Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 09, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | NEPHROS INC | |
Entity Central Index Key | 1,196,298 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 63,710,322 | |
Trading Symbol | NEPH | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash | $ 1,819 | $ 2,194 |
Accounts receivable, net | 678 | 836 |
Investment in lease, net-current portion | 26 | 20 |
Inventory, net | 928 | 674 |
Prepaid expenses and other current assets | 63 | 85 |
Total current assets | 3,514 | 3,809 |
Property and equipment, net | 35 | 52 |
Investment in lease, net-less current portion | 34 | 39 |
License and supply agreement, net | 1,038 | 1,072 |
Other asset | 11 | 11 |
Total assets | 4,632 | 4,983 |
Current liabilities: | ||
Secured revolving credit facility | 150 | 711 |
Current portion of secured note payable | 184 | |
Accounts payable | 1,069 | 872 |
Accrued expenses | 328 | 218 |
Deferred revenue, current portion | 70 | |
Total current liabilities | 1,731 | 1,871 |
Secured note payable, net of current portion | 1,003 | |
Unsecured long-term note payable, net of debt issuance costs and debt discount of $0 and $233, respectively | 954 | |
Long-term portion of deferred revenue | 208 | |
Total liabilities | 2,734 | 3,033 |
Stockholders' equity: | ||
Preferred stock, $.001 par value; 5,000,000 shares authorized at March 31, 2018 and December 31, 2017; no shares issued and outstanding at March 31, 2018 and December 31, 2017 | ||
Common stock, $.001 par value; 90,000,000 shares authorized at March 31, 2018 and December 31, 2017; 57,169,653 and 55,293,267 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively | 57 | 55 |
Additional paid-in capital | 124,018 | 122,924 |
Accumulated other comprehensive income | 80 | 77 |
Accumulated deficit | (122,257) | (121,106) |
Total stockholders' equity | 1,898 | 1,950 |
Total liabilities and stockholders' equity | $ 4,632 | $ 4,983 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Debt discount | $ 0 | $ 233 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 57,169,653 | 55,293,267 |
Common stock, shares outstanding | 57,169,653 | 55,293,267 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net revenues: | ||
Product revenues | $ 958 | $ 690 |
License and royalty revenues | 27 | 44 |
Total net revenues | 985 | 734 |
Cost of goods sold | 518 | 279 |
Gross margin | 467 | 455 |
Operating expenses: | ||
Research and development | 289 | 231 |
Depreciation and amortization | 41 | 59 |
Selling, general and administrative | 1,260 | 770 |
Total operating expenses | 1,590 | 1,060 |
Loss from operations | (1,123) | (605) |
Loss on extinguishment of debt | (199) | |
Interest expense | (86) | (66) |
Interest income | 1 | 1 |
Other expense | (22) | (10) |
Net loss | (1,429) | (680) |
Other comprehensive income, foreign currency translation adjustments, net of tax | 3 | 1 |
Total comprehensive loss | $ (1,426) | $ (679) |
Net loss per common share, basic and diluted | $ (0.03) | $ (0.01) |
Weighted average common shares outstanding, basic and diluted | 55,568,575 | 49,601,521 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - 3 months ended Mar. 31, 2018 - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2017 | $ 55 | $ 122,924 | $ 77 | $ (121,106) | $ 1,950 |
Balance, shares at Dec. 31, 2017 | 55,293,267 | ||||
Net loss | (1,429) | (1,429) | |||
Cumulative effect of adoption of ASC 606 | 278 | 278 | |||
Net unrealized gains on foreign currency translation, net of tax | 3 | 3 | |||
Issuance of common stock | $ 2 | 852 | 854 | ||
Issuance of common stock, shares | 1,900,000 | ||||
Cashless exercise of stock options | |||||
Cashless exercise of stock options, shares | 22,245 | ||||
Cancelled restricted stock shares | |||||
Cancelled restricted stock shares, shares | (45,859) | ||||
Noncash stock-based compensation | 242 | 242 | |||
Balance at Mar. 31, 2018 | $ 57 | $ 124,018 | $ 80 | $ (122,257) | $ 1,898 |
Balance, shares at Mar. 31, 2018 | 57,169,653 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating activities: | ||
Net loss | $ (1,429) | $ (680) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation of property and equipment | 7 | 7 |
Amortization of license and supply agreement | 34 | 52 |
Non-cash stock-based compensation, including stock options and restricted stock | 242 | 199 |
Loss on extinguishment of debt | 199 | |
Amortization of debt discount | 34 | 26 |
Inventory reserve | 50 | |
Allowance for doubtful accounts reserve | 2 | |
Writeoff of equipment | 10 | |
Loss on foreign currency transactions | 7 | 2 |
(Increase) decrease in operating assets: | ||
Accounts receivable | 158 | (185) |
Inventory | (304) | 78 |
Prepaid expenses and other current assets | 22 | (26) |
Other assets | ||
Increase (decrease) in operating liabilities: | ||
Accounts payable | 190 | (226) |
Accrued expenses | 111 | 109 |
Deferred revenue | (17) | |
Net cash used in operating activities | (669) | (659) |
Financing activities: | ||
Proceeds from issuance of common stock, net of equity issuance costs of $0 and $144, respectively | 854 | 1,187 |
Net payments on secured revolving credit facility | (561) | |
Proceeds from issuance of secured note | 1,187 | |
Repayment of secured long term note payable | (1,187) | |
Net cash provided by financing activities | 293 | 1,187 |
Effect of exchange rates on cash | 1 | |
Net decrease in cash | (375) | 528 |
Cash, beginning of period | 2,194 | 275 |
Cash, end of period | 1,819 | 803 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 64 | 5 |
Cash paid for income taxes | $ 3 | $ 2 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Cash Flows [Abstract] | ||
Equity issuance costs | $ 0 | $ 144 |
Organization and Nature of Oper
Organization and Nature of Operations | 3 Months Ended |
Mar. 31, 2018 | |
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. The Company was founded by health professionals, scientists and engineers affiliated with Columbia University to develop advanced end stage renal disease (“ESRD”) therapy technology and products. Today, the Company has two FDA-cleared products in the hemodiafiltration (“HDF”) market that deliver therapy to 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. Beginning in 2009, Nephros introduced an additional, complementary business developing and marketing high performance liquid purification filters to meet the demand for water purification in certain medical markets. The Company’s filters, generally classified as ultrafilters, are primarily used in hospitals for the prevention of infection from water-borne pathogens, such as legionella and pseudomonas, and in dialysis centers for the removal of biological contaminants from water and bicarbonate concentrate. The Company is also exploring water purification applications in several commercial markets, including food and beverage, data center cooling, and military field applications. The U.S. facilities, located at 380 Lackawanna Place, South Orange, New Jersey, 07079, are used to house the Company’s corporate headquarters and research facilities. 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 office in Dublin, Ireland. |
Basis of Presentation and Liqui
Basis of Presentation and Liquidity | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Liquidity | Note 2 - Basis of Presentation and Liquidity Interim Financial Information The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for annual financial statements. Results for the period ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The condensed consolidated interim financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K. Use of Estimates 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 collection of accounts receivable, value of inventories, useful life of fixed assets and intangible assets, and assumptions used in determining stock compensation such as expected volatility and risk-free interest rate. Liquidity The Company has sustained operating losses and expects such losses to continue over the next several quarters. Net losses from operations since inception have generated an accumulated deficit of approximately $122,257,000 as of March 31, 2018. On April 10, 2018, the Company completed a private placement transaction whereby the Company sold 6,540,669 shares of its common stock for aggregate net proceeds of approximately $2.9 million. The Company believes that its cash and cash equivalents, together with the proceeds from the private placement, will be sufficient to fund the Company’s current operating plan through at least the next twelve months. |
Major Customers and Concentrati
Major Customers and Concentration of Credit Risk | 3 Months Ended |
Mar. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Major Customers and Concentration of Credit Risk | Note 3 - Major Customers and Concentration of Credit Risk For the three months ended March 31, 2018, three customers accounted for 37% of the Company’s revenues. For the three months ended March 31, 2017, three customers accounted for 48% of the Company’s revenues. As of March 31, 2018, three customers accounted for 36% of the Company’s accounts receivable. As of December 31, 2017, three customers accounted for 34% of the Company’s accounts receivable. For the three months ended March 31, 2018 and 2017, the following customers accounted for the following percentages of the Company’s revenues, respectively: Customer 2018 2017 A 16 % 25 % B 13 % 13 % C 8 % 10 % As of March 31, 2018 and December 31, 2017, the following customers accounted for the following percentages of the Company’s accounts receivable, respectively: Customer March 31, 2018 December 31, 2017 D 14 % 5 % B 14 % 18 % E 8 % 11 % 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 $1,000 as of March 31, 2018 and December 31, 2017. There was no allowance for sales returns at March 31, 2018 or December 31, 2017. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2018 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Note 4 - Revenue Recognition The Company adopted Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, as of January 1, 2018 using the modified retrospective method. ASC 606 prescribes a five step model for recognizing revenue which includes (i) identifying contracts with customers; (ii) identifying performance obligations; (iii) determining the transaction price; (iv) allocating the transaction price and (v) recognizing revenue. The Company recognizes revenue related to product sales when product is shipped via external logistics provider and the other criteria of ASC 606 are met. Product revenue is recorded net of returns and allowances. In addition to product revenue, the Company recognizes revenue related to license, royalty and other agreements in accordance with the five step model in ASC 606. During the three months ended March 31, 2018 and 2017, the Company recognized a total of approximately $27,000 and $44,000, respectively, related to the license agreement with Bellco. In accordance with the adoption of ASC 606, the remaining deferred revenue of approximately $278,000 related to license revenue as of December 31, 2017 was recognized as a cumulative effect adjustment to accumulated deficit as of January 1, 2018. During the three months ended March 31, 2017, approximately $17,000 was recognized as license revenue. The Company recognized royalty income from Bellco pursuant to the license agreement of approximately $27,000 for each of the three months ended March 31, 2018 and 2017. The following table presents the Company’s revenue for the three months ended March 31, 2018 under the ASC 606 model as compared to revenue under the previous guidance: Revenue as reported Revenue under previous guidance Difference Product revenue $ 958,000 $ 958,000 $ - Royalty revenue under the License Agreement with Bellco 27,000 27,000 - License revenue under the License Agreement with Bellco (1) - 17,000 (17,000 ) Total net revenues $ 985,000 $ 1,002,000 $ (17,000 ) (1) Under ASC 606, amounts received related to the license under the Bellco license agreement would have been recognized.as revenue at the time that the license was transferred, which was at the time the payments were received by the Company. Under previous guidance, amounts received under the Bellco license agreement were deferred and recognized as revenue over the term of the Bellco license agreement. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 5 - Fair Value of Financial Instruments The carrying amounts of cash, accounts receivable, secured revolving credit facility, accounts payable and accrued expenses approximate fair value due to the short-term maturity of these instruments. The carrying amounts of the investment in lease, net, the secured long-term note payable and the unsecured long-term note payable approximate fair value as of March 31, 2018 and December 31, 2017 because those financial instruments bear interest at rates that approximate current market rates for similar agreements with similar maturities and credit. |
Stock Plans and Share-Based Pay
Stock Plans and Share-Based Payments | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Plans and Share-Based Payments | Note 6 - Stock Plans and Share-Based Payments Stock Options The fair value of stock options is recognized as stock-based compensation expense in the Company’s condensed 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 is 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. The fair value of stock-based awards is amortized over the vesting period of the award. Stock-Based Compensation Stock-based compensation expense related to stock option grants was approximately $130,000 and $102,000 for the three months ended March 31, 2018 and 2017, respectively. For the three months ended March 31, 2018, approximately $120,000 and approximately $10,000 are included in selling, general and administrative expenses and research and development expenses, respectively, on the accompanying condensed consolidated statement of operations and comprehensive loss. During the three months ended March 31, 2018, previously issued stock options were modified for an employee who is no longer employed with the Company. As a result of this modification, approximately $12,000 was recognized as stock option modification expense and included in research and development expenses on the accompanying condensed consolidated statement of operations and comprehensive loss. The remaining income recorded as stock-based compensation included in research and development expenses of approximately $2,000 is primarily due to the reversal of expense due to the forfeiture of unvested stock options. For the three months ended March 31, 2017, approximately $94,000 and approximately $8,000 are included in selling, general and administrative expenses and research and development expenses, respectively, on the accompanying condensed consolidated statements of operations and comprehensive loss. There was no tax benefit related to expense recognized in the three months ended March 31, 2018 and 2017, as the Company is in a net operating loss position. As of March 31, 2018, there was approximately $1,179,000 of total unrecognized compensation cost related to unvested share-based compensation awards granted under the equity compensation plans. Approximately $230,000 of the $1,179,000 total unrecognized compensation will be recognized at the time that certain performance conditions are met. The remaining unrecognized compensation expense of approximately $949,000 will be amortized over the weighted average remaining requisite service period of 2.2 years. Such amount does not include the effect of future grants of equity compensation, if any. Restricted Stock Total stock-based compensation expense for restricted stock grants was approximately $112,000 and $97,000 for the three months ended March 31, 2018 and 2017, respectively. Approximately $100,000 and $97,000 is included in selling, general and administrative expenses on the accompanying condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2018 and 2017, respectively. Approximately $12,000 is included in research and development expenses on the accompanying condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2018. As of March 31, 2018, there was approximately $103,000 of unrecognized compensation expense related to the restricted stock awards, which is expected to be recognized over the next three months. |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Warrants | Note 7 - Warrants There were no warrants exercised during the three months ended March 31, 2018 or 2017. |
Net Income (Loss) Per Common Sh
Net Income (Loss) Per Common Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Common Share | Note 8 - 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 potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding as they would be anti-dilutive: March 31, 2018 2017 Shares underlying warrants outstanding 7,099,010 7,432,342 Shares underlying options outstanding 6,474,527 5,040,306 Unvested restricted stock 753,528 584,467 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Note 9 – Recent Accounting Pronouncements Recently Adopted 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 to be 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. In March, April and May 2016, the FASB issued ASU No. 2016-08, ASU No. 2016-10 and ASU No. 2016-12, respectively, which clarify implementation guidance, including the guidance on principal versus agent considerations, performance obligations and licensing and assessments of collectability and noncash considerations. 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. The Company adopted the new revenue recognition standard as of January 1, 2018 using the modified retrospective method, which requires the cumulative effect of adoption, if any, to be recognized as an adjustment to opening accumulated deficit in the period of adoption. The majority of the Company’s revenue relates to the sale of finished products to various customers, and the adoption did not have any impact on revenue recognized from these transactions. The Company completed its analysis of the impact on certain less significant transactions involving third-party arrangements, and as a result of the analysis, the Company accelerated the remaining approximately $278,000 of deferred revenue to be recognized under the Bellco license agreement as of December 31, 2017 and recorded a cumulative effect adjustment to opening accumulated deficit as of January 1, 2018. 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 was permitted. The Company adopted this guidance as of January 1, 2018 and the guidance did not have an impact 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 was effective for the Company beginning in the first quarter of fiscal year 2018. Early adoption was permitted. The Company adopted the guidance as of January 1, 2018 and the guidance did not have a significant impact on its consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, “Restricted Cash,” which clarifies how restricted cash is presented and classified in the statement of cash flows. The guidance was effective for the Company beginning in the first quarter of fiscal year 2018. Early adoption was permitted. The Company adopted the guidance as of January 1, 2018 and the guidance did not have an impact 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 was effective for the Company beginning in the first quarter of fiscal year 2018. Early adoption was permitted. The Company adopted the guidance as of January 1, 2018 and the guidance did not have an impact on its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation” which requires modification accounting to be used on shared-based payment awards if the fair value, the vesting conditions, or the classification of the award changes as a result of the change in terms or conditions. The guidance was effective for the Company beginning in the first quarter of fiscal year 2018. The Company adopted the guidance as of January 1, 2018 and the guidance did not have an impact on its consolidated financial statements. Recent Accounting Pronouncements, Not Yet Effective 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 assessing the impact of adopting this guidance 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 assessing the impact of adopting this guidance on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment,” which simplifies the test for goodwill impairment. The guidance is effective for the Company beginning in the first quarter of fiscal year 2020. Early adoption is permitted for interim or annual goodwill impairments tests after January 1, 2017. The Company is assessing the impact of adopting this guidance on its consolidated financial statements. |
Inventory, Net
Inventory, Net | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory, Net | Note 10 – Inventory, net Inventory is stated at the lower of cost or net realizable value using the first-in, first-out method and consists of raw materials and finished goods. The Company’s inventory as of March 31, 2018 and December 31, 2017 was as follows: March 31, 2018 December 31, 2017 (Unaudited) (Audited) Finished goods $ 936,000 $ 654,000 Raw materials 73,000 51,000 Less: inventory reserve (81,000 ) (31,000 ) Total inventory, net $ 928,000 $ 674,000 |
Secured Note Payable
Secured Note Payable | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Secured Note Payable | Note 11 – Secured Note Payable On March 27, 2018, the Company entered into a Secured Promissory Note (the “Secured Note”) with Tech Capital, LLC (“Tech Capital”) for a principal amount of $1,187,000. As of March 31, 2018, the principal balance of the Secured Note was approximately $1,187,000. The Company used these proceeds to repay the Company’s 11% unsecured promissory notes issued pursuant to the Note and Warrant Agreement dated June 3, 2016 (see Note 13 below). The Secured Note has a maturity date of April 1, 2023. The unpaid principal balance accrues interest at a rate of 8% per annum. Principal and interest payments are due on the first day of each month commencing on May 1, 2018. The Secured Note is subject to the terms and conditions of and is secured by security interests granted by the Company in favor of Tech Capital under the Loan and Security Agreement between the Company and Tech Capital, dated August 16, 2017 and all of the riders and amendments thereto (the “Loan Agreement”) (see Note 12 below). An event of default under such Loan Agreement shall be an event of default under the Secured Note, and vice versa. In the event the principal balance under the Loan Agreement is due, all amounts due under the Secured Note shall also be due. Debt issuance costs of approximately $6,000 were recognized as interest expense on the condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2018. |
Secured Revolving Credit Facili
Secured Revolving Credit Facility | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Secured Revolving Credit Facility | Note 12 – Secured Revolving Credit Facility On August 17, 2017, the Company entered into the Loan Agreement with Tech Capital. The Loan Agreement provides for a secured asset-based revolving credit facility of up to $1,000,000, which the Company may draw upon and repay from time to time during the term of the Loan Agreement. The outstanding principal balance of the Loan Agreement was approximately $150,000 and approximately $711,000 as of March 31, 2018 and December 31, 2017, respectively. The Company is using these proceeds for working capital and general corporate purposes. The Loan Agreement has a term of 12 months, which will automatically renew for successive 12-month periods unless cancelled. Availability under the Loan Agreement will be based upon periodic borrowing base certifications valuing certain of the Company’s accounts receivable and inventory. Outstanding borrowings under the Loan Agreement accrue interest, which shall be payable monthly based on the average daily outstanding balance, at a rate equal to 3.5% plus the prime rate per annum, provided that such prime rate shall not be less than 4.25% per annum. As of March 31, 2018, the current interest rate was 8.25% per annum. The Company also granted to Tech Capital a first priority security interest in its assets, including its accounts receivable and inventory, to secure all of its obligations under the Loan Agreement. In addition, Nephros International Limited, the Company’s wholly-owned subsidiary, unconditionally guaranteed the Company’s obligations under the Loan Agreement. For the three months ended March 31, 2018, approximately $6,000 was recognized as interest expense on the condensed consolidated statement of operations and comprehensive loss. As of March 31, 2018, approximately $2,000 of the $6,000 of interest expense incurred is included in accrued expenses on the condensed consolidated balance sheet. |
Unsecured Promissory Notes and
Unsecured Promissory Notes and Warrants | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Unsecured Promissory Notes and Warrants | Note 13 – Unsecured Promissory Notes and Warrants On June 7, 2016, the Company entered into a Note and Warrant Agreement (the “Note and Warrant Agreement”) with new creditors as well as existing stockholders under which the Company issued unsecured promissory notes and warrants resulting in total gross proceeds to the Company during June 2016 of approximately $1,187,000. As of December 31, 2017, the portion of the outstanding unsecured promissory notes held by related parties comprised of persons 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 notes required the Company to make interest only payments on a semi-annual basis, with all outstanding principal under the notes being 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. The portion of the gross proceeds allocated to the warrants of approximately $393,000 was accounted for as additional paid-in capital resulting in a debt discount. The debt discount, which includes approximately $9,000 of debt issuance costs in addition to the fair value of the warrants, is being amortized to interest expense using the effective interest method in accordance with ASC 835 over the term of the Note and Warrant Agreement. Approximately $34,000 and $26,000 was recognized as amortization of debt discount during the three months ended March 31, 2018 and 2017, respectively, and is included in interest expense on the condensed consolidated statement of operations and comprehensive loss. Approximately $30,000 and $33,000 was recognized as interest expense for the three months ended March 31, 2018 and 2017, respectively, for interest payable to noteholders. For each of the three month periods ended March 31, 2018 and 2017, the amount of interest expense recognized related to related parties comprised of entities controlled by a member of management and by Lambda was approximately $1,000 and $8,000, respectively. On March 30, 2018, using proceeds from the Secured Note, the principal balance of the notes was repaid in full. In addition, the remaining accrued interest of approximately $43,000 was paid. While the notes were outstanding, approximately $195,000 of interest was paid to noteholders. The remaining debt discount of approximately $199,000 was written off and recorded as loss on extinguishment of debt in the Company’s condensed consolidated statements of operations and comprehensive loss. |
Stockholders_ Equity
Stockholders’ Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Stockholders’ Equity | Note 14 – Stockholders’ Equity March 2017 Private Placement On March 17, 2017, the Company entered into a Securities Purchase Agreement with certain accredited investors identified therein pursuant to which the Company issued and sold in a private placement 4,059,994 units of its securities resulting in gross proceeds to the Company of approximately $1,218,000. Each unit consisted of one share of the Company’s common stock and a five-year warrant to purchase one additional share of common stock. The purchase price for each unit was $0.30. The warrants are exercisable at a price of $0.30 per share and are indexed to the Company’s common stock; therefore, the Company is accounting for the warrants as a component of equity. The portion of the gross proceeds received from certain members of management and existing shareholders amounted to $315,000. Proceeds, net of equity issuance costs of $152,000, recorded as a result of the private placement were approximately $1,066,000. In addition to the equity issuance costs incurred as a result of the private placement, the Company also issued a warrant to purchase 81,199 shares of its common stock to the placement agent engaged in connection with the private placement. The form and terms of the placement agent warrant is substantially the same as the form of warrants issued to the investors under the Securities Purchase Agreement, except that the exercise price is $0.33 per share. July 2015 Purchase Agreement and Registration Rights Agreement On July 24, 2015, the Company entered into both a securities purchase agreement and registration rights agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”), an Illinois limited liability company. Under the terms and subject to the conditions of the securities purchase agreement, the Company has the right to sell to Lincoln Park, 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. Pursuant to the securities purchase agreement, during the three months ended March 31, 2018 and 2017, the Company issued and sold 1,900,000 and 300,000 shares of common stock, respectively, to Lincoln Park. The issuance of the common shares to Lincoln Park resulted in gross proceeds of $854,000 and $113,000 for the three months ended March 31, 2018 and 2017, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 15 – 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 OLpūr 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 (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 the license agreement with Bellco, pursuant to which 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 $2.10) per unit; thereafter, €1.25 (approximately $1.50) per unit. 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 30 days. In accordance with the adoption of ASC 606, the remaining deferred revenue of approximately $278,000 related to license revenue as of December 31, 2017 was recognized as a cumulative effect adjustment to accumulated deficit as of January 1, 2018. During the three months ended March 31, 2017, approximately $17,000 was recognized as license revenue. The Company recognized royalty income from Bellco pursuant to the license agreement of approximately $27,000 for each of the three months ended March 31, 2018 and 2017. License 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, and for 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. On May 5, 2017, the Company and Medica entered into a Third Amendment to the License and Supply Agreement (the “Third Amendment”) which expanded the products covered by the original License and Supply Agreement to include both certain filtration products based on Medica’s proprietary Versatile microfiber technology and certain filtration products based on Medica’s proprietary Medisulfone ultrafiltration technology. The Third Amendment also limits the territory in which Medica granted the Company an exclusive license, with right of sublicense, to market, promote, distribute, offer for sale, and sell the filtration products. On September 26, 2017, the Company and Medica entered into a Fourth Amendment to the License and Supply Agreement (the “Fourth Amendment”) which extended the term of the License and Supply Agreement from December 31, 2022 to December 31, 2025, unless earlier terminated by either party in accordance with the terms of the License and Supply Agreement. In exchange for the rights granted, the Company agreed to make certain minimum annual aggregate purchases from Medica over the term of the License and Supply Agreement. For the year ended December 31, 2018, the Company has agreed to make minimum annual aggregate purchases from Medica of €2,500,000 (approximately $3,000,000). As of March 31, 2018, the Company’s aggregate purchase commitments totaled approximately €471,000 (approximately $565,000). In exchange for the license, the gross value of the intangible asset capitalized was approximately $2,250,000. License and supply agreement, net, on the condensed consolidated balance sheet is approximately $1,038,000 and $1,072,000 as of March 31, 2018 and December 31, 2017, respectively. Accumulated amortization is approximately $1,211,000 and $1,178,000 as of March 31, 2018 and December 31, 2017, respectively. The asset is being amortized as an expense over the life of the License and Supply Agreement. Approximately $34,000 and $52,000 has been charged to amortization expense for the three months ended March 31, 2018 and 2017, respectively, on the condensed consolidated statement of operations and comprehensive loss. 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 the three months ended March 31, 2018 and 2017, approximately $10,000 and $7,000 of interest, respectively, was recognized as interest expense. In addition, for the period beginning April 23, 2014 through December 31, 2025, 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. Approximately $29,000 and $19,000 for the three months ended March 31, 2018 and 2017, respectively, was recognized as royalty expense and is included in cost of goods sold on the condensed consolidated statement of operations and comprehensive loss. Approximately $29,000 in royalties are included in accrued expenses as of March 31, 2018. Approximately $34,000 in royalties are included in accounts payable as of December 31, 2017. Contractual Obligations The Company entered into an operating lease that began in December 2017 for 380 Lackawanna Place, South Orange, New Jersey 07079, which consists of approximately 7,700 square feet of space. The rental agreement expires in November 2022 with a monthly cost of approximately $11,000. Approximately $11,000 related to a security deposit for this U.S. office facility is classified as other assets on the condensed consolidated balance sheet as of March 31, 2018 and December 31, 2017. We use these facilities to house our corporate headquarters and research facilities. The lease agreement for the office space in Ireland was entered into on August 1, 2017 and includes a twelve month term. Rent expense for the three months ended March 31, 2018 and 2017 totaled $51,000 and $31,000, respectively. As of March 31, 2018, minimum lease payments are as follows: 2018 $ 99,000 2019 136,000 2020 140,000 2021 145,000 2022 136,000 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 direct financing 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 condensed consolidated statement of cash flows. At lease inception, an investment in lease of approximately $92,000 was recorded, net of unearned interest of approximately $14,000. Approximately $1,000 was recognized in interest income during each of the three months ended March 31, 2018 and 2017. As of March 31, 2018, investment in lease, current is approximately $26,000, net of unearned interest of $3,000. As of March 31, 2018, investment in lease, noncurrent is approximately $34,000, net of unearned interest of $2,000. As of March 31, 2018, scheduled maturities of minimum lease payments receivable were as follows: 2018 19,000 2019 19,000 2020 22,000 60,000 Less: Current portion (26,000 ) Investment in lease, net – less current portion $ 34,000 Included in the above scheduled maturities of minimum lease payments receivable, approximately $7,000 was due as of March 31, 2018. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 16 – Subsequent Event On April 11, 2018, the Company completed a private placement in which it sold approximately 6,500,000 shares of common stock at a purchase price of $0.45 per share, resulting in total gross proceeds to the Company of approximately $2.9 million. |
Basis of Presentation and Liq24
Basis of Presentation and Liquidity (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Interim Financial Information | Interim Financial Information The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for annual financial statements. Results for the period ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The condensed consolidated interim financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K. |
Use of Estimates | Use of Estimates 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 collection of accounts receivable, value of inventories, useful life of fixed assets and intangible assets, and assumptions used in determining stock compensation such as expected volatility and risk-free interest rate. |
Liquidity | Liquidity The Company has sustained operating losses and expects such losses to continue over the next several quarters. Net losses from operations since inception have generated an accumulated deficit of approximately $122,257,000 as of March 31, 2018. On April 10, 2018, the Company completed a private placement transaction whereby the Company sold 6,540,669 shares of its common stock for aggregate net proceeds of approximately $2.9 million. The Company believes that its cash and cash equivalents, together with the proceeds from the private placement, will be sufficient to fund the Company’s current operating plan through at least the next twelve months. |
Major Customers and Concentra25
Major Customers and Concentration of Credit Risk (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Schedule of Revenues and Receivable Major Customers | For the three months ended March 31, 2018 and 2017, the following customers accounted for the following percentages of the Company’s revenues, respectively: Customer 2018 2017 A 16 % 25 % B 13 % 13 % C 8 % 10 % As of March 31, 2018 and December 31, 2017, the following customers accounted for the following percentages of the Company’s accounts receivable, respectively: Customer March 31, 2018 December 31, 2017 D 14 % 5 % B 14 % 18 % E 8 % 11 % |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue Recognition [Abstract] | |
Schedule of Revenues, Net | The following table presents the Company’s revenue for the three months ended March 31, 2018 under the ASC 606 model as compared to revenue under the previous guidance: Revenue as reported Revenue under previous guidance Difference Product revenue $ 958,000 $ 958,000 $ - Royalty revenue under the License Agreement with Bellco 27,000 27,000 - License revenue under the License Agreement with Bellco (1) - 17,000 (17,000 ) Total net revenues $ 985,000 $ 1,002,000 $ (17,000 ) (1) Under ASC 606, amounts received related to the license under the Bellco license agreement would have been recognized.as revenue at the time that the license was transferred, which was at the time the payments were received by the Company. Under previous guidance, amounts received under the Bellco license agreement were deferred and recognized as revenue over the term of the Bellco license agreement. |
Net Income (Loss) Per Common 27
Net Income (Loss) Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding as they would be anti-dilutive: March 31, 2018 2017 Shares underlying warrants outstanding 7,099,010 7,432,342 Shares underlying options outstanding 6,474,527 5,040,306 Unvested restricted stock 753,528 584,467 |
Inventory, Net (Tables)
Inventory, Net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Net | The Company’s inventory as of March 31, 2018 and December 31, 2017 was as follows: March 31, 2018 December 31, 2017 (Unaudited) (Audited) Finished goods $ 936,000 $ 654,000 Raw materials 73,000 51,000 Less: inventory reserve (81,000 ) (31,000 ) Total inventory, net $ 928,000 $ 674,000 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Minimum Lease Payments | As of March 31, 2018, minimum lease payments are as follows: 2018 $ 99,000 2019 136,000 2020 140,000 2021 145,000 2022 136,000 |
Schedule of Maturities Minimum Lease Payments Receivable | As of March 31, 2018, scheduled maturities of minimum lease payments receivable were as follows: 2018 19,000 2019 19,000 2020 22,000 60,000 Less: Current portion (26,000 ) Investment in lease, net – less current portion $ 34,000 |
Basis of Presentation and Liq30
Basis of Presentation and Liquidity (Details Narrative) - USD ($) $ in Thousands | Mar. 17, 2017 | Mar. 31, 2018 | Dec. 31, 2017 |
Accumulated deficit | $ 122,257 | $ 121,106 | |
Private Placement [Member] | |||
Number of common stock shares sold, shares | 4,059,994 | ||
Private Placement [Member] | April 10, 2018 [Member] | |||
Number of common stock shares sold, shares | 6,540,669 | ||
Number of common stock shares sold, value | $ 2,900 |
Major Customers and Concentra31
Major Customers and Concentration of Credit Risk (Details Narrative) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018USD ($)Products | Mar. 31, 2017Products | Dec. 31, 2017USD ($)Products | |
Allowance for doubtful accounts | $ | $ 1,000 | $ 1,000 | |
Allowance for sales returns | $ | |||
Sales Revenue Goods Net [Member] | |||
Concentration risk, percentage | 37.00% | 48.00% | |
Number of major customers | Products | 3 | 3 | |
Accounts Receivable [Member] | |||
Concentration risk, percentage | 36.00% | 34.00% | |
Number of major customers | Products | 3 | 3 |
Major Customers and Concentra32
Major Customers and Concentration of Credit Risk - Schedule of Revenues and Receivable Major Customers (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Sales Revenue Goods Net [Member] | |||
Concentration risk percentage | 37.00% | 48.00% | |
Accounts Receivable [Member] | |||
Concentration risk percentage | 36.00% | 34.00% | |
Customer A [Member] | Sales Revenue Goods Net [Member] | |||
Concentration risk percentage | 16.00% | 25.00% | |
Customer B [Member] | Sales Revenue Goods Net [Member] | |||
Concentration risk percentage | 13.00% | 13.00% | |
Customer B [Member] | Accounts Receivable [Member] | |||
Concentration risk percentage | 14.00% | 18.00% | |
Customer C [Member] | Sales Revenue Goods Net [Member] | |||
Concentration risk percentage | 8.00% | 10.00% | |
Customer D [Member] | Accounts Receivable [Member] | |||
Concentration risk percentage | 14.00% | 5.00% | |
Customer E [Member] | Accounts Receivable [Member] | |||
Concentration risk percentage | 8.00% | 11.00% |
Revenue Recognition (Details Na
Revenue Recognition (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | ||
License and royalty revenues | [1] | |||
Royalty income | 27 | $ 44 | ||
License Agreement with Bellco [Member] | ||||
License and royalty revenues | 27 | 44 | ||
Deferred revenue | $ 278 | |||
Deferred revenue recognized | 17 | |||
Royalty income | $ 27 | $ 27 | ||
[1] | Under ASC 606, amounts received related to the license under the Bellco license agreement would have been recognized.as revenue at the time that the license was transferred, which was at the time the payments were received by the Company. Under previous guidance, amounts received under the Bellco license agreement were deferred and recognized as revenue over the term of the Bellco license agreement. |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Revenues, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Product revenue | $ 958 | $ 690 | |
Royalty revenue under the License Agreement with Bellco | 27 | 44 | |
License revenue under the License Agreement with Bellco | [1] | ||
Total net revenues | 985 | $ 734 | |
Revenue Under Previous Guidance [Member] | |||
Product revenue | 958 | ||
Royalty revenue under the License Agreement with Bellco | 27 | ||
License revenue under the License Agreement with Bellco | [1] | 17 | |
Total net revenues | 1,002 | ||
Difference [Member] | |||
Product revenue | |||
Royalty revenue under the License Agreement with Bellco | |||
License revenue under the License Agreement with Bellco | [1] | (17) | |
Total net revenues | $ (17) | ||
[1] | Under ASC 606, amounts received related to the license under the Bellco license agreement would have been recognized.as revenue at the time that the license was transferred, which was at the time the payments were received by the Company. Under previous guidance, amounts received under the Bellco license agreement were deferred and recognized as revenue over the term of the Bellco license agreement. |
Stock Plans and Share-Based P35
Stock Plans and Share-Based Payments (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 130 | $ 102 |
Unrecognized compensation cost | $ 949 | |
Amortized over weighted average remaining requisite service period | 2 years 2 months 12 days | |
Equity Compensation Plans [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost | $ 1,179 | |
Performance Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost | 230 | |
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 112 | 97 |
Unrecognized compensation cost | 103 | |
Selling, General and Administrative Expenses [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 120 | 94 |
Selling, General and Administrative Expenses [Member] | Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 100 | 97 |
Research and Development Expenses [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 10 | $ 8 |
Stock option modification expense | 12 | |
Unrecognized compensation cost | 2 | |
Research and Development Expenses [Member] | Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 12 |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Equity [Abstract] | ||
Proceeds from warrant exercises |
Net Income (Loss) Per Common 37
Net Income (Loss) Per Common Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Shares Underlying Warrants Outstanding [Member] | ||
Excluded anti-dilutive stock options and warrants | 7,099,010 | 7,432,342 |
Shares Underlying Options Outstanding [Member] | ||
Excluded anti-dilutive stock options and warrants | 6,474,527 | 5,040,306 |
Unvested Restricted Stock [Member] | ||
Excluded anti-dilutive stock options and warrants | 753,528 | 584,467 |
Recent Accounting Pronounceme38
Recent Accounting Pronouncements (Details Narrative) $ in Thousands | Dec. 31, 2017USD ($) |
License Agreement [Member] | Bellco [Member] | |
Deferred revenue | $ 278 |
Inventory, Net - Schedule of In
Inventory, Net - Schedule of Inventory, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 936 | $ 654 |
Raw materials | 73 | 51 |
Less: inventory reserve | (81) | (31) |
Total inventory, net | $ 928 | $ 674 |
Secured Note Payable (Details N
Secured Note Payable (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 27, 2018 | |
Secured Promissory Note [Member] | Tech Capital, LLC [Member] | ||
Principal amount of secured note payable | $ 1,187 | |
Principal balance of line of credit | $ 1,187 | |
Debt interest rate | 8.00% | |
Maturity date | Apr. 1, 2023 | |
Debt instrument, maturity date, description | Principal and interest payments are due on the first day of each month commencing on May 1, 2018. | |
Debt issuance costs | $ 6 | |
Unsecured Promissory Note [Member] | ||
Debt interest rate | 11.00% |
Secured Revolving Credit Faci41
Secured Revolving Credit Facility (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Aug. 17, 2017 | |
Interest expense | $ 86 | $ 66 | |||
Interest expense included in accrued expenses | 328 | $ 218 | |||
Loan Agreement [Member] | Tech Capital, LLC [Member] | |||||
Maximum secured revolving credit facility | $ 1,000 | ||||
Principal balance of line of credit | $ 150 | $ 711 | |||
Loan agreement, term | 12 months | ||||
Line of credit interest rate | 8.25% | ||||
Interest expense | $ 6 | ||||
Loan Agreement [Member] | Tech Capital, LLC [Member] | Revolving Credit Facility [Member] | |||||
Interest expense | $ 6 | ||||
Interest expense included in accrued expenses | $ 2 | ||||
Loan Agreement [Member] | Tech Capital, LLC [Member] | Prime Rate [Member] | |||||
Line of credit interest rate | 3.50% | ||||
Loan Agreement [Member] | Tech Capital, LLC [Member] | Prime Rate [Member] | Maximum [Member] | |||||
Line of credit interest rate | 4.25% |
Unsecured Promissory Notes an42
Unsecured Promissory Notes and Warrants (Details Narrative) - USD ($) $ in Thousands | Mar. 30, 2018 | Jun. 07, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Amortization of debt discount | $ 34 | $ 26 | |||
Interest expense | 86 | 66 | |||
Loss on extinguishment of debt | (199) | ||||
Lambda Investors, LLC [Member] | |||||
Due to related party | $ 300 | ||||
Entities Controlled by Member of Management [Member] | |||||
Due to related party | $ 30 | ||||
Entities Controlled by Member of Management [Member] | Lambda [Member] | |||||
Interest expense related party | 1 | 8 | |||
Note and Warrant Agreement [Member] | |||||
Gross proceeds from unsecured promissory notes and warrants | $ 1,187 | ||||
Percentage of accrues interest rate per annum | 11.00% | ||||
Note repayable date | Jun. 7, 2019 | ||||
Proceeds from warrants | $ 393 | ||||
Debt issuance costs | $ 9 | ||||
Amortization of debt discount | 34 | 26 | |||
Interest expense | $ 30 | $ 33 | |||
Note and Warrant Agreement [Member] | Investors [Member] | |||||
Number of warrants issued to purchase of shares of common stock | 2,400,000 | ||||
Secured Note Agreement [Member] | |||||
Accrued interest | $ 43 | ||||
Loss on extinguishment of debt | 199 | ||||
Secured Note Agreement [Member] | Noteholders [Member] | |||||
Interest paid | $ 195 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Mar. 17, 2017 | Jul. 24, 2015 | Mar. 31, 2018 | Mar. 31, 2017 |
Class of Stock [Line Items] | ||||
Proceeds from issuance of common stock | $ 854 | $ 1,187 | ||
Lincoln Park Capital Fund LLC [Member] | ||||
Class of Stock [Line Items] | ||||
Stock issued during period, value, new issues | $ 10,000 | |||
Limited liability company description for purchase shares level | Lincoln Park, and Lincoln Park is obligated to purchase, up to $10.0 million in shares of the Companys common stock, subject to certain limitations, from time to time, over the 36-month period commencing on September 4, 2015. | |||
Number of shares issued during period | 1,900,000 | 300,000 | ||
Proceeds from issuance of common stock | $ 854 | $ 113 | ||
Private Placement [Member] | ||||
Class of Stock [Line Items] | ||||
Number of common stock shares sold during the period | 4,059,994 | |||
Gross proceeds from issuance of private placement | $ 1,218 | |||
Warrants description | Each unit consisted of one share of the Companys common stock and a five-year warrant to purchase one additional share of common stock. | |||
Shares issued price per share | $ 0.30 | |||
Proceeds received from certain members of management and existing shareholders | $ 315 | |||
Proceeds of equity issuance costs net | 152 | |||
Proceeds from private placement | $ 1,066 | |||
Number of warrants to placement agent | 81,199 | |||
Exercise price per share | $ 0.33 |
Commitments and Contingencies44
Commitments and Contingencies (Details Narrative) | Oct. 08, 2015USD ($) | Mar. 31, 2018USD ($)Products$ / shares | Mar. 31, 2018EUR (€) | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($)a | Mar. 31, 2018€ / shares | Sep. 30, 2013 |
Commitments And Contingencies [Line Items] | |||||||
Royalty income | $ 27,000 | $ 44,000 | |||||
Long-term intangible asset | 2,250,000 | ||||||
Other long-term assets | 1,038,000 | $ 1,072,000 | |||||
Accumulated amortization | 1,211,000 | 1,178,000 | |||||
Amortization of other deferred charges | 34,000 | 52,000 | |||||
Interest expense | 10,000 | 7,000 | |||||
Royalty expense and cost of goods sold | 29,000 | 19,000 | |||||
Accrued expenses | 29,000 | ||||||
Accounts payable | 34,000 | ||||||
Rent expense | 51,000 | 31,000 | |||||
Interest income | 1,000 | 1,000 | |||||
Investment in lease, net-current portion | 26,000 | 20,000 | |||||
Unearned interest current | 3,000 | ||||||
Investment in lease, net-less current portion | 34,000 | 39,000 | |||||
Unearned interest noncurrent | 2,000 | ||||||
Minimum lease payments receivable | 60,000 | ||||||
Minimum [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Minimum lease payments receivable | 7,000 | ||||||
License Agreement [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Deferred revenue | $ 278,000 | ||||||
Deferred revenue recognized | 17,000 | ||||||
Operating Lease One [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Area of a land | a | 7,700 | ||||||
Lease expiration date | expires in November 2022 | ||||||
Security deposit | $ 11,000 | $ 11,000 | |||||
Monthly rent expense | $ 11,000 | ||||||
Equipment Lease Agreement [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Investment lease | $ 92,000 | ||||||
Unearned interest | 14,000 | ||||||
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 | $ 2.10 | ||||||
Second tier royalty per unit | $ / shares | $ 1.50 | ||||||
Bellco [Member] | License Agreement [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Royalty income | $ 27,000 | $ 27,000 | |||||
Bellco [Member] | EUR [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
First tier royalty per unit | € / shares | € 1.75 | ||||||
Second tier royalty per unit | € / shares | € 1.25 | ||||||
Medica Spa [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Purchase commitment | 565,000 | ||||||
Debt instrument, interest rate, stated percentage | 12.00% | ||||||
Medica Spa [Member] | December 31, 2018 [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Purchase commitment | $ 3,000,000 | ||||||
Medica Spa [Member] | EUR [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Purchase commitment | € | € 471,000 | ||||||
Medica Spa [Member] | EUR [Member] | December 31, 2018 [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Purchase commitment | € | € 2,500,000 | ||||||
Medica [Member] | April 23, 2014 through December 31, 2025 [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Royalty rate | 3.00% | 3.00% |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Minimum Lease Payments (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 99 |
2,019 | 136 |
2,020 | 140 |
2,021 | 145 |
2,022 | $ 136 |
Commitments and Contingencies46
Commitments and Contingencies - Schedule of Maturities Minimum Lease Payments Receivable (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||
2,018 | $ 19,000 | |
2,019 | 19,000 | |
2,020 | 22,000 | |
Total | 60,000 | |
Less: Current portion | (26,000) | $ (20,000) |
Investment in lease, noncurrent | $ 34,000 |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) - Private Placement [Member] - USD ($) $ / shares in Units, $ in Thousands | Apr. 11, 2018 | Mar. 17, 2017 |
Number of common stock sold in private placement | 4,059,994 | |
Subsequent Event [Member] | ||
Number of common stock sold in private placement | 6,500,000 | |
Sale of stock, price per share | $ 0.45 | |
Total gross proceeds | $ 2,900 |