Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 01, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | SONM | |
Entity Registrant Name | SONIM TECHNOLOGIES INC | |
Entity Central Index Key | 0001178697 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 20,357,783 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock par value $0.001 per share | |
Security Exchange Name | NASDAQ | |
Entity File Number | 001-38907 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, State or Province | CA | |
Entity Address, Address Line One | 1875 South Grant Street | |
Entity Address, Address Line Two | Suite 750 | |
Entity Address, City or Town | San Mateo | |
Entity Tax Identification Number | 94-3336783 | |
Entity Address, Postal Zip Code | 94402 | |
City Area Code | 650 | |
Local Phone Number | 378-8100 | |
Document Quarterly Report | true | |
Document Transition Report | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 16,349 | $ 13,049 |
Accounts receivable, net | 17,370 | 18,877 |
Inventory | 24,907 | 21,831 |
Prepaid expenses and other current assets | 7,143 | 10,111 |
Total current assets | 65,769 | 63,868 |
Property and equipment, net | 1,518 | 1,071 |
Other assets | 1,686 | 2,406 |
Total assets | 68,973 | 67,345 |
Liabilities and stockholders’ equity | ||
Current portion of long-term debt | 147 | 301 |
Accounts payable | 18,000 | 27,295 |
Accrued expenses | 11,127 | 16,381 |
Deferred revenue | 297 | 4,223 |
Total current liabilities | 29,571 | 48,200 |
Income tax payable | 979 | 807 |
Long-term debt, less current portion | 9,792 | 13,209 |
Total liabilities | 40,342 | 62,216 |
Stockholders' equity | ||
Common stock, $0.001 par value per share; 100,000,000 shares authorized: and 20,357,783 and 15,591,357 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively. | 20 | 15 |
Additional paid-in capital | 191,195 | 148,641 |
Accumulated deficit | (162,584) | (143,527) |
Total stockholders’ equity | 28,631 | 5,129 |
Total liabilities and stockholders’ equity | $ 68,973 | $ 67,345 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (UNAUDITED) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 20,357,783 | 15,591,357 |
Common stock, shares outstanding | 20,357,783 | 15,591,357 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Net revenues | $ 28,850 | $ 39,498 | $ 99,081 | $ 89,138 |
Cost of revenues | 21,602 | 25,435 | 67,643 | 59,272 |
Gross profit | 7,248 | 14,063 | 31,438 | 29,866 |
Operating expenses: | ||||
Research and development | 7,010 | 5,997 | 23,645 | 16,764 |
Sales and marketing | 3,042 | 3,395 | 10,985 | 8,803 |
General and administrative | 2,870 | 1,388 | 12,770 | 4,435 |
Restructuring costs | 578 | 578 | ||
Total operating expenses | 13,500 | 10,780 | 47,978 | 30,002 |
Income (loss) from operations | (6,252) | 3,283 | (16,540) | (136) |
Interest expense | (235) | (538) | (1,211) | (1,416) |
Change in fair value of warrant liability | (644) | (644) | ||
Other income (expense), net | (248) | 19 | (522) | (197) |
Income (loss) before income taxes | (6,735) | 2,120 | (18,273) | (2,393) |
Income tax benefit (expense) | (33) | 14 | (784) | (667) |
Net income (loss) | (6,768) | 2,134 | (19,057) | (3,060) |
Cumulative dividends on Series A, Series A-1 and Series A-2 preferred shares | (3,081) | (9,048) | ||
Net loss attributable to common stockholders | $ (6,768) | $ (947) | $ (19,057) | $ (12,108) |
Net loss per share attributable to common stockholders, basic and diluted | $ (0.33) | $ (0.91) | $ (1.05) | $ (11.69) |
Weighted–average shares used in computing net loss per share attributable to common stockholders, basic and diluted | 20,356,447 | 1,037,090 | 18,085,719 | 1,035,927 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED) - USD ($) $ in Thousands | Total | Convertible Preferred Stock | Common Stock | Common StockIPO | Additional Paid-in Capital | Additional Paid-in CapitalIPO | Accumulated Deficit |
Balance, shares at Dec. 31, 2017 | 11,906,783 | ||||||
Balance, beginning of period at Dec. 31, 2017 | $ 80,397 | ||||||
Balance, beginning of period at Dec. 31, 2017 | $ 1 | $ 54,892 | $ (144,804) | ||||
Balance, shares at Dec. 31, 2017 | 1,027,113 | ||||||
Exercise of stock options | 12 | ||||||
Exercise of stock options, shares | 9,977 | ||||||
Exercise of warrants | $ 47 | ||||||
Exercise of warrants, shares | 310,676 | ||||||
Employee and nonemployee stock-based compensation | 129 | ||||||
Reclassification of warrants from liability to preferred stock upon exercise | $ 2,951 | ||||||
Net income (loss) | $ (3,060) | (3,060) | |||||
Balance, shares at Sep. 30, 2018 | 12,217,459 | ||||||
Balance, at end of period at Sep. 30, 2018 | $ 83,395 | ||||||
Balance, at end of period at Sep. 30, 2018 | (92,830) | $ 1 | 55,033 | (147,864) | |||
Balance, shares at Sep. 30, 2018 | 1,037,090 | ||||||
Balance, shares at Dec. 31, 2017 | 11,906,783 | ||||||
Balance, beginning of period at Dec. 31, 2017 | $ 80,397 | ||||||
Balance, beginning of period at Dec. 31, 2017 | $ 1 | 54,892 | (144,804) | ||||
Balance, shares at Dec. 31, 2017 | 1,027,113 | ||||||
Balance, at end of period at Dec. 31, 2018 | 5,129 | $ 15 | 148,641 | (143,527) | |||
Balance, shares at Dec. 31, 2018 | 15,591,357 | ||||||
Balance, shares at Jun. 30, 2018 | 11,906,783 | ||||||
Balance, beginning of period at Jun. 30, 2018 | $ 80,397 | ||||||
Balance, beginning of period at Jun. 30, 2018 | $ 1 | 54,969 | (149,998) | ||||
Balance, shares at Jun. 30, 2018 | 1,037,090 | ||||||
Exercise of stock options | 1 | ||||||
Exercise of warrants | $ 47 | ||||||
Exercise of warrants, shares | 310,676 | ||||||
Employee and nonemployee stock-based compensation | 63 | ||||||
Reclassification of warrants from liability to preferred stock upon exercise | $ 2,951 | ||||||
Net income (loss) | 2,134 | 2,134 | |||||
Balance, shares at Sep. 30, 2018 | 12,217,459 | ||||||
Balance, at end of period at Sep. 30, 2018 | $ 83,395 | ||||||
Balance, at end of period at Sep. 30, 2018 | (92,830) | $ 1 | 55,033 | (147,864) | |||
Balance, shares at Sep. 30, 2018 | 1,037,090 | ||||||
Balance, beginning of period at Dec. 31, 2018 | $ 5,129 | $ 15 | 148,641 | (143,527) | |||
Balance, shares at Dec. 31, 2018 | 15,591,357 | ||||||
Issuance of common stock, net of issuance costs | $ 1 | $ 4 | 1,603 | $ 36,845 | |||
Issuance of common stock, net of issuance costs, shares | 227,628 | 4,297,901 | |||||
Taxes paid on net issuance of restricted stock award | (1,897) | ||||||
Exercise of stock options | 69 | ||||||
Exercise of stock options, shares | 85,559 | 85,559 | |||||
Exercise of warrants | 23 | ||||||
Exercise of warrants, shares | 155,338 | ||||||
Employee and nonemployee stock-based compensation | 5,911 | ||||||
Net income (loss) | $ (19,057) | (19,057) | |||||
Balance, at end of period at Sep. 30, 2019 | 28,631 | $ 20 | 191,195 | (162,584) | |||
Balance, shares at Sep. 30, 2019 | 20,357,783 | ||||||
Balance, beginning of period at Jun. 30, 2019 | $ 20 | 190,874 | (155,816) | ||||
Balance, shares at Jun. 30, 2019 | 20,344,258 | ||||||
Exercise of stock options | 14 | ||||||
Exercise of stock options, shares | 13,525 | ||||||
Employee and nonemployee stock-based compensation | 307 | ||||||
Net income (loss) | (6,768) | (6,768) | |||||
Balance, at end of period at Sep. 30, 2019 | $ 28,631 | $ 20 | $ 191,195 | $ (162,584) | |||
Balance, shares at Sep. 30, 2019 | 20,357,783 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (19,057) | $ (3,060) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,580 | 1,339 |
Stock-based compensation | 5,911 | 129 |
Trade-in guarantee | (268) | |
Inventory write-downs | 2,109 | |
Warrant revaluation | 644 | |
Noncash interest expense | 50 | 942 |
Deferred income taxes | (7) | (100) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,507 | (8,303) |
Inventory | (5,185) | (6,801) |
Prepaid expenses and other current assets | 2,968 | (5,670) |
Other assets | (44) | 133 |
Accounts payable | (9,620) | 13,236 |
Accrued expenses | (5,263) | 5,284 |
Deferred revenue | (3,657) | (96) |
Income tax payable | 173 | 336 |
Net cash used in operating activities | (28,803) | (1,987) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (908) | (502) |
Development of tooling and purchased software licenses | (347) | (1,468) |
Net cash used in investing activities | (1,255) | (1,970) |
Cash flows from financing activities: | ||
Proceeds from borrowings on long-term debt | 5,000 | |
Proceeds on line of credit | 5,614 | 62,809 |
Repayment on line of credit | (5,614) | (63,884) |
Costs associated with amendments to credit agreements | (77) | |
Repayment on loan | (3,621) | |
Proceeds from issuance of common stock, net of costs | 1,604 | |
Proceeds from issuance of common stock upon IPO, net of costs | 37,180 | |
Taxes paid on net Issuance of restricted stock award | (1,897) | |
Proceeds from exercise of warrants | 23 | 47 |
Proceeds from exercise of stock options | 69 | 12 |
Net cash provided by financing activities | 33,358 | 3,907 |
Net increase (decrease) in cash and cash equivalents | 3,300 | (50) |
Cash and cash equivalents at beginning of period | 13,049 | 1,581 |
Cash and cash equivalents at end of period | 16,349 | 1,531 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 1,392 | 290 |
Cash paid for income taxes | 352 | 156 |
Non-cash investing and financing activities: | ||
Other assets included in accounts payable | 74 | 339 |
IPO issuance costs included in accounts payable | $ 331 | |
Reclassification of warrant from liability to preferred stock upon exercise | $ 2,951 |
The Company and its Significant
The Company and its Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Company And Significant Accounting Policies [Abstract] | |
The Company and its significant accounting policies | SONIM TECHNOLOGIES, INC (In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed) NOTE 1 —The Company and its significant accounting policies Description of Business —Sonim Technologies, Inc. was incorporated in the state of Delaware on August 5, 1999 and is headquartered in San Mateo, California. The Company is a leading U.S. provider of ultra-rugged mobile phones and accessories designed specifically for task workers physically engaged in their work environments, often in mission-critical roles. Financial Statement Presentation —The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. The unaudited interim condensed consolidated financial statements, which reflect all adjustments (consisting of normal recurring items or items discussed herein) that management believes necessary to fairly state results of interim operations, should be read in conjunction with the Notes to Consolidated Financial Statements (including the Significant Accounting Policies and Recent Accounting Pronouncements) included in the Company’s audited consolidated financial statements for the year ended December 31, 2018, as filed with the SEC on Form S-1 (the “2018 Report”). Results of operations for interim periods are not necessarily indicative of annual results of operations. The unaudited condensed consolidated balance sheet at December 31, 2018 was extracted from the audited annual consolidated financial statements and does not include all disclosures required by U.S. GAAP for annual financial statements. Principles of Consolidation — The accompanying condensed consolidated financial statements include the accounts of Sonim Technologies. Inc. and its wholly-owned foreign subsidiaries, Sonim Technologies Spain SL, Sonim Technologies India Private Limited, Sonim Technologies (Shenzhen) Limited, Sonim Technologies (Hong Kong) Limited, Sonim Technologies (Canada), Inc and Sonim Communications India Private Limited (collectively, the “Company”). All significant intercompany transactions and balances have been eliminated in consolidation. Estimates —The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These estimates include, but are not limited to, estimates related to revenue recognition; valuation assumptions regarding the determination of the fair value of common stock, as well as stock options and warrants; the useful lives of our long-lived assets; product warranties; loss contingencies; and the recognition and measurement of income tax assets and liabilities, including uncertain tax positions; The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates. Significant accounting policies — There have been no material changes in the accounting policies from those disclosed in the 2018 Report. Revenue Recognition — We recognize revenues primarily from the sale of products. We also enter into multiple-element agreements that include a combination of products and Non-Recurring Engineering (“NRE”) services. Revenues from the sale of our mobile phones and accessories is recognized when all of the following conditions are met per Accounting Standards Codification, or ASC, Topic 605, Revenue Recognition Terms of product sales are generally FOB destination. Revenue recognition also incorporates allowances for discounts, price protection, returns and customer incentives that can be reasonably estimated. In addition to cooperative marketing and other incentive programs, the Company has arrangements with some distributors, which allow for price protection and limited rights of return, generally through stock rotation programs. Under the price protection programs, the Company gives distributors credits for the difference between the original price paid and the Company’s then current price. Under the stock rotation programs, certain distributors are able to exchange certain products based on the number of qualified purchases made during the period. The Company monitors and tracks these programs and records a provision, at the time of the sale, for future payments or credits granted as reductions of revenue based on historical experience. Recorded revenues are reduced by these allowances. When revenue arrangements involve multiple elements, each element, referred to as a deliverable, is evaluated to determine whether it represents a separate unit of accounting in accordance with ASC 605-25, Revenue Recognition – Multiple-Element Arrangements. software that is essential to the functionality of the hardware, revenues are recognized according to the milestone method in accordance with the provisions of ASC Topic 605-35, Construction-Type and Production- Type Contract . Under this method, we recognize revenues from milestone payments when: (i) the milestone event is substantive and its achievability was not reasonably assured at the inception of the agreement, and (i) we do not have ongoing performance requirements related to the achievement of the milestone earned. Milestone payments are considered substantive if all of the following conditions are met: the milestone payment (i) is commensurate with either our performance to achieve the milestone or the enhancement of the value of the delivered item or items as a result of a specific outcome resulting from our performance to achieve the milestone, (ii) relates solely to past performance, and (iii) is reasonable relative to all of the deliverables and payment terms ( other potential milestone consideration) within the arrangement. If a milestone is deemed non-substantive, we defer, if applicable, and recognize such non-substantive milestones over the estimated period of performance applicable to each agreement on a straight-line basis, as appropriate. Liquidity and Ability to Continue as a Going Concern - Our condensed consolidated financial statements account for the continuation of our business as a going concern. We are subject to the risks and uncertainties associated with the development and release of new products. Our principal sources of liquidity as of September 30, 2019 consist of existing cash and cash equivalents totaling $16,349, which includes the impact of approximately $36,849 in proceeds from our initial public offering of common stock that closed in May 2019. In the first nine months of 2019, we used approximately $28,803 million of cash and investments for operating activities. Due to these conditions, along with reductions in our current revenue run-rate, substantial doubt exists as to our ability to continue as a going concern. Our unaudited condensed consolidated financial statements have been prepared assuming we will continue as a going concern and do not include any adjustments that might be necessary should we be unable to continue as a going concern. After evaluation of the aforementioned conditions, we believe our current resources, along with expected proceeds from forecasted billings, will provide sufficient funding for planned operations into the third quarter of 2020. Our new management team has commenced a ninety-day initiative to outline a revised strategy for the Company and its forward-looking operations to address the ongoing business in light of these liquidity concerns. If we cannot grow our revenue run-rate or enhance our operating model, we might be forced to make substantial reductions in our operating expenses, which could adversely affect our ability to implement our business plan and ultimately our viability as a Company. As such, the Company will reevaluate its going concern condition during the year-end reporting cycle. If necessary, we will seek to raise additional capital from the sale of equity securities or the incurrence of indebtedness to allow us to continue operations. There can be no assurance that additional financing will be available to us on acceptable terms, or at all. Additionally, if we issue additional equity securities to raise funds, whether to existing investors or others, the ownership percentage of our existing stockholders would be reduced. New investors may demand rights, preferences or privileges senior to those of existing holders of common stock. Additionally, we may be limited as to the amount of funds we can raise pursuant to SEC rules and the continued listing requirements of Nasdaq . Additional Sonim Subsidiary – On August 21, 2019, Sonim Technologies (Canada), Inc. was incorporated, a fully owned subsidiary of the Company, to aide with sales and post sales services. During the three months ended September 30, 2019, immaterial fees were incurred in the set-up of the subsidiary and the Company did not record any intercompany transactions. Restructuring and Reduction in Force – In September 2019, the Board of Directors approved, and management commenced and completed, a restructuring plan to reduce operating costs and better align its workforce with the needs of its business. Under the plan, the Company reduced its workforce by 14 employees. Affected employees are eligible to receive severance and COBRA reimbursement payments. In connection with the restructuring, the Company incurred $578 in aggregate restructuring charges related to one-time termination severance payments and other employee-related costs. $128 related to the restructuring charges were paid during the third quarter of 2019, with the remaining $450 to be paid by the second quarter of 2020. The Company may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the workforce reduction. Departure of Certain Officers and Appointment of Certain Officers — On October 29, 2019, the Company and Mr. Robert Plaschke agreed that Mr. Plaschke would cease serving as the Company’s Chief Executive Officer, effective immediately. In connection with Mr. Plaschke’s transition, the Company entered into a Transition and Separation Agreement with Mr. Plaschke pursuant to which he will serve as a Senior Advisor to the Board until April 30, 2020. On October 29, 2019, the Company entered into an employment agreement with Thomas W. Wilkinson, which governs the terms of Mr. Wilkinson’s employment as the Company’s Chief Executive Officer and member of the board. On September 9, 2019, the Company and Mr. James Walker determined that Mr. Walker would cease serving as the Company’s Chief Financial Officer, effective immediately. Mr. Walker was deemed eligible to receive certain severance benefits following his last day of employment pursuant to, and subject to the conditions set forth in, his existing agreements with the Company, as well as an extension of his post-separation option exercise period to January 17, 2020. These fees were included in the restructuring costs recorded by the Company during the third quarter. On September 10, 2019, the Company entered into an employment agreement with Robert Tirva, which governs the terms of Mr. Tirva’s employment as the Company’s interim Chief Financial Officer. In this role, Mr. Tirva will serve as the Company’s principal financial officer and principal accounting officer. Initial Public Offering (“IPO”) —On May 14, 2019, the Company closed an initial public offering (“IPO’) in which the Company sold 3,571,429 shares of its common stock, at a price to the public of $11.00 per share. On May 22, 2019, the Company sold an additional 505,714 shares of common stock, and our Chief Executive Officer sold 30,000 shares of common stock, at a price to the public of $11.00 per share pursuant to the exercise of the underwriters’ option to purchase additional shares. The offer and sale of the shares in the IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-230887), which was declared effective by the SEC on May 9, 2019. The Company raised approximately $36,849 in net proceeds, after deducting underwriting discounts and commissions of $3,139 and offering expenses paid by us of approximately $4,861. Offering costs, which consist of direct incremental legal, consulting, banking and accounting fees relating to the Company’s IPO, are offset against proceeds from the IPO within stockholders’ equity. As of December 31, 2018, there was $63 of deferred offering costs within other non-current assets on the condensed consolidated balance sheets. During the nine months ended September 30, 2019, $4,861 in deferred offering costs were incurred, and charged to additional paid in capital. $331 issuance cost was unpaid and charged to accounts payable/accrued expenses as of September 30, 2019. Reverse Stock Split —In November 2018, the Company’s stockholders approved a one-for-fifteen reverse stock split of its common and convertible preferred stock which was effected on November 2, 2018. The par value of the common stock and convertible preferred stock were not adjusted as a result of the reverse stock split. Accordingly, all share and per share amounts for the period presented in the consolidated financial statements and notes thereto have been adjusted retrospectively to reflect this reverse stock split. New accounting pronouncements: Pronouncements adopted in 2018: The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, will adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company, which is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used. In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-Controlling Interests with a Scope Exception. Distinguishing Liabilities from Equity Pronouncements not yet adopted: In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Changes to the Disclosure Requirements for Fair Value Measurement In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718) In October 2016, the FASB issued ASU 2016-16 , Income Taxes—Intra-Entity Transfers of Assets Other Than Inventory In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), In January 2016, the FASB issued ASU 2016-01 , Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In May 2014, the FASB, issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), to The guidance permits two methods of adoption, the full retrospective method applying the standard to each prior reporting period presented, or the modified retrospective method with a cumulative effect of initially applying the guidance recognized at the date of initial application. The standard also allows entities to apply certain practical expedients at their discretion. We currently anticipate adopting the standard using the modified retrospective method with a cumulative adjustment and will provide additional disclosures comparing results to previous U.S. GAAP in our fiscal 2019 consolidated financial statements. We plan to apply the new revenue standards only to contracts not completed as of the date of initial application, referred to as open While the Company’s evaluation of the impact of this new guidance is not complete, we believe the impact of the new standard related to revenue recognition will not have a material impact on our consolidated financial statements other than potentially expanded disclosures. More judgements and estimates are required under Topic 606 than are required under Topic 605, including estimating the stand alone selling price (“SSP”) for each performance obligation identified within our arrangements with multiple elements and estimating the amount of variable considerations at inception of the arrangement. We will continue to evaluate sales incentives provided to our customers in order to determine the transaction price at inception of the This preliminary assessment is based on the revenue arrangements currently in place. The exact impact of ASC 606 will be dependent on facts and circumstances at adoption and could vary from quarter to quarter. New products or offerings, or changes to current offerings, may yield significantly different impacts than currently expected. Our conclusions will be reassessed periodically based on current facts and circumstances. We are also evaluating accounting systems, processes and internal controls over revenue recognition to assist us in the application of the new standard. |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | NOTE 2 —Fair value measurement The fair value measurements standard establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under the standard are described Level 1—Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. Level 2—Inputs to the valuation methodology include: • Quoted market prices for similar assets or liabilities in active • Quoted prices for identical or similar assets or liabilities in inactive • Inputs other than quoted prices that are observable for the asset or • Inputs that are derived principally from or corroborated by observable market data by If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability. Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable Following is a description of the valuation methodologies used for assets and liabilities measured at fair value. There have been no changes in the methodologies used at September 30, 2019 and 2018, and December 31, 2018. Money market funds are classified within level 1 of the fair value hierarchy because they are valued using quoted market prices. The warrant liability was classified within level 3 of the fair value hierarchy because there was no active market for the warrant or for similar warrants. The fair value of the Series A and Series B warrants at September 30, 2018, was estimated by first applying a weighting of the income approach and the market approach to determine the equity value of the Company. An Option-Pricing Method (“OPM”) was then used to allocate the total equity value of the Company to the different classes of equity according to their rights and preferences. As the Company was a private company at September 30, 2018, the fair value measurement was based on significant inputs that are not observable in the market and thus represent Level 3 inputs. As of September 30, 2019, and December 31, 2018, as a result of the Company’s November 2018 stock conversion of preferred shares into common shares, all Series A and Series B warrants outstanding are now exercisable into common stock and are no longer required to be remeasured at fair value on a recurring Trade-in guarantee liability is classified within level 3 of the fair value hierarchy because the fair value measurement is based on inputs that are not observable in the market, including the probability and timing of a customer upgrading to a new device and the value of the upgraded device. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The following tables sets forth by level, within the fair value hierarchy, the Company’s assets and liabilities at fair value: September 30, 2019 Level 1 Level 2 Level 3 Total Assets: Money market funds * $ 14,050 $ — $ — $ 14,050 Liabilities: Trade-in Guarantee** $ — $ — $ — $ — December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Money market funds * $ 11,006 $ — $ — $ 11,006 Liabilities: Trade-in Guarantee** $ — $ — $ 268 $ 268 * Included in cash and cash equivalents on the condensed consolidated balance ** Included in deferred revenue on the condensed consolidated balance sheets. The table below sets forth a summary of changes in the fair value of the Company’s level 3 liabilities for the nine months ended September 30, 2019 and 2018: Warrant Trade-In Liability Guarantee Balance at January 1, 2019 $ — $ 268 Recognition of revenue — (268 ) Balance at September 30, 2019 $ — $ — Balance at January 1, 2018 $ 3,785 $ 805 Exercise of warrants (2,951 ) — Recognition of revenue — (268 ) Change in fair value 644 — Balance at September 30, 2018 $ 1,478 $ 537 |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory | NOTE 3 —Inventory Inventory consisted of the following: September 30, 2019 December 31, 2018 Devices - for resale $ 17,664 $ 11,319 Work in process 598 — Raw materials 4,737 8,826 Accessories 1,908 1,686 $ 24,907 $ 21,831 During the three and nine months ended September 30, 2019, the Company recorded a one-time inventory reserve adjustment of $2.1 million as a result of aging materials and finished goods and accrued a loss of $0.7 million of purchase commitments in connection with end of life products. |
Warranty Liability
Warranty Liability | 9 Months Ended |
Sep. 30, 2019 | |
Guarantees And Product Warranties [Abstract] | |
Warranty Liability | NOTE 4 —Warranty Liability The table below sets forth the activity in the warranty liability account, which is included in accrued expenses on the condensed consolidated balance sheets for the nine months ended September 30, 2019 and 2018: Balance, January 1, 2019 $ 1,103 Additions 957 Cost of warranty claims (856 ) Balance, September 30, 2019 $ 1,204 Balance, January 1, 2018 $ 1,742 Additions 577 Cost of warranty claims (1,072 ) Balance, September 30, 2018 $ 1,247 |
Borrowings
Borrowings | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Borrowings | NOTE 5 —Borrowings Senior Credit Agreement The Company has a loan and security agreement (“the EWB Loan Agreement”) with East West Bank (the “Senior Lender”). The maximum borrowings available under the line of credit is $8,000 and will bear interest at 1% plus the Prime Rate with a maturity date of November 2019. The EWB Loan Agreement contains certain negative and affirmative covenants as well as financial covenants, including covenants that restrict our ability to, among other things, incur or prepay indebtedness on subordinated debt, dispose of assets, engage in mergers and consolidations, make acquisitions or other investments, exceed annual capital expenditure limits, as defined, and make changes in the nature of the business. Objective events of default, therein, include, without limitation, nonpayment of principal, interest or other obligations, violation of the covenants, insolvency, and court-ordered judgments. Audited financial statements are required to be submitted to the lenders no later than 120 days after year end. In particular, we are required to maintain a minimum availability under the line of credit under the EWB Loan Agreement of $750 and maintain a fixed charge coverage ratio, defined as the sum of Adjusted Covenant EBITDA plus capital expenditures minus taxes and dividends over fixed charges, of at least 1.05 to 1.00 as of the last of each month. In 2018, the financial covenants were amended to temporarily suspend the obligation to comply with the minimum fixed charge coverage ratio through September 30, 2018, to increase the minimum fixed charge coverage ratio as of December 31, 2018, and for the last day of each month thereafter, from 1.00 to 1.10, and to increase the minimum excess availability to $1,200. In 2018, the financial covenants were amended to permanently remove the requirement to maintain positive Adjusted Covenant EBITDA. As a result, as of the period ended March 31, 2018, we were no longer subject to this Adjusted Covenant EBITDA financial covenant. In October 2019, the financial covenants were amended to suspend the obligation to comply with the minimum fixed charge coverage ratio through the maturity date, which was amended to February 28, 2020, a cash block was placed on interest payments under the Company’s subordinated debt under the Riley Loan Agreement (as defined below) and the establishment of a blocked account was mandated, following which we may request revolving advances up to the amount on deposit in such blocked account in EWB’s discretion. As of September 30, 2019, no amounts were outstanding under the EWB Loan Agreement. As of both September 30, 2019 and December 31, 2018, the Company had remaining borrowing capacity of up to $8,000 against the line of credit. As of September 30, 2019, the Company was not in compliance with one of the financial covenants, specifically the fixed charge coverage ratio, however, EWB waived such noncompliance in October 2019 by amending the EWB Loan Agreement. The Company is currently restricted from borrowing under the EWB Loan Agreement until it establishes a blocked account and, thereafter, any future borrowings will be, subject to continued compliance with the covenants set forth in the EWB Loan Agreement, at EWB’s discretion and limited to the amount on deposit in such blocked account. Long-Term Debt Riley Loan — On October 26, 2017 (the “Effective Date”), the Company entered into a Subordinated Term Loan and Security agreement (the “Riley Loan Agreement”) with B. Riley Principal Investments, LLC (“BRPI”), an affiliate of B. Riley Financial, Inc., a shareholder of the Company. Under the original Riley Loan Agreement, the Company could borrow principal up to $10,000 via a subordinated secured convertible promissory note (the “Convertible Note”), with an optional conversion feature as described below. During the year ended December 31, 2018, the Company amended the Riley Loan Agreement to increase the available aggregate principal borrowings to $12,000. The 2018 amendments did not change the terms of the original Riley Loan Agreement other than to provide a waiver of the defined prepayment penalties if any repayment does not reduce the principal amount outstanding below $10,000. The Riley Loan Agreement, as amended, matures on September 1, 2022 (the “Maturity Date”) and carries a stated interest rate of 10% and provided that the first year of interest commencing on October 26, 2018 be compounded into the principal, with interest-only payments beginning thereafter. In October 2019, a cash block was placed on interest payments under the Riley Loan Agreement, which was accepted by B. Riley. As of September 30, 2019 and December 31, 2018, the total outstanding principal and interest under the Riley Loan Agreement, as amended, was $9,751 and Optional Conversion — On November 2, 2018, in conjunction with the Company’s conversion of all of its outstanding shares of preferred stock into shares of common stock (See Note 6) and the 15-to-1 reverse stock split, the Company amended the optional conversion terms of its existing Convertible Note. As amended, the Convertible Note provides that at any time, on or prior to the Maturity Date, BRPI may elect to convert principal amounts outstanding, including accrued interest, as limited below, into shares of common stock at $8.87 per share. The number of shares of common stock to be issued upon conversion is limited to the sum of (A) the lesser of (i) the principal outstanding and (ii) the aggregate principal amount borrowed under the Riley Loan Agreement to date multiplied by the Designated Percentage as described below, and (B) accrued interest. The “Designated Percentage” is one hundred percent (100%) if the conversion date is prior to the first anniversary of the Effective Date, seventy-five percent (75%) in Year 2 of the Riley Loan Agreement, fifty percent (50%) in Year 3, twenty-five percent (25%) in Year 4, and twelve and a half of percent (12.5%) in the final year of the Riley Loan Agreement on or prior to the Maturity Date. Promissory Notes Payable —In 2014 and 2017, the Company entered into agreements with one of its suppliers, whereby certain of its trade payables for royalties and royalty up-front payments were converted to payment plans. In December 2018, the Company amended its accounts payable financing agreements, effective January 1, 2019, which provides for the $736 outstanding balance to be paid in twenty equal quarterly installments. The amounts due under these agreements would be paid in quarterly installments over periods from two to four years, with interest ranging up to 8%. Remaining balances are $547 and $718 at September 30, 2019 and December 31, 2018, respectively. Other Financing Arrangements —In 2017, the Company entered into three financing arrangements totaling approximately $472 with remaining maturity dates of June 2020 and August 2020. As of September 30, 2019, and December 31, 2018, the remaining balances were zero and $238, respectively. Future aggregate annual principal payment on all long-term debt, excluding the discount of $359, are as follows for the next 5 years as of September 30, 2019: Year Ending, December 31 st Remainder of 2019 $ 37 2020 144 2021 144 2022 9,895 2023 78 $ 10,298 |
Convertible Preferred Stock and
Convertible Preferred Stock and Stockholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Convertible Preferred Stock and Stockholders' Equity | NOTE 6 —Convertible Preferred Stock And Stockholders’ Equity Under the Company’s Amended and Restated Certificate of Incorporation dated October 23, 2017, the authorized capital stock of the Company consisted of 33,853,333 shares of capital stock (par value of $0.001 per share), comprising 18,666,666 shares of common stock and 15,186,664 shares of convertible preferred stock, of which 1,266,666 shares were designated as Series A-3, 1,186,666 shares were designated as Series A-2 convertible preferred stock (“Series A-2”), 1,733,333 shares were designated as Series A-1 convertible preferred stock (“Series A-1”), 9,333,333 shares were designated as Series A, and 1,666,666 shares were designated as Series B convertible preferred stock (“Series B”). On November 1, 2018, the Company converted all outstanding shares of Series A, Series A-1, Series A-2 and Series B into shares of common stock. Prior to this conversion, the Company also approved the payment of dividends to all holders of Series A, Series A-1 and Series A-2 of record on this date. The value of the dividends of $6,539 were determined in accordance with the terms of the Amended and Restated Certificate of Incorporation dated October 23, 2017, based on the stated dividend rate per respective Series. The total Series A, Series A-1 and Series A-2 shares issued On November 2, 2018, the Company amended and restated its previous certificate of incorporation and adjusted its authorized capital stock (par value of $0.001) to consist of 100,000,000 shares of common stock and 5,000,000 shares of preferred stock. Each outstanding share of common stock entitles the holder to one vote of each matter properly submitted to the stockholders of the Company for vote. During the nine months ended September 30, 2019, no shares of preferred have been issued. On November 2, 2018, the Company entered into a Securities Purchase Agreement for the sale of 2,089,136 shares of common stock, under which 1,270,905 shares of common stock were sold as of December 31, 2018, at $7.18 per share for net proceeds of approximately $8,295. Issuance cost approximating $831 were incurred and netted against the proceeds within the condensed consolidated statements of stockholder’s equity (deficit). The Company sold an additional 227,628 shares of common stock for net proceeds of $1,603, incurring issuance cost of $30 and were netted against the proceeds within the condensed consolidated statements of stockholder’s equity (deficit) in January 2019. On April 24, 2019, the Company issued 10,000 shares of common stock to a former employee in exchange for a release of claims and other agreements. |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2019 | |
Warrants [Abstract] | |
Warrants | NOTE 7 —Warrants There were 155,338 warrants exercised on May 10, 2019 for total cash proceeds of $23. The following table discloses warrants issued and outstanding as of September 30, 2019 and December 31, 2018: September 30, 2019 Number of Exercise warrant Year of Issuance date price shares expiration Common November 2012 $ 6.00 7 2028 November 2012 $ 6.00 927 2020 November 2012 $ 14.50 22 2028 Total warrants 956 December 31, 2018 Number of Exercise warrant Year of Issuance date price shares expiration Common November 2012 $ 6.00 7 2028 November 2012 $ 6.00 927 2020 November 2012 $ 14.50 22 2028 August 2016 $ 0.15 155,338 2023 Total warrants 156,294 |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-based Compensation | NOTE 8 —Stock-based Compensation As of September 30, 2019, the Company had the 2012 Equity Incentive Plan (the “2012 Option Plan”), and 2019 Equity Incentive Plan (the “2019 Option Plan”) in place. As of September 30, 2019, the number of shares available to be issued under the 2012 Option Plan and 2019 Option Plan were zero and 2,011,449 respectively. The Option Plans provides for the grant of incentive and non-statutory stock options (“Options”), stock appreciation rights (“SAR”), restricted stock awards (“RSA”), and restricted stock unit awards (“RSU”) to employees, nonemployee directors, and consultants of the Company. Option awards granted under the Option Plan generally become exercisable ratably over a two-year or four-year period following the date of grant and expire ten years from the date of grant. At the discretion of the Company’s Board of Directors, certain awards may be exercisable immediately at the date of grant but are subject to a repurchase right, under which the Company may buy back any unvested shares at their original exercise price in the event of an employee’s termination prior to full vesting. All other awards are exercisable only to the extent vested. At September 30, 2019 and December 31, 2018, there were no shares that had been early exercised that were subject to the Company’s repurchase right at that date. The exercise price or strike price for Options and SARs granted under the Option Plan must generally be at least equal to 100% of the fair value of the Company’s common stock at the date of grant, as determined by the Board of Directors. The exercise price of incentive stock options granted under the Option Plan to ten percent or greater stockholders must be at least equal to 110% of the fair value of the Company’s common stock at the date of grant, as determined by the Board of Directors, and are not exercisable after five years from the date of grant. The Company’s board of directors adopted, and its stockholders approved, the 2019 Employee Stock Purchase Plan and the 2019 Equity Incentive Plan in March 2019 and April 2019, respectively, each of which became effective in connection with the IPO. There are Plan. Additionally, the number of shares of common stock reserved for issuance under the 2019 Employee Stock Purchase Plan will automatically increase on January 1 of each calendar year for 10 years, starting January 1, 2020, and ending on, and including, January 1, 2029, in an amount equal to the lesser of 1% of the total number of shares of capital stock outstanding on December 31 st As of September 30, 2019, no shares have been issued under the 2019 Employee Stock Purchase Plan. On April 10, 2019, the Company granted an aggregate of 128,000 restricted stock units to the Company’s executives of which 90,000 are outstanding at September 30, 2019. On May 13, 2019, the Company granted a fully vested restricted stock award of 383,197 shares, and issued 210,758 net shares of common stock after withholding 172,439 shares of common stock totaling $1,897, recorded as a reduction to additional paid-in capital, to satisfy tax obligations associated with the grant, to the Company’s Chief Executive Officer as a bonus pursuant to his employment agreement. As a result, the Company recorded $4,215 as compensation expense to operating expenses under the Statement of Operations during the nine months ended September 30, 2019. In connection with the IPO, the Company accelerated vesting of 201,666 options dated September 10, 2018, pursuant to the employment agreement of the Company’s Chief Financial Officer. As a result, the Company recorded $287 as compensation expense to operating expenses under the Statement of Operations during the nine months ended September 30, 2019. Stock-based compensation expense for the three and nine months ended September 30, 2019 and 2018 is as follows: Three Months Ended Nine Months Ended September 30 September 30 2019 2018 2019 2018 Research and development $ 93 $ 10 $ 268 $ 21 Sales and marketing 65 16 543 33 General and administrative 114 28 5,045 57 Cost of revenues 35 9 55 18 $ 307 $ 63 $ 5,911 $ 129 Stock Options: Stock option activity for the nine months ended September 30, 2019 is as follows: Weighted average Weighted average remaining Aggregate exercise price contractual life Intrinsic Options per share (in years) Value Outstanding at January 1, 2019 1,320,197 $ 0.77 7.99 $ 8,465 Options granted 637,213 $ 10.94 Options exercised (85,559 ) $ 0.81 Options forfeited (150,730 ) $ 6.64 Options cancelled — $ — Outstanding at September 30, 2019 1,721,121 $ 4.02 7.93 $ 2,541 Vested and expected to vest at September 30, 2019 1,721,121 $ 4.02 7.93 $ 2,541 Vested at September 30, 2019 1,139,418 $ 2.72 7.33 $ 1,993 As of September 30, 2019, there was approximately $2,473 of unamortized stock-based compensation cost related to unvested stock options, which is expected to be recognized over a weighted average period of three years. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 9 —Income Taxes In determining quarterly provisions for income taxes, the Company uses the annual estimated effective tax rate applied to the actual year-to-date profit or loss, adjusted for discrete items arising in that quarter. The Company’s annual estimated effective tax rate differs from the U.S. federal statutory rate primarily as result of the Company’s full valuation allowance related to U.S. federal and state operating losses. For the three months ended September 30, 2019 and 2018, the Company recorded provisions for income tax expense of $33 and income tax benefit of $14, respectively. For the nine months ended September 30, 2019 and 2018, the Company recorded provisions for income tax expense of $784, and $667, respectively. On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the Tax Act), which significantly changes existing U.S. tax laws, including a reduction in the corporate tax rate from 35% to 21%, and move from a worldwide tax system to a territorial system, as well as other changes. The tax rate reduction was effective January 1, 2018. Beginning in 2018, the Company became subject to the global intangible low-taxed income (GILTI) provisions of the Tax Act on the income of the Company’s foreign subsidiaries. The Company’s foreign subsidiaries are profitable for the three and nine months ended September 30, 2019 and forecast profits for all of 2019. The GILTI subjects the income of the foreign subsidiaries to U.S. taxation. The Company’s accounting policy related to the GILTI is to treat GILTI related book/tax differences as period costs and to use the incremental cash tax savings approach in evaluating the Company’s U.S. net operating loss valuation allowance assessment. The Company's income tax returns are subject to examinations by the Internal Revenue Service and other tax authorities in various jurisdictions. In accordance with the guidance on the accounting for uncertainty in income taxes, the Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provision for income taxes. These assessments can require considerable estimates and judgments. The gross amount of unrecognized tax benefits was approximately $5,985 as of September 30, 2019. Our unrecognized tax benefits that, if recognized, would reduce the effective income tax rate in future periods totaled $735 as of September 30, 2019. If the Company's estimate of income tax liabilities proves to be less than the ultimate assessment, then a further charge to expense would be required. If events occur and the payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when the Company determines the liabilities are no longer necessary. The Company does not anticipate any material changes to its uncertain tax positions during the next twelve months. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 10 —Commitments and Contingencies Royalty payments —The Company is required to pay per unit royalties to wireless essential patent holders and other providers of integrated technologies on mobile devices delivered, which, in aggregate, amount to less than 5% of net revenues associated with each unit, and expire in 2021 and 2023. Royalty expense for the three months ended September 30, 2019 and 2018 was $862 and $321, respectively. Royalty expense for the nine months ended September 30, 2019 and 2018 was $2,560 and $1,350, respectively, which are included in cost of revenues on the condensed consolidated statements of operations. Securities litigation — On September 20, 2019, a purported Sonim stockholder who allegedly purchased stock registered in Sonim’s initial public offering (“IPO”) filed a putative class action complaint in the Superior Court of the State of California, County of San Mateo, captioned Pearson v. Sonim Technologies, Inc., et al., Case No. 19CIV05564, on behalf of himself and others who purchased shares of Sonim registered in the IPO (the “Pearson Action”). On October 4 and 16, 2019, two additional purported class action complaints substantially similar to the Pearson Action were filed on behalf of different plaintiffs yet the same putative class of Sonim stockholders, in the same court as the Pearson Action. On October 7, 2019, a substantially similar putative class action lawsuit was filed in the United States District Court for the Northern District of California. All four complaints allege violations of the Securities Act of 1933 by Sonim and certain of its current and former officers and directors for, among other things, alleged false or misleading statements and omissions in the registration statement issued in connection with the IPO, relating primarily to an alleged failure to disclose software defects in Sonim’s phones and alleged misstatements about performance characteristics of Sonim’s phones. Sonim intends to defend these matters vigorously. An adverse outcome in any of these matters, however, could have a material adverse effect on our financial condition, results of operations, or cash flows for a particular period. Due to the uncertainly of the outcome of this matter, the Company has not recorded any accruals as of September 30, 2019. General litigation — The Company is involved in various other legal proceedings arising in the normal course of business. The Company does not believe that the ultimate resolution of these other matters will have a material adverse effect on its consolidated financial position, results of operations, or cash flows. The results of any future litigation cannot be predicted with certainty and, regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management time and resources and other factors. Indemnification —Under the terms of its agreements with wireless carriers and other partners, the Company has agreed to provide indemnification for intellectual property infringement claims related to the Company’s product sold by them to their end customers. From time to time, the Company receives notices from these wireless carriers and other partners of a claim for infringement of intellectual property rights potentially related to their products. These infringement claims have been settled, dismissed, have not been further pursued by the customers, or are pending for further action by the Company. Contingent severance obligations —The Company has agreements in place with certain key employees guaranteeing severance payments under certain circumstances. Generally, in the event of termination by the Company without cause, termination due to death or disability, or resignation for good reason, the Company is obligated to the pay the employees: (i) any time before a Change in Control, amounts up to $1,342 or (ii) if at any time within 12 months of a Change in Control, amounts up to $1,667. In addition, in the event of termination by the Company with cause, the Company is obligated to pay the employees up to $240. As of September 30, 2019 and December 31, 2018, no accrual has been recorded. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 11 —Related Party Transactions Revenue transactions with a certain investor —During the three months ended September 30, 2019 and 2018, the Company recognized revenue of zero and during the nine months ended September 30, 2019 and 2018, the Company recognized revenue of zero and $797, respectively, with an investor and holder of the August 2016 Series A warrants which were amended to common stock warrants in conjunction with the November 2018 preferred stock conversion event. Management Services Agreement— In October 2017, the Company entered into a management services agreement with B. Riley Principal Investments, an investor, pursuant to which B. Riley Investments agreed to provide advisory and consulting services to the Company. The Company incurred approximately zero and $50 in related consulting fees in each of the three months ended September 30, 2019 and 2018, respectively. The Company incurred approximately $56 and $150 in related consulting fees during the nine months ended September 30, 2019 and 2018, respectively. At the closing of the Company’s IPO, the management services agreement was terminated in accordance with its terms. |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Stockholders | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share Attributable to Common Stockholders | NOTE 12 — Net loss per share attributable to common stockholders for the three and nine months ended September 30, 2019 and 2018 was determined by increasing Net income (loss) for the three and nine months then ended by the number of cumulative dividends, not yet declared, on the Company's previously outstanding convertible preferred stock. The following table sets forth the computation of the Company’s basic and diluted net loss per share attributable to common stockholders for the three and nine months ended: Three Months Ended Nine Months Ended September 30 September 30 2019 2018 2019 2018 Numerator: Net loss allocable to common stockholders $ (6,768 ) $ (947 ) $ (19,057 ) $ (12,108 ) Denominator: Weighted-average shares used in computing net loss per share, basic and diluted 20,356,447 1,037,090 18,085,719 1,035,927 Net loss per share, basic and diluted $ (0.33 ) $ (0.91 ) $ (1.05 ) $ (11.69 ) The potentially dilutive common shares that were excluded from the calculation of diluted net loss per share because their effect would have been antidilutive for the three and nine months ended September 30, 2019 and 2018, respectively, are as follows: Three Months Ended Nine Months Ended September 30 September 30 2019 2018 2019 2018 Shares of convertible preferred stock — 12,217,459 — 12,217,459 Shares subject to options to purchase common stock 1,721,121 1,356,511 1,721,121 1,356,511 Unvested restricted stock units 90,000 90,000 Shares subject to warrants to purchase convertible preferred stock 156,294 — 156,294 Shares subject to warrants to purchase common stock 956 — 956 — Shares subject to term debt optional conversion into convertible preferred stock — 1,457,437 — 1,457,437 Shares subject to term debt optional conversion into common stock 1,099,317 — 1,099,317 — Total 2,911,394 15,187,701 2,911,394 15,187,701 |
Entity Level Information
Entity Level Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Entity Level Information | NOTE 13 —Entity Level Information Segment Information —The Company operates in one reporting segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker, who is the chief executive officer, in deciding how to allocate resources and assessing performance. The Company’s chief operating decision maker allocates resources and assesses performance based upon discrete financial information at the consolidated level. The following table summarizes the revenue by region based on ship-to destinations for the three and nine months ended September 30, 2019 and 2018: Three Months Ended Nine Months Ended September 30 September 30 2019 2018 2019 2018 U.S $ 23,170 $ 33,030 $ 78,401 $ 69,583 Canada and Latin America 3,964 3,517 13,255 10,149 Europe and Middle East 756 2,012 4,766 8,098 Asia Pacific 960 939 2,659 1,308 $ 28,850 $ 39,498 $ 99,081 $ 89,138 Long-lived assets located in the United States and Asia Pacific region were $1,175 and $511, The composition of revenues for the three and nine months ended September 30, 2019 and 2018 is follows: Three Months Ended Nine Months Ended September 30 September 30 2019 2018 2019 2018 Product Sales $ 28,773 $ 38,892 $ 98,714 $ 86,876 Services 77 606 367 2,262 Total revenues $ 28,850 $ 39,498 $ 99,081 $ 89,138 Concentrations of Credit Risk —The Company’s product revenues are concentrated in the technology industry , which is highly competitive and rapidly changing. Significant technological changes in the industry or customer requirements, or the emergence of competitive products with new capabilities or technologies, could adversely affect the Company’s consolidated operating results. Financial instruments that potentially subject the Company to credit risk consist primarily of cash and cash equivalents and accounts receivable. Cash and cash equivalents are deposited with high-quality, federally insured commercial banks in the United States and cash balances are in excess of federal insurance limits at September 30, 2019 and December 31, 2018. The Company generally does not require collateral or other security in support of accounts receivable. To reduce credit risk, management performs ongoing credit evaluations of its customers’ financial condition. The Company analyzes the need for reserves for potential credit losses and records allowances for doubtful accounts when necessary. The Company had allowances for such losses totaling approximately $7 and $11 at September 30, 2019 and December 31, 2018, respectively. Receivables from three customers approximated 54%, 22%, and 11% at September 30, 2019, and two customers approximated 44% and 43% of total accounts receivable at December 31, 2018. Revenue from customers with concentration greater than 10% in the three and nine months ended September 30, 2019 and 2018, accounted for approximately the following percentage of total revenues: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Customer A 25% 16% 31% 15% Customer B * 19% * 18% Customer C 19% * 20% * Customer D 19% 13% 12% 12% Customer E * 33% * 31% * Customer revenue did not exceed 10% in the respective |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 14 —SUBSEQUENT EVENTS Senior Credit Agreement In October 2019, the Company entered into an amendment to the EWB Loan Agreement which suspended the Company’s obligation to comply with the minimum fixed charge coverage ratio through the maturity date, which was amended to February 28, 2020, placed a cash block on interest payments under the Company’s subordinated debt under the Riley Loan Agreement, required the Company to establish a blocked account, following which the Company may request revolving advances up to the amount on deposit in such blocked account in EWB’s discretion and waived the Company’s noncompliance with the fixed charge coverage ratio financial covenant. D e On October 29, 2019, the Company and Mr. Robert Plaschke agreed that Mr. Plaschke would cease serving as the Company’s Chief Executive Officer, effective immediately. In connection with Mr. Plaschke’s transition, the Company entered into a Transition and Separation Agreement with Mr. Plaschke pursuant to which he will serve as a Senior Advisor to the Board until April 30, 2020. On October 29, 2019, the Company entered into an employment agreement with Thomas W. Wilkinson, which governs the terms of Mr. Wilkinson’s employment as the Company’s Chief Executive Officer and member of the board. |
The Company and its Significa_2
The Company and its Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Company And Significant Accounting Policies [Abstract] | |
Description of Business | Description of Business —Sonim Technologies, Inc. was incorporated in the state of Delaware on August 5, 1999 and is headquartered in San Mateo, California. The Company is a leading U.S. provider of ultra-rugged mobile phones and accessories designed specifically for task workers physically engaged in their work environments, often in mission-critical roles. |
Financial Statement Presentation | Financial Statement Presentation —The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. The unaudited interim condensed consolidated financial statements, which reflect all adjustments (consisting of normal recurring items or items discussed herein) that management believes necessary to fairly state results of interim operations, should be read in conjunction with the Notes to Consolidated Financial Statements (including the Significant Accounting Policies and Recent Accounting Pronouncements) included in the Company’s audited consolidated financial statements for the year ended December 31, 2018, as filed with the SEC on Form S-1 (the “2018 Report”). Results of operations for interim periods are not necessarily indicative of annual results of operations. The unaudited condensed consolidated balance sheet at December 31, 2018 was extracted from the audited annual consolidated financial statements and does not include all disclosures required by U.S. GAAP for annual financial statements. |
Principles of Consolidation | Principles of Consolidation — The accompanying condensed consolidated financial statements include the accounts of Sonim Technologies. Inc. and its wholly-owned foreign subsidiaries, Sonim Technologies Spain SL, Sonim Technologies India Private Limited, Sonim Technologies (Shenzhen) Limited, Sonim Technologies (Hong Kong) Limited, Sonim Technologies (Canada), Inc and Sonim Communications India Private Limited (collectively, the “Company”). All significant intercompany transactions and balances have been eliminated in consolidation. |
Estimates | Estimates —The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These estimates include, but are not limited to, estimates related to revenue recognition; valuation assumptions regarding the determination of the fair value of common stock, as well as stock options and warrants; the useful lives of our long-lived assets; product warranties; loss contingencies; and the recognition and measurement of income tax assets and liabilities, including uncertain tax positions; The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates. |
Significant accounting policies | Significant accounting policies — There have been no material changes in the accounting policies from those disclosed in the 2018 Report. |
Revenue Recognition | Revenue Recognition — We recognize revenues primarily from the sale of products. We also enter into multiple-element agreements that include a combination of products and Non-Recurring Engineering (“NRE”) services. Revenues from the sale of our mobile phones and accessories is recognized when all of the following conditions are met per Accounting Standards Codification, or ASC, Topic 605, Revenue Recognition Terms of product sales are generally FOB destination. Revenue recognition also incorporates allowances for discounts, price protection, returns and customer incentives that can be reasonably estimated. In addition to cooperative marketing and other incentive programs, the Company has arrangements with some distributors, which allow for price protection and limited rights of return, generally through stock rotation programs. Under the price protection programs, the Company gives distributors credits for the difference between the original price paid and the Company’s then current price. Under the stock rotation programs, certain distributors are able to exchange certain products based on the number of qualified purchases made during the period. The Company monitors and tracks these programs and records a provision, at the time of the sale, for future payments or credits granted as reductions of revenue based on historical experience. Recorded revenues are reduced by these allowances. When revenue arrangements involve multiple elements, each element, referred to as a deliverable, is evaluated to determine whether it represents a separate unit of accounting in accordance with ASC 605-25, Revenue Recognition – Multiple-Element Arrangements. software that is essential to the functionality of the hardware, revenues are recognized according to the milestone method in accordance with the provisions of ASC Topic 605-35, Construction-Type and Production- Type Contract . Under this method, we recognize revenues from milestone payments when: (i) the milestone event is substantive and its achievability was not reasonably assured at the inception of the agreement, and (i) we do not have ongoing performance requirements related to the achievement of the milestone earned. Milestone payments are considered substantive if all of the following conditions are met: the milestone payment (i) is commensurate with either our performance to achieve the milestone or the enhancement of the value of the delivered item or items as a result of a specific outcome resulting from our performance to achieve the milestone, (ii) relates solely to past performance, and (iii) is reasonable relative to all of the deliverables and payment terms ( other potential milestone consideration) within the arrangement. If a milestone is deemed non-substantive, we defer, if applicable, and recognize such non-substantive milestones over the estimated period of performance applicable to each agreement on a straight-line basis, as appropriate. |
Liquidity and Ability to Continue as a Going Concern | Liquidity and Ability to Continue as a Going Concern - Our condensed consolidated financial statements account for the continuation of our business as a going concern. We are subject to the risks and uncertainties associated with the development and release of new products. Our principal sources of liquidity as of September 30, 2019 consist of existing cash and cash equivalents totaling $16,349, which includes the impact of approximately $36,849 in proceeds from our initial public offering of common stock that closed in May 2019. In the first nine months of 2019, we used approximately $28,803 million of cash and investments for operating activities. Due to these conditions, along with reductions in our current revenue run-rate, substantial doubt exists as to our ability to continue as a going concern. Our unaudited condensed consolidated financial statements have been prepared assuming we will continue as a going concern and do not include any adjustments that might be necessary should we be unable to continue as a going concern. After evaluation of the aforementioned conditions, we believe our current resources, along with expected proceeds from forecasted billings, will provide sufficient funding for planned operations into the third quarter of 2020. Our new management team has commenced a ninety-day initiative to outline a revised strategy for the Company and its forward-looking operations to address the ongoing business in light of these liquidity concerns. If we cannot grow our revenue run-rate or enhance our operating model, we might be forced to make substantial reductions in our operating expenses, which could adversely affect our ability to implement our business plan and ultimately our viability as a Company. As such, the Company will reevaluate its going concern condition during the year-end reporting cycle. If necessary, we will seek to raise additional capital from the sale of equity securities or the incurrence of indebtedness to allow us to continue operations. There can be no assurance that additional financing will be available to us on acceptable terms, or at all. Additionally, if we issue additional equity securities to raise funds, whether to existing investors or others, the ownership percentage of our existing stockholders would be reduced. New investors may demand rights, preferences or privileges senior to those of existing holders of common stock. Additionally, we may be limited as to the amount of funds we can raise pursuant to SEC rules and the continued listing requirements of Nasdaq . |
Additional Sonim Subsidiary | Additional Sonim Subsidiary – On August 21, 2019, Sonim Technologies (Canada), Inc. was incorporated, a fully owned subsidiary of the Company, to aide with sales and post sales services. During the three months ended September 30, 2019, immaterial fees were incurred in the set-up of the subsidiary and the Company did not record any intercompany transactions. |
Restructuring and Reduction in Force | Restructuring and Reduction in Force – In September 2019, the Board of Directors approved, and management commenced and completed, a restructuring plan to reduce operating costs and better align its workforce with the needs of its business. Under the plan, the Company reduced its workforce by 14 employees. Affected employees are eligible to receive severance and COBRA reimbursement payments. In connection with the restructuring, the Company incurred $578 in aggregate restructuring charges related to one-time termination severance payments and other employee-related costs. $128 related to the restructuring charges were paid during the third quarter of 2019, with the remaining $450 to be paid by the second quarter of 2020. The Company may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the workforce reduction. |
Departure of Certain Officers and Appointment of Certain Officers | Departure of Certain Officers and Appointment of Certain Officers — On October 29, 2019, the Company and Mr. Robert Plaschke agreed that Mr. Plaschke would cease serving as the Company’s Chief Executive Officer, effective immediately. In connection with Mr. Plaschke’s transition, the Company entered into a Transition and Separation Agreement with Mr. Plaschke pursuant to which he will serve as a Senior Advisor to the Board until April 30, 2020. On October 29, 2019, the Company entered into an employment agreement with Thomas W. Wilkinson, which governs the terms of Mr. Wilkinson’s employment as the Company’s Chief Executive Officer and member of the board. On September 9, 2019, the Company and Mr. James Walker determined that Mr. Walker would cease serving as the Company’s Chief Financial Officer, effective immediately. Mr. Walker was deemed eligible to receive certain severance benefits following his last day of employment pursuant to, and subject to the conditions set forth in, his existing agreements with the Company, as well as an extension of his post-separation option exercise period to January 17, 2020. These fees were included in the restructuring costs recorded by the Company during the third quarter. On September 10, 2019, the Company entered into an employment agreement with Robert Tirva, which governs the terms of Mr. Tirva’s employment as the Company’s interim Chief Financial Officer. In this role, Mr. Tirva will serve as the Company’s principal financial officer and principal accounting officer. |
Initial Public Offering (“IPO”) | Initial Public Offering (“IPO”) —On May 14, 2019, the Company closed an initial public offering (“IPO’) in which the Company sold 3,571,429 shares of its common stock, at a price to the public of $11.00 per share. On May 22, 2019, the Company sold an additional 505,714 shares of common stock, and our Chief Executive Officer sold 30,000 shares of common stock, at a price to the public of $11.00 per share pursuant to the exercise of the underwriters’ option to purchase additional shares. The offer and sale of the shares in the IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-230887), which was declared effective by the SEC on May 9, 2019. The Company raised approximately $36,849 in net proceeds, after deducting underwriting discounts and commissions of $3,139 and offering expenses paid by us of approximately $4,861. Offering costs, which consist of direct incremental legal, consulting, banking and accounting fees relating to the Company’s IPO, are offset against proceeds from the IPO within stockholders’ equity. As of December 31, 2018, there was $63 of deferred offering costs within other non-current assets on the condensed consolidated balance sheets. During the nine months ended September 30, 2019, $4,861 in deferred offering costs were incurred, and charged to additional paid in capital. $331 issuance cost was unpaid and charged to accounts payable/accrued expenses as of September 30, 2019. |
Reverse Stock Split | Reverse Stock Split —In November 2018, the Company’s stockholders approved a one-for-fifteen reverse stock split of its common and convertible preferred stock which was effected on November 2, 2018. The par value of the common stock and convertible preferred stock were not adjusted as a result of the reverse stock split. Accordingly, all share and per share amounts for the period presented in the consolidated financial statements and notes thereto have been adjusted retrospectively to reflect this reverse stock split. |
New accounting pronouncements | New accounting pronouncements: Pronouncements adopted in 2018: The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, will adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company, which is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used. In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-Controlling Interests with a Scope Exception. Distinguishing Liabilities from Equity Pronouncements not yet adopted: In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Changes to the Disclosure Requirements for Fair Value Measurement In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718) In October 2016, the FASB issued ASU 2016-16 , Income Taxes—Intra-Entity Transfers of Assets Other Than Inventory In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), In January 2016, the FASB issued ASU 2016-01 , Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In May 2014, the FASB, issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), to The guidance permits two methods of adoption, the full retrospective method applying the standard to each prior reporting period presented, or the modified retrospective method with a cumulative effect of initially applying the guidance recognized at the date of initial application. The standard also allows entities to apply certain practical expedients at their discretion. We currently anticipate adopting the standard using the modified retrospective method with a cumulative adjustment and will provide additional disclosures comparing results to previous U.S. GAAP in our fiscal 2019 consolidated financial statements. We plan to apply the new revenue standards only to contracts not completed as of the date of initial application, referred to as open While the Company’s evaluation of the impact of this new guidance is not complete, we believe the impact of the new standard related to revenue recognition will not have a material impact on our consolidated financial statements other than potentially expanded disclosures. More judgements and estimates are required under Topic 606 than are required under Topic 605, including estimating the stand alone selling price (“SSP”) for each performance obligation identified within our arrangements with multiple elements and estimating the amount of variable considerations at inception of the arrangement. We will continue to evaluate sales incentives provided to our customers in order to determine the transaction price at inception of the This preliminary assessment is based on the revenue arrangements currently in place. The exact impact of ASC 606 will be dependent on facts and circumstances at adoption and could vary from quarter to quarter. New products or offerings, or changes to current offerings, may yield significantly different impacts than currently expected. Our conclusions will be reassessed periodically based on current facts and circumstances. We are also evaluating accounting systems, processes and internal controls over revenue recognition to assist us in the application of the new standard. |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value Assets and Liabilities | The following tables sets forth by level, within the fair value hierarchy, the Company’s assets and liabilities at fair value: September 30, 2019 Level 1 Level 2 Level 3 Total Assets: Money market funds * $ 14,050 $ — $ — $ 14,050 Liabilities: Trade-in Guarantee** $ — $ — $ — $ — December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Money market funds * $ 11,006 $ — $ — $ 11,006 Liabilities: Trade-in Guarantee** $ — $ — $ 268 $ 268 * Included in cash and cash equivalents on the condensed consolidated balance ** Included in deferred revenue on the condensed consolidated balance sheets. |
Summary of Changes in Fair Value of Company's Level 3 Financial Liabilities | The table below sets forth a summary of changes in the fair value of the Company’s level 3 liabilities for the nine months ended September 30, 2019 and 2018: Warrant Trade-In Liability Guarantee Balance at January 1, 2019 $ — $ 268 Recognition of revenue — (268 ) Balance at September 30, 2019 $ — $ — Balance at January 1, 2018 $ 3,785 $ 805 Exercise of warrants (2,951 ) — Recognition of revenue — (268 ) Change in fair value 644 — Balance at September 30, 2018 $ 1,478 $ 537 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following: September 30, 2019 December 31, 2018 Devices - for resale $ 17,664 $ 11,319 Work in process 598 — Raw materials 4,737 8,826 Accessories 1,908 1,686 $ 24,907 $ 21,831 |
Warranty Liability (Tables)
Warranty Liability (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Guarantees And Product Warranties [Abstract] | |
Schedule of Warranty Liability Included in Accrued Expenses on Condensed Consolidated Balance Sheet | The table below sets forth the activity in the warranty liability account, which is included in accrued expenses on the condensed consolidated balance sheets for the nine months ended September 30, 2019 and 2018: Balance, January 1, 2019 $ 1,103 Additions 957 Cost of warranty claims (856 ) Balance, September 30, 2019 $ 1,204 Balance, January 1, 2018 $ 1,742 Additions 577 Cost of warranty claims (1,072 ) Balance, September 30, 2018 $ 1,247 |
Borrowings (Tables)
Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Future Aggregate Annual Principal Payment on All Long-Term Debt | Future aggregate annual principal payment on all long-term debt, excluding the discount of $359, are as follows for the next 5 years as of September 30, 2019: Year Ending, December 31 st Remainder of 2019 $ 37 2020 144 2021 144 2022 9,895 2023 78 $ 10,298 |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of Warrants Issued and Outstanding | There were 155,338 warrants exercised on May 10, 2019 for total cash proceeds of $23. The following table discloses warrants issued and outstanding as of September 30, 2019 and December 31, 2018: September 30, 2019 Number of Exercise warrant Year of Issuance date price shares expiration Common November 2012 $ 6.00 7 2028 November 2012 $ 6.00 927 2020 November 2012 $ 14.50 22 2028 Total warrants 956 December 31, 2018 Number of Exercise warrant Year of Issuance date price shares expiration Common November 2012 $ 6.00 7 2028 November 2012 $ 6.00 927 2020 November 2012 $ 14.50 22 2028 August 2016 $ 0.15 155,338 2023 Total warrants 156,294 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Stock-based Compensation Expense | Stock-based compensation expense for the three and nine months ended September 30, 2019 and 2018 is as follows: Three Months Ended Nine Months Ended September 30 September 30 2019 2018 2019 2018 Research and development $ 93 $ 10 $ 268 $ 21 Sales and marketing 65 16 543 33 General and administrative 114 28 5,045 57 Cost of revenues 35 9 55 18 $ 307 $ 63 $ 5,911 $ 129 |
Summary of Stock Option Activity | Stock option activity for the nine months ended September 30, 2019 is as follows: Weighted average Weighted average remaining Aggregate exercise price contractual life Intrinsic Options per share (in years) Value Outstanding at January 1, 2019 1,320,197 $ 0.77 7.99 $ 8,465 Options granted 637,213 $ 10.94 Options exercised (85,559 ) $ 0.81 Options forfeited (150,730 ) $ 6.64 Options cancelled — $ — Outstanding at September 30, 2019 1,721,121 $ 4.02 7.93 $ 2,541 Vested and expected to vest at September 30, 2019 1,721,121 $ 4.02 7.93 $ 2,541 Vested at September 30, 2019 1,139,418 $ 2.72 7.33 $ 1,993 |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Stockholders (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders | Three Months Ended Nine Months Ended September 30 September 30 2019 2018 2019 2018 Numerator: Net loss allocable to common stockholders $ (6,768 ) $ (947 ) $ (19,057 ) $ (12,108 ) Denominator: Weighted-average shares used in computing net loss per share, basic and diluted 20,356,447 1,037,090 18,085,719 1,035,927 Net loss per share, basic and diluted $ (0.33 ) $ (0.91 ) $ (1.05 ) $ (11.69 ) |
Summary of Potentially Dilutive Common Shares were Excluded from Calculation of Diluted Net Loss Per Share | The potentially dilutive common shares that were excluded from the calculation of diluted net loss per share because their effect would have been antidilutive for the three and nine months ended September 30, 2019 and 2018, respectively, are as follows: Three Months Ended Nine Months Ended September 30 September 30 2019 2018 2019 2018 Shares of convertible preferred stock — 12,217,459 — 12,217,459 Shares subject to options to purchase common stock 1,721,121 1,356,511 1,721,121 1,356,511 Unvested restricted stock units 90,000 90,000 Shares subject to warrants to purchase convertible preferred stock 156,294 — 156,294 Shares subject to warrants to purchase common stock 956 — 956 — Shares subject to term debt optional conversion into convertible preferred stock — 1,457,437 — 1,457,437 Shares subject to term debt optional conversion into common stock 1,099,317 — 1,099,317 — Total 2,911,394 15,187,701 2,911,394 15,187,701 |
Entity Level Information (Table
Entity Level Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Summary of Revenue by Region | Segment Information —The Company operates in one reporting segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker, who is the chief executive officer, in deciding how to allocate resources and assessing performance. The Company’s chief operating decision maker allocates resources and assesses performance based upon discrete financial information at the consolidated level. The following table summarizes the revenue by region based on ship-to destinations for the three and nine months ended September 30, 2019 and 2018: Three Months Ended Nine Months Ended September 30 September 30 2019 2018 2019 2018 U.S $ 23,170 $ 33,030 $ 78,401 $ 69,583 Canada and Latin America 3,964 3,517 13,255 10,149 Europe and Middle East 756 2,012 4,766 8,098 Asia Pacific 960 939 2,659 1,308 $ 28,850 $ 39,498 $ 99,081 $ 89,138 |
Composition of Revenues | The composition of revenues for the three and nine months ended September 30, 2019 and 2018 is follows: Three Months Ended Nine Months Ended September 30 September 30 2019 2018 2019 2018 Product Sales $ 28,773 $ 38,892 $ 98,714 $ 86,876 Services 77 606 367 2,262 Total revenues $ 28,850 $ 39,498 $ 99,081 $ 89,138 |
Percentage of Total Revenues | Revenue from customers with concentration greater than 10% in the three and nine months ended September 30, 2019 and 2018, accounted for approximately the following percentage of total revenues: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Customer A 25% 16% 31% 15% Customer B * 19% * 18% Customer C 19% * 20% * Customer D 19% 13% 12% 12% Customer E * 33% * 31% * Customer revenue did not exceed 10% in the respective |
The Company and its Significa_3
The Company and its Significant Accounting Policies - Additional Information (Details) $ / shares in Units, $ in Thousands | May 22, 2019USD ($)$ / sharesshares | May 14, 2019$ / sharesshares | Nov. 02, 2018 | Jun. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($)Employeeshares | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) |
Company And Significant Accounting Policies [Line Items] | ||||||||
Reverse stock split ratio | 0.0667 | |||||||
Cash and cash equivalents | $ 16,349 | $ 16,349 | $ 13,049 | |||||
Net proceeds from issuance of IPO | 37,180 | |||||||
Cash and investment for operating activities | $ 28,803 | $ 1,987 | ||||||
Number of employees reduced related to restructuring activities | Employee | 14 | |||||||
Aggregate restructuring charges | 578 | $ 578 | ||||||
Restructuring charges paid | 128 | |||||||
IPO closing date | May 14, 2019 | |||||||
Unpaid issuance cost and charged to accounts payable or accrued expenses | 331 | $ 331 | ||||||
Forecast | ||||||||
Company And Significant Accounting Policies [Line Items] | ||||||||
Aggregate restructuring charges | $ 450 | |||||||
Common Stock | ||||||||
Company And Significant Accounting Policies [Line Items] | ||||||||
Shares issued and sold | shares | 227,628 | |||||||
Common Stock | IPO | ||||||||
Company And Significant Accounting Policies [Line Items] | ||||||||
Net proceeds from issuance of IPO | $ 36,849 | $ 36,849 | ||||||
Shares issued and sold | shares | 505,714 | 3,571,429 | 4,297,901 | |||||
Shares issued and sold, price per share | $ / shares | $ 11 | $ 11 | ||||||
Underwriting discounts and commissions | $ 3,139 | |||||||
Offering expenses paid | $ 4,861 | |||||||
Deferred offering costs | $ 4,861 | $ 4,861 | $ 63 | |||||
Common Stock | Over-Allotment | ||||||||
Company And Significant Accounting Policies [Line Items] | ||||||||
Shares issued and sold | shares | 30,000 | |||||||
Shares issued and sold, price per share | $ / shares | $ 11 |
Fair Value Measurement - Summar
Fair Value Measurement - Summary of Fair Value Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Trade-in Guarantee | ||
Liabilities: | ||
Liabilities | $ 268 | |
Money Market Funds | ||
Assets: | ||
Assets | $ 14,050 | 11,006 |
Level 1 | Money Market Funds | ||
Assets: | ||
Assets | $ 14,050 | 11,006 |
Level 3 | Trade-in Guarantee | ||
Liabilities: | ||
Liabilities | $ 268 |
Fair Value Measurement - Summ_2
Fair Value Measurement - Summary of Changes in Fair Value of Company's Level 3 Financial Liabilities (Details) - Level 3 - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Trade-In Guarantee | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | $ 268 | $ 805 |
Recognition of revenue | $ (268) | (268) |
Change in fair value | 0 | |
Ending Balance | 537 | |
Warrant Liability | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | 3,785 | |
Exercise of warrants | (2,951) | |
Recognition of revenue | 0 | |
Change in fair value | 644 | |
Ending Balance | $ 1,478 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Devices - for resale | $ 17,664 | $ 11,319 |
Work in process | 598 | |
Raw materials | 4,737 | 8,826 |
Accessories | 1,908 | 1,686 |
Total inventory | $ 24,907 | $ 21,831 |
Inventory - Additional Informat
Inventory - Additional Information (Details) $ in Millions | Sep. 30, 2019USD ($) |
Inventory Disclosure [Abstract] | |
Inventory reserve adjustment | $ 2.1 |
Accrued loss on purchase commitments | $ 0.7 |
Warranty Liability - Schedule o
Warranty Liability - Schedule of Warranty Liability Which is Included in Accrued Expenses on Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Guarantees And Product Warranties [Abstract] | ||
Beginning balance | $ 1,103 | $ 1,742 |
Additions | 957 | 577 |
Cost of warranty claims | (856) | (1,072) |
Ending balance | $ 1,204 | $ 1,247 |
Borrowings - Additional Informa
Borrowings - Additional Information (Details) | Nov. 02, 2018$ / shares | Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)FinancingArrangement | Jun. 30, 2019USD ($) | Jan. 01, 2019USD ($)Installment | Oct. 26, 2017USD ($) |
Debt Instrument [Line Items] | |||||||||
Lines of credit repaid principal amount | $ 5,614,000 | $ 63,884,000 | |||||||
Reverse stock split | 15-to-1 | ||||||||
Reverse stock split ratio | 0.0667 | ||||||||
Long-term debt | $ 10,298,000 | $ 10,298,000 | |||||||
Other Financing Arrangements | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of financing arrangements | FinancingArrangement | 3 | ||||||||
Debt instrument, face amount | $ 472,000 | ||||||||
Long-term debt | 0 | 0 | $ 238,000 | ||||||
Debt instrument, discount | $ 359,000 | ||||||||
Other Financing Arrangement One | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, maturity date | 2020-06 | ||||||||
Other Financing Arrangement Two | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, maturity date | 2020-08 | ||||||||
Loan and Security Agreement | East West Bank | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowings available | 8,000,000 | $ 8,000,000 | |||||||
Line of credit facility, interest rate during period | 1.00% | ||||||||
Line of credit facility, maturity date | 2019-11 | ||||||||
Line of credit facility, covenant compliance minimum required availability amount | 1,200,000 | $ 750,000 | |||||||
Line of credit facility, status of covenant compliance | The Company was not in compliance with one of the financial covenants, specifically the fixed charge coverage ratio, however, EWB waived such noncompliance in October 2019 by amending the EWB Loan Agreement. | ||||||||
Outstanding borrowings | 0 | $ 0 | |||||||
Loan and Security Agreement | East West Bank | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Fixed charge coverage ratio for last day of each month | 1.05 | ||||||||
Remaining borrowing capacity | 8,000,000 | 8,000,000 | $ 8,000,000 | ||||||
Loan and Security Agreement | East West Bank | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Fixed charge coverage ratio for last day of each month | 1.10 | 1 | |||||||
Subordinated Term Loan and Security Agreement | B. Riley Principal Investments, LLC | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowings available | $ 12,000,000 | $ 10,000,000 | |||||||
Outstanding borrowings | 9,751,000 | $ 9,751,000 | 13,001,000 | ||||||
Minimum principal amount outstanding to have waiver of defined prepayment penalties | $ 10,000,000 | ||||||||
Debt instrument, stated interest rate | 10.00% | ||||||||
Line of credit facility, maturity date | Sep. 1, 2022 | ||||||||
Lines of credit repaid principal amount | $ 3,250,000 | ||||||||
Lines of credit repaid principal amount percentage | 25.00% | ||||||||
Percentage of fee incurred | 2.00% | ||||||||
Debt instrument, convertible, price of common stock per share | $ / shares | $ 8.87 | ||||||||
Subordinated Term Loan and Security Agreement | B. Riley Principal Investments, LLC | Prior to First Anniversary of Effective Date | |||||||||
Debt Instrument [Line Items] | |||||||||
Designated percentage | 100.00% | ||||||||
Subordinated Term Loan and Security Agreement | B. Riley Principal Investments, LLC | Year Two of Loan Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Designated percentage | 75.00% | ||||||||
Subordinated Term Loan and Security Agreement | B. Riley Principal Investments, LLC | Year Three of Loan Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Designated percentage | 50.00% | ||||||||
Subordinated Term Loan and Security Agreement | B. Riley Principal Investments, LLC | Year Four of Loan Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Designated percentage | 25.00% | ||||||||
Subordinated Term Loan and Security Agreement | B. Riley Principal Investments, LLC | Final Year of Agreement on or Prior to Maturity Date | |||||||||
Debt Instrument [Line Items] | |||||||||
Designated percentage | 12.50% | ||||||||
Promissory Notes Payable | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, outstanding balance | $ 547,000 | $ 547,000 | $ 718,000 | $ 736,000 | |||||
Debt instrument, periodic payment, number of equal quarterly installments | Installment | 20 | ||||||||
Debt instrument, frequency of periodic payment | quarterly | ||||||||
Promissory Notes Payable | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, stated interest rate | 8.00% | 8.00% | |||||||
Debt instrument, payment term | 4 years | ||||||||
Promissory Notes Payable | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, payment term | 2 years |
Borrowings - Schedule of Future
Borrowings - Schedule of Future Aggregate Annual Principal Payment on All Long-Term Debt (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Debt Disclosure [Abstract] | |
Remainder of 2019 | $ 37 |
2020 | 144 |
2021 | 144 |
2022 | 9,895 |
2023 | 78 |
Long-term Debt | $ 10,298 |
Convertible Preferred Stock a_2
Convertible Preferred Stock and Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 01, 2018 | Oct. 23, 2017 | Jan. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | Dec. 31, 2018 | Apr. 24, 2019 | Nov. 02, 2018 |
Class Of Stock [Line Items] | ||||||||
Authorized capital stock | 33,853,333 | |||||||
Common stock, shares authorized | 18,666,666 | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | |||
Capital stock par value | $ 0.001 | $ 0.001 | ||||||
Convertible preferred stock | 5,000,000 | |||||||
Dividends, value | $ 6,539 | |||||||
Dividends, fair value | $ 10,152 | |||||||
Preferred shares converted into common stock | 13,277,864 | |||||||
Preferred stock, shares issued | 0 | |||||||
Proceeds from issuance of common stock, net of costs | $ 1,604 | |||||||
Common stock, shares issued to former employee in exchange for release of claims and other agreements | 10,000 | |||||||
Securities Purchase Agreement | ||||||||
Class Of Stock [Line Items] | ||||||||
Common stock, number of shares available for sale | 2,089,136 | |||||||
Proceeds from issuance of common stock, net of costs | $ 1,603 | $ 8,295 | ||||||
Issuance cost | $ 30 | $ 831 | ||||||
Common Stock | ||||||||
Class Of Stock [Line Items] | ||||||||
Shares issued and sold | 227,628 | |||||||
Common Stock | Securities Purchase Agreement | ||||||||
Class Of Stock [Line Items] | ||||||||
Shares issued and sold | 227,628 | 1,270,905 | ||||||
Common stock, shares issued price per share | $ 7.18 | $ 7.18 | ||||||
Convertible Preferred Stock | ||||||||
Class Of Stock [Line Items] | ||||||||
Convertible preferred stock | 15,186,664 | |||||||
Series A-3 Convertible Preferred Stock | ||||||||
Class Of Stock [Line Items] | ||||||||
Convertible preferred stock | 1,266,666 | |||||||
Series A-2 Convertible Preferred Stock | ||||||||
Class Of Stock [Line Items] | ||||||||
Convertible preferred stock | 1,186,666 | |||||||
Number of shares issued as dividends | 49,456 | |||||||
Series A-1 Convertible Preferred Stock | ||||||||
Class Of Stock [Line Items] | ||||||||
Convertible preferred stock | 1,733,333 | |||||||
Number of shares issued as dividends | 66,255 | |||||||
Series A Convertible Preferred Stock | ||||||||
Class Of Stock [Line Items] | ||||||||
Convertible preferred stock | 9,333,333 | |||||||
Number of shares issued as dividends | 944,694 | |||||||
Series B Convertible Preferred Stock | ||||||||
Class Of Stock [Line Items] | ||||||||
Convertible preferred stock | 1,666,666 |
Warrants - Additional Informati
Warrants - Additional Information (Details) - USD ($) $ in Thousands | May 10, 2019 | Sep. 30, 2019 | Sep. 30, 2018 |
Equity [Abstract] | |||
Number of warrants exercised | 155,338 | ||
Cash proceeds from warrants exercised | $ 23 | $ 23 | $ 47 |
Warrants - Schedule of Warrants
Warrants - Schedule of Warrants Issued and Outstanding (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Class Of Warrant Or Right [Line Items] | ||
Number of warrant shares | 956 | 156,294 |
Issuance Date, November 2012 Tranche One | ||
Class Of Warrant Or Right [Line Items] | ||
Exercise price | $ 6 | $ 6 |
Number of warrant shares | 7 | 7 |
Year of expiration | 2028 | 2028 |
Issuance Date, November 2012 Tranche Two | ||
Class Of Warrant Or Right [Line Items] | ||
Exercise price | $ 6 | $ 6 |
Number of warrant shares | 927 | 927 |
Year of expiration | 2020 | 2020 |
Issuance Date, November 2012 Tranche Three | ||
Class Of Warrant Or Right [Line Items] | ||
Exercise price | $ 14.50 | $ 14.50 |
Number of warrant shares | 22 | 22 |
Year of expiration | 2028 | 2028 |
Issuance Date, August 2016 | ||
Class Of Warrant Or Right [Line Items] | ||
Exercise price | $ 0.15 | |
Number of warrant shares | 155,338 | |
Year of expiration | 2023 |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Details) - USD ($) $ in Thousands | May 13, 2019 | Apr. 10, 2019 | Sep. 10, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Number of shares exercised | 85,559 | |||||||
Compensation expense | $ 307 | $ 63 | $ 5,911 | $ 129 | ||||
Accelerated vesting of options | 1,139,418 | |||||||
Unamortized stock-based compensation cost related to unvested stock options | $ 2,473 | $ 2,473 | ||||||
Unamortized stock-based compensation cost, weighted average period of recognition | 3 years | |||||||
IPO | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Compensation expense | $ 287 | |||||||
Chief Financial Officer | IPO | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Accelerated vesting of options | 201,666 | |||||||
Common Stock | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Number of shares exercised | 13,525 | 85,559 | 9,977 | |||||
Common Stock | Chief Executive Officer | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Restricted stock award, fully vested shares | 383,197 | |||||||
Restricted stock award, net shares issued | 210,758 | |||||||
Restricted stock award, shares withheld to satisfy tax obligations | 172,439 | |||||||
Tax obligations recorded as reduction in additional paid in capital | $ 1,897 | |||||||
Restricted Stock Unit | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Aggregate restricted stock units, granted | 128,000 | |||||||
Aggregate restricted stock units, outstanding | 90,000 | 90,000 | ||||||
Restricted Stock Award | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Compensation expense | $ 4,215 | |||||||
2012 Equity Incentive Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Number of shares available to be issued | 0 | 0 | ||||||
Expiration period | 10 years | |||||||
Number of shares exercised | 0 | 0 | ||||||
2012 Equity Incentive Plan | Minimum | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Vesting period | 2 years | |||||||
2012 Equity Incentive Plan | Maximum | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Vesting period | 4 years | |||||||
2012 Equity Incentive Plan | Options and SARs | Minimum | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Exercise price options granted from fair value common stock, percent | 100.00% | |||||||
2012 Equity Incentive Plan | Granted to Ten Percent Stockholders | Minimum | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Exercise price options granted from fair value common stock, percent | 110.00% | |||||||
2012 Equity Incentive Plan | Granted to Ten Percent Stockholders | Maximum | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Vesting period | 5 years | |||||||
2019 Equity Incentive Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Number of shares available to be issued | 2,011,449 | 2,011,449 | ||||||
2019 Employee Stock Purchase Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Common stock, number of shares available for sale | 337,007 | 337,007 | ||||||
Period in which reserved shares will increase annually | 10 years | |||||||
Increase in common stock reserved for issuance as a percentage of total number of shares of capital stock outstanding on the last day of the prior calendar year | 1.00% | 1.00% | ||||||
Increase In common stock reserved for issuance of number of shares of capital stock outstanding on last day of prior calendar year | 500,000 | 500,000 | ||||||
Common stock reserved for issuance description | Additionally, the number of shares of common stock reserved for issuance under the 2019 Employee Stock Purchase Plan will automatically increase on January 1 of each calendar year for 10 years, starting January 1, 2020, and ending on, and including, January 1, 2029, in an amount equal to the lesser of 1% of the total number of shares of capital stock outstanding on December 31st of the prior calendar year, and (ii) 500,000 shares, unless the board of directors or compensation committee determines prior to such date that there will be a lesser increase, or no increase. | |||||||
Number of shares issued | 0 | |||||||
2019 Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Common stock, number of shares available for sale | 1,885,039 | 1,885,039 | ||||||
Period in which reserved shares will increase annually | 10 years | |||||||
Increase in common stock reserved for issuance as a percentage of total number of shares of capital stock outstanding on the last day of the prior calendar year | 5.00% | 5.00% | ||||||
Common stock reserved for issuance description | 1,885,039 shares of common stock are reserved for future issuance under the 2019 Equity Incentive Plan, plus the number of shares subject to outstanding stock options or other stock awards that were granted under the 2012 Option Plan that are forfeited, terminated, expire or are otherwise not issued. Additionally, the number of shares of common stock reserved for issuance under the 2019 Equity Incentive Plan will automatically increase on January 1 of each calendar year for 10 years, starting January 1, 2020 and ending on and including January 1, 2029, in an amount equal to 5% of the total number of shares of capital stock outstanding on December 31 of the prior calendar year, unless the board of directors or compensation committee determines prior to the date of increase that there will be a lesser increase, or no increase. |
Stock-based Compensation - Sche
Stock-based Compensation - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 307 | $ 63 | $ 5,911 | $ 129 |
Research and development | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 93 | 10 | 268 | 21 |
Sales and marketing | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 65 | 16 | 543 | 33 |
General and administrative | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 114 | 28 | 5,045 | 57 |
Cost of revenues | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 35 | $ 9 | $ 55 | $ 18 |
Stock-based Compensation - Summ
Stock-based Compensation - Summary of Stock Option Activity (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Options Outstanding | 1,320,197 | |
Options granted | 637,213 | |
Options exercised | (85,559) | |
Options forfeited | (150,730) | |
Options cancelled | 0 | |
Options Outstanding | 1,721,121 | 1,320,197 |
Options Vested and expected to vest at September 30, 2019 | 1,721,121 | |
Options Vested at September 30, 2019 | 1,139,418 | |
Outstanding, Weighted average exercise price per share | $ / shares | $ 0.77 | |
Options granted, Weighted average exercise price per share | $ / shares | 10.94 | |
Options exercised, Weighted average exercise price per share | $ / shares | 0.81 | |
Options forfeited, Weighted average exercise price per share | $ / shares | 6.64 | |
Outstanding, Weighted average exercise price per share | $ / shares | 4.02 | $ 0.77 |
Vested and expected to vest at September 30, 2019, Weighted average exercise price per share | $ / shares | 4.02 | |
Vested at September 30, 2019, Weighted average exercise price per share | $ / shares | $ 2.72 | |
Outstanding, Weighted average remaining contractual life (in years) | 7 years 11 months 4 days | 7 years 11 months 26 days |
Vested and expected to vest at September 30, 2019, Weighted average remaining contractual life (in years) | 7 years 11 months 4 days | |
Vested at September 30, 2019, Weighted average remaining contractual life (in years) | 7 years 3 months 29 days | |
Outstanding, Aggregate Intrinsic Value | $ | $ 2,541 | $ 8,465 |
Vested and expected to vest at September 30, 2019, Aggregate Intrinsic Value | $ | 2,541 | |
Vested at September 30, 2019, Aggregate Intrinsic Value | $ | $ 1,993 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Provisions for income tax expense/(benefit) | $ 33 | $ (14) | $ 784 | $ 667 | |
Corporate tax rate | 21.00% | 35.00% | |||
Gross amount of unrecognized tax benefits | 5,985 | $ 5,985 | |||
Unrecognized tax benefits that would reduce effective tax rate | $ 735 | $ 735 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Loss Contingencies [Line Items] | |||||
Contingent severance obligation accrual | $ 0 | $ 0 | $ 0 | ||
Severance obligation change in control period | 12 months | ||||
Pearson Action | |||||
Loss Contingencies [Line Items] | |||||
Contingent severance obligation accrual | 0 | $ 0 | |||
Cost of Revenues | |||||
Loss Contingencies [Line Items] | |||||
Royalty expense | 862,000 | $ 321,000 | $ 2,560,000 | $ 1,350,000 | |
Wireless Essential Patent Holders | |||||
Loss Contingencies [Line Items] | |||||
Royalty expire year | 2021 | ||||
Other Providers of Integrated Technologies | |||||
Loss Contingencies [Line Items] | |||||
Royalty expire year | 2023 | ||||
Maximum | |||||
Loss Contingencies [Line Items] | |||||
Severance obligation before change in control | 1,342,000 | $ 1,342,000 | |||
Severance obligation change in control | 1,667,000 | 1,667,000 | |||
Severance obligation in event of termination with cause | $ 240,000 | $ 240,000 | |||
Maximum | Wireless Essential Patent Holders | |||||
Loss Contingencies [Line Items] | |||||
Royalty payment percent of net revenues | 5.00% | ||||
Maximum | Other Providers of Integrated Technologies | |||||
Loss Contingencies [Line Items] | |||||
Royalty payment percent of net revenues | 5.00% |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Investor and Holder of August 2016 Series A Warrants | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related party | $ 0 | $ 0 | $ 0 | $ 797 |
B . Riley Principal Investments | ||||
Related Party Transaction [Line Items] | ||||
Consulting fees | $ 0 | $ 50 | $ 56 | $ 150 |
Net Loss Per Share Attributab_3
Net Loss Per Share Attributable to Common Stockholders - Schedule of Computation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||
Net loss allocable to common stockholders | $ (6,768) | $ (947) | $ (19,057) | $ (12,108) |
Denominator: | ||||
Weighted–average shares used in computing net loss per share attributable to common stockholders, basic and diluted | 20,356,447 | 1,037,090 | 18,085,719 | 1,035,927 |
Net loss per share attributable to common stockholders, basic and diluted | $ (0.33) | $ (0.91) | $ (1.05) | $ (11.69) |
Net Loss Per Share Attributab_4
Net Loss Per Share Attributable to Common Stockholders - Summary of Potentially Dilutive Common Shares were Excluded from Calculation of Diluted Net Loss Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total dilutive common shares excluded from calculation of diluted net loss per share | 2,911,394 | 15,187,701 | 2,911,394 | 15,187,701 |
Convertible Preferred Stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total dilutive common shares excluded from calculation of diluted net loss per share | 12,217,459 | 12,217,459 | ||
Shares Subject to Options to Purchase Common Stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total dilutive common shares excluded from calculation of diluted net loss per share | 1,721,121 | 1,356,511 | 1,721,121 | 1,356,511 |
Unvested Restricted Stock Units | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total dilutive common shares excluded from calculation of diluted net loss per share | 90,000 | 90,000 | ||
Shares Subject to Warrants to Purchase Convertible Preferred Stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total dilutive common shares excluded from calculation of diluted net loss per share | 156,294 | 156,294 | ||
Shares Subject to Warrants to Purchase Common Stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total dilutive common shares excluded from calculation of diluted net loss per share | 956 | 956 | ||
Shares Subject to Term Debt Optional Conversion into Convertible Preferred Stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total dilutive common shares excluded from calculation of diluted net loss per share | 1,457,437 | 1,457,437 | ||
Shares Subject to Term Debt Optional Conversion into Common Stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total dilutive common shares excluded from calculation of diluted net loss per share | 1,099,317 | 1,099,317 |
Entity Level Information - Addi
Entity Level Information - Additional Information (Details) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019USD ($)Segment | Dec. 31, 2018USD ($) | |
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Number of reporting segment | Segment | 1 | |
Allowance for credit losses | $ 7 | $ 11 |
Receivables | Customer Concentration | Customer One | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Concentration risk percentage | 54.00% | 44.00% |
Receivables | Customer Concentration | Customer Two | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Concentration risk percentage | 22.00% | 43.00% |
Receivables | Customer Concentration | Customer Three | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Concentration risk percentage | 11.00% | |
U.S [Member] | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets | $ 1,175 | $ 2,013 |
Asia Pacific [Member] | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets | $ 511 | $ 393 |
Entity Level Information - Summ
Entity Level Information - Summary of Revenue by Region (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Revenue | $ 28,850 | $ 39,498 | $ 99,081 | $ 89,138 |
U.S [Member] | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Revenue | 23,170 | 33,030 | 78,401 | 69,583 |
Canada and Latin America [Member] | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Revenue | 3,964 | 3,517 | 13,255 | 10,149 |
Europe and Middle East [Member] | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Revenue | 756 | 2,012 | 4,766 | 8,098 |
Asia Pacific [Member] | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Revenue | $ 960 | $ 939 | $ 2,659 | $ 1,308 |
Entity Level Information - Comp
Entity Level Information - Composition of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Entity Wide Information Revenue From External Customer [Line Items] | ||||
Total revenues | $ 28,850 | $ 39,498 | $ 99,081 | $ 89,138 |
Product Sales | ||||
Entity Wide Information Revenue From External Customer [Line Items] | ||||
Total revenues | 28,773 | 38,892 | 98,714 | 86,876 |
Services | ||||
Entity Wide Information Revenue From External Customer [Line Items] | ||||
Total revenues | $ 77 | $ 606 | $ 367 | $ 2,262 |
Entity Level Information - Perc
Entity Level Information - Percentage of Total Revenues (Details) - Revenues - Customer Concentration | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Customer A | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Concentration risk percentage | 25.00% | 16.00% | 31.00% | 15.00% |
Customer B | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Concentration risk percentage | 19.00% | 18.00% | ||
Customer C | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Concentration risk percentage | 19.00% | 20.00% | ||
Customer D | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Concentration risk percentage | 19.00% | 13.00% | 12.00% | 12.00% |
Customer E | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Concentration risk percentage | 33.00% | 31.00% |