Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2016 | |
Document And Entity Information [Abstract] | |
Entity Registrant Name | NEPHROS INC |
Entity Central Index Key | 1,196,298 |
Document Type | S1 |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2016 |
Entity Filer Category | Smaller Reporting Company |
Trading Symbol | NEPH |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash | $ 275,000 | $ 1,248,000 |
Accounts receivable, net | 388,000 | 397,000 |
Investment in lease, net-current portion | 27,000 | |
Inventory, net | 479,000 | 591,000 |
Prepaid expenses and other current assets | 95,000 | 228,000 |
Total current assets | 1,264,000 | 2,464,000 |
Property and equipment, net | 70,000 | 12,000 |
Investment in lease, net-less current portion | 61,000 | |
License and supply agreement, net | 1,262,000 | 1,473,000 |
Other asset | 21,000 | 21,000 |
Total assets | 2,678,000 | 3,970,000 |
Current liabilities: | ||
Accounts payable | 585,000 | 652,000 |
Accrued expenses | 240,000 | 237,000 |
Deferred revenue, current portion | 70,000 | 70,000 |
Total current liabilities | 895,000 | 959,000 |
Unsecured long-term note payable, net of debt issuance costs and debt discount of $349 | 838,000 | |
Long-term portion of deferred revenue | 278,000 | 347,000 |
Total liabilities | 2,011,000 | 1,306,000 |
Commitments and Contingencies (Note 13) | ||
Stockholders' equity: | ||
Preferred stock, $.001 par value; 5,000,000 shares authorized at December 31, 2016 and 2015; no shares issued and outstanding at December 31, 2016 and 2015. | ||
Common stock, $.001 par value; 90,000,000 shares authorized at December 31, 2016 and 2015; 49,782,797 and 48,580,355 shares issued and outstanding at December 31, 2016 and December 31, 2015, respectively. | 50,000 | 49,000 |
Additional paid-in capital | 120,835,000 | 119,797,000 |
Accumulated other comprehensive income | 67,000 | 71,000 |
Accumulated deficit | (120,285,000) | (117,253,000) |
Total stockholders' equity | 667,000 | 2,664,000 |
Total liabilities and stockholders' equity | $ 2,678,000 | $ 3,970,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Debt discount | $ 349 | $ 0 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 49,782,797 | 48,580,355 |
Common stock, shares outstanding | 49,782,797 | 48,580,355 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Net revenue: | ||
Product revenues | $ 2,093,000 | $ 1,790,000 |
License, royalty and other revenues | 227,000 | 154,000 |
Total net revenues | 2,320,000 | 1,944,000 |
Cost of goods sold | 1,026,000 | 884,000 |
Gross margin | 1,294,000 | 1,060,000 |
Operating expenses: | ||
Research and development | 1,079,000 | 826,000 |
Depreciation and amortization | 230,000 | 212,000 |
Selling, general and administrative | 2,854,000 | 3,443,000 |
Total operating expenses | 4,163,000 | 4,481,000 |
Loss from operations | (2,869,000) | (3,421,000) |
Change in fair value of warrant liability | 2,099,000 | |
Warrant modification expense | (1,761,000) | |
Interest expense | (172,000) | (42,000) |
Interest income | 5,000 | |
Other income (expense), net | 4,000 | 37,000 |
Net loss | (3,032,000) | (3,088,000) |
Other comprehensive loss, foreign currency translation adjustments | (4,000) | (1,000) |
Total comprehensive loss | (3,036,000) | (3,089,000) |
Net loss | (3,032,000) | (3,088,000) |
Deemed dividend as a result of warrant modification | (73,000) | |
Net loss attributable to common stockholders | $ (3,032,000) | $ (3,161,000) |
Net loss per common share, basic and diluted | $ (0.06) | $ (0.09) |
Weighted average common shares outstanding, basic and diluted | 48,583,165 | 34,780,506 |
Consolidated Statements of Chan
Consolidated Statements of Changes In Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2014 | $ 30 | $ 108,382 | $ 72 | $ (114,165) | $ (5,681) |
Balance, shares at Dec. 31, 2014 | 30,391,513 | ||||
Net loss | (3,088) | (3,088) | |||
Net unrealized losses on foreign currency translation, net of tax | (1) | $ (1) | |||
Issuance of common stock, net of equity issuance costs of $24 | 2 | 1,203 | 1,205 | ||
Issuance of common stock, net of equity issuance costs, shares | $ 1,834,299 | ||||
Issuance of common stock, net of commitment fee of $163 | $ 1 | $ 135 | $ 136 | ||
Issuance of common stock, net of commitment fee, shares | 550,000 | ||||
Issuance of restricted stock | $ 1 | 174 | 175 | ||
Issuance of restricted stock, shares | 501,182 | ||||
Issuance of restricted stock to a vendor | 68 | 68 | |||
Issuance of restricted stock to a vendor, shares | 116,613 | ||||
Exercise of warrants | $ 15 | 9,484 | 9,499 | ||
Exercise of warrants, shares | 15,186,748 | ||||
Noncash stock-based compensation | 351 | 351 | |||
Balance at Dec. 31, 2015 | $ 49 | 119,797 | 71 | (117,253) | 2,664 |
Balance, shares at Dec. 31, 2015 | 48,580,355 | ||||
Net loss | (3,032) | (3,032) | |||
Net unrealized losses on foreign currency translation, net of tax | (4) | (4) | |||
Issuance of restricted stock | $ 1 | 1 | |||
Issuance of restricted stock, shares | 1,021,763 | ||||
Restricted stock issued to settle liability | 51 | 51 | |||
Restricted stock issued to settle liability, shares | 179,773 | ||||
Issuance of warrants | 389 | 389 | |||
Exercise of warrants | 1 | 1 | |||
Exercise of warrants, shares | 906 | ||||
Noncash stock-based compensation | 597 | 597 | |||
Balance at Dec. 31, 2016 | $ 50 | $ 120,835 | $ 67 | $ (120,285) | $ 667 |
Balance, shares at Dec. 31, 2016 | 49,782,797 |
Consolidated Statements of Cha6
Consolidated Statements of Changes In Stockholders' Equity (Deficit) (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Equity issuance costs | $ 24 |
Commitment fee | $ 163 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities | ||
Net loss | $ (3,032,000) | $ (3,088,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation of property and equipment | 19,000 | 1,000 |
Amortization of license and supply agreement | 211,000 | 211,000 |
Non-cash stock-based compensation, including stock options and restricted stock | 551,000 | 489,000 |
Non-employee stock-based compensation | 46,000 | 68,000 |
Change in fair value of warrant liability | (2,099,000) | |
Warrant modification | 1,761,000 | |
Inventory reserve | 27,000 | |
Allowance for doubtful accounts reserve | 35,000 | 15,000 |
Amortization of debt discount | 53,000 | |
Gain on foreign currency transactions | (4,000) | (7,000) |
(Increase) decrease in operating assets: | ||
Accounts receivable | (17,000) | (302,000) |
Inventory | 103,000 | (405,000) |
Prepaid expenses and other current assets | (10,000) | (144,000) |
Increase (decrease) in operating liabilities: | ||
Accounts payable | (76,000) | (176,000) |
Accrued expenses | 51,000 | (69,000) |
Deferred revenue | (69,000) | (70,000) |
Net cash used in operating activities | (2,112,000) | (3,815,000) |
Investing activities | ||
Purchases of property and equipment | (45,000) | (13,000) |
Net cash used in investing activities | (45,000) | (13,000) |
Financing activities | ||
Proceeds from issuance of unsecured note | 1,187,000 | |
Proceeds from issuance of common stock | 1,340,000 | |
Proceeds from exercise of warrants | 1,000 | 2,451,000 |
Payment of senior secured notes | ||
Net cash provided by financing activities | 1,188,000 | 3,791,000 |
Effect of exchange rates on cash | (4,000) | 1,000 |
Net decrease in cash | (973,000) | (36,000) |
Cash, beginning of year | 1,248,000 | 1,284,000 |
Cash, end of year | 275,000 | 1,248,000 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest expense | 113,000 | 43,000 |
Cash paid for income taxes | 11,000 | 5,000 |
Supplemental disclosure of noncash financing activities | ||
Fair value of warrants issued with unsecured note payable | 393,000 | |
Investment in lease receivable, net | 92,000 | |
Cost of equipment in sales-type lease | 92,000 | |
Restricted stock issued to settle liability | 51,000 | 36,000 |
Deposit on inventory reclassified from prepaid expenses and other current assets to inventory | 18,000 | |
Deposit on property and equipment reclassified from prepaid expenses and other current assets to property and equipment | 124,000 | |
Deemed dividend as a result of warrant modification | 73,000 | |
Issuance of common stock as commitment fee | 163,000 | |
Extinguishment of warrant liability | $ 5,287,000 |
Organization and Nature of Oper
Organization and Nature of Operations | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | Note 1 - Organization and Nature of Operations Nephros, Inc. (“Nephros” or the “Company”) was incorporated under the laws of the State of Delaware on April 3, 1997. Nephros was founded by health professionals, scientists and engineers affiliated with Columbia University to develop advanced End Stage Renal Disease (“ESRD”) therapy technology and products. The Company has two products in the hemodiafiltration (“HDF”) modality to deliver therapy for ESRD patients. These are the OLpūr mid-dilution HDF filter or “dialyzer,” designed expressly for HDF therapy, and the OLpūr H2H HDF module, an add-on module designed to allow the most common types of hemodialysis machines to be used for HDF therapy. In 2009, the Company introduced its Dual Stage Ultrafilter (“DSU”) water filter, which represented a new and complementary product line to the Company’s ESRD therapy business. The DSU incorporates the Company’s unique and proprietary dual stage filter architecture. On June 4, 2003, Nephros International Limited was incorporated under the laws of Ireland as a wholly-owned subsidiary of the Company. In August 2003, the Company established a European Customer Service and financial operations center in Dublin, Ireland. The U.S. facilities, located at 41 Grand Avenue, River Edge, New Jersey, 07661, are used to house the Company’s corporate headquarters and research facilities. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Nephros International Limited. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amount of revenues and expenses, during the reporting period. Actual results could differ materially from those estimates. Included in these estimates are assumptions about the valuation of the warrant liability, the collection of accounts receivable, value of inventories, useful life of fixed assets and intangible assets, assumptions used in determining stock compensation such as expected volatility and risk-free interest rate and the ability of the Company to continue as a going concern. Reclassifications Certain reclassifications were made to the prior year’s amounts to conform to the 2016 presentation. Other assets, net, as presented as of December 31, 2015 is now presented as license and supply agreement, net and other asset, respectively. Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company’s recurring losses and difficulty in generating sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern. The Company’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company has incurred significant losses from operations in each quarter since inception. In addition, the Company has not generated positive cash flow from operations for the years ended December 31, 2016 and 2015. To become profitable, the Company must increase revenue substantially and achieve and maintain income from operations. If the Company is not able to increase revenue and generate income from operations sufficiently to achieve profitability, its results of operations and financial condition will be materially and adversely affected. On March 17, 2017, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain purchasers, including members of the Company’s management, identified therein. Pursuant to the Purchase Agreement, the Company agreed to issue and sell, and the purchasers agreed to purchase, an aggregate of 4,059,994 shares at a price of $0.30 per share for total gross proceeds of approximately $1.2 million. In addition, the Company will issue to the purchasers warrants to purchase an aggregate of 4,059,994 shares of common stock. The warrants will have an exercise price of $0.30 per share and will be exercisable for a five-year term. See Note 14 for further discussion. On June 7, 2016, the Company received gross proceeds of approximately $1,187,000 in connection with the issuance of unsecured promissory notes and warrants. The portion of the outstanding unsecured promissory notes held by related parties comprised of entities controlled by a member of management and by Lambda Investors LLC (“Lambda”), the majority shareholder, amounted to $30,000 and $300,000, respectively. The outstanding principal under the Notes accrues interest at a rate of 11% per annum. In addition to the Notes, the Company issued Warrants to purchase approximately 2.4 million shares of the Company’s common stock to the investors in the Agreement. The Warrants have an exercise price of $0.30 per share and are exercisable for 5 years from the issuance date. See Note 7 for further discussion. On December 23, 2015, the Company received proceeds of approximately $688,000 in connection with its offer to holders of certain warrants of the opportunity to exercise their warrants at a temporarily reduced cash exercise price. Warrant holders elected to exercise warrants to purchase an aggregate of 3,442,521 shares of the Company’s common stock at the reduced cash exercise price of $0.20 per share, providing a total of approximately $688,000 in gross proceeds to the Company. Of the 3,442,521 shares issued, 2,782,577 are held by Lambda, the majority shareholder. The warrants that were not exercised pursuant to the offer to exercise will remain in effect, with an exercise price of $0.40 per share of common stock. On September 29, 2015, the Company issued 11,742,100 shares of common stock to Lambda, the majority shareholder, for warrants exercised and received approximately $1,761,000 in cash proceeds. The exercise price for each warrant was $0.15. See Note 3 for further discussion. On July 24, 2015, the Company entered into a purchase agreement (the “Purchase Agreement”), together with a registration rights agreement (the “Registration Rights Agreement”), with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which the Company has the right to sell and Lincoln Park has the obligation to purchase up to $10,000,000 of the Company’s common stock. In connection with the Purchase Agreement, the Company issued to Lincoln Park 250,000 shares of common stock for no proceeds. Pursuant to the Purchase Agreement, in September 2015, the Company issued and sold 300,000 shares of common stock to Lincoln Park at a per share purchase price of $0.45, resulting in gross proceeds of $136,000. See Note 11 - Stockholders’ Equity (Deficit). On May 18, 2015, the Company raised gross proceeds of approximately $1,230,000 through the private placement of 1,834,299 units of its securities. Each unit consisted of one share of its common stock and a five-year warrant to purchase one-half of one share of the Company’s common stock. The purchase price for each unit was $0.67. The 917,149 warrants issued are exercisable at a price of $0.85 per share. See Note 11 - Stockholders’ Equity (Deficit). There can be no assurance that the Company’s future cash flow will be sufficient to meet its obligations and commitments. If the Company is unable to generate sufficient cash flow from operations in the future to service its commitments, the Company will be required to adopt alternatives, such as seeking to raise debt or equity capital, curtailing its planned activities or ceasing its operations. There can be no assurance that any such actions could be effected on a timely basis or on satisfactory terms or at all, or that these actions would enable the Company to continue to satisfy its capital requirements. Recently Adopted Accounting Pronouncement In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” ASU 2014-15 provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and sets rules for how this information should be disclosed in the financial statements. ASU 2014-15 is effective for annual periods ending after December 15, 2016 and interim periods thereafter. The Company adopted ASU 2014-15 as of the fiscal year ended December 31, 2016. In April 2015, the FASB issued ASU 2015-03, “Interest - Imputation of Interest (Subtopic 2015-03): Simplifying the Presentation of Debt Issuance Costs” related to the presentation requirements for debt issuance costs and debt discount and premium. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by ASU 2015-03. ASU 2015-03 is effective for annual and interim periods beginning after December 15, 2015. The Company adopted ASU 2015-03 upon entering into the Note and Warrant Agreement as discussed in Note 7. Concentration of Credit Risk The Company deposits its cash in financial institutions. At times, such deposits may be in excess of insured limits. To date, the Company has not experienced any impairment losses on its cash. Major Customers For the year ended December 31, 2016, four customers accounted for 55% of the Company’s revenues. For the year ended December 31, 2015, four customers accounted for 67% of the Company’s revenues. As of December 31, 2016, four customers accounted for 59% of the Company’s accounts receivable. As of December 31, 2015, four customers accounted for 73% of the Company’s accounts receivable. Accounts Receivable The Company provides credit terms to customers in connection with purchases of the Company’s products. Management periodically reviews customer account activity in order to assess the adequacy of the allowances provided for potential collection issues and returns. Factors considered include economic conditions, each customer’s payment and return history and credit worthiness. Adjustments, if any, are made to reserve balances following the completion of these reviews to reflect management’s best estimate of potential losses. The allowance for doubtful accounts was approximately $50,000 and $15,000 as of December 31, 2016 and 2015, respectively. There was no allowance for sales returns at December 31, 2016 or 2015. There were no write offs of accounts receivable to bad debt expense during 2016 or 2015. Inventory The Company engages third parties to manufacture and package inventory held for sale, takes title to certain inventory once manufactured, and warehouses such goods until packaged for final distribution and sale. Inventory consists of finished goods held at the manufacturers’ facilities, and are valued at the lower of cost or market using the first-in, first-out method. The Company’s inventory reserve requirements are based on factors including the products’ expiration date and estimates for the future sales of the product. If estimated sales levels do not materialize, the Company will make adjustments to its assumptions for inventory reserve requirements. License and Supply Rights The Company’s rights under the License and Supply Agreement are capitalized and stated at cost, less accumulated amortization, and are amortized using the straight-line method over the term of the License and Supply Agreement. The License and Supply Agreement term is from April 23, 2012 through December 31, 2022. The Company determines amortization periods for licenses based on its assessment of various factors impacting estimated useful lives and cash flows of the acquired rights. Such factors include the expected launch date of the product, the strength of the intellectual property protection of the product and various other competitive, developmental and regulatory issues, and contractual terms. Patents The Company has filed numerous patent applications with the United States Patent and Trademark Office and in foreign countries. All costs and direct expenses incurred in connection with patent applications have been expensed as incurred and are included in Selling, General and Administrative expenses on the accompanying consolidated statement of operations and comprehensive loss. Property and Equipment, net Property and equipment, net is stated at cost less accumulated depreciation. These assets are depreciated over their estimated useful lives of three to seven years using the straight line method. Impairment for Long-Lived Assets The Company adheres to Accounting Standards Codification (“ASC”) Topic 360 and periodically evaluates whether current facts or circumstances indicate that the carrying value of its depreciable assets to be held and used may not be recoverable. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the long-lived assets, or the appropriate grouping of assets, is compared to the carrying value to determine whether impairment exists. If an asset is determined to be impaired, the loss is measured based on the difference between the asset’s fair value and its carrying value. For long-lived assets, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows. The Company reports an asset to be disposed of at the lower of its carrying value or its fair value less costs to sell. There were no impairment losses for long-lived assets recorded for the years ended December 31, 2016 and December 31, 2015. Fair Value of Financial Instruments The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short-term maturity of these instruments. See Note 3 for information on the fair value of derivative liabilities. The carrying amounts of the investment in lease, net, and the unsecured long-term note payable approximate fair value as of December 31, 2016 because those financial instruments bear interest at rates that approximate current market rates for similar agreements with similar maturities and credit. Revenue Recognition Revenue is recognized in accordance with ASC Topic 605. Four basic criteria must be met before revenue can be recognized: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the fee is fixed or determinable; and (iv) collectability is reasonably assured. The Company recognizes revenue related to product sales when delivery is confirmed by its external logistics provider and the other criteria of ASC Topic 605 are met. Product revenue is recorded net of returns and allowances. All costs and duties relating to delivery are absorbed by Nephros. All shipments are currently received directly by the Company’s customers. Deferred revenue was approximately $348,000 and $417,000 on the accompanying consolidated balance sheets as of December 31, 2016 and 2015, respectively, and is related to the License Agreement with Bellco. The Company has recognized approximately $2,728,000 of revenue related to this license agreement to date, including approximately $69,000 for the year ended December 31, 2016, resulting in $348,000 being deferred over the remainder of the expected obligation period (see Note 13). The Company recognized approximately $70,000 of revenue related to this license agreement for the year ended December 31, 2015. Beginning on January 1, 2015, Bellco began paying the Company a royalty based on the number of units of certain products sold per year (see Note 13). The Company recognized royalty income of approximately $114,000 and $84,000, respectively, for the years ended December 31, 2016 and 2015. The Company also invoiced Biocon 1, LLC approximately $24,000 related to consulting services provided during the fiscal year ended December 31, 2016, which is included in license, royalty and other revenue on the consolidated statement of operations and comprehensive loss. Approximately $24,000 is also included in accounts receivable as of December 31, 2016. On May 6, 2015, the Company entered into a Sublicense Agreement with CamelBak Products, LLC (“CamelBak”). The Company granted CamelBak an exclusive, non-transferable, worldwide (with the exception of Italy) sublicense and license, in each case solely to market, sell, distribute, import and export the HydraGuard individual water treatment devices. In exchange for the rights granted to CamelBak, CamelBak agreed, through December 31, 2022, to pay the Company a percentage of the gross profit on any sales made to a branch of the U.S. military, subject to certain exceptions, and to pay the Company a fixed per-unit fee for any other sales made. The Company recognized royalty revenue of $10,000 during the fiscal year ended December 31, 2016. On October 17, 2016, the Company entered into a Sublicense Agreement with Roving Blue, Inc. (“Roving Blue”). The Company granted Roving Blue an exclusive, non-transferable, worldwide (with the exception of Italy) sublicense and license. In exchange for the rights granted to Roving Blue, Roving Blue paid the Company an upfront fee of $10,000, which was recognized as royalty revenue during the fiscal year ended December 31, 2016. The Sublicense Agreement with Roving Blue also includes an agreement for Roving Blue to pay the Company a fixed per-unit fee for sales made, subject to certain minimums. Shipping and Handling Costs Shipping and handling costs charged to customers are recorded as cost of goods sold and were approximately $24,000 and $12,000 for the years ended December 31, 2016 and 2015, respectively. Research and Development Costs Research and development costs are expensed as incurred. Stock-Based Compensation The fair value of stock options is recognized as stock-based compensation expense in the Company’s consolidated statement of operations and comprehensive loss. The Company calculates employee stock-based compensation expense in accordance with ASC 718. The Company accounts for stock option grants to consultants under the provisions of ASC 505-50, and as such, these stock options are revalued at each reporting period through the vesting period. The fair value of the Company’s stock option awards are estimated using a Black-Scholes option valuation model. This model requires the input of highly subjective assumptions and elections including expected stock price volatility and the estimated life of each award. In addition, the calculation of compensation costs requires that the Company estimate the number of awards that will be forfeited during the vesting period. The fair value of stock-based awards is amortized over the vesting period of the award. Warrants The Company accounts for stock warrants as either equity instruments or derivative liabilities depending on the specific terms of the warrant agreement. Stock warrants that allow for cash settlement or provide for anti-dilution of the warrant exercise price under certain conditions are accounted for as derivative liabilities. The Company classifies derivative warrant liabilities on the balance sheet as a liability, which is revalued using a binomial options pricing model at each balance sheet date subsequent to the initial issuance. A binomial options pricing model requires the input of highly subjective assumptions and elections including expected stock price volatility and the estimated life of each award. The changes in fair value of the derivative warrant liabilities are remeasured at each balance sheet date and the resulting changes in fair value are recorded in current period earnings. Amortization of Debt Issuance Costs The Company accounts for debt issuance costs in accordance with ASU 2015-03, which requires that costs paid directly to the issuer of a recognized debt liability be reported in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The Company amortizes the debt discount, including debt issuance costs, in accordance with ASC 835, Interest, over the term of the associated debt. See Note 7 for a discussion of the Company’s unsecured long-term note payable. Other Income (Expense), net Other income of approximately $4,000 and $37,000, respectively, for the years ended December 31, 2016 and 2015 is primarily due to foreign currency transaction gains. Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, which requires accounting for deferred income taxes under the asset and liability method. Deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable in future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. For financial reporting purposes, the Company has incurred a loss in each period since its inception. Based on available objective evidence, including the Company’s history of losses, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at December 31, 2016 and 2015. ASC Topic 740 prescribes, among other things, a recognition threshold and measurement attributes for the financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in a company’s income tax return. ASC 740 utilizes a two-step approach for evaluating uncertain tax positions. Step one, or recognition, requires a company to determine if the weight of available evidence indicates a tax position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation processes, if any. Step two, or measurement, is based on the largest amount of benefit, which is more likely than not to be realized on settlement with the taxing authority. The Company is subject to income tax examinations by major taxing authorities for all tax years subsequent to 2012. During the years ended December 31, 2016 and 2015, the Company recognized no adjustments for uncertain tax positions. However, management’s conclusions regarding this policy may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulation and interpretations, thereof. Net Income (loss) per Common Share Basic income (loss) per common share is calculated by dividing net income (loss) available to common shareholders by the number of weighted average common shares issued and outstanding. Diluted earnings (loss) per common share is calculated by dividing net income (loss) available to common shareholders by the weighted average number of common shares issued and outstanding for the period, plus amounts representing the dilutive effect from the exercise of stock options and warrants, as applicable. The Company calculates dilutive potential common shares using the treasury stock method, which assumes the Company will use the proceeds from the exercise of stock options and warrants to repurchase shares of common stock to hold in its treasury stock reserves. The following securities have been excluded from the dilutive per share computation as they are antidilutive: December 31, 2016 2015 Shares underlying options outstanding 4,592,347 4,303,638 Shares underlying warrants outstanding 3,291,149 2,482,563 Unvested restricted stock 957,336 501,182 Foreign Currency Translation Foreign currency translation is recognized in accordance with ASC Topic 830. The functional currency of Nephros International Limited is the Euro and its translation gains and losses are included in accumulated other comprehensive income. The balance sheet is translated at the year-end rate. The statement of operations is translated at the weighted average rate for the year. Comprehensive Income (Loss) Comprehensive income (loss), as defined in ASC 220, is the total of net income (loss) and all other non-owner changes in equity (or other comprehensive income (loss)). The Company’s other comprehensive income (loss) consists only of foreign currency translation adjustments. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers,” related to revenue recognition. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to be entitled to in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in prior accounting guidance. ASU 2014-09 provides alternative methods of initial adoption, and was effective for fiscal years beginning after December 15, 2016, and interim periods within those annual periods. Early adoption was not permitted. In August, 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers: Deferral of the Effective Date”. The amendment in this ASU defers the effective date of ASU No. 2014-09 for all entities for one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to fiscal years beginning after December 15, 2017, including interim reporting periods within that fiscal year. Earlier application is permitted only as of fiscal years beginning after December 31, 2016, including interim reporting periods with that fiscal year. The Company is currently reviewing the revised guidance and assessing the potential impact on its consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, “Simplifying the Measurement of Inventory,” that requires inventory be measured at the lower of cost and net realizable value and options that currently exist for market value be eliminated. The standard defines net realizable value as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation and is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years with early adoption permitted. The guidance should be applied prospectively. The Company does not believe that the adoption of ASU 2015-11 will have a significant impact on its consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes,” that requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by this amendment. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption is permitted and the standard may be applied either retrospectively or on a prospective basis to all deferred tax assets and liabilities. The Company does not believe that the adoption of ASU 2015-17 will have a significant impact on its consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” that modifies certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. The accounting standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. The Company is currently assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases”, that discusses how an entity should account for lease assets and lease liabilities. The guidance specifies that an entity who is a lessee under lease agreements should recognize lease assets and lease liabilities for those leases classified as operating leases under previous FASB guidance. Accounting for leases by lessors is largely unchanged under the new guidance. The guidance is effective for the Company beginning in the first quarter of 2019. Early adoption is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-08, “Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” which clarifies the implementation guidance on principal versus agent considerations. The amendments in this update do not change the core principle of ASU 2014-09. The effective date and transition requirements for the amendments in this update are the same as the effective date and transition requirements of ASU 2014-09. As discussed above, ASU 2015-14 defers the effective date of ASU 2014-09 by one year. The Company is assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is effective for the Company beginning in the first quarter of fiscal year 2017. Early adoption is permitted. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements. In April 2016, the FASB issued ASU 2016-10, “Identifying Performance Obligations and Licensing,” which clarifies the implementation guidance for performance obligations and licensing. The amendments in this update do not change the core principle of ASU 2014-09. The effective date and transition requirements for the amendments in this update are the same as the effective date and transition requirements of ASU 2014-09. As discussed above, ASU 2015-14 defers the effective date of ASU 2014-09 by one year. The Company is currently assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements. In May 2016, the FASB issued ASU 2016-12, “Narrow Scope Improvements and Practical Expedients,” which clarifies the accounting for certain aspects of guidance issued in ASU 2014-09, including assessing collectability and noncash consideration. The clarifications in this update do not change the core principle of ASU 2014-09. The effective date and transition requirements for the amendments in this update are the same as the effective date and transition requirements of ASU 2014-09. As discussed above, ASU 2015-14 defers the effective date of ASU 2014-09 by one year. The Company is currently assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments,” which replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance is effective for the Company beginning in the first quarter of fiscal year 2020. Early adoption is permitted beginning in the first quarter of fiscal year 2019. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments,” which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows in order to reduce diversity in practice. The guidance is effective for the Company beginning in the first quarter of fiscal year 2018. Early adoption is permitted. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements. In November 2016, the FASB issued ASU 2016-17, “Restricted Cash,” which clarifies how restricted cash is presented and classified in the statement of cash flows. The guidance is effective for the Company beginning in the first quarter of fiscal year 2018. Early adoption is permitted. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, “Clarifying the Definition of a Business,” which clarifies the definition of a business in a business combination. The guidance is effective for the Company beginning in the first quarter of fiscal year 2018. Early adoption is permitted. The Company does not expect this ASU to have a significant impact on its consolidated financial statements. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | Note 3 - Financial Instruments The fair value guidance requires fair value measurements be classified and disclosed in one of the following three categories: ● Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; ● Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; ● Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The Company had outstanding warrants originally issued in 2007 (the “2007 Warrants”) that were accounted for as a derivative liability until they were fully exercised on September 29, 2015. The 2007 Warrants were classified as a liability because the transactions that would trigger the anti-dilution adjustment provision in the 2007 Warrants were not inputs to the fair value of the warrants. The 2007 Warrants were recorded as liabilities at their estimated fair value at the date of issuance, with the subsequent changes in estimated fair value recorded in changes in fair value of warrant liability in the Company’s consolidated statement of operations and comprehensive income (loss) in each subsequent period. The Company utilized a binomial options pricing model to value the 2007 Warrants at each reporting period. The estimated fair value of the 2007 Warrants was determined using Level 3 inputs. Inherent in a binomial options pricing model are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero. On the consolidated statement of operations for the year ended December 31, 2015, the Company recorded income of approximately $2,099,000 as a result of the change in fair value of the warrant liability. A reconciliation of the warrant liability is as follows (in thousands): 2007 Warrants Balance at December 31, 2014 $ 7,386 Decrease in fair value of warrant liability (2,099 ) Balance at September 29, 2015 $ 5,287 The following table summarizes the calculated aggregate fair value of the warrants, along with the assumptions utilized in the calculation: September 29, 2015 Calculated aggregate value $ 5,287 Weighted average exercise price $ 0.30 Closing price per share of common stock $ 0.40 Volatility 137 % Weighted average remaining expected life (years) 4.2 Risk-free interest rate 1.4 % Dividend yield - On September 29, 2015, the Company entered into a Warrant Amendment and Exercise Agreement (the “Amendment”) with Lambda. Pursuant to the Amendment, the Company agreed to reduce the current exercise price of the 2007 Warrants by 50%, to $0.15 per share, in exchange for Lambda’s agreement to exercise the 2007 Warrants in their entirety immediately following the modification. Upon exercise of the 2007 Warrants, the Company issued 11,742,100 shares of common stock to Lambda and received approximately $1,761,000 in cash proceeds from Lambda. Following such exercise, no 2007 Warrants remain outstanding. The value of the 2007 Warrants as of September 29, 2015, after the modification, was approximately $7,048,000, calculated as intrinsic value with an expected term of zero. As a result, approximately $1,761,000 was recorded as warrant modification expense for the year ended December 31, 2015. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 4 - Inventory The Company’s inventory components as of December 31, 2016 and 2015 were as follows: December 31, 2016 2015 Total gross inventory, finished goods $ 528,000 $ 634,000 Less: inventory reserve (49,000 ) (43,000 ) Total inventory $ 479,000 $ 591,000 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2016 | |
Other Assets [Abstract] | |
Prepaid Expenses and Other Current Assets | Note 5 - Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets as of December 31, 2016 and 2015 were as follows: December 31, 2016 2015 Prepaid insurance premiums $ 66,000 $ 62,000 Deposit on equipment - 124,000 Inventory in transit - 18,000 Other 29,000 24,000 Prepaid expenses and other current assets $ 95,000 $ 228,000 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Note 6 - Property and Equipment, Net Property and equipment as of December 31, 2016 and 2015 was as follows: December 31, Life 2016 2015 Manufacturing equipment 3-5 years $ 690,000 $ 611,000 Research equipment 5 years 37,000 37,000 Computer equipment 3-4 years 43,000 43,000 Furniture and fixtures 7 years 37,000 37,000 Property and equipment, gross 807,000 728,000 Less: accumulated depreciation 737,000 716,000 Property and equipment, net $ 70,000 $ 12,000 Depreciation expense for each of the years ended December 31, 2016 and 2015 was approximately $19,000 and $1,000, respectively. |
Unsecured Promissory Notes and
Unsecured Promissory Notes and Warrants | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Unsecured Promissory Notes and Warrants | Note 7 - Unsecured Promissory Notes and Warrants On June 7, 2016, the Company entered into a Note and Warrant Agreement (the “Agreement”) with new creditors as well as existing shareholders under which the Company issued unsecured promissory notes (“Notes”) and warrants (“Warrants”) resulting in total gross proceeds to the Company during June 2016 of approximately $1,187,000. As of December 31, 2016, the portion of the outstanding unsecured promissory notes held by related parties comprised of entities controlled by a member of management and by Lambda Investors LLC (“Lambda”), the majority shareholder, amounted to $30,000 and $300,000, respectively. The outstanding principal under the Notes accrues interest at a rate of 11% per annum. The Company is required to make interest only payments on a semi-annual basis, and all outstanding principal under the Notes is repayable in cash on June 7, 2019, the third anniversary of the date of issuance. In addition to the Notes, the Company issued Warrants to purchase approximately 2.4 million shares of the Company’s common stock to the investors in the Agreement. The Warrants have an exercise price of $0.30 per share and are exercisable for 5 years from the issuance date. The Warrants issued under the Agreement are indexed to the Company’s common stock, therefore, the Company is accounting for the Warrants as a component of equity. In connection with the Agreement, the Company incurred approximately $13,000 in legal fees. The approximately $1,187,000 in gross proceeds from the Agreement, along with the legal fees of approximately $13,000, were allocated between the Notes and Warrants based on their relative fair values. The portion of the gross proceeds allocated to the Warrants of approximately $393,000 was accounted for as additional paid-in capital. Approximately $4,000 of the legal fees were allocated to the Warrants and recorded as a reduction to additional paid-in capital. The remainder of the gross proceeds of approximately $794,000, net of the remainder of the fees of approximately $9,000, was allocated to the Notes with the fair value of the Warrants resulting in a debt discount. The debt discount is being amortized to interest expense using the effective interest method in accordance with ASC 835 over the term of the Agreement. Approximately $53,000 was recognized as amortization of debt discount during the fiscal year ended December 31, 2016 and is included in interest expense on the consolidated statement of operations and comprehensive loss. Approximately $77,000 was recognized as interest expense for the fiscal year ended December 31, 2016 for interest payable to noteholders. For the year ended December 31, 2016, the amount of interest expense recognized related to related parties comprised of entities controlled by a member of management and by Lambda Investors LLC (“Lambda”), the majority shareholder, was approximately $2,000 and $19,000, respectively. As of December 31, 2016, approximately $65,000 of interest has been paid to noteholders and approximately $12,000 of interest is included in accrued expenses on the consolidated balance sheet. There were no unsecured long-term notes payable outstanding as of December 31, 2015. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Note 8 - Accrued Expenses Accrued expenses as of December 31, 2016 and 2015 were as follows: December 31, 2016 2015 Accrued legal $ 99,000 $ 103,000 Accrued directors’ compensation 30,000 52,000 Accrued royalty 18,000 14,000 Accrued credits issued to customers - 10,000 Accrued management bonus 19,000 - Accrued accounting 6,000 1,000 Accrued interest 17,000 12,000 Accrued other 51,000 45,000 $ 240,000 $ 237,000 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9 - Income Taxes A reconciliation of the income tax provision computed at the statutory tax rate to the Company’s effective tax rate is as follows: 2016 2015 U.S. federal statutory rate 35.00 % 34.00 % Warrant liability - % 3.71 % State & local taxes (5.21 )% 5.78 % Tax on foreign operations - % 0.36 % State research and development credits 1.87 % 1.47 % Other 0.97 % (3.11 )% Valuation allowance (32.63 )% (42.21 )% Effective tax rate - % - % Significant components of the Company’s deferred tax assets as of December 31, 2016 and 2015 are as follows: 2016 2015 Deferred tax assets: Net operating loss carry forwards $ 29,861,148 $ 29,092,799 Research and development credits 1,220,115 1,163,616 Nonqualified stock option compensation expense 537,037 374,769 Other temporary book - tax differences 254,813 258,445 Total deferred tax assets 31,873,112 30,889,629 Valuation allowance for deferred tax assets (31,873,112 ) (30,889,629 ) Net deferred tax assets $ - $ - A valuation allowance has been recognized to offset the Company’s net deferred tax asset as it is more likely than not that such net asset will not be realized. The Company primarily considered its historical loss and potential Internal Revenue Code Section 382 limitations to arrive at its conclusion that a valuation allowance was required. The Company’s valuation allowance increased $983,483 from December 31, 2015 to December 31, 2016. At December 31, 2016, the Company had Federal income tax net operating loss carryforwards of $79,458,888 and New Jersey income tax net operating loss carryforwards of $19,233,370. Foreign income tax net operating loss carryforwards were $7,403,077 as of December 31, 2016. The Company also had Federal research tax credit carryforwards of $1,220,115 at December 31, 2016 and $1,163,616 at December 31, 2015. The Company’s net operating losses and research credits may ultimately be limited by Section 382 of the code and, as a result, it may be unable to offset future taxable income (if any) with losses, or its tax liability with credits, before such losses and credits expire. The Federal and New Jersey net operating loss carryforwards and Federal tax credit carryforwards will expire at various times between 2017 and 2035 unless utilized. The Company has analyzed the tax positions taken or expected to be taken in its tax returns and concluded it has no liability related to uncertain tax positions. It is the Company’s policy to report interest and penalties, if any, related to unrecognized tax benefits in income tax expense. |
Stock Plans, Share-Based Paymen
Stock Plans, Share-Based Payments and Warrants | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Plans, Share-Based Payments and Warrants | Note 10 - Stock Plans, Share-Based Payments and Warrants Stock Plans In 2015, the Board of Directors adopted the Nephros, Inc. 2015 Equity Incentive Plan (“2015 Plan”). Under the 2015 Plan, 7,000,000 shares are reserved and authorized for awards and the maximum contractual term is 10 years for stock options issued under the 2015 Plan. The Company’s previously adopted and approved plan, the 2004 Stock Incentive Plan (“2004 Plan”), expired in the year ended December 31, 2014. As of December 31, 2016, 3,042,568 options had been issued to employees under the 2015 Plan and were outstanding. The options issued to employees expire on various dates between May 7, 2025 and December 14, 2026. As of December 31, 2016, 281,656 options had been issued to non-employees under the 2015 Plan, were outstanding and will expire on various dates between May 31, 2021 and May 7, 2025. Taking into account all options and restricted stock granted under the 2015 Plan, 1,865,610 shares are available for future grant under the 2015 Plan. Options currently outstanding are fully vested or will vest upon a combination of the following: immediate vesting, performance-based vesting or straight line vesting of two or four years. Of the 3,042,568 options granted to employees, 1,604,725 options will vest when the specified performance condition is met. As of December 31, 2016, 475,263 options had been issued to employees under the 2004 Plan and were outstanding. The options expire on various dates between January 6, 2019 and February 5, 2024. As of December 31, 2016, 792,861 options had been issued to non-employees under the 2004 Plan and were outstanding. Such options expire at various dates between November 30, 2017 and November 17, 2024. No shares are available for future grants under the 2004 Plan. Options currently outstanding are fully vested or are currently vesting over a period of four years. Share-Based Payment Expense is recognized, net of expected forfeitures, over the vesting period of the options. Stock based compensation expense recognized for the years ended December 31, 2016 and 2015 was approximately $388,000 and approximately $328,000, respectively. Approximately $5,000 of total stock based compensation expense is the result of a modification of stock options awards issued to a non-employee director who is no longer serving as a director for the Company. Approximately $363,000 and $306,000, respectively, has been recognized in Selling, General and Administrative expenses on the consolidated statement of operations and comprehensive loss for the years ended December 31, 2016 and 2015. Approximately $25,000 and $22,000, respectively, has been recognized in Research and Development expenses on the consolidated statement of operations and comprehensive loss for the years ended December 31, 2016 and 2015. The following table summarizes the option activity for the years ended December 31, 2016 and 2015: Shares Weighted Average Exercise Price Outstanding at December 31, 2014 2,472,234 $ 0.96 Options granted 2,911,829 0.56 Options forfeited or expired (1,080,425 ) 1.28 Outstanding at December 31, 2015 4,303,638 0.65 Options granted 510,520 0.37 Options forfeited or expired (221,811 ) 1.04 Outstanding at December 31, 2016 4,592,347 $ 0.60 The following table summarizes the options exercisable and vested and expected to vest as of December 31, 2016 and 2015: Shares Weighted Average Exercise Price Exercisable at December 31, 2015 1,377,665 $ 0.84 Vested and expected to vest at December 31, 2015 4,133,932 $ 0.66 Exercisable at December 31, 2016 1,866,019 $ 0.70 Vested and expected to vest at December 31, 2016 4,434,220 $ 0.61 The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the below assumptions for the risk-free interest rates, expected dividend yield, expected lives and expected stock price volatility. Option Pricing Assumptions Grant Year 2016 2015 Stock Price Volatility 114.63 % 121.90 % Risk-Free Interest Rates 1.81 % 1.60 % Expected Life (in years) 5.83 6.15 Expected Dividend Yield 0 % 0 % Expected volatility is based on historical volatility of the Company’s common stock at the time of grant. The risk-free interest rate is based on the U.S. Treasury yields in effect at the time of grant for periods corresponding with the expected life of the options. For the expected life, the Company is using the simplified method as described in the SEC Staff Accounting Bulletin 107. This method assumes that stock option grants will be exercised based on the average of the vesting periods and the option’s life. The weighted-average fair value of options granted in 2016 and 2015 is $0.31 and $0.49, respectively. The aggregate intrinsic values of stock options outstanding and stock options vested or expected to vest as of December 31, 2016 are approximately $25,000 and $24,000, respectively. A stock option has intrinsic value, at any given time, if and to the extent that the exercise price of such stock option is less than the market price of the underlying common stock at such time. The weighted-average remaining contractual life of options vested or expected to vest is 7.8 years. The aggregate intrinsic values of stock options outstanding and of stock options vested or expected to vest as of December 31, 2015 are $0. A stock option has intrinsic value, at any given time, if and to the extent that the exercise price of such stock option is less than the market price of the underlying common stock at such time. The weighted-average remaining contractual life of options vested or expected to vest is 8.5 years. As of December 31, 2016, there was approximately $934,000 of total unrecognized compensation cost related to unvested share-based compensation awards granted under the equity compensation plans. Approximately $158,000 of the $934,000 total unrecognized compensation will be recognized at the time if and when certain performance conditions are met. The remaining approximately $776,000 will be amortized over the weighted average remaining requisite service period of 2.2 years. Restricted Stock Issued to Employees and Directors The Company has issued restricted stock as compensation for the services of certain employees and non-employee directors. The grant date fair value of restricted stock was based on the fair value of the common stock on the date of grant, and compensation expense is recognized based on the period in which the restrictions lapse. The following table summarizes restricted stock activity for the year end December 31, 2016 and 2015: Shares Weighted Average Grant Date Fair Value Nonvested at December 31, 2014 132,077 $ 0.86 Granted 617,795 0.48 Vested (248,690 ) 0.73 Nonvested at December 31, 2015 501,182 0.46 Granted 957,336 0.35 Vested (501,182 ) 0.46 Nonvested at December 31, 2016 957,336 $ 0.35 The total fair value of restricted stock which vested during the years ended December 31, 2016 and 2015 was approximately $291,000 and $181,000, respectively. Total stock-based compensation expense for the restricted stock granted to employees and non-employee directors was approximately $163,000 and $161,000, respectively, for the years ended December 31, 2016 and December 31, 2015 and is included in Selling, General and Administrative expenses on the accompanying consolidated statement of operations and comprehensive loss. Approximately $51,000 and $36,000 of restricted stock was granted to employees for the years ended December 31, 2016 and 2015, respectively, to settle liabilities for services incurred in the respective prior fiscal years. As of December 31, 2016, there was approximately $178,000 of unrecognized compensation expense related to the restricted stock awards, which is expected to be recognized over the next six months. Restricted Stock Issued to Nonemployees In March 2016, 57,143 shares of restricted stock, with a fair value of approximately $16,000, were issued as payment for consulting services to be provided through December 2016. The Company recorded approximately $16,000 of selling, general and administrative expense during the year ended December 31, 2016. The restricted stock vested on June 15, 2016. In March 2016, 38,461 shares of restricted stock, with a fair value of approximately $10,000, were issued as payment for consulting services to be provided during the fiscal year ended December 31, 2016. The Company recorded approximately $10,000 of selling, general and administrative expense during the year ended December 31, 2016. The restricted stock vested on September 30, 2016. In January 2016, 58,823 shares of restricted stock, with a fair value of approximately $20,000, were issued as payment for consulting services to be provided through December 2016. The Company recorded approximately $20,000 of selling, general and administrative expense during the year ended December 31, 2016. The restricted stock vested on April 12, 2016. In September 2015, 47,382 shares of restricted stock, with a fair value of approximately $23,000, were issued as payment for marketing services to be provided in fiscal year 2015. The Company recorded approximately $23,000 of selling, general and administrative expense during the year ended December 31, 2015. The restricted stock vested on November 25, 2015. In July 2015, 69,231 shares of restricted stock, with a fair value of approximately $45,000, were issued as payment for marketing services to be provided through November 2015 under the Company’s agreement with Proactive Capital Resources Group. The Company recorded approximately $45,000 of selling, general and administrative expense during the year ended December 31, 2015. The restricted stock vested on August 7, 2015. Warrants The Company accounts for stock warrants as either equity instruments or derivative liabilities depending on the specific terms of the warrant agreement. Stock warrants are accounted for as derivative liabilities if the stock warrants allow for cash settlement or provide for modification of the warrant exercise price in the event that subsequent sales of common stock are at a lower price per share than the then-current warrant exercise price. The Company classifies derivative warrant liabilities on the balance sheet as a long-term liability, which is measured to fair value at each balance sheet date subsequent to the initial issuance of the stock warrant. The following table summarizes certain terms of all of the Company’s outstanding warrants at December 31, 2016 and 2015: Total Outstanding Warrants Exercise Total Common Shares Issuable as of December 31, Title of Warrant Date Issued Expiry Date Price 2016 2015 Equity-classified warrants Shareholder Rights Offering Warrants 3/10/2011 3/10/2016 $ 0.40 - 1,565,414 May 2015 - private placement warrants 3/18/2015 3/18/2020 $ 0.85 917,149 917,149 June 2016 – Note and Warrant Agreement 6/7/2016 6/7/2021 $ 0.30 2,374,000 - 3,291,149 2,482,563 Total 3,291,149 2,482,563 The weighted average exercise price of the outstanding warrants was $0.45 as of December 31, 2016 and $0.57 as of December 31, 2015. Warrants exercised during 2016 and 2015 During the twelve months ended December 31, 2016, 19,621 warrants were exercised, resulting in proceeds of approximately $1,000 and the issuance of 906 shares of the Company’s common stock. On December 18, 2015, the Company completed its offer to exercise (the “Offer to Exercise”) certain outstanding warrants to purchase an aggregate of 5,008,689 shares of the Company’s common stock, consisting of outstanding warrants to purchase an aggregate of 2,226,112 shares of the Company’s common stock at an exercise price of $0.40 per share, issued on March 10, 2011 to investors participating in the Company’s 2011 rights offering (the “Rights Offering Warrants”) and outstanding warrants to purchase an aggregate of 2,782,577 shares of the Company’s common stock at an exercise price of $0.40 per share, issued on March 10, 2011 to Lambda in connection with a private placement financing transaction (the “Lambda Warrants” and, together with the Rights Offering Warrants, the “2011 Warrants”). Pursuant to the Offer to Exercise, 2011 Warrants to purchase an aggregate of 3,442,521 shares of the Company’s common stock were tendered by their holders and were exercised in connection therewith. Gross proceeds of approximately $688,000 were received by the Company on December 23, 2015. The 2011 Warrants of holders who elected to participate in the Offer to Exercise were exercisable at a temporarily reduced cash exercise price of $0.20 per share of common stock beginning on November 20, 2015 and expiring on December 18, 2015. The incremental value of the 2011 Warrants exercised pursuant to the Offer to Exercise on November 20, 2015, after the modification, was approximately $106,000. As a result, approximately $73,000 was recorded as a deemed dividend for the year ended December 31, 2015. During the twelve months ended December 31, 2015, in addition to those warrants exercised during Offer to Exercise period above and those warrants exercised by Lambda on September 29, 2015 (see Note 3), 2,127 shares of common stock were issued as a result of additional warrants exercised, resulting in proceeds of $851. In addition, 30 common shares were not issued as a result of warrant exercises for the years ended December 31, 2015 due to rounding. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | Note 11 - Stockholders’ Equity (Deficit) July 2015 Purchase Agreement and Registration Rights Agreement On July 24, 2015, the Company entered into a Purchase Agreement, together with a Registration Rights Agreement, with Lincoln Park, an Illinois limited liability company. Under the terms and subject to the conditions of the Purchase Agreement, the Company has the right to sell to and Lincoln Park is obligated to purchase up to $10.0 million in shares of the Company’s common stock, subject to certain limitations, from time to time, over the 36-month period commencing on September 4, 2015. The Company may direct Lincoln Park, at its sole discretion and subject to certain conditions, to purchase up to 100,000 shares of common stock on any business day, provided that at least one business day has passed since the most recent purchase, increasing to up to 200,000 shares depending upon the closing sale price of the common stock (such purchases, “Regular Purchases”). However, in no event shall a Regular Purchase be more than $500,000. The purchase price of shares of common stock related to the future funding will be based on the prevailing market prices of such shares at the time of sales, but in no event will shares be sold to Lincoln Park on a day the common stock closing price is less than the floor price as set forth in the Purchase Agreement. In addition, the Company may direct Lincoln Park to purchase additional amounts as accelerated purchases if on the date of a Regular Purchase the closing sale price of the common stock is not below the threshold price as set forth in the Purchase Agreement. The Company’s sales of shares of common stock to Lincoln Park under the Purchase Agreement are limited to no more than the number of shares that would result in the beneficial ownership by Lincoln Park and its affiliates, at any single point in time, of more than 9.99% of the then-outstanding shares of the common stock. In connection with the Purchase Agreement, the Company issued to Lincoln Park 250,000 shares of common stock for no proceeds. The fair value of the 250,000 shares of common stock issued was approximately $163,000 and was recorded as a commitment fee. Pursuant to the Purchase Agreement, in September 2015, the Company issued and sold an additional 300,000 shares of common stock to Lincoln Park at a per share price of $0.45, resulting in gross proceeds of $135,000. The commitment fee of $163,000 was fully amortized and recorded in additional paid-in capital as of December 31, 2015. The Purchase Agreement and the Registration Rights Agreement contain customary representations, warranties, agreements and conditions to completing future sale transactions, indemnification rights and obligations of the parties. The Company has the right to terminate the Purchase Agreement at any time, at no cost or penalty. Actual sales of shares of common stock to Lincoln Park under the Purchase Agreement will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the common stock and determinations by the Company as to the appropriate sources of funding for the Company and its operations. There are no trading volume requirements or restrictions under the Purchase Agreement. Lincoln Park has no right to require any sales by the Company, but is obligated to make purchases from the Company as the Company directs in accordance with the Purchase Agreement. Lincoln Park has covenanted not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of Company shares. May 2015 Private Placement On May 18, 2015, the Company raised gross proceeds of approximately $1.23 million through the private placement of 1,834,299 units of its securities. Each unit consisted of one share of its common stock and a five-year warrant to purchase one-half of one share of the Company’s common stock. The purchase price for each unit was $0.67. The 917,149 warrants issued are equity-classified and are exercisable at a price of $0.85 per share. Proceeds net of equity issuance costs of $24,000 were recorded as a result of the private placement was approximately $1,205,000. |
401(k) Plan
401(k) Plan | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
401(k) Plan | Note 12 - 401(k) Plan The Company has established a 401(k) deferred contribution retirement plan (the “401(k) Plan”) which covers all employees. The 401(k) Plan provides for voluntary employee contributions of up to 15% of annual earnings, as defined. As of January 1, 2004, the Company matches 100% of the first 3% and 50% of the next 2% of employee earnings to the 401(k) Plan. The Company contributed and expensed $44,000 and $42,000 in 2016 and 2015, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13 - Commitments and Contingencies Manufacturing and Suppliers The Company has not and does not intend in the near future, to manufacture any of its products and components. With regard to the OLpur MD190 and MD220, on June 27, 2011, the Company entered into a license agreement, effective July 1, 2011, with Bellco S.r.l., an Italy-based supplier of hemodialysis and intensive care products, for the manufacturing, marketing and sale of our patented mid-dilution dialysis filters (MD 190, MD 220), referred to herein as the Products. Under the agreement, Nephros granted Bellco a license to manufacture, market and sell the Products under its own name, label and CE mark in Italy, France, Belgium, Spain and Canada on an exclusive basis, and to do the same on a non-exclusive basis in the United Kingdom and Greece and, upon our written approval, other European countries where the Company does not sell the Products as well as non-European countries (referred to as the “Territory”). On February 19, 2014, the Company entered into the First Amendment to License Agreement (the “First Amendment”), by and between the Company and Bellco, which amends the License Agreement, entered into as of July 1, 2011 by and between the Company and Bellco. Pursuant to the First Amendment, the Company and Bellco agreed to extend the term of the License Agreement from December 31, 2016 to December 31, 2021. The First Amendment also expands the Territory covered by the License Agreement to include, on an exclusive basis, Sweden, Denmark, Norway and Finland and on a non-exclusive basis, Korea, Mexico, Brazil, China and the Netherlands. The First Amendment further provides new minimum sales targets which, if not satisfied, will, at the discretion of the Company, result in conversion of the license to non-exclusive status. The Company has agreed to reduce the fixed royalty payment payable to the Company for the period beginning on January 1, 2015 through and including December 31, 2021. Beginning on January 1, 2015 through and including December 31, 2021, Bellco will pay the Company a royalty based on the number of units of Products sold per year in the Territory as follows: for the first 125,000 units sold in total, €1.75 (approximately $1.91) per unit; thereafter, €1.25 (approximately $1.36) per unit. In addition, the Company received a total of €450,000 (approximately $612,000) in upfront fees in connection with the First Amendment, half of which was received on February 19, 2014 and the remaining half was received on April 4, 2014. In addition, the First Amendment provides that, in the event that the Company pursues a transaction to sell, assign or transfer all right, title and interest to the licensed patents to a third party, the Company will provide Bellco with written notice thereof and a right of first offer with respect to the contemplated transaction for a period of thirty (30) days. L icense and Supply Agreement On April 23, 2012, the Company entered into a License and Supply Agreement (the “License and Supply Agreement”) with Medica S.p.A. (“Medica”), an Italy-based medical product manufacturing company, for the marketing and sale of certain filtration products based upon Medica’s proprietary Medisulfone ultrafiltration technology in conjunction with the Company’s filtration products (collectively, the “Filtration Products”), and to engage in an exclusive supply arrangement for the Filtration Products. Under the License and Supply Agreement, Medica granted to the Company an exclusive license, with right of sublicense, to market, promote, distribute, offer for sale and sell the Filtration Products worldwide, excluding Italy for the first three years, during the term of the License and Supply Agreement. In addition, the Company granted to Medica an exclusive license under the Company’s intellectual property to make the Filtration Products during the term of the License and Supply Agreement. In exchange for the rights granted, the Company agreed to make minimum annual aggregate purchases from Medica of €300,000 (approximately $400,000), €500,000 (approximately $700,000) and €750,000 (approximately $1,000,000) for the years 2012, 2013 and 2014, respectively. The Company’s aggregate purchase commitments totaled approximately €1,200,000 (approximately $1,300,000) and €999,000 (approximately $1,119,000) for the years ended December 31, 2016 and 2015, respectively. For calendar years 2017 through 2022, annual minimum amounts will be mutually agreed upon between Medica and the Company. The Company has not yet formalized an agreed upon minimum purchase level for 2017 with Medica. In exchange for the license, the Company paid Medica a total of €1,500,000 (approximately $2,000,000) in three installments: €500,000 (approximately $700,000) on April 23, 2012, €600,000 (approximately $800,000) on February 4, 2013, and €400,000 (approximately $500,000) on May 23, 2013. As further consideration for the license and other rights granted to the Company, the Company granted Medica options to purchase 300,000 shares of the Company’s common stock. The fair market value of these stock options was approximately $273,000 at the time of their issuance, calculated as described in Note 2 under Stock-Based Compensation. The fair market value of the options, along with the total installment payments, is approximately $2,250,000 and has been capitalized as a long-term intangible asset on the consolidated balance sheet. As of December 31, 2016 and 2015, accumulated amortization related to the Medica long-term asset is approximately $988,000 and $777,000, respectively. The Medica long-term asset is being amortized as an expense over the life of the agreement. Approximately $211,000 has been charged to amortization expense for the years ended December 31, 2016 and 2015 on the consolidated statement of operations and comprehensive loss. Approximately $210,000 of amortization expense will be recognized in each of the years ended December 31, 2017 through 2022. In addition, for the period beginning April 23, 2014 through December 31, 2022, the Company will pay Medica a royalty rate of 3% of net sales of the Filtration Products sold, subject to reduction as a result of a supply interruption pursuant to the terms of the License and Supply Agreement. Royalty expense of approximately $18,000 and $14,000, respectively was included in accrued expenses as of December 31, 2016 and 2015. The term of the License and Supply Agreement commenced on April 23, 2012 and continues in effect through December 31, 2022, unless earlier terminated by either party in accordance with the terms of the License and Supply Agreement. As of September 2013, the Company has an understanding with Medica whereby the Company has agreed to pay interest to Medica at a 12% annual rate calculated on the principal amount of any outstanding invoices that are not paid pursuant to the original payment terms. For each of the fiscal years ended December 31, 2016 and 2015, approximately $41,000 was recognized as interest expense. Contractual Obligations The Company had an operating lease that expired on November 30, 2015 for the rental of its U.S. office and research and development facilities with a monthly cost of approximately $8,000. The rental agreement was renewed with a monthly cost of approximately $9,000 and will expire in November 2018. Approximately $21,000 related to a security deposit for the U.S. office facility is classified as an other asset on the consolidated balance sheet as of December 31, 2016 and 2015. We use these facilities to house our corporate headquarters and research facilities. The lease agreement for the office space in Europe was entered into on August 1, 2016 and includes a twelve month term. Rent expense for the years ended December 31, 2016 and 2015 totaled $126,000 and $125,000, respectively. Investment in Lease, net On October 8, 2015, the Company entered into an equipment lease agreement with Biocon 1, LLC. The lease commenced on January 1, 2016 with a term of 60 months and monthly rental payments of approximately $1,800 will be paid to the Company. At the completion of the lease term, Biocon 1, LLC will own the equipment provided under the agreement. An investment in lease was established for the sales-type lease receivable at the present value of the future minimum lease payments. Interest income will be recognized monthly over the lease term using the effective-interest method. Cash received will be applied against the direct financing lease receivable and will be presented within changes in operating assets and liabilities in the operating section of the Company’s consolidated statement of cash flows. At lease inception, an investment in the lease of approximately $92,000 was recorded, net of unearned interest of approximately $14,000. During the fiscal year ended December 31, 2016, approximately $5,000 was recognized in interest income. As of December 31, 2016, investment in lease, current, is approximately $27,000, net of unearned interest of $4,000. As of December 31, 2016, investment in lease, noncurrent, is approximately $61,000, net of unearned interest of $5,000. As of December 31, 2016, scheduled maturities of minimum lease payments receivable were as follows: 2016 $ 13,000 2017 17,000 2018 18,000 2019 19,000 2020 21,000 88,000 Less: Current portion (27,000 ) Investment in sales-type lease, noncurrent $ 61,000 Contractual Obligations and Commercial Commitments The following tables summarize our approximate minimum contractual obligations and commercial commitments as of December 31, 2016: Payments Due in Period Total Within 1 Year Years 2 - 3 Years 4 - 5 Leases 1 $ 240,000 $ 116,000 $ 118,000 $ 6,000 Employment Contract 2 550,000 240,000 310,000 - Total $ 790,000 $ 356,000 $ 428,000 $ 6,000 1 2 |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 14 – Subsequent Event On March 17, 2017, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain purchasers identified therein. Pursuant to the Purchase Agreement, the Company agreed to issue and sell, and the purchasers agreed to purchase, an aggregate of 4,059,994 shares at a price of $0.30 per share for total gross proceeds of approximately $1.2 million. In addition, the Company will issue to the purchasers warrants to purchase an aggregate of 4,059,994 shares of common stock. The warrants will have an exercise price of $0.30 per share and will be exercisable for a five-year term. The purchase and sale of the shares and warrants is expected to close on or about March 22, 2017, subject to satisfying customary closing conditions. Additionally, the Company entered into a Registration Rights Agreement with such purchasers, pursuant to which the Company has agreed to file a registration statement with the SEC covering the resale of the shares of common stock and shares issuable upon the exercise of the warrants within thirty days of the closing date. Maxim Group LLC (“Maxim”) is acting as the sole placement agent for the offering, and the Company has agreed to pay Maxim a cash fee equal to 7.5% of the aggregate gross proceeds of the offering, to reimburse Maxim for certain expenses, and to grant Maxim a warrant to purchase 81,199 shares of common stock, upon substantially the same terms as the warrants issued to the purchasers, except that the warrant issued to Maxim will have an exercise price of $0.33 per share. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Nephros International Limited. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amount of revenues and expenses, during the reporting period. Actual results could differ materially from those estimates. Included in these estimates are assumptions about the valuation of the warrant liability, the collection of accounts receivable, value of inventories, useful life of fixed assets and intangible assets, assumptions used in determining stock compensation such as expected volatility and risk-free interest rate and the ability of the Company to continue as a going concern. |
Reclassifications | Reclassifications Certain reclassifications were made to the prior year’s amounts to conform to the 2016 presentation. Other assets, net, as presented as of December 31, 2015 is now presented as license and supply agreement, net and other asset, respectively. |
Going Concern | Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company’s recurring losses and difficulty in generating sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern. The Company’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company has incurred significant losses from operations in each quarter since inception. In addition, the Company has not generated positive cash flow from operations for the years ended December 31, 2016 and 2015. To become profitable, the Company must increase revenue substantially and achieve and maintain income from operations. If the Company is not able to increase revenue and generate income from operations sufficiently to achieve profitability, its results of operations and financial condition will be materially and adversely affected. On March 17, 2017, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain purchasers, including members of the Company’s management, identified therein. Pursuant to the Purchase Agreement, the Company agreed to issue and sell, and the purchasers agreed to purchase, an aggregate of 4,059,994 shares at a price of $0.30 per share for total gross proceeds of approximately $1.2 million. In addition, the Company will issue to the purchasers warrants to purchase an aggregate of 4,059,994 shares of common stock. The warrants will have an exercise price of $0.30 per share and will be exercisable for a five-year term. See Note 14 for further discussion. On June 7, 2016, the Company received gross proceeds of approximately $1,187,000 in connection with the issuance of unsecured promissory notes and warrants. The portion of the outstanding unsecured promissory notes held by related parties comprised of entities controlled by a member of management and by Lambda Investors LLC (“Lambda”), the majority shareholder, amounted to $30,000 and $300,000, respectively. The outstanding principal under the Notes accrues interest at a rate of 11% per annum. In addition to the Notes, the Company issued Warrants to purchase approximately 2.4 million shares of the Company’s common stock to the investors in the Agreement. The Warrants have an exercise price of $0.30 per share and are exercisable for 5 years from the issuance date. See Note 7 for further discussion. On December 23, 2015, the Company received proceeds of approximately $688,000 in connection with its offer to holders of certain warrants of the opportunity to exercise their warrants at a temporarily reduced cash exercise price. Warrant holders elected to exercise warrants to purchase an aggregate of 3,442,521 shares of the Company’s common stock at the reduced cash exercise price of $0.20 per share, providing a total of approximately $688,000 in gross proceeds to the Company. Of the 3,442,521 shares issued, 2,782,577 are held by Lambda, the majority shareholder. The warrants that were not exercised pursuant to the offer to exercise will remain in effect, with an exercise price of $0.40 per share of common stock. On September 29, 2015, the Company issued 11,742,100 shares of common stock to Lambda, the majority shareholder, for warrants exercised and received approximately $1,761,000 in cash proceeds. The exercise price for each warrant was $0.15. See Note 3 for further discussion. On July 24, 2015, the Company entered into a purchase agreement (the “Purchase Agreement”), together with a registration rights agreement (the “Registration Rights Agreement”), with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which the Company has the right to sell and Lincoln Park has the obligation to purchase up to $10,000,000 of the Company’s common stock. In connection with the Purchase Agreement, the Company issued to Lincoln Park 250,000 shares of common stock for no proceeds. Pursuant to the Purchase Agreement, in September 2015, the Company issued and sold 300,000 shares of common stock to Lincoln Park at a per share purchase price of $0.45, resulting in gross proceeds of $136,000. See Note 11 - Stockholders’ Equity (Deficit). On May 18, 2015, the Company raised gross proceeds of approximately $1,230,000 through the private placement of 1,834,299 units of its securities. Each unit consisted of one share of its common stock and a five-year warrant to purchase one-half of one share of the Company’s common stock. The purchase price for each unit was $0.67. The 917,149 warrants issued are exercisable at a price of $0.85 per share. See Note 11 - Stockholders’ Equity (Deficit). There can be no assurance that the Company’s future cash flow will be sufficient to meet its obligations and commitments. If the Company is unable to generate sufficient cash flow from operations in the future to service its commitments, the Company will be required to adopt alternatives, such as seeking to raise debt or equity capital, curtailing its planned activities or ceasing its operations. There can be no assurance that any such actions could be effected on a timely basis or on satisfactory terms or at all, or that these actions would enable the Company to continue to satisfy its capital requirements. |
Recently Adopted Accounting Pronouncement | Recently Adopted Accounting Pronouncement In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” ASU 2014-15 provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and sets rules for how this information should be disclosed in the financial statements. ASU 2014-15 is effective for annual periods ending after December 15, 2016 and interim periods thereafter. The Company adopted ASU 2014-15 as of the fiscal year ended December 31, 2016. In April 2015, the FASB issued ASU 2015-03, “Interest - Imputation of Interest (Subtopic 2015-03): Simplifying the Presentation of Debt Issuance Costs” related to the presentation requirements for debt issuance costs and debt discount and premium. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by ASU 2015-03. ASU 2015-03 is effective for annual and interim periods beginning after December 15, 2015. The Company adopted ASU 2015-03 upon entering into the Note and Warrant Agreement as discussed in Note 7. |
Concentration of Credit Risk | Concentration of Credit Risk The Company deposits its cash in financial institutions. At times, such deposits may be in excess of insured limits. To date, the Company has not experienced any impairment losses on its cash. |
Major Customers | Major Customers For the year ended December 31, 2016, four customers accounted for 55% of the Company’s revenues. For the year ended December 31, 2015, four customers accounted for 67% of the Company’s revenues. As of December 31, 2016, four customers accounted for 59% of the Company’s accounts receivable. As of December 31, 2015, four customers accounted for 73% of the Company’s accounts receivable. |
Accounts Receivable | Accounts Receivable The Company provides credit terms to customers in connection with purchases of the Company’s products. Management periodically reviews customer account activity in order to assess the adequacy of the allowances provided for potential collection issues and returns. Factors considered include economic conditions, each customer’s payment and return history and credit worthiness. Adjustments, if any, are made to reserve balances following the completion of these reviews to reflect management’s best estimate of potential losses. The allowance for doubtful accounts was approximately $50,000 and $15,000 as of December 31, 2016 and 2015, respectively. There was no allowance for sales returns at December 31, 2016 or 2015. There were no write offs of accounts receivable to bad debt expense during 2016 or 2015. |
Inventory | Inventory The Company engages third parties to manufacture and package inventory held for sale, takes title to certain inventory once manufactured, and warehouses such goods until packaged for final distribution and sale. Inventory consists of finished goods held at the manufacturers’ facilities, and are valued at the lower of cost or market using the first-in, first-out method. The Company’s inventory reserve requirements are based on factors including the products’ expiration date and estimates for the future sales of the product. If estimated sales levels do not materialize, the Company will make adjustments to its assumptions for inventory reserve requirements. |
License and Supply Rights | License and Supply Rights The Company’s rights under the License and Supply Agreement are capitalized and stated at cost, less accumulated amortization and are amortized using the straight-line method over the term of the License and Supply Agreement. The License and Supply Agreement term is from April 23, 2012 through December 31, 2022. The Company determines amortization periods for licenses based on its assessment of various factors impacting estimated useful lives and cash flows of the acquired rights. Such factors include the expected launch date of the product, the strength of the intellectual property protection of the product and various other competitive, developmental and regulatory issues, and contractual terms. |
Patents | Patents The Company has filed numerous patent applications with the United States Patent and Trademark Office and in foreign countries. All costs and direct expenses incurred in connection with patent applications have been expensed as incurred and are included in Selling, General and Administrative expenses on the accompanying consolidated statement of operations and comprehensive loss. |
Property and Equipment, net | Property and Equipment, net Property and equipment, net is stated at cost less accumulated depreciation. These assets are depreciated over their estimated useful lives of three to seven years using the straight line method. |
Impairment for Long-Lived Assets | Impairment for Long-Lived Assets The Company adheres to Accounting Standards Codification (“ASC”) Topic 360 and periodically evaluates whether current facts or circumstances indicate that the carrying value of its depreciable assets to be held and used may not be recoverable. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the long-lived assets, or the appropriate grouping of assets, is compared to the carrying value to determine whether impairment exists. If an asset is determined to be impaired, the loss is measured based on the difference between the asset’s fair value and its carrying value. For long-lived assets, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows. The Company reports an asset to be disposed of at the lower of its carrying value or its fair value less costs to sell. There were no impairment losses for long-lived assets recorded for the years ended December 31, 2016 and December 31, 2015. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short-term maturity of these instruments. See Note 3 for information on the fair value of derivative liabilities. The carrying amounts of the investment in lease, net, and the unsecured long-term note payable approximate fair value as of December 31, 2016 because those financial instruments bear interest at rates that approximate current market rates for similar agreements with similar maturities and credit. |
Revenue Recognition | Revenue Recognition Revenue is recognized in accordance with ASC Topic 605. Four basic criteria must be met before revenue can be recognized: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the fee is fixed or determinable; and (iv) collectability is reasonably assured. The Company recognizes revenue related to product sales when delivery is confirmed by its external logistics provider and the other criteria of ASC Topic 605 are met. Product revenue is recorded net of returns and allowances. All costs and duties relating to delivery are absorbed by Nephros. All shipments are currently received directly by the Company’s customers. Deferred revenue was approximately $348,000 and $417,000 on the accompanying consolidated balance sheets as of December 31, 2016 and 2015, respectively, and is related to the License Agreement with Bellco. The Company has recognized approximately $2,728,000 of revenue related to this license agreement to date, including approximately $69,000 for the year ended December 31, 2016, resulting in $348,000 being deferred over the remainder of the expected obligation period (see Note 13). The Company recognized approximately $70,000 of revenue related to this license agreement for the year ended December 31, 2015. Beginning on January 1, 2015, Bellco began paying the Company a royalty based on the number of units of certain products sold per year (see Note 13). The Company recognized royalty income of approximately $114,000 and $84,000, respectively, for the years ended December 31, 2016 and 2015. The Company also invoiced Biocon 1, LLC approximately $24,000 related to consulting services provided during the fiscal year ended December 31, 2016, which is included in license, royalty and other revenue on the consolidated statement of operations and comprehensive loss. Approximately $24,000 is also included in accounts receivable as of December 31, 2016. On May 6, 2015, the Company entered into a Sublicense Agreement with CamelBak Products, LLC (“CamelBak”). The Company granted CamelBak an exclusive, non-transferable, worldwide (with the exception of Italy) sublicense and license, in each case solely to market, sell, distribute, import and export the HydraGuard individual water treatment devices. In exchange for the rights granted to CamelBak, CamelBak agreed, through December 31, 2022, to pay the Company a percentage of the gross profit on any sales made to a branch of the U.S. military, subject to certain exceptions, and to pay the Company a fixed per-unit fee for any other sales made. The Company recognized royalty revenue of $10,000 during the fiscal year ended December 31, 2016. On October 17, 2016, the Company entered into a Sublicense Agreement with Roving Blue, Inc. (“Roving Blue”). The Company granted Roving Blue an exclusive, non-transferable, worldwide (with the exception of Italy) sublicense and license. In exchange for the rights granted to Roving Blue, Roving Blue paid the Company an upfront fee of $10,000, which was recognized as royalty revenue during the fiscal year ended December 31, 2016. The Sublicense Agreement with Roving Blue also includes an agreement for Roving Blue to pay the Company a fixed per-unit fee for sales made, subject to certain minimums. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs charged to customers are recorded as cost of goods sold and were approximately $24,000 and $12,000 for the years ended December 31, 2016 and 2015, respectively. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. |
Stock-Based Compensation | Stock-Based Compensation The fair value of stock options is recognized as stock-based compensation expense in the Company’s consolidated statement of operations and comprehensive loss. The Company calculates employee stock-based compensation expense in accordance with ASC 718. The Company accounts for stock option grants to consultants under the provisions of ASC 505-50, and as such, these stock options are revalued at each reporting period through the vesting period. The fair value of the Company’s stock option awards are estimated using a Black-Scholes option valuation model. This model requires the input of highly subjective assumptions and elections including expected stock price volatility and the estimated life of each award. In addition, the calculation of compensation costs requires that the Company estimate the number of awards that will be forfeited during the vesting period. The fair value of stock-based awards is amortized over the vesting period of the award. |
Warrants | Warrants The Company accounts for stock warrants as either equity instruments or derivative liabilities depending on the specific terms of the warrant agreement. Stock warrants that allow for cash settlement or provide for anti-dilution of the warrant exercise price under certain conditions are accounted for as derivative liabilities. The Company classifies derivative warrant liabilities on the balance sheet as a liability, which is revalued using a binomial options pricing model at each balance sheet date subsequent to the initial issuance. A binomial options pricing model requires the input of highly subjective assumptions and elections including expected stock price volatility and the estimated life of each award. The changes in fair value of the derivative warrant liabilities are remeasured at each balance sheet date and the resulting changes in fair value are recorded in current period earnings. |
Amortization of Debt Issuance Costs | Amortization of Debt Issuance Costs The Company accounts for debt issuance costs in accordance with ASU 2015-03, which requires that costs paid directly to the issuer of a recognized debt liability be reported in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The Company amortizes the debt discount, including debt issuance costs, in accordance with ASC 835, Interest, over the term of the associated debt. See Note 7 for a discussion of the Company’s unsecured long-term note payable. |
Other Income (Expense), net | Other Income (Expense), net Other income of approximately $4,000 and $37,000, respectively, for the years ended December 31, 2016 and 2015 is primarily due to foreign currency transaction gains. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, which requires accounting for deferred income taxes under the asset and liability method. Deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable in future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. For financial reporting purposes, the Company has incurred a loss in each period since its inception. Based on available objective evidence, including the Company’s history of losses, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at December 31, 2016 and 2015. ASC Topic 740 prescribes, among other things, a recognition threshold and measurement attributes for the financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in a company’s income tax return. ASC 740 utilizes a two-step approach for evaluating uncertain tax positions. Step one, or recognition, requires a company to determine if the weight of available evidence indicates a tax position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation processes, if any. Step two, or measurement, is based on the largest amount of benefit, which is more likely than not to be realized on settlement with the taxing authority. The Company is subject to income tax examinations by major taxing authorities for all tax years subsequent to 2012. During the years ended December 31, 2016 and 2015, the Company recognized no adjustments for uncertain tax positions. However, management’s conclusions regarding this policy may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulation and interpretations, thereof. |
Net Income (loss) per Common Share | Net Income (loss) per Common Share Basic income (loss) per common share is calculated by dividing net income (loss) available to common shareholders by the number of weighted average common shares issued and outstanding. Diluted earnings (loss) per common share is calculated by dividing net income (loss) available to common shareholders by the weighted average number of common shares issued and outstanding for the period, plus amounts representing the dilutive effect from the exercise of stock options and warrants, as applicable. The Company calculates dilutive potential common shares using the treasury stock method, which assumes the Company will use the proceeds from the exercise of stock options and warrants to repurchase shares of common stock to hold in its treasury stock reserves. The following securities have been excluded from the dilutive per share computation as they are antidilutive: December 31, 2016 2015 Shares underlying options outstanding 4,592,347 4,303,638 Shares underlying warrants outstanding 3,291,149 2,482,563 Unvested restricted stock 957,336 501,182 |
Foreign Currency Translation | Foreign Currency Translation Foreign currency translation is recognized in accordance with ASC Topic 830. The functional currency of Nephros International Limited is the Euro and its translation gains and losses are included in accumulated other comprehensive income. The balance sheet is translated at the year-end rate. The statement of operations is translated at the weighted average rate for the year. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss), as defined in ASC 220, is the total of net income (loss) and all other non-owner changes in equity (or other comprehensive income (loss)). The Company’s other comprehensive income (loss) consists only of foreign currency translation adjustments. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers,” related to revenue recognition. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to be entitled to in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in prior accounting guidance. ASU 2014-09 provides alternative methods of initial adoption, and was effective for fiscal years beginning after December 15, 2016, and interim periods within those annual periods. Early adoption was not permitted. In August, 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers: Deferral of the Effective Date”. The amendment in this ASU defers the effective date of ASU No. 2014-09 for all entities for one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to fiscal years beginning after December 15, 2017, including interim reporting periods within that fiscal year. Earlier application is permitted only as of fiscal years beginning after December 31, 2016, including interim reporting periods with that fiscal year. The Company is currently reviewing the revised guidance and assessing the potential impact on its consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, “Simplifying the Measurement of Inventory,” that requires inventory be measured at the lower of cost and net realizable value and options that currently exist for market value be eliminated. The standard defines net realizable value as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation and is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years with early adoption permitted. The guidance should be applied prospectively. The Company does not believe that the adoption of ASU 2015-11 will have a significant impact on its consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes,” that requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by this amendment. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption is permitted and the standard may be applied either retrospectively or on a prospective basis to all deferred tax assets and liabilities. The Company does not believe that the adoption of ASU 2015-17 will have a significant impact on its consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” that modifies certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. The accounting standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. The Company is currently assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases”, that discusses how an entity should account for lease assets and lease liabilities. The guidance specifies that an entity who is a lessee under lease agreements should recognize lease assets and lease liabilities for those leases classified as operating leases under previous FASB guidance. Accounting for leases by lessors is largely unchanged under the new guidance. The guidance is effective for the Company beginning in the first quarter of 2019. Early adoption is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-08, “Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” which clarifies the implementation guidance on principal versus agent considerations. The amendments in this update do not change the core principle of ASU 2014-09. The effective date and transition requirements for the amendments in this update are the same as the effective date and transition requirements of ASU 2014-09. As discussed above, ASU 2015-14 defers the effective date of ASU 2014-09 by one year. The Company is assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is effective for the Company beginning in the first quarter of fiscal year 2017. Early adoption is permitted. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements. In April 2016, the FASB issued ASU 2016-10, “Identifying Performance Obligations and Licensing,” which clarifies the implementation guidance for performance obligations and licensing. The amendments in this update do not change the core principle of ASU 2014-09. The effective date and transition requirements for the amendments in this update are the same as the effective date and transition requirements of ASU 2014-09. As discussed above, ASU 2015-14 defers the effective date of ASU 2014-09 by one year. The Company is currently assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements. In May 2016, the FASB issued ASU 2016-12, “Narrow Scope Improvements and Practical Expedients,” which clarifies the accounting for certain aspects of guidance issued in ASU 2014-09, including assessing collectability and noncash consideration. The clarifications in this update do not change the core principle of ASU 2014-09. The effective date and transition requirements for the amendments in this update are the same as the effective date and transition requirements of ASU 2014-09. As discussed above, ASU 2015-14 defers the effective date of ASU 2014-09 by one year. The Company is currently assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments,” which replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance is effective for the Company beginning in the first quarter of fiscal year 2020. Early adoption is permitted beginning in the first quarter of fiscal year 2019. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments,” which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows in order to reduce diversity in practice. The guidance is effective for the Company beginning in the first quarter of fiscal year 2018. Early adoption is permitted. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements. In November 2016, the FASB issued ASU 2016-17, “Restricted Cash,” which clarifies how restricted cash is presented and classified in the statement of cash flows. The guidance is effective for the Company beginning in the first quarter of fiscal year 2018. Early adoption is permitted. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, “Clarifying the Definition of a Business,” which clarifies the definition of a business in a business combination. The guidance is effective for the Company beginning in the first quarter of fiscal year 2018. Early adoption is permitted. The Company does not expect this ASU to have a significant impact on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, “ Simplifying the Test for Goodwill Impairment,” |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Securities Excluded From Dilutive Per Share Computation | The following securities have been excluded from the dilutive per share computation as they are antidilutive: December 31, 2016 2015 Shares underlying options outstanding 4,592,347 4,303,638 Shares underlying warrants outstanding 3,291,149 2,482,563 Unvested restricted stock 957,336 501,182 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Reconciliation of Warrant Liability | A reconciliation of the warrant liability is as follows (in thousands): 2007 Warrants Balance at December 31, 2014 $ 7,386 Decrease in fair value of warrant liability (2,099 ) Balance at September 29, 2015 $ 5,287 |
Fair Value Inputs, Liabilities, Quantitative Information | The following table summarizes the calculated aggregate fair value of the warrants, along with the assumptions utilized in the calculation: September 29, 2015 Calculated aggregate value $ 5,287 Weighted average exercise price $ 0.30 Closing price per share of common stock $ 0.40 Volatility 137 % Weighted average remaining expected life (years) 4.2 Risk-free interest rate 1.4 % Dividend yield - |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | The Company’s inventory components as of December 31, 2016 and 2015 were as follows: December 31, 2016 2015 Total gross inventory, finished goods $ 528,000 $ 634,000 Less: inventory reserve (49,000 ) (43,000 ) Total inventory $ 479,000 $ 591,000 |
Prepaid Expenses and Other Cu26
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets as of December 31, 2016 and 2015 were as follows: December 31, 2016 2015 Prepaid insurance premiums $ 66,000 $ 62,000 Deposit on equipment - 124,000 Inventory in transit - 18,000 Other 29,000 24,000 Prepaid expenses and other current assets $ 95,000 $ 228,000 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment as of December 31, 2016 and 2015 was as follows: December 31, Life 2016 2015 Manufacturing equipment 3-5 years $ 690,000 $ 611,000 Research equipment 5 years 37,000 37,000 Computer equipment 3-4 years 43,000 43,000 Furniture and fixtures 7 years 37,000 37,000 Property and equipment, gross 807,000 728,000 Less: accumulated depreciation 737,000 716,000 Property and equipment, net $ 70,000 $ 12,000 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses as of December 31, 2016 and 2015 were as follows: December 31, 2016 2015 Accrued legal $ 99,000 $ 103,000 Accrued directors’ compensation 30,000 52,000 Accrued royalty 18,000 14,000 Accrued credits issued to customers - 10,000 Accrued management bonus 19,000 - Accrued accounting 6,000 1,000 Accrued interest 17,000 12,000 Accrued other 51,000 45,000 $ 240,000 $ 237,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the income tax provision computed at the statutory tax rate to the Company’s effective tax rate is as follows: 2016 2015 U.S. federal statutory rate 35.00 % 34.00 % Warrant liability - % 3.71 % State & local taxes (5.21 )% 5.78 % Tax on foreign operations - % 0.36 % State research and development credits 1.87 % 1.47 % Other 0.97 % (3.11 )% Valuation allowance (32.63 )% (42.21 )% Effective tax rate - % - % |
Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets as of December 31, 2016 and 2015 are as follows: 2016 2015 Deferred tax assets: Net operating loss carry forwards $ 29,861,148 $ 29,092,799 Research and development credits 1,220,115 1,163,616 Nonqualified stock option compensation expense 537,037 374,769 Other temporary book - tax differences 254,813 258,445 Total deferred tax assets 31,873,112 30,889,629 Valuation allowance for deferred tax assets (31,873,112 ) (30,889,629 ) Net deferred tax assets $ - $ - |
Stock Plans, Share-Based Paym30
Stock Plans, Share-Based Payments and Warrants (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Option Activity | The following table summarizes the option activity for the years ended December 31, 2016 and 2015: Shares Weighted Average Exercise Price Outstanding at December 31, 2014 2,472,234 $ 0.96 Options granted 2,911,829 0.56 Options forfeited or expired (1,080,425 ) 1.28 Outstanding at December 31, 2015 4,303,638 0.65 Options granted 510,520 0.37 Options forfeited or expired (221,811 ) 1.04 Outstanding at December 31, 2016 4,592,347 $ 0.60 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable | The following table summarizes the options exercisable and vested and expected to vest as of December 31, 2016 and 2015: Shares Weighted Average Exercise Price Exercisable at December 31, 2015 1,377,665 $ 0.84 Vested and expected to vest at December 31, 2015 4,133,932 $ 0.66 Exercisable at December 31, 2016 1,866,019 $ 0.70 Vested and expected to vest at December 31, 2016 4,434,220 $ 0.61 |
Schedule of Fair Value Assumptions | The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the below assumptions for the risk-free interest rates, expected dividend yield, expected lives and expected stock price volatility. Option Pricing Assumptions Grant Year 2016 2015 Stock Price Volatility 114.63 % 121.90 % Risk-Free Interest Rates 1.81 % 1.60 % Expected Life (in years) 5.83 6.15 Expected Dividend Yield 0 % 0 % |
Summary of Restricted Stock Activity | The following table summarizes restricted stock activity for the year end December 31, 2016 and 2015: Shares Weighted Average Grant Date Fair Value Nonvested at December 31, 2014 132,077 $ 0.86 Granted 617,795 0.48 Vested (248,690 ) 0.73 Nonvested at December 31, 2015 501,182 0.46 Granted 957,336 0.35 Vested (501,182 ) 0.46 Nonvested at December 31, 2016 957,336 $ 0.35 |
Summary of Terms of Outstanding Warrants | The following table summarizes certain terms of all of the Company’s outstanding warrants at December 31, 2016 and 2015: Total Outstanding Warrants Total Common Shares Issuable as of December 31, Title of Warrant Date Issued Expiry Date Exercise Price 2016 2015 Equity-classified warrants Shareholder Rights Offering Warrants 3/10/2011 3/10/2016 $ 0.40 - 1,565,414 May 2015 - private placement warrants 3/18/2015 3/18/2020 $ 0.85 917,149 917,149 June 2016 – Note and Warrant Agreement 6/7/2016 6/7/2021 $ 0.30 2,374,000 - 3,291,149 2,482,563 Total 3,291,149 2,482,563 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Maturities Minimum Lease Payments Receivable | As of December 31, 2016, scheduled maturities of minimum lease payments receivable were as follows: 2016 $ 13,000 2017 17,000 2018 18,000 2019 19,000 2020 21,000 88,000 Less: Current portion (27,000 ) Investment in sales-type lease, noncurrent $ 61,000 |
Contractual Obligations and Commercial Commitments | The following tables summarize our approximate minimum contractual obligations and commercial commitments as of December 31, 2016: Payments Due in Period Total Within 1 Year Years 2 - 3 Years 4 - 5 Leases 1 $ 240,000 $ 116,000 $ 118,000 $ 6,000 Employment Contract 2 550,000 240,000 310,000 - Total $ 790,000 $ 356,000 $ 428,000 $ 6,000 1 2 |
Organization and Nature of Op32
Organization and Nature of Operations (Details Narrative) | 12 Months Ended |
Dec. 31, 2016Products | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of products in development | 2 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Details Narrative) | Jun. 07, 2016USD ($)$ / sharesshares | Dec. 23, 2015USD ($)$ / sharesshares | Sep. 29, 2015USD ($)$ / sharesshares | Jul. 24, 2015USD ($)shares | May 18, 2015$ / sharesshares | May 18, 2015USD ($)$ / sharesshares | Sep. 30, 2015USD ($)$ / sharesshares | Dec. 31, 2016USD ($)Products$ / sharesshares | Dec. 31, 2015USD ($)Products$ / sharesshares |
Warrants exercised to purchase of common stock | shares | 1,205 | ||||||||
Exercise price per share | $ / shares | $ 0.45 | $ 0.57 | |||||||
Proceeds from warrant exercises | $ 1,000 | $ 2,451,000 | |||||||
Common stock, shares issued | shares | 49,782,797 | 48,580,355 | |||||||
Impairment losses for long-lived assets | |||||||||
Allowance for doubtful accounts receivable | 50,000 | 15,000 | |||||||
Sales returns and allowances | 0 | 0 | |||||||
Allowance for doubtful accounts receivable, write-offs | 0 | 0 | |||||||
Deferred revenue | 348,000 | 417,000 | |||||||
Licenses revenue | 227,000 | 154,000 | |||||||
Royalty income | 114,000 | 84,000 | |||||||
Accounts receivable | 388,000 | 397,000 | |||||||
Shipping, handling and transportation costs | 24,000 | 12,000 | |||||||
Other nonoperating income expense | $ 4,000 | $ 37,000 | |||||||
Sales Revenue Goods Net [Member] | |||||||||
Concentration risk, percentage | 55.00% | 67.00% | |||||||
Number of major customers | Products | 4 | 4 | |||||||
Accounts Receivable [Member] | |||||||||
Concentration risk, percentage | 59.00% | 73.00% | |||||||
Number of major customers | Products | 4 | 4 | |||||||
Private Placement [Member] | |||||||||
Warrants exercised to purchase of common stock | shares | 1,834,299 | ||||||||
Exercise price per share | $ / shares | $ 0.85 | $ 0.85 | |||||||
Proceeds from warrants | $ 1,230,000 | ||||||||
Number of common stock issued and sale of stock, shares | shares | 1,834,299 | ||||||||
Shares issued, price per share | $ / shares | $ 0.67 | $ 0.67 | |||||||
Number of warrants issued during the period | shares | 917,149 | ||||||||
Lincoln Park Capital Fund LLC [Member] | |||||||||
Share price | $ / shares | $ 0.45 | ||||||||
Proceeds from warrants | $ 136,000 | ||||||||
Proceeds from warrant exercises | $ 10,000,000 | ||||||||
Stock issued during period, shares, other | shares | 250,000 | ||||||||
Number of common stock issued and sale of stock, shares | shares | 300,000 | ||||||||
Bellco [Member] | |||||||||
Licenses revenue | $ 2,728,000 | ||||||||
License Agreement with Bellco [Member] | |||||||||
Licenses revenue | 69,000 | ||||||||
Royalty income | $ 70,000 | ||||||||
Biocon 1, LLC [Member] | |||||||||
Licenses revenue | 24,000 | ||||||||
Accounts receivable | 24,000 | ||||||||
CamelBak Products, LLC [Member] | |||||||||
Royalty income | 10,000 | ||||||||
Roving Blue, Inc [Member] | |||||||||
Royalty income | 10,000 | ||||||||
Entities Controlled By Member Of Management [Member] | Lambda Investors, LLC [Member] | |||||||||
Due to related party | 30,000 | ||||||||
Majority Shareholder [Member] | |||||||||
Share price | $ / shares | $ 0.40 | ||||||||
Due to related party | $ 300,000 | ||||||||
Common stock, shares issued | shares | 2,782,577 | ||||||||
Unsecured Promissory Notes [Member] | Entities Controlled By Member Of Management [Member] | Lambda Investors, LLC [Member] | |||||||||
Due to related party | $ 30,000 | ||||||||
Unsecured Promissory Notes [Member] | Majority Shareholder [Member] | |||||||||
Due to related party | $ 300,000 | ||||||||
Warrant [Member] | |||||||||
Warrants exercised to purchase of common stock | shares | 2,400,000 | 3,442,521 | |||||||
Exercise price per share | $ / shares | $ 0.30 | $ 0.20 | $ 0.15 | ||||||
Warrant exercisable, term | 5 years | ||||||||
Gross proceeds from unsecured promissory notes and warrants | $ 1,187,000 | ||||||||
Note accrued interest rate | 11.00% | ||||||||
Proceeds from warrants | $ 688,000 | ||||||||
Proceeds from warrant exercises | $ 688,000 | ||||||||
Common stock, shares issued | shares | 3,442,521 | ||||||||
Stock issued during period, shares, other | shares | 11,742,100 | ||||||||
Warrant [Member] | Lambda Investors, LLC [Member] | |||||||||
Proceeds from warrant exercises | $ 1,761,000 | ||||||||
Stock issued during period, shares, other | shares | 11,742,100 | ||||||||
Securities Purchase Agreement [Member] | March 17, 2017 [Member] | |||||||||
Number of options to purchase, shares | shares | 4,059,994 | ||||||||
Share price | $ / shares | $ 0.30 | ||||||||
Proceeds from option to purchase | $ 1,200,000 | ||||||||
Warrants exercised to purchase of common stock | shares | 4,059,994 | ||||||||
Exercise price per share | $ / shares | $ 0.30 | ||||||||
Warrant exercisable, term | 5 years |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Schedule of Securities Excluded From Dilutive Per Share Computation (Details) - shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Stock Option [Member] | ||
Excluded anti-dilutive stock options and warrants | 4,592,347 | 4,303,638 |
Warrant [Member] | ||
Excluded anti-dilutive stock options and warrants | 3,291,149 | 2,482,563 |
Restricted Stock [Member] | ||
Excluded anti-dilutive stock options and warrants | 957,336 | 501,182 |
Financial Instruments (Details
Financial Instruments (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Sep. 29, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 07, 2016 | Dec. 23, 2015 | |
Fair Value Disclosures [Line Items] | |||||
Amount of dilutive securities effect on earnings per share warrants | $ (2,099,000) | ||||
Exercise price per share | $ 0.45 | $ 0.57 | |||
Warrant modification expense | $ 1,761,000 | ||||
Warrant [Member] | |||||
Fair Value Disclosures [Line Items] | |||||
Reduced percentage of warrant excersize price | 50.00% | ||||
Exercise price per share | $ 0.15 | $ 0.30 | $ 0.20 | ||
Stock issued during period, shares, other | 11,742,100 | ||||
Warrant inducement | $ 1,761,000 | ||||
Warrants and rights outstanding | $ 7,048,000 | ||||
Warran term | 0 years |
Financial Instruments - Schedul
Financial Instruments - Schedule of Reconciliation of Warrant Liability (Details) - 2007 Warrants [Member] | 9 Months Ended |
Sep. 29, 2015USD ($) | |
Warrant liability, beginning balance | $ 7,386,000 |
Decrease in fair value of warrant liability | (2,099,000) |
Warrant liability, ending balance | $ 5,287,000 |
Financial Instruments - Fair Va
Financial Instruments - Fair Value Inputs, Liabilities, Quantitative Information (Details) | 9 Months Ended |
Sep. 29, 2015USD ($)$ / shares | |
Fair Value Disclosures [Abstract] | |
Calculated aggregate value | $ | $ 5,287 |
Weighted average exercise price | $ 0.30 |
Closing price per share of common stock | $ 0.40 |
Volatility | 137.00% |
Weighted average remaining expected life (years) | 4 years 2 months 12 days |
Risk-free interest rate | 1.40% |
Dividend yield | 0.00% |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Total gross inventory, finished goods | $ 528,000 | $ 634,000 |
Less: inventory reserve | (49,000) | (43,000) |
Total inventory | $ 479,000 | $ 591,000 |
Prepaid Expenses and Other Cu39
Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Other Assets [Abstract] | ||
Prepaid insurance premiums | $ 66,000 | $ 62,000 |
Deposit on equipment | 124,000 | |
Inventory in transit | 18,000 | |
Other | 29,000 | 24,000 |
Prepaid expenses and other current assets | $ 95,000 | $ 228,000 |
Property and Equipment, Net (De
Property and Equipment, Net (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation depletion and amortization | $ 19,000 | $ 1,000 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property and equipment, gross | $ 807,000 | $ 728,000 |
Less: accumulated depreciation | 737,000 | 716,000 |
Property and equipment, net | 70,000 | 12,000 |
Manufacturing Equipment [Member] | ||
Property and equipment, gross | $ 690,000 | $ 611,000 |
Manufacturing Equipment [Member] | Minimum [Member] | ||
Property and equipment, Life | 3 years | 3 years |
Manufacturing Equipment [Member] | Maximum [Member] | ||
Property and equipment, Life | 5 years | 5 years |
Research Equipment [Member] | ||
Property and equipment, gross | $ 37,000 | $ 37,000 |
Property and equipment, Life | 5 years | 5 years |
Computer Equipment [Member] | ||
Property and equipment, gross | $ 43,000 | $ 43,000 |
Computer Equipment [Member] | Minimum [Member] | ||
Property and equipment, Life | 3 years | 3 years |
Computer Equipment [Member] | Maximum [Member] | ||
Property and equipment, Life | 4 years | 4 years |
Furniture and Fixtures [Member] | ||
Property and equipment, gross | $ 37,000 | $ 37,000 |
Property and equipment, Life | 7 years | 7 years |
Unsecured Promissory Notes an42
Unsecured Promissory Notes and Warrants (Details Narrative) - USD ($) | Jun. 07, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 18, 2015 |
Number of warrants issued to purchase of shares of common stock | 906 | 5,008,689 | ||
Exercise price per share | $ 0.45 | $ 0.57 | ||
Legal fees | $ 9,000 | |||
Amortization of debt discount | $ 53,000 | |||
Interest expense | 172,000 | $ 42,000 | ||
Entities Controlled By Member Of Management [Member] | Lambda Investors, LLC [Member] | ||||
Due to related party | 30,000 | |||
Entities Controlled By Member Of Management [Member] | Lambda Investors, LLC [Member] | Interest Expense [Member] | ||||
Due to related party | 2,000 | |||
Majority Shareholder [Member] | ||||
Due to related party | 300,000 | |||
Majority Shareholder [Member] | Interest Expense [Member] | ||||
Due to related party | 19,000 | |||
Note Holders [Member] | ||||
Interest expense | 77,000 | |||
Payment of note payable | 65,000 | |||
Accrued interest expense | 12,000 | |||
Note And Warrant Agreement [Member] | ||||
Gross proceeds from unsecured promissory notes and warrants | $ 1,187,000 | |||
Percentage of accrues interest rate per annaum | 11.00% | |||
Note repayable date | Jun. 7, 2019 | |||
Legal fees | $ 13,000 | |||
Proceeds from warrants | 393,000 | |||
Unsecured promissory notes | $ 794,000 | |||
Amortization of debt discount | $ 53,000 | |||
Note And Warrant Agreement [Member] | Investors [Member] | ||||
Number of warrants issued to purchase of shares of common stock | 2,400,000 | |||
Exercise price per share | $ 0.30 | |||
Warrants exercisable term | 5 years | |||
Warrant Agreement [Member] | ||||
Legal fees | $ 4,000 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Liabilities (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accrued legal | $ 99,000 | $ 103,000 |
Accrued directors' compensation | 30,000 | 52,000 |
Accrued royalty | 18,000 | 14,000 |
Accrued credits issued to customers | 10,000 | |
Accrued management bonus | 19,000 | |
Accrued accounting | 6,000 | 1,000 |
Accrued interest | 17,000 | 12,000 |
Accrued other | 51,000 | 45,000 |
Accrued expenses | $ 240,000 | $ 237,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax [Line Items] | ||
Valuation allowance, deferred tax asset, increase, amount | $ 983,483 | |
Federal [Member] | ||
Income Tax [Line Items] | ||
Operating loss carryforwards | 79,458,888 | |
Federal And New Jersey [Member] | ||
Income Tax [Line Items] | ||
Operating loss carryforwards | 19,233,370 | |
Foreign [Member] | ||
Income Tax [Line Items] | ||
Operating loss carryforwards | $ 7,403,077 | |
Foreign [Member] | Minimum [Member] | ||
Income Tax [Line Items] | ||
Operating loss carryforwards, expiration date | Dec. 31, 2017 | |
Foreign [Member] | Maximum [Member] | ||
Income Tax [Line Items] | ||
Operating loss carryforwards, expiration date | Dec. 31, 2035 | |
Research Tax Credit Carryforward [Member] | ||
Income Tax [Line Items] | ||
Tax credit carryforward, amount | $ 1,220,115 | $ 1,163,616 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal statutory rate | 35.00% | 34.00% |
Warrant liability | 0.00% | 3.71% |
State & local taxes | (5.21%) | 5.78% |
Tax on foreign operations | 0.00% | 0.36% |
State research and development credits | 1.87% | 1.47% |
Other | 0.97% | (3.11%) |
Valuation allowance | (32.63%) | (42.21%) |
Effective tax rate | 0.00% | 0.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forwards | $ 29,861,148 | $ 29,092,799 |
Research and development credits | 1,220,115 | 1,163,616 |
Nonqualified stock option compensation expense | 537,037 | 374,769 |
Other temporary book - tax differences | 254,813 | 258,445 |
Total deferred tax assets | 31,873,112 | 30,889,629 |
Valuation allowance for deferred tax assets | (31,873,112) | (30,889,629) |
Net deferred tax assets |
Stock Plans, Share-Based Paym47
Stock Plans, Share-Based Payments and Warrants (Details Narrative) - USD ($) | Dec. 23, 2015 | Nov. 20, 2015 | Sep. 29, 2015 | Mar. 31, 2016 | Jan. 31, 2016 | Sep. 30, 2015 | Jul. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 18, 2015 | Dec. 31, 2014 | Mar. 10, 2011 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Options outstanding | 4,592,347 | 4,303,638 | 2,472,234 | |||||||||
Stock options granted | 510,520 | 2,911,829 | ||||||||||
Share-based compensation expense | $ 388,000 | $ 328,000 | ||||||||||
Weighted-average fair value of options granted | $ 0.31 | $ 0.49 | ||||||||||
Share-based compensation arrangement by share-based payment award, options, outstanding, intrinsic value | $ 25,000 | $ 0 | ||||||||||
Share-based compensation arrangement by share-based payment award, options, vested and expected to vest, outstanding, aggregate intrinsic value | $ 24,000 | $ 0 | ||||||||||
Share-based compensation arrangement by share-based payment award, options, vested and expected to vest, outstanding, weighted average remaining contractual term | 7 years 9 months 18 days | 8 years 6 months | ||||||||||
Employee service share-based compensation, nonvested awards, compensation not yet recognized, stock options | $ 934,000 | |||||||||||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 2 years 2 months 12 days | |||||||||||
Employee service share-based compensation, nonvested awards, compensation recognized at the time of certain performance conditions met | $ 158,000 | |||||||||||
Exercise price per share | $ 0.45 | $ 0.57 | ||||||||||
Stock based compensation recognized amortization cost | $ 776,000 | |||||||||||
Fair value of restricted stock | 291,000 | $ 181,000 | ||||||||||
Selling, general and administrative expense | $ 2,854,000 | 3,443,000 | ||||||||||
Warrants exercised, shares | 19,621 | |||||||||||
Warrants exercised | $ 1,000 | 2,451,000 | ||||||||||
Class of warrant or right, number of securities called by warrants or rights | 906 | 5,008,689 | ||||||||||
Deemed dividend | $ 73,000 | |||||||||||
Additional shares not issued results of warrants exercised | 30 | |||||||||||
Lambda Warrants [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Warrants exercised | $ 851 | |||||||||||
Class of warrant or right, number of securities called by warrants or rights | 2,127 | |||||||||||
Restricted Stock [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock options granted | 957,336 | 617,795 | ||||||||||
Share-based compensation expense | $ 163,000 | $ 161,000 | ||||||||||
General and administrative expenses | $ 51,000 | $ 36,000 | ||||||||||
Weighted-average fair value of options granted | $ 0.35 | $ 0.48 | ||||||||||
Employee service share-based compensation, nonvested awards, compensation not yet recognized, stock options | $ 178,000 | |||||||||||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 6 months | |||||||||||
Restricted Stock [Member] | Tranche One [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares issued for consulting services | 57,143 | |||||||||||
Number of shares issued for consulting services value | $ 16,000 | |||||||||||
Selling, general and administrative expense | $ 16,000 | |||||||||||
Stock vested date | Jun. 15, 2016 | |||||||||||
Restricted Stock [Member] | Tranche Two [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares issued for consulting services | 38,461 | |||||||||||
Number of shares issued for consulting services value | $ 10,000 | |||||||||||
Selling, general and administrative expense | 10,000 | |||||||||||
Stock vested date | Sep. 30, 2016 | |||||||||||
Restricted Stock [Member] | Tranche Three [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares issued for consulting services | 58,823 | |||||||||||
Number of shares issued for consulting services value | $ 20,000 | |||||||||||
Selling, general and administrative expense | 20,000 | |||||||||||
Stock vested date | Apr. 12, 2016 | |||||||||||
Restricted Stock [Member] | Tranche Four [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares issued for consulting services | 47,382 | |||||||||||
Number of shares issued for consulting services value | $ 23,000 | |||||||||||
Selling, general and administrative expense | $ 23,000 | |||||||||||
Stock vested date | Nov. 25, 2015 | |||||||||||
Restricted Stock [Member] | Tranche Five [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares issued for consulting services | 69,231 | |||||||||||
Number of shares issued for consulting services value | $ 45,000 | |||||||||||
Selling, general and administrative expense | 45,000 | |||||||||||
Stock vested date | Aug. 7, 2015 | |||||||||||
Selling, General and Administrative Expenses [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Share-based compensation expense | 363,000 | 306,000 | ||||||||||
Research and Development Expense [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Share-based compensation expense | 25,000 | $ 22,000 | ||||||||||
Stock Options Non-Employee Director [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Share-based compensation expense | 5,000 | |||||||||||
Rights Offering Warrants [Member] | Investor [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Exercise price per share | $ 0.40 | |||||||||||
Class of warrant or right, number of securities called by warrants or rights | 2,226,112 | |||||||||||
Rights Offering Warrants [Member] | Lambda Warrants [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Exercise price per share | $ 0.40 | |||||||||||
Class of warrant or right, number of securities called by warrants or rights | 2,782,577 | |||||||||||
2011 Warrants [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Warrants exercised | $ 106,000 | $ 0 | ||||||||||
Class of warrant or right, number of securities called by warrants or rights | 3,442,521 | |||||||||||
Gross proceeds from warrants exercise | $ 688,000 | |||||||||||
Warrants exercised under cashless exercise provision | $ 0.20 | |||||||||||
Class of warrant or right, date from which warrants or rights exercisable | Dec. 18, 2015 | |||||||||||
2015 Equity Incentive Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares reserved and authorized for awards | 7,000,000 | |||||||||||
2015 Equity Incentive Plan [Member] | Employee Stock Option [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Options outstanding | 3,042,568 | |||||||||||
Stock option plan terms and description | The options issued to employees expire on various dates between May 7, 2025 and December 14, 2026 | |||||||||||
Stock option vesting term description | Options currently outstanding are fully vested or will vest upon a combination of the following: immediate vesting, performance-based vesting or straight line vesting of two or four years. | |||||||||||
Stock options granted | 3,042,568 | |||||||||||
Stock options will vest upon the specified performance condition is met | 1,604,725 | |||||||||||
2015 Equity Incentive Plan [Member] | Employee Stock Option [Member] | Option and Resteicted Stock [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Shares available for future grants | 1,865,610 | |||||||||||
2015 Equity Incentive Plan [Member] | Non Employee Stock Options [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Options outstanding | 281,656 | |||||||||||
Stock option plan terms and description | Expire on various dates between May 31, 2021 and May 7, 2025 | |||||||||||
2015 Equity Incentive Plan [Member] | Maximum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock options contractual term | 10 years | |||||||||||
2004 Stock Incentive Plan [Member] | Employee Stock Option [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Options outstanding | 475,263 | |||||||||||
Stock option plan terms and description | The options expire on various dates between January 6, 2019 and February 5, 2024. | |||||||||||
Stock option vesting term description | Options currently outstanding are fully vested or are currently vesting over a period of four years. | |||||||||||
2004 Stock Incentive Plan [Member] | Non Employee Stock Options [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Options outstanding | 792,861 | |||||||||||
Stock option plan terms and description | options expire at various dates between November 30, 2017 and November 17, 2024 |
Stock Plans, Share-Based Paym48
Stock Plans, Share-Based Payments and Warrants - Summary of Option Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Shares, Outstanding at beginning of year | 4,303,638 | 2,472,234 |
Shares, Options granted | 510,520 | 2,911,829 |
Shares, Options forfeited or expired | (221,811) | (1,080,425) |
Shares, Outstanding at end of year | 4,592,347 | 4,303,638 |
Weighted Average Exercise Price, Outstanding at beginning of year | $ 0.65 | $ 0.96 |
Weighted Average Exercise Price, Options granted | 0.37 | 0.56 |
Weighted Average Exercise Price, Options forfeited or expired | 1.04 | 1.28 |
Weighted Average Exercise Price, Outstanding at end of year | $ 0.6 | $ 0.65 |
Stock Plans, Share-Based Paym49
Stock Plans, Share-Based Payments and Warrants - Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable (Details) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Shares, Exercisable | 1,866,019 | 1,377,665 |
Shares, Vested and expected to vest | 4,434,220 | 4,133,932 |
Weighted Average Exercise Price, Exercisable | $ 0.70 | $ 0.84 |
Weighted Average Exercise Price, Vested and expected to vest | $ 0.61 | $ 0.66 |
Stock Plans, Share-Based Paym50
Stock Plans, Share-Based Payments and Warrants - Schedule of Fair Value Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Stock Price Volatility | 114.63% | 121.90% |
Risk-Free Interest Rates | 1.81% | 1.60% |
Expected Life (in years) | 5 years 9 months 29 days | 6 years 1 month 24 days |
Expected Dividend Yield | 0.00% | 0.00% |
Stock Plans, Share-Based Paym51
Stock Plans, Share-Based Payments and Warrants - Summary of Restricted Stock Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Class of Warrant or Right [Line Items] | ||
Shares, Granted | 510,520 | 2,911,829 |
Weighted Average Grant Date Fair Value, Granted | $ 0.31 | $ 0.49 |
Restricted Stock [Member] | ||
Class of Warrant or Right [Line Items] | ||
Shares, Nonvested Beginning Balance | 501,182 | 132,077 |
Shares, Granted | 957,336 | 617,795 |
Shares, Vested | (501,182) | (248,690) |
Shares, Nonvested Ending Balance | 957,336 | 501,182 |
Weighted Average Grant Date Fair Value, Nonvested Beginning Balance | $ 0.46 | $ 0.86 |
Weighted Average Grant Date Fair Value, Granted | 0.35 | 0.48 |
Weighted Average Grant Date Fair Value, Vested | 0.46 | 0.73 |
Weighted Average Grant Date Fair Value, Nonvested Ending Balance | $ 0.35 | $ 0.46 |
Stock Plans, Share-Based Paym52
Stock Plans, Share-Based Payments and Warrants - Summary of Terms of Outstanding Warrants (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Class of Warrant or Right [Line Items] | ||
Exercise price per share | $ 0.45 | $ 0.57 |
Total Common Shares Issuable | 3,291,149 | 2,482,563 |
Equity-Classified Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Total Common Shares Issuable | 3,291,149 | 2,482,563 |
Equity-Classified Warrants [Member] | Shareholder Rights Offering Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Date Issued | Mar. 10, 2011 | |
Expiry Date | Mar. 10, 2016 | |
Exercise price per share | $ 0.40 | |
Total Common Shares Issuable | 1,565,414 | |
Equity-Classified Warrants [Member] | May 2015 - Private Placement Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Date Issued | Mar. 18, 2015 | |
Expiry Date | Mar. 18, 2020 | |
Exercise price per share | $ 0.85 | |
Total Common Shares Issuable | 917,149 | 917,149 |
Equity-Classified Warrants [Member] | June 2016 - Note and Warrant Agreement [Member] | ||
Class of Warrant or Right [Line Items] | ||
Date Issued | Jun. 7, 2016 | |
Expiry Date | Jun. 7, 2021 | |
Exercise price per share | $ 0.30 | |
Total Common Shares Issuable | 2,374,000 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Details Narrative) - USD ($) | Jul. 24, 2015 | May 18, 2015 | Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Class of Stock [Line Items] | |||||
Proceeds from issuance of common stock | $ 1,340,000 | ||||
Exercise price per share | $ 0.45 | $ 0.57 | |||
Private Placement [Member] | |||||
Class of Stock [Line Items] | |||||
Number of common stock shares sold during the period | 1,834,299 | ||||
Gross proceeds from issuance of private placement | $ 1,230,000 | ||||
Warrants description | Each unit consisted of one share of its common stock and a five-year warrant to purchase one-half of one share of the Companys common stock. | ||||
Shares issued price per share | $ 0.67 | ||||
Class of warrant or right, number of securities called by each warrant or right | 917,149 | ||||
Exercise price per share | $ 0.85 | ||||
Proceeds of equity issuance costs net | $ 24,000 | ||||
Proceeds from private placement | $ 1,205,000 | ||||
Lincoln Park Capital Fund LLC [Member] | |||||
Class of Stock [Line Items] | |||||
Stock issued during period, value, new issues | $ 10,000,000 | ||||
Limited liability company description for purchase shares level | direct Lincoln Park, at its sole discretion and subject to certain conditions, to purchase up to 100,000 shares of common stock on any business day, provided that at least one business day has passed since the most recent purchase, increasing to up to 200,000 shares depending upon the closing sale price of the common stock | ||||
Limited liability company (llc) or limited partnership (lp), members or limited partners, ownership interest | 9.99% | ||||
Limited liability company description for regular purchase | Regular Purchase be more than $500,000. | ||||
Stock issued during period, shares, other | 250,000 | ||||
Fair value of stock issued as commitment fee | $ 163,000 | ||||
Number of common stock shares sold during the period | 300,000 | ||||
Share price | $ 0.45 | ||||
Proceeds from issuance of common stock | $ 135,000 | ||||
Amortized commitment fee | $ 163,000 |
401(k) Plan (Details Narrative)
401(k) Plan (Details Narrative) - USD ($) | Jan. 01, 2004 | Dec. 31, 2016 | Dec. 31, 2015 |
Defined Benefit Plan Disclosure [Line Items] | |||
Maximum employee contribution, percentage | 15.00% | ||
Contribution expense | $ 44,000 | $ 42,000 | |
Three Percent Employee Contribution [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer matching contribution, percentage | 100.00% | ||
Percentage of employee contributions matched by employer | 3.00% | ||
Two Percent Employee Contribution [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer matching contribution, percentage | 50.00% | ||
Percentage of employee contributions matched by employer | 2.00% |
Commitments and Contingencies55
Commitments and Contingencies (Details Narrative) | Aug. 01, 2016 | Oct. 08, 2015USD ($) | Apr. 15, 2015 | May 23, 2013USD ($) | May 23, 2013EUR (€) | Feb. 04, 2013USD ($) | Feb. 04, 2013EUR (€) | Apr. 23, 2012USD ($) | Apr. 23, 2012EUR (€) | Dec. 31, 2016USD ($)Products$ / sharesshares | Dec. 31, 2016EUR (€)shares | Dec. 31, 2015USD ($) | Dec. 31, 2015EUR (€) | Dec. 31, 2016€ / shares | Sep. 30, 2013 |
Commitments And Contingencies [Line Items] | |||||||||||||||
Long-term intangible asset | $ 2,250,000 | ||||||||||||||
Accumulated amortization | 988,000 | $ 777,000 | |||||||||||||
Amortization of other deferred charges | 211,000 | ||||||||||||||
Amortization expense, years two and three | $ 210,000 | ||||||||||||||
Royalty rate | 3.00% | 3.00% | |||||||||||||
Royalty payable | $ 18,000 | 14,000 | |||||||||||||
Interest expense | 41,000 | 41,000 | |||||||||||||
Monthly rent expense | 8,000 | ||||||||||||||
Future renewed monthly rent expense | $ 9,000 | ||||||||||||||
Lease expiration date | expire in November 2018 | expire in November 2018 | |||||||||||||
Security deposit | $ 21,000 | 21,000 | |||||||||||||
Rent expense | 126,000 | 125,000 | |||||||||||||
Investment lease | 92,000 | ||||||||||||||
Unearned interest | 14,000 | ||||||||||||||
Interest income | 5,000 | ||||||||||||||
Investment in lease, net - current portion | 27,000 | ||||||||||||||
Unearned interest current | 4,000 | ||||||||||||||
Investment in lease, net - less current portion | 61,000 | ||||||||||||||
Unearned interest noncurrent | $ 5,000 | ||||||||||||||
Office Equipment [Member] | |||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||
Lease expiration date | expires in 2020 | ||||||||||||||
Daron Evans [Member] | |||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||
Lease term | 4 years | ||||||||||||||
Lease Agreement [Member] | |||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||
Lease term | 12 months | ||||||||||||||
Equipment Lease Agreement [Member] | Biocon 1, LLC [Member] | |||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||
Monthly rent expense | $ 1,800 | ||||||||||||||
Lease term | 60 months | ||||||||||||||
Bellco [Member] | |||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||
Number of units under first tier royalty receivable | Products | 125,000 | ||||||||||||||
First tier royalty per unit | $ / shares | $ 1.91 | ||||||||||||||
Second tier royalty per unit | $ / shares | $ 1.36 | ||||||||||||||
Bellco [Member] | EUR [Member] | |||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||
Number of units under first tier royalty receivable | Products | 125,000 | ||||||||||||||
First tier royalty per unit | € / shares | € 1.75 | ||||||||||||||
Second tier royalty per unit | € / shares | € 1.25 | ||||||||||||||
Medica Spa [Member] | |||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||
Upfront fees and connection of first amendment | $ 612,000 | ||||||||||||||
License agreement product purchases in year one | 400,000 | ||||||||||||||
License agreement product purchases in year two | 700,000 | ||||||||||||||
License agreement product purchases in year three | 1,000,000 | ||||||||||||||
Purchase commitment | 1,300,000 | $ 1,119,000 | |||||||||||||
License agreement payment | $ 2,000,000 | ||||||||||||||
License agreement first installment payment | $ 700,000 | ||||||||||||||
License agreement second installment payment | $ 800,000 | ||||||||||||||
License agreement final installment payment | $ 500,000 | ||||||||||||||
License agreement options to purchase shares | shares | 300,000 | 300,000 | |||||||||||||
Fair value of stock options granted to medica | $ 273,000 | ||||||||||||||
Debt instrument, interest rate, stated percentage | 12.00% | ||||||||||||||
Medica Spa [Member] | EUR [Member] | |||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||
Upfront fees and connection of first amendment | € | € 450,000 | ||||||||||||||
License agreement product purchases in year one | € | 300,000 | ||||||||||||||
License agreement product purchases in year two | € | 500,000 | ||||||||||||||
License agreement product purchases in year three | € | 750,000 | ||||||||||||||
Purchase commitment | € | 1,200,000 | € 999,000 | |||||||||||||
License agreement payment | € | € 1,500,000 | ||||||||||||||
License agreement first installment payment | € | € 500,000 | ||||||||||||||
License agreement second installment payment | € | € 600,000 | ||||||||||||||
License agreement final installment payment | € | € 400,000 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Maturities Minimum Lease Payments Receivable (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Commitments and Contingencies Disclosure [Abstract] | ||
2,016 | $ 13,000 | |
2,017 | 17,000 | |
2,018 | 18,000 | |
2,019 | 19,000 | |
2,020 | 21,000 | |
Total | 88,000 | |
Less: Current portion | (27,000) | |
Investment in sales-type lease, noncurrent | $ 61,000 |
Commitments and Contingencies57
Commitments and Contingencies - Contractual Obligations and Commercial Commitments (Details) | Dec. 31, 2016USD ($) | |
Commitments And Contingencies [Line Items] | ||
Payments Due, Total | $ 790,000 | |
Payments Due Within 1 Year | 356,000 | |
Payments Due Within 2 - 3 Years | 428,000 | |
Payments Due Within 4 - 5 Years | 6,000 | |
Leases [Member] | ||
Commitments And Contingencies [Line Items] | ||
Payments Due, Total | 240,000 | [1] |
Payments Due Within 1 Year | 116,000 | [1] |
Payments Due Within 2 - 3 Years | 118,000 | [1] |
Payments Due Within 4 - 5 Years | 6,000 | [1] |
Employment Contracts [Member] | ||
Commitments And Contingencies [Line Items] | ||
Payments Due, Total | 550,000 | [2] |
Payments Due Within 1 Year | 240,000 | [2] |
Payments Due Within 2 - 3 Years | 310,000 | [2] |
Payments Due Within 4 - 5 Years | [2] | |
[1] | In addition to lease obligations for office space, obligations include a lease for various office equipment which expires in 2020. | |
[2] | Relates to employment agreement with Daron Evans, the Company's President and Chief Executive Officer, entered into on April 15, 2015 for a term of four years, |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Mar. 17, 2017 | Dec. 31, 2015 | Dec. 31, 2016 | |
Warrants exercised to purchase of common stock | 1,205 | ||
Warrant exercise price, per share | $ 0.57 | $ 0.45 | |
Subsequent Event [Member] | Securities Purchase Agreement [Member] | |||
Number of options to purchase, shares | 4,059,994 | ||
Share price, per share | $ 0.30 | ||
Proceeds from option to purchase | $ 1,200,000 | ||
Warrants exercised to purchase of common stock | 4,059,994 | ||
Warrant exercise price, per share | $ 0.30 | ||
Warrant exercisable term | 5 years | ||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Maxim Group LLC [Member] | |||
Warrants exercised to purchase of common stock | 81,199 | ||
Warrant exercise price, per share | $ 0.33 | ||
Percentage of cash fee | 7.50% |