovered from future taxable income, and a valuation allowance is established when necessary to reduce deferred tax assets to the amounts more likely than not expected to be realized. The Company's net deferred tax assets have been fully reserved by a valuation allowance. |
Basic and Diluted Loss per Share | Basic and Diluted Loss per Share Basic loss per share is computed by dividing the net loss to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share is computed by dividing the loss for the period by the weighted average number of shares of common stock and dilutive common equivalent shares outstanding during the period. Common equivalent shares, consisting of approximately 5,557,326 and 5,370,274 of shares as of December 31, 2019 and 2018, respectively, issuable upon the exercise of stock options and warrants, have been excluded from the diluted earnings per share calculation because their effect is anti-dilutive. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure fair value. The fair value hierarchy distinguishes between (1)market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I) and the lowest priority to unobservable inputs (Level III). The three levels of the fair value hierarchy are described below: Level Input: Input Definition: Level I Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level II Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date. Level III Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Financial instruments classified as Level III in the fair value hierarchy as of December 31, 2019, represent liabilities measured at market value on a recurring basis which include warrant liabilities. In accordance with current accounting rules, the warrant liabilities are being marked-to-market each quarter-end until they are completely settled or expire. The warrants are valued using the Black-Scholes option-pricing model, using both observable and unobservable inputs and assumptions consistent with those used in the estimate of fair value of employee stock options. See Warrant Liabilities below. The carrying value of the Senior Secured Notes is estimated to approximate their fair value as the variable interest rate of the Senior Secured Notes approximates the market rate for debt with similar terms and risk characteristics. |
Capital Leases | Capital Leases Assets held under capital leases include computer equipment, and are recorded at the lower of the net present value of the minimum lease payments or the fair value of the leased asset at the inception of the lease. Depreciation expense is computed using the straight-line method over the estimated useful lives of the assets. All lease agreements meet at least one of the five requirements of a capital lease in accordance with ASC 842 of the codification. |
Variable Interest Entities | Variable Interest Entities Generally, an entity is defined as a Variable Interest Entity (“VIE”) under current accounting rules if it either lacks sufficient equity to finance its activities without additional subordinated financial support, or it is structured such that the holders of the voting rights do not substantively participate in the gains and losses of the entity. When determining whether an entity that meets the definition of a business, qualifies for a scope exception from applying VIE guidance, the Company considers whether: (i) it has participated significantly in the design of the entity, (ii) it has provided more than half of the total financial support to the entity, and (iii) substantially all of the activities of the VIE are conducted on its behalf. A VIE is consolidated by its primary beneficiary, the party that has the power to direct the activities that most significantly affect the economics of the VIE and has the right to receive benefits or the obligation to absorb losses of the entity that could be potentially significant to the VIE. The primary beneficiary assessment must be re-evaluated on an ongoing basis. As discussed under the heading Management Services Agreement (“MSA”) below, the Company has an MSA with a Texas nonprofit health organization (“TIH”) and a California Professional Corporation (“CIH”). Under the MSA’s, the equity owners of TIH and CIH have only a nominal equity investment at risk, and the Company absorbs or receives a majority of the entity’s expected losses or benefits. The Company participates significantly in the design of these MSA’s. The Company also agrees to provide working capital loans to allow for TIH and CIH to fund their day to day obligations. Substantially all of the activities of TIH and CIH include its decision making, approval or are conducted for its benefit, as evidenced by the facts that (i) the operations of TIH and CIH are conducted primarily using the Company's licensed network of providers and (ii) under the MSA, the Company agrees to provide and perform all non-medical management and administrative services for the entities. Payment of the Company's management fee is subordinate to payments of the obligations of TIH and CIH, and repayment of the working capital loans is not guaranteed by the equity owner of the affiliated medical group or other third party. Creditors of TIH and CIH do not have recourse to the Company's general credit. Based on the design of the entity and the lack of sufficient equity to finance its activities without additional working capital loans the Company has determined that TIH and CIH are VIE’s. The Company is the primary beneficiary required to consolidate the entities as it has power and potentially significant interests in the entities. Accordingly, the Company is required to consolidate the assets, liabilities, revenues and expenses of the managed treatment centers. Management Services Agreement In April 2018, the Company executed an MSA with TIH and in July 2018, the Company executed an MSA with CIH. Under the MSA’s, the Company licenses to TIH and CIH the right to use its proprietary treatment programs and related trademarks and provide all required day-to-day business management services, including, but not limited to: • general administrative support services; • information systems; • recordkeeping; • billing and collection; • obtaining and maintaining all federal, state and local licenses, certifications and regulatory permits. All clinical matters relating to the operation of TIH and CIH and the performance of clinical services through the network of providers shall be the sole and exclusive responsibility of the TIH and CIH Board free of any control or direction from the Company. TIH pays the Company a monthly fee equal to the aggregate amount of (a) its costs of providing management services (including reasonable overhead allocated to the delivery of its services and including salaries, rent, equipment, and tenant improvements incurred for the benefit of the medical group, provided that any capitalized costs will be amortized over a five CIH pays the Company a monthly fee equal to the aggregate amount of (a) its costs of providing management services (including reasonable overhead allocated to the delivery of its services and including salaries, rent, equipment, and tenant improvements incurred for the benefit of the entity, provided that any capitalized costs will be amortized over a five |
Warrant Liabilities | Warrant Liabilities The assumptions used in the Black-Scholes option-pricing model are determined as follows: December 31, 2019 December 31, 2018 Volatility 98.04 % 102.90 % Risk-free interest rate 1.81 % 2.63 % Weighted average expected life (in years) 6.25 1.29 Dividend yield 0 % 0 % For the years ended December 31, 2019 and 2018, losses related to the revaluation of warrant liabilities were $0.1 million, respectively. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments, which potentially subject us to a concentration of risk, include cash, restricted cash and accounts receivable. All of our customers are based in the United States at this time and we are not subject to exchange risk for accounts receivable. The Company maintains its cash in domestic financial institutions subject to insurance coverage issued by the Federal Deposit Insurance Corporation (FDIC). Under FDIC rules, the company is entitled to aggregate coverage as defined by the Federal regulation per account type per separate legal entity per financial institution. The Company has incurred no losses as a result of any credit risk exposures. |
Recently Adopted Accounting Standards and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Standards Effective January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the consolidated balance sheet as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. For finance leases, interest on the lease liability and the amortization of the right-of-use asset results in front-loaded expense over the lease term. Variable lease expenses are recorded when incurred. In calculating the right-of-use asset and lease liability, the Company elected to combine lease and non-lease components. The Company also elected to exclude short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term. In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”), which supersedes ASC 505-50 and expands the scope of ASC 718 to include all share-based payments arrangements related to the acquisition of goods and services from both employees and nonemployees. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted, but no earlier than a company's adoption date of ASC 606. The adoption of this ASU 2018-07 on January 1, 2019 did not have a material impact on its financial statements. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception (“ASU 2017-11”). The amendments in this update are intended to simplify the accounting for certain equity linked financial instruments and embedded features with down round features that result in the strike price being reduced on the basis of the pricing of future equity offerings. Under the new guidance, a down round feature will no longer need to be considered when determining whether certain financial instruments or embedded features should be classified as liabilities or equity instruments. That is, a down round feature will no longer preclude equity classification when assessing whether an instrument or embedded feature is indexed to an entity's own stock. In addition, the amendments clarify existing disclosure requirements for equity-classified instruments. These amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The adoption of this ASU 2017-11 on January 1, 2019 did not have a material impact on its financial statements. Recently Issued Accounting Pronouncements In August 2018, the FASB issued Accounting Standard Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820) , which modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, including, among other changes, the consideration of costs and benefits when evaluating disclosure requirements. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted. We are currently assessing the impact that adopting this new accounting guidance will have on our financial statements and footnote disclosures. In December 2019, the FASB issued ASU No. 2019-12, "Simplifying the Accounting for Income Taxes" which enhances and simplifies various aspects of income tax accounting guidance. The guidance is effective for the Company in the first quarter of 2021, although early adoption is permitted. The Company is currently evaluating the impact of adoption of ASU 2019-12 on its consolidated financial statements and related footnote disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of fair value measurements by level | The following tables summarize fair value measurements by level at December 31, 2019 and 2018, respectively, for assets and liabilities measured at fair value on a recurring basis (in thousands): Balance at December 31, 2019 Level I Level II Level III Total Letter of credit 1 $ 408 $ — $ — $ 408 Total assets $ 408 $ — $ — $ 408 Warrant liabilities $ — $ — $ 691 $ 691 Total liabilities $ — $ — $ 691 $ 691 1 $408,000 is included in restricted cash, long-term, on our balance sheet as of December 31, 2019. Balance at December 31, 2018 Level I Level II Level III Total Letter of credit 2 $ 479 $ — $ — $ 479 Total assets $ 479 $ — $ — $ 479 Warrant liabilities $ — $ — $ 86 $ 86 Total liabilities $ — $ — $ 86 $ 86 2 $71,000 is included in cash and restricted cash and $408,000 is included in restricted cash, long-term, on our balance sheet as of December 31, 2018. |
Schedule of fair value measurements using significant Level III inputs | The fair value measurements using significant Level III inputs, and changes therein, for the years ended December 31, 2019 and 2018 are as follows: Level III Balance as of December 31, 2017 $ 30 Issuance of warrants — Change in fair value 56 Balance as of December 31, 2018 $ 86 ASU Adoption APIC Reclassification (86) Issuance of warrants 631 Change in fair value 60 Balance as of December 31, 2019 $ 691 |
Schedule of VIEs | The Company's consolidated balance sheets include the following assets and liabilities from its VIE's (in thousands): December 31, December 31, Cash and cash equivalents $ 379 $ 45 Accounts receivable 564 94 Prepaid and other current assets 26 29 Total assets $ 969 $ 168 Accounts payable $ 9 $ 7 Accrued liabilities 100 14 Deferred revenue 73 — Intercompany payable 685 147 Total liabilities $ 867 $ 168 |
Schedule of warranty liability assumptions | The assumptions used in the Black-Scholes option-pricing model are determined as follows: December 31, 2019 December 31, 2018 Volatility 98.04 % 102.90 % Risk-free interest rate 1.81 % 2.63 % Weighted average expected life (in years) 6.25 1.29 Dividend yield 0 % 0 % The assumptions used in the Black-Scholes option-pricing model are determined as follows: December 31, 2019 Volatility 98.01 % Risk-free interest rate 1.58 % Expected life (in years) 7 Dividend yield 0 % |
Common Stock (Tables)
Common Stock (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted net loss per share | Basic and diluted net loss per share (in thousands, except per share amounts) are as follows: December 31, December 31, 2019 2018 Net loss $ (25,659) $ (14,212) Weighted-average shares of common stock outstanding 16,418 15,955 Net loss per share - basic and diluted $ (1.56) $ (0.89) |
Schedule of shares excluded from net loss per share | The following common equivalent shares as of December 31, 2019 and 2018, respectively, issuable upon the exercise of stock options and warrants have been excluded from the diluted earnings per share calculation as their effect is anti-dilutive: December 31, December 31, 2019 2018 Warrants to purchase common stock 1,550,975 1,608,996 Options to purchase 4,006,351 3,761,278 Total shares excluded from net loss per share 5,557,326 5,370,274 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of debt valuation assumptions | The assumptions used in the Black-Scholes option-pricing model are determined as follows: December 31, 2019 December 31, 2018 Volatility 98.04 % 102.90 % Risk-free interest rate 1.81 % 2.63 % Weighted average expected life (in years) 6.25 1.29 Dividend yield 0 % 0 % The assumptions used in the Black-Scholes option-pricing model are determined as follows: December 31, 2019 Volatility 98.01 % Risk-free interest rate 1.58 % Expected life (in years) 7 Dividend yield 0 % |
Schedule of carrying amounts of debt | The 2024 Notes and 2022 Loan consist of the following (in thousands): December 31, December 31, Liability component 2019 2018 Principal $ 36,502 $ 7,950 Less: debt discount (4,905) (478) Net carrying amount $ 31,597 $ 7,472 |
Schedule of interest expense recognized | The following table sets forth total interest expense recognized related to the 2024 Notes and 2022 Loan (in thousands): December 31, December 31, 2019 2018 Contractual interest expense $ 2,653 $ 388 Accretion of debt discount 394 182 Total $ 3,047 $ 570 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of assumptions used in the Black-Scholes option-pricing model | The assumptions used in the Black-Scholes option-pricing model are determined as follows: December 31, 2019 December 31, 2018 Volatility 100.34 % 100.34% - 102.90 Risk-free interest rate 1.63%-2.60% 2.56% - 2.85% Expected life (in years) 2.85-6.08 2.4 - 6.08 Dividend yield 0 % 0 % |
Schedule of stock option activity | A summary of stock option activity for employee and director grants is as follows: Number of Weighted- Balance, December 31, 2017 1,885,383 $ 11.46 Stock options granted 1,985,539 7.70 Stock options forfeited and canceled (109,644) 14.29 Balance, December 31, 2018 3,761,278 $ 9.44 Exercisable at December 31, 2018 721,766 $ 17.14 Stock options granted 1,459,289 14.18 Stock options exercised (195,351) 9.69 Stock options forfeited and canceled (1,068,865) 10.36 Balance at December 31, 2019 3,956,351 $ 10.93 Exercisable at December 31, 2019 1,062,178 $ 11.24 |
Schedule of warrants granted to non-employees outstanding | A summary of warrants granted to non-employees outstanding as of December 31, 2019 and 2018 is as follows: Number of Weighted- Warrants issued in connection with debt agreements 224,440 $ 16.04 Warrants issued for services 4,167 13.82 Balance at December 31, 2019 228,607 $ 16.00 Number of Warrants Outstanding Weighted- Warrants issued in connection with debt agreements 9,720 $ 7.72 Warrants issued for services 24,000 4.68 Balance at December 31, 2018 33,720 $ 5.56 |
Schedule of warrant activity | A summary of warrant activity for the years ended December 31, 2019 and 2018 is as follows: Number of Weighted- Balance at December 31, 2017 2,011,528 $ 4.85 Warrants granted 33,720 5.56 Warrants exercised (436,252) (4.70) Balance at December 31, 2018 1,608,996 $ 4.71 Warrants granted 228,607 16.00 Warrants exercised (232,461) (4.85) Warrants expired (54,167) (12.46) Balance at December 31, 2019 1,550,975 $ 6.08 |
Schedule of performance based and market based issuances | Issuances under this structure are as follows: Grant Date Performance Measures Vesting Term Performance Period # of Shares Exercise Price December 2017 Weighted Average Price of our common stock is $15.00 for at least twenty trading days within a period of thirty consecutive trading days ending on the trading day prior to January 1, 2023. Fully vest on January 1, 2023 January 1, 2023 642,307 $ 7.50 August 2018 Weighted Average Price of our common stock is $15.00 for at least twenty trading days within a period of thirty consecutive trading days ending on the trading day prior to January 1, 2023. Fully vest on January 1, 2023 January 1, 2023 397,693 $ 7.50 April 2018 The Options will be divided into five equal tranches and Performance Targets to be established by Board of Directors for each tranche at the beginning of the fiscal year Amended and vested 115,950 options based on severance agreement Amended and vested 115,950 options based on severance agreement 115,950 $ 7.50 August 2018 The Options will be divided into five equal tranches and Performance Targets to be established by Board of Directors for each tranche at the beginning of the fiscal year Amended and fully forfeited based on severance agreement Amended and fully forfeited based on severance agreement — $ 7.50 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of lease cost | As of December 31, 2019, supplemental information related to operating leases was as follows (in thousands): Consolidated Statement of Operations Operating Operating lease expense $ 443 Short-term lease rent expense 58 Total rent expense $ 501 Consolidated Statements of Cash Flows |
Schedule of operating leases information | Operating cash flows from operating leases $ 381 Right-of-use assets obtained in exchange for lease obligations $ 2,574 Other Information Weighted-average remaining lease term 4.5 years Weighted-average discount rate 10.15 % |
Schedule of maturities of the operating lease liabilities | As of December 31, 2019, the future minimum lease payments under operating leases are as follows (in thousands): Operating 2020 $ 581 2021 603 2022 623 2023 644 2024 329 Total lease payments $ 2,780 Less: imputed interest (570) Present value of lease liabilities $ 2,210 Less: current portion (374) Lease liabilities, non-current $ 1,836 |
Schedule of future minimum lease payments under capital leases | As of December 31, 2019, the future minimum lease payments under capital leases are as follows (in thousands): Capital Total lease payments $ 406 Less: interest (28) Present value of lease liabilities $ 378 Less: current portion (145) Lease liabilities, non-current $ 233 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule net deferred tax assets and liabilities | Net deferred tax assets and liabilities for the years ended December 31, 2019 and 2018 are as follows (in thousands): 2019 2018 Net operating losses $ 66,405 $ 62,800 Stock-based compensation 1,648 873 Interest expense 1,494 — Accrued liabilities and reserves 744 218 Fixed assets 51 72 Lease liability 658 — Other temporary differences 23 315 Prepaid expenses (186) (176) Right-of-use asset (710) — Valuation allowance (70,127) (64,102) Net deferred tax asset $ — $ — |
Schedule of reconciliation between the statutory federal income tax rate and the effective income tax rate | A reconciliation between the statutory federal income tax rate and the effective income tax rate for the years ended December 31, 2019 and 2018 is as follows: 2019 2018 Tax at federal statutory rate 21.0 % 21.0 % Stock-based compensation (1.2) % (29.3) % Deferred revenue — % (2.8) % Change in Foreign NOLS due to liquidation — % (8.3) % Other (0.2) % 3.3 % Change in federal valuation allowance (19.6) % 16.1 % Change in federal NOLs due to 382 study results — % — % Tax provision — % — % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments under capital leases and non-cancelable operating leases | Future minimum lease payments under capital leases and non-cancelable operating leases at December 31, 2019 are as follows (in thousands): Year Amount 2020 $ 737 2021 757 2022 717 2023 644 2024 328 $ 3,183 |
Restricted Cash (Tables)
Restricted Cash (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of cash and cash equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash total as presented in the consolidated statement of cash flows for the years ended December 31, 2019 and 2018 (in thousands): 2019 2018 Cash and cash equivalents $ 13,610 $ 3,091 Restricted cash (current and long-term) 408 479 Total cash, cash equivalents and restricted cash $ 14,018 $ 3,570 |
Restrictions on cash and cash equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash total as presented in the consolidated statement of cash flows for the years ended December 31, 2019 and 2018 (in thousands): 2019 2018 Cash and cash equivalents $ 13,610 $ 3,091 Restricted cash (current and long-term) 408 479 Total cash, cash equivalents and restricted cash $ 14,018 $ 3,570 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($)shares | |
Significant Accounting Policies [Line Items] | ||
Cash and cash equivalents | $ 13,610 | $ 3,091 |
Working capital deficit | $ 6,300 | |
Number of states in which entity operates | 27 | |
Antidilutive shares excluded from the diluted earnings per share calculation | shares | 5,557,326 | 5,370,274 |
Loss related to revaluation of warranty liabilities | $ 60 | $ 56 |
Initial Contracts | ||
Significant Accounting Policies [Line Items] | ||
Capitalized costs amortization period | 6 years | |
Member Enrollments | ||
Significant Accounting Policies [Line Items] | ||
Capitalized costs amortization period | 1 year | |
TIH | ||
Significant Accounting Policies [Line Items] | ||
Capitalized costs amortization period | 5 years | |
CIH | ||
Significant Accounting Policies [Line Items] | ||
Capitalized costs amortization period | 5 years | |
Revenues | Customer Concentration Risk | ||
Significant Accounting Policies [Line Items] | ||
Number of major customers | 4 | 4 |
Revenues | Customer Concentration Risk | Four Customers | ||
Significant Accounting Policies [Line Items] | ||
Concentration risk percentage | 85.00% | 76.00% |
Accounts Receivable | Customer Concentration Risk | ||
Significant Accounting Policies [Line Items] | ||
Number of major customers | 4 | 4 |
Accounts Receivable | Customer Concentration Risk | Four Customers | ||
Significant Accounting Policies [Line Items] | ||
Concentration risk percentage | 89.00% | 88.00% |
Minimum | TIH | ||
Significant Accounting Policies [Line Items] | ||
Foregoing costs, percent | 10.00% | |
Maximum | TIH | ||
Significant Accounting Policies [Line Items] | ||
Foregoing costs, percent | 15.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Fair Value, Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liabilities | $ 691 | $ 86 |
Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 408 | 479 |
Warrant liabilities | 691 | 86 |
Total liabilities | 691 | 86 |
Fair Value, Recurring | Letter of credit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Letter of credit | 408 | 479 |
Fair Value, Recurring | Letter of credit | Restricted cash, long term | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Letter of credit | 408 | 408 |
Fair Value, Recurring | Letter of credit | Cash and restricted cash | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Letter of credit | 71 | |
Level I | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 408 | 479 |
Warrant liabilities | 0 | 0 |
Total liabilities | 0 | 0 |
Level I | Fair Value, Recurring | Letter of credit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Letter of credit | 408 | 479 |
Level II | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Warrant liabilities | 0 | 0 |
Total liabilities | 0 | 0 |
Level II | Fair Value, Recurring | Letter of credit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Letter of credit | 0 | 0 |
Level III | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Warrant liabilities | 691 | 86 |
Total liabilities | 691 | 86 |
Level III | Fair Value, Recurring | Letter of credit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Letter of credit | $ 0 | $ 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Fair Value Measurements Using Significant Level III Inputs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
ASU Adoption APIC Reclassification | $ (86) | |
Warrants | Level III | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 86 | $ 30 |
Issuance of warrants | 631 | 0 |
Change in fair value | 60 | 56 |
Ending balance | $ 691 | $ 86 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Summary of Amounts and Classification of Assets and Liabilities of the VIE in Our Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Variable Interest Entity [Line Items] | ||
Cash and cash equivalents | $ 13,610 | $ 3,091 |
Prepaid expenses and other current assets | 1,074 | 1,108 |
Total assets | 23,855 | 6,323 |
Accounts payable | 1,385 | 497 |
Deferred revenue | 5,803 | 4,195 |
Total liabilities | 47,764 | 15,288 |
Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Cash and cash equivalents | 379 | 45 |
Accounts receivable | 564 | 94 |
Prepaid expenses and other current assets | 26 | 29 |
Total assets | 969 | 168 |
Accounts payable | 9 | 7 |
Accrued liabilities | 100 | 14 |
Deferred revenue | 73 | 0 |
Intercompany payable | 685 | 147 |
Total liabilities | $ 867 | $ 168 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Fair Value Assumptions, Warrant Liabilities (Details) | Dec. 31, 2019 | Dec. 31, 2018 |
Volatility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liability assumptions | 0.9804 | 1.0290 |
Risk-free interest rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liability assumptions | 0.0181 | 0.0263 |
Weighted average expected life (in years) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liability assumptions | 6.25 | 1.29 |
Dividend yield | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liability assumptions | 0 | 0 |
Common Stock - Earnings per sha
Common Stock - Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (25,659) | $ (14,212) |
Weighted-average shares used to compute basic and diluted net loss per share (in shares) | 16,418 | 15,955 |
Net loss per share, basic and diluted (in dollars per share) | $ (1.56) | $ (0.89) |
Common Stock - Antidilutive sha
Common Stock - Antidilutive shares (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares excluded from net loss per share (in shares) | 5,557,326 | 5,370,274 |
Warrants to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares excluded from net loss per share (in shares) | 1,550,975 | 1,608,996 |
Options to purchase | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares excluded from net loss per share (in shares) | 4,006,351 | 3,761,278 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Sep. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||||||||
Exercise price of warrants (in dollars per share) | $ 6.08 | $ 4.71 | $ 4.85 | |||||
Early termination costs | $ 1,956,000 | $ 0 | ||||||
Write-off of debt issuance costs | $ 1,505,000 | $ 0 | ||||||
2024 Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Proceeds from debt | $ 35,000,000 | |||||||
Interest rate | 15.75% | |||||||
Purchase of additional debt | $ 10,000,000 | |||||||
2022 Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate | 9.75% | |||||||
Principal amount of notes | $ 15,000,000 | |||||||
Receivables financing facility | 2,500,000 | $ 2,500,000 | ||||||
A/R facility, amount borrowed | $ 1,900,000 | |||||||
A/R facility, amount repayed | $ 1,900,000 | |||||||
Additional loan amount | 7,500,000 | $ 7,500,000 | ||||||
Additional loan, tranche one | 2,500,000 | |||||||
Additional loan, tranche two | 2,500,000 | |||||||
Additional loan, tranche three | 2,500,000 | |||||||
First billings threshold for additional loan | 5,000,000 | |||||||
Second billings threshold for additional loan | 7,000,000 | |||||||
Third billings threshold for additional loan | $ 8,000,000 | |||||||
Warrants issued (in shares) | 40,279 | |||||||
Term of warrants | 7 years | |||||||
Aggregate amount of debt purchased | $ 600,000 | |||||||
Duration of days preceding grant date | 5 days | |||||||
Exercise price of warrants (in dollars per share) | $ 9.93 | |||||||
Equity financing securities issuance period following agreement date | 18 months | |||||||
Payment to lender | $ 150,000 | |||||||
Percentage of outstanding principal balance | 6.00% | |||||||
Early termination costs | $ 1,100,000 | |||||||
2022 Loan | Other income/(expense) | ||||||||
Debt Instrument [Line Items] | ||||||||
Write-off of debt issuance costs | $ 1,500,000 | |||||||
2022 Loan | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal amount of notes | $ 7,500,000 | $ 7,500,000 | ||||||
2022 Loan | Minimum | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 2.00% |
Debt - Valuation Assumptions (D
Debt - Valuation Assumptions (Details) | Dec. 31, 2019 |
Volatility | |
Debt Instrument [Line Items] | |
Equity component valuation input | 0.9801 |
Risk-free interest rate | |
Debt Instrument [Line Items] | |
Equity component valuation input | 0.0158 |
Weighted average expected life (in years) | |
Debt Instrument [Line Items] | |
Equity component valuation input | 7 |
Dividend yield | |
Debt Instrument [Line Items] | |
Equity component valuation input | 0 |
Debt - Net Carrying Amounts (De
Debt - Net Carrying Amounts (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Principal | $ 36,502 | $ 7,950 |
Less: debt discount | (4,905) | (478) |
Net carrying amount | $ 31,597 | $ 7,472 |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Disclosure [Abstract] | ||
Contractual interest expense | $ 2,653 | $ 388 |
Accretion of debt discount | 394 | 182 |
Total | $ 3,047 | $ 570 |
Stock Based Compensation - Narr
Stock Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 5.2 | $ 2.1 | ||
Employees and Directors | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation costs | $ 18 | $ 18 | ||
Unrecognized compensation costs, recognition period | 2 years 8 months 1 day | |||
Stock options issued (in shares) | 1,459,289 | 1,985,539 | ||
Weighted average exercise price (in dollars per share) | $ 10.93 | $ 10.93 | $ 9.44 | $ 11.46 |
Employees and Directors | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 5.1 | $ 2.1 | ||
Consultants | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 0.1 | |||
Stock options issued (in shares) | 50,000 | |||
Weighted average exercise price (in dollars per share) | $ 9.93 | $ 9.93 | ||
Key executive | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 1.1 | |||
Previously forfeited awards vested (in shares) | 115,950 | |||
2017 and 2010 Stock Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares authorized (in shares) | 4,530,071 | 4,530,071 | ||
Expiration period | 10 years | |||
Vested and unvested stock options outstanding (in shares) | 4,006,351 | 4,006,351 | ||
Shares reserved for future award (in shares) | 328,369 | 328,369 | ||
2017 and 2010 Stock Incentive Plan | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
2017 and 2010 Stock Incentive Plan | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 5 years |
Stock Based Compensation - Assu
Stock Based Compensation - Assumptions used in the Black-Scholes option-pricing model (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 100.34% | |
Volatility, minimum | 100.34% | |
Volatility, maximum | 102.90% | |
Risk free interest rate, minimum | 1.63% | 2.56% |
Risk free interest rate, maximum | 2.60% | 2.85% |
Dividend yield | 0.00% | 0.00% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life (in years) | 2 years 10 months 6 days | 2 years 4 months 24 days |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life (in years) | 6 years 29 days | 6 years 29 days |
Stock Based Compensation - Empl
Stock Based Compensation - Employee and Director Stock Option Activity (Details) - Employees and Directors - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Shares Outstanding | ||
Beginning balance (in shares) | 3,761,278 | 1,885,383 |
Stock options granted (in shares) | 1,459,289 | 1,985,539 |
Stock options exercised (in shares) | (195,351) | |
Stock options forfeited and cancelled (in shares) | (1,068,865) | (109,644) |
Ending balance (in shares) | 3,956,351 | 3,761,278 |
Exercisable (in shares) | 1,062,178 | 721,766 |
Weighted- Average Exercise Price | ||
Beginning balance (in dollars per share) | $ 9.44 | $ 11.46 |
Stock options granted (in dollars per share) | 14.18 | 7.70 |
Stock options exercised (in dollars per share) | 9.69 | |
Stock options forfeited and cancelled (in dollars per share) | 10.36 | 14.29 |
Ending balance (in dollars per share) | 10.93 | 9.44 |
Exercisable (in dollars per share) | $ 11.24 | $ 17.14 |
Stock Based Compensation - Stoc
Stock Based Compensation - Stock Options and Warrants Granted to Non-employees for Services Outstanding (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants Issued (in shares) | 228,607 | 33,720 |
Stock Options and Warrants Nonemployees | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants Issued (in shares) | 228,607 | 33,720 |
Warrants issued weighted average exercise price (in dollars per share) | $ 16 | $ 5.56 |
Warrants issued in connection with debt agreements | Stock Options and Warrants Nonemployees | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants Issued (in shares) | 224,440 | 9,720 |
Warrants issued weighted average exercise price (in dollars per share) | $ 16.04 | $ 7.72 |
Warrants issued for services | Stock Options and Warrants Nonemployees | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants Issued (in shares) | 4,167 | 24,000 |
Warrants issued weighted average exercise price (in dollars per share) | $ 13.82 | $ 4.68 |
Stock Based Compensation - Summ
Stock Based Compensation - Summary of Warrant Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Warrants Outstanding | ||
Warrants outstanding, beginning balance (in shares) | 1,608,996 | 2,011,528 |
Warrants granted (in shares) | 228,607 | 33,720 |
Warrants exercised (in shares) | (232,461) | (436,252) |
Warrants expired (in shares) | (54,167) | |
Warrants outstanding, ending balance (in shares) | 1,550,975 | 1,608,996 |
Weighted- Average Exercise Price | ||
Warrants outstanding, exercise price, beginning balance (in dollars per share) | $ 4.71 | $ 4.85 |
Warrants issued, weighted average exercise price (in dollars per share) | 16 | 5.56 |
Warrants exercised, weighted average exercise price (in dollars per share) | (4.85) | (4.70) |
Warrants expired, weighted average exercise price (in dollars per share) | (12.46) | |
Warrants outstanding, exercise price, ending balance (in dollars per share) | $ 6.08 | $ 4.71 |
Stock Based Compensation - Perf
Stock Based Compensation - Performance-based and Market-based Awards (Details) - $ / shares | 1 Months Ended | ||
Aug. 31, 2018 | Apr. 30, 2018 | Dec. 31, 2017 | |
Market Based Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common Stock, share price (in dollars per share) | $ 15 | $ 15 | |
Fully Vest On January 1, 2023 | Market Based Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted (in shares) | 397,693 | 642,307 | |
Stock options granted (in dollars per share) | $ 7.50 | $ 7.50 | |
Vest Annually On December 31 for One Fifth of Each Tranche | Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted (in shares) | 0 | 115,950 | |
Stock options granted (in dollars per share) | $ 7.50 | $ 7.50 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($)ft² | Dec. 31, 2018USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Area of real estate property (in sq. ft) | ft² | 7,869 | |
Operating lease, term | 60 months | |
Base annual rent | $ 600 | |
Operating lease liability | 2,210 | |
Operating lease, right of use asset | 2,400 | |
Operating lease expense | 443 | |
Operating lease rent expense | $ 300 | |
Computer Equipment | ||
Lessee, Lease, Description [Line Items] | ||
Capital lease, right of use asset | 400 | |
Lease amortization | $ 100 |
Leases - Operating Lease Cost (
Leases - Operating Lease Cost (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease expense | $ 443 |
Short-term lease rent expense | 58 |
Total rent expense | $ 501 |
Leases - Operating Lease Inform
Leases - Operating Lease Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows from operating leases | $ 381 |
Right of use asset obtained in exchange for lease obligation | $ 2,574 |
Weighted-average remaining lease term | 4 years 6 months |
Weighted-average discount rate | 10.15% |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 581 |
2021 | 603 |
2022 | 623 |
2023 | 644 |
2024 | 329 |
Total lease payments | 2,780 |
Less: imputed interest | (570) |
Present value of lease liabilities | 2,210 |
Less: current portion | (374) |
Lease liabilities, non-current | $ 1,836 |
Leases - Finance Lease Liabilit
Leases - Finance Lease Liabilities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
Total lease payments | $ 406 |
Less: interest | (28) |
Present value of lease liabilities | 378 |
Less: current portion | (145) |
Lease liabilities, non-current | $ 233 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes [Line Items] | ||
Valuation allowance | $ 70,127,000 | $ 64,102,000 |
Change in valuation allowance | 6,000,000 | 1,700,000 |
Interest and penalties | 0 | $ 0 |
Domestic Tax Authority | ||
Income Taxes [Line Items] | ||
Operating loss carryforwards | 277,000,000 | |
State and Local Jurisdiction | ||
Income Taxes [Line Items] | ||
Operating loss carryforwards | $ 39,000,000 |
Income Taxes - Primary Componen
Income Taxes - Primary Components of Net Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operating losses | $ 66,405 | $ 62,800 |
Stock-based compensation | 1,648 | 873 |
Interest expense | 1,494 | 0 |
Accrued liabilities and reserves | 744 | 218 |
Fixed assets | 51 | 72 |
Lease liability | 658 | 0 |
Other temporary differences | 23 | 315 |
Prepaid expenses | (186) | (176) |
Right-of-use asset | (710) | 0 |
Valuation allowance | (70,127) | (64,102) |
Net deferred tax asset | $ 0 | $ 0 |
Income Taxes - Reconciliation B
Income Taxes - Reconciliation Between the Statutory Federal Income Tax Rate and the Effective Income Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Tax at federal statutory rate | 21.00% | 21.00% |
Stock-based compensation | (1.20%) | (29.30%) |
Deferred revenue | 0.00% | (2.80%) |
Change in Foreign NOLS due to liquidation | 0.00% | (8.30%) |
Other | (0.20%) | 3.30% |
Change in federal valuation allowance | (19.60%) | 16.10% |
Change in federal NOLs due to 382 study results | 0.00% | 0.00% |
Tax provision | 0.00% | 0.00% |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Other Commitments [Line Items] | ||
Operating lease expense | $ 443 | |
Operating lease rent expense | $ 300 | |
Interest expense period | 3 years | |
Computer Equipment | ||
Other Commitments [Line Items] | ||
Financing agreement amount | $ 400 |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Payments, Under Non-cancelable Operating Leases (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 737 |
2021 | 757 |
2022 | 717 |
2023 | 644 |
2024 | 328 |
Total | $ 3,183 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Travel and Expenses | Chairman and Chief Executive Officer | ||
Related Party Transaction [Line Items] | ||
Accounts payable to related party | $ 0.4 | $ 0.4 |
Restricted Cash - Narrative (De
Restricted Cash - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Cash and Cash Equivalents [Line Items] | |||
Long term restricted cash | $ 408 | $ 408 | |
Stand-by Letter of Credit Guarantee | |||
Cash and Cash Equivalents [Line Items] | |||
Long term restricted cash | $ 400 |
Restricted Cash - Cash, Cash Eq
Restricted Cash - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Cash and Cash Equivalents [Abstract] | |||
Cash and cash equivalents | $ 13,610 | $ 3,091 | |
Restricted cash (current and long-term) | 408 | 479 | |
Total cash, cash equivalents and restricted cash | $ 14,018 | $ 3,570 | $ 4,779 |
Uncategorized Items - cats-2019
Label | Element | Value |
Retained Earnings [Member] | ||
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | $ (291,443,000) |
Additional Paid-in Capital [Member] | ||
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | 294,220,000 |
Common Stock [Member] | ||
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | $ 2,000 |
Common Stock, Shares, Outstanding | us-gaap_CommonStockSharesOutstanding | 15,889,171 |
Accounting Standards Update 2014-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 1,881,000 |
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 1,881,000 |
Accounting Standards Update 2017-11 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 86,000 |
Accounting Standards Update 2017-11 [Member] | Additional Paid-in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 86,000 |