Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2014 | 13-May-14 | |
Document Information [Line Items] | ' | ' |
Entity Registrant Name | 'BAXANO SURGICAL, INC. | ' |
Entity Central Index Key | '0001230355 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Trading Symbol | 'BAXS | ' |
Entity Common Stock, Shares Outstanding | ' | 48,578,712 |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 31-Mar-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations and Comprehensive Loss (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Revenue | $4,412 | $3,099 |
Cost of revenue | 1,263 | 1,031 |
Gross profit | 3,149 | 2,068 |
Operating expenses: | ' | ' |
Research and development | 1,987 | 1,285 |
Sales and marketing | 7,274 | 4,927 |
General and administrative | 2,548 | 1,550 |
Merger and integration expenses | 19 | 1,313 |
Total operating expenses | 11,828 | 9,166 |
Operating loss | -8,679 | -7,098 |
Non-operating items: | ' | ' |
Interest expense | -376 | 0 |
Loss on fair value of common stock warrants | -52 | 0 |
Other expense, net | -2 | -2 |
Net loss | -9,109 | -7,100 |
Other comprehensive loss: | ' | ' |
Foreign currency translation adjustments | -1 | -1 |
Comprehensive loss | -9,110 | -7,101 |
Net loss per common share - basic and diluted (in dollars Per Share) | ($0.19) | ($0.26) |
Weighted average common shares outstanding - basic and diluted (in shares) | 47,058 | 27,317 |
US Treasury and Government [Member] | ' | ' |
Operating expenses: | ' | ' |
Charges related to U.S. Government settlement | $0 | $91 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $1,456 | $8,540 |
Restricted cash | 569 | 610 |
Accounts receivable, net of allowances of $774 and $832, respectively | 3,787 | 4,699 |
Inventory | 7,457 | 7,037 |
Prepaid expenses and other assets | 503 | 475 |
Total current assets | 13,772 | 21,361 |
Property and equipment, net | 2,713 | 3,047 |
Goodwill | 8,463 | 8,463 |
Intangible assets, net | 15,215 | 15,530 |
Other long-term assets | 748 | 577 |
Total assets | 40,911 | 48,978 |
Current liabilities: | ' | ' |
Current portion of long-term debt, net | 1,242 | 563 |
Accounts payable | 3,493 | 3,693 |
Accrued expenses | 3,233 | 3,593 |
Total current liabilities | 10,718 | 10,585 |
Long-term debt, net | 5,665 | 6,268 |
Common stock warrant liability | 580 | 528 |
Other noncurrent liabilities | 1,453 | 2,150 |
Commitments and contingencies (Note 6) | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock, $0.0001 par value; 5,000,000 shares authorized, none issued and outstanding at March 31, 2014 and December 31, 2013 | 0 | 0 |
Common stock, $0.0001 par value; 75,000,000 shares authorized, 47,872,699 and 46,156,921 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively | 5 | 5 |
Additional paid-in capital | 202,418 | 200,260 |
Accumulated other comprehensive income | 14 | 15 |
Accumulated deficit | -179,942 | -170,833 |
Total stockholders' equity | 22,495 | 29,447 |
Total liabilities and stockholders' equity | 40,911 | 48,978 |
US Treasury and Government [Member] | ' | ' |
Current liabilities: | ' | ' |
Accrued expenses | $2,750 | $2,736 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets [Parenthetical] (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Accounts receivable, net of allowances (in dollars) | $774 | $832 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
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 (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 47,872,699 | 46,156,921 |
Common stock, shares outstanding | 47,872,699 | 46,156,921 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operating activities: | ' | ' |
Net loss | ($9,109) | ($7,100) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 818 | 359 |
Stock-based compensation | 385 | 317 |
Provision (reversal of provision) for bad debts | -5 | 11 |
Loss on fair value of common stock warrants | 52 | 0 |
Amortization of debt discount and deferred financing fees | 115 | 0 |
Loss on sale of fixed assets | 4 | 0 |
Changes in operating assets and liabilities: | ' | ' |
Decrease in accounts receivable | 917 | 259 |
Increase in inventory | -420 | -36 |
Increase in prepaid expenses | -28 | -263 |
Increase (decrease) in accounts payable and accrued expenses | -811 | 481 |
Net cash used in operating activities | -8,765 | -6,405 |
Cash flows from investing activities: | ' | ' |
Purchases of property and equipment | -173 | -396 |
Restricted cash classification | 41 | -62 |
Net cash used in investing activities | -132 | -458 |
Cash flows from financing activities: | ' | ' |
Net proceeds from issuance of common stock | 1,814 | 0 |
Proceeds from employee stock plans | 0 | 9 |
Net cash provided by financing activities | 1,814 | 9 |
Effect of exchange rate changes on cash and cash equivalents | -1 | -1 |
Net decrease in cash and cash equivalents | -7,084 | -6,855 |
Cash and cash equivalents, beginning of period | 8,540 | 21,541 |
Cash and cash equivalents, end of period | 1,456 | 14,686 |
US Treasury and Government [Member] | ' | ' |
Changes in operating assets and liabilities: | ' | ' |
Decrease in accrued expenses related to U.S. Government settlement | ($683) | ($433) |
Organization
Organization | 3 Months Ended | |
Mar. 31, 2014 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | ' | |
1 | Organization | |
Baxano Surgical, Inc. (“we” or the “Company”) is a medical device company focused on designing, developing and marketing minimally invasive products to treat degenerative conditions of the spine affecting the lumbar region. We are passionately committed to delivering innovative technologies to our surgeon customers that benefit their patients. On May 31, 2013, we, through our wholly-owned subsidiary Racer X Acquisition Corp. (“Merger Sub”), consummated our acquisition of Baxano, Inc. (“Baxano”) pursuant to an Agreement and Plan of Merger (the “Merger Agreement”). Under the terms of the Merger Agreement, Merger Sub merged with and into Baxano, with Baxano remaining as the surviving corporation and as a wholly-owned subsidiary of the Company (the “Merger”). Immediately following the closing of the Merger on May 31, 2013, we changed our name to Baxano Surgical, Inc. in connection with the merger of this wholly-owned subsidiary with and into the Company. Our condensed consolidated statements of operations reflect the Baxano results, including the iO-Flex® and iO-Tome® products, from the Merger date, May 31, 2013. | ||
We currently market the AxiaLIF® family of products for single and two level lower lumbar fusion, the VEO® lateral access and interbody fusion system, iO-Flex, a proprietary set of flexible instruments used by surgeons during spinal decompression procedures, iO-Tome instrument, which rapidly and precisely removes bone, specifically the facet joints, which is commonly performed in spinal fusion procedures and Avance™, an MIS pedicle screw system used in lumbar spinal fusion procedures. We also market other products that complement these primary offerings, including our Vectre™ facet screw system, Bi-Ostetic™ bone void filler, bowel retractors, discectomy tools, and a bone graft harvesting system that can be used to extract bone graft from the patient’s hip for use in fusion procedures. We currently sell our products through a direct sales force, independent sales agents and distributors. | ||
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Significant Accounting Policies [Text Block] | ' | |||||||
2 | Summary of Significant Accounting Policies | |||||||
Basis of Presentation | ||||||||
We have prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X issued by the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such SEC rules and regulations. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC on March 10, 2014 (“2013 Form 10-K”). The Company’s historical results are not necessarily indicative of future operating results, and the results for the three months ended March 31, 2014 are not necessarily indicative of results to be expected for the full year or for any other period. | ||||||||
In our opinion, the accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as our annual audited consolidated financial statements and contain all material adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of Company’s management necessary to present fairly our financial condition, results of operations, and cash flows for the periods presented. These principles require 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The principal estimates relate to accounts receivable reserves, inventory valuation, valuation of warrant stock-based compensation, accrued expenses, valuation of warrant for common stock and income tax valuation. Actual results could differ from those estimates. The condensed consolidated balance sheet that we have presented as of December 31, 2013 has been derived from the audited consolidated financial statements on that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. | ||||||||
Our financial statements are prepared on the basis that our business would continue as a going concern in accordance with U.S. GAAP. This basis of presentation assumes that we will continue in operation for the foreseeable future and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business. However, our independent registered public accounting firm has indicated in its audit report on our fiscal 2013 financial statements, included in our 2013 Form 10-K, that our recurring losses from operations raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts of liabilities that might result from the outcome of this uncertainty. To meet our capital needs, we are considering multiple alternatives, including, but not limited to, additional equity financings, debt financings and other funding transactions. There can be no assurance that we will be able to complete any such transaction on acceptable terms or otherwise. If we are unable to obtain the necessary capital, we will need to pursue a plan to license or sell our assets, cease operations and/or seek bankruptcy protection. | ||||||||
Significant Accounting Policies | ||||||||
A detailed description of our significant accounting policies is presented in the footnotes to our annual audited consolidated financial statements included in our 2013 Form 10-K. Our significant accounting policies, estimates, and assumptions have not changed materially since December 31, 2013. | ||||||||
Inventories | ||||||||
The following table presents the components of inventories (in thousands): | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Finished goods | $ | 4,880 | $ | 4,607 | ||||
Raw materials | 1,760 | 1,584 | ||||||
Work-in-process | 817 | 846 | ||||||
Total inventories, net | $ | 7,457 | $ | 7,037 | ||||
Segment and Geographic Reporting | ||||||||
We apply the relevant guidance which establishes standards for the reporting by business enterprises of information about operating segments, products and services, geographic areas, and major customers. We have determined that we did not have any separately reportable segments. All our products provide surgical treatment for the lumbar region of the spine. Long-lived assets are primarily located in the United States. | ||||||||
The following table summarizes revenue by geographic area (in thousands): | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
United States | $ | 4,263 | $ | 2,594 | ||||
Europe | 92 | 482 | ||||||
Asia | 57 | 23 | ||||||
$ | 4,412 | $ | 3,099 | |||||
Net Loss per Common Share | ||||||||
We calculate basic earnings per share based upon the weighted average number of common shares outstanding. We calculate diluted earnings per share based upon the weighted average number of common shares outstanding plus the dilutive effect of common share equivalents calculated using the treasury stock method. Our potential dilutive common shares, which consist of shares issuable upon the exercise of stock options, restricted stock units and warrants, have not been included in the computation of diluted net loss per common share for all periods as the result would be anti-dilutive. The following table sets forth the potential shares of common stock that are not included in the calculation of diluted net loss per share as the result would be anti-dilutive as of the end of each period presented: | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Weighted average stock options and restricted stock units outstanding | 6,622,186 | 3,579,814 | ||||||
Common stock warrants | 882,353 | - | ||||||
Recently Issued Accounting Standards | ||||||||
As of March 31, 2014 there were no applicable pronouncements that have not yet been implemented. There were no new accounting pronouncements during the three months ended March 31, 2014 that are expected to have a material impact on our consolidated financial statements or related disclosures. | ||||||||
Merger
Merger | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Business Combinations [Abstract] | ' | ||||
Business Combination Disclosure [Text Block] | ' | ||||
3 | Merger | ||||
On May 31, 2013, we, through our wholly-owned subsidiary Merger Sub, consummated our acquisition of Baxano pursuant to the Merger Agreement. Additional information regarding the Merger can be found in Note 3, “Merger and Financing Transaction,” included in the footnotes to our annual audited consolidated financial statements included in our 2013 Form 10-K. | |||||
The results of operations of Baxano have been included in our condensed consolidated financial statements from the date of the acquisition. The following pro forma results of operations assume the acquisition of Baxano occurred on January 1, 2013. The pro forma results for the three months ended March 31, 2013 presented below reflect our historical data and the historical data of the Baxano business adjusted for amortization of intangibles, interest costs associated with Baxano preferred stock and convertible debt, and elimination of intercompany general and administrative expenses. The pro forma results of operations presented below may not be indicative of the results we would have achieved had we completed the acquisition on January 1, 2013, or that we may achieve in the future. | |||||
The following table presents the pro forma results for the three months ended March 31, 2013 (in thousands, except per share data): | |||||
Revenue | $ | 6,052 | |||
Operating loss | $ | -10,638 | |||
Net loss | $ | -10,640 | |||
Net loss per common share | $ | -0.24 | |||
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||
Goodwill and Intangible Assets Disclosure [Text Block] | ' | |||||||
4 | Goodwill and Intangible Assets | |||||||
The goodwill and intangible assets amounts as of March 31, 2014 and December 31, 2013, were recorded as part of the purchase price allocation for the Merger. The carrying amount of goodwill as of December 31, 2013 was $8.5 million and unchanged during the three months ended March 31, 2014. Amortization expense for the three months ended March 31, 2014 was $0.3 million. | ||||||||
Intangible assets as of March 31, 2014 consisted of the following (in thousands): | ||||||||
Amortization | ||||||||
Period (Years) | ||||||||
Trademark | $ | 830 | Indefinite | |||||
Product trademarks | 1,530 | 15-17 | ||||||
Technology | 13,001 | 15-17 | ||||||
Customer relationships | 475 | 10 | ||||||
15,836 | ||||||||
Less: accumulated amortization | -621 | |||||||
$ | 15,215 | |||||||
Long_Term_Debt_and_Credit_Faci
Long Term Debt and Credit Facilities | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Long-term Debt [Text Block] | ' | |||||||
5 | Long Term Debt and Credit Facilities | |||||||
Credit Facility with Hercules Technology Growth Capital, Inc. | ||||||||
On December 3, 2013 (the “Credit Facility Closing Date”), we obtained a credit facility of up to $15.0 million (the “Credit Facility”) from Hercules Technology Growth Capital, Inc., a Maryland corporation (“Hercules”). The Credit Facility is governed by a loan and security agreement, dated December 3, 2013 (the “Loan Agreement”), which provides for up to three separate advances, with the first advance of $7.5 million available at closing. The availability of the second advance of $2.5 million was dependent upon our achieving $6.0 million in gross commercial revenue for the fourth quarter of our 2013 fiscal year. The availability of the third advance of $5.0 million was dependent upon our achieving $7.0 million in gross commercial revenue for the first quarter of our 2014 fiscal year and net proceeds of at least $15.0 million from sales of our equity securities on or before June 15, 2014. We did not achieve the requirements to draw the second or third advances. | ||||||||
The following table presents the components of long-term debt (in thousands): | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Advance | $ | 7,500 | $ | 7,500 | ||||
Final payment | 263 | 263 | ||||||
Debt discounts, including common stock warrant | -856 | -932 | ||||||
Total long-term debt | 6,907 | 6,831 | ||||||
Less: Current portion of long-term debt | -1,242 | -563 | ||||||
Total long-term debt, net of current portion | $ | 5,665 | $ | 6,268 | ||||
The Credit Facility has a term of 39 months and accrues interest at a rate equal to the prime rate plus 7.75% (with the prime rate subject to a floor of 4.75%), calculated on an actual/360 basis and payable monthly in arrears. Amounts outstanding during an event of default accrue interest at a rate of 3% in excess of the above rate, and past due amounts are subject to a 5% late charge. Outstanding principal will amortize in the 30-month period preceding maturity, payable in equal installments of principal and interest (subject to recalculation upon a change in prime rates). Any advance may be prepaid in whole or in part at any time, subject to a prepayment fee of 1-2% if prepaid more than one year after closing. In addition, a fee equal to 3.50% of all advances made under the Credit Facility will be payable upon the final principal payment or prepayment in full of the advances. The Credit Facility is secured by a lien on substantially all of our assets. | ||||||||
The Loan Agreement contains customary covenants and representations, including a financial reporting covenant and limitations on cash dividends, distributions, debt, contingent obligations, liens, loans, investments, mergers, acquisitions, divestitures, subsidiaries, and changes in control. We are not allowed to declare or pay any cash dividends or make cash distributions on any class of stock or other equity interest, except that our subsidiary may pay dividends or make distributions up to Baxano Surgical. There are no financial covenants. Prior to the maturity of the Credit Facility, Hercules will also have the right to participate on the same terms as other participants in certain types of our broadly marketed equity financings. | ||||||||
The events of default under the Loan Agreement include, without limitation, (1) a material adverse change in our ability to perform our obligations under the Loan Agreement, or in the value of our collateral, and (2) an event of default under any other of our indebtedness in excess of $150,000. If an event of default occurs, Hercules is entitled to take enforcement action, including acceleration of amounts due under the Loan Agreement. The Loan Agreement also contains other customary provisions, such as expense reimbursement and confidentiality. Hercules has indemnification rights and the right to assign the Credit Facility. | ||||||||
The estimated fair value of the debt (categorized as a Level 2 liability for fair value measurement purposes) is determined using current market factors and our ability to obtain debt at comparable terms to those that are currently in place. We believe the estimated fair value at March 31, 2014 and December 31, 2013 approximates the carrying amount. | ||||||||
Common Stock Warrant Liability | ||||||||
In connection with the Credit Facility, we issued to Hercules a warrant to purchase shares of our common stock (the “Warrant”). The Warrant consists of two tranches, the first tranche issued at closing and the second tranche to be issued if and when Hercules makes a second advance under the Loan Agreement. The first tranche is exercisable for a number of shares of our common stock equal to $900,000 divided by the exercise price. The second tranche is exercisable for a number of shares of our common stock equal to $300,000 divided by the exercise price. The exercise price is $1.02 per share initially, but is subject to downward adjustment upon our consummation of a financing at a lower effective price per share during the one-year period following the Credit Facility Closing Date. The aggregate number of shares issuable upon exercise is limited to 1,176,471. The Warrant is exercisable by Hercules in whole or in part, at any time, or from time to time, prior to the fifth anniversary of the Credit Facility Closing Date. The Warrant will be exercised automatically on a net issuance basis if not exercised prior to the expiration date. | ||||||||
The Warrant is considered a mark-to-market liability which is re-measured to fair value at each reporting period due to a provision whereby the exercise price of the Warrant could be decreased if we had a subsequent issue of equity instruments at a price less than $1.02 per share. We will be required to mark-to-market the fair value of the warrant liability each reporting period over the warrants term. At December 3, 2013, we recorded as a liability the initial Warrant tranche for 882,353 shares of our common stock at an estimated fair value of approximately $0.7 million with an offset to debt discount. The debt discount associated with the initial value of the Warrant will be amortized to interest expense over the term of the Credit Facility. We revalued the liability (categorized as a Level 2 liability for fair value measurement purposes) as of March 31, 2014 using the Black-Scholes-Merton option pricing model and recorded a loss of approximately $52,000. The value of the Warrant was determined on March 31, 2014 using the following assumptions: stock price of $1.08 per share, risk free interest rates of 1.7%, volatility of 72.6 %, a 4.7 year term and no dividends yield. | ||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | |
Mar. 31, 2014 | ||
Commitments and Contingencies Disclosure [Abstract] | ' | |
Commitments and Contingencies Disclosure [Text Block] | ' | |
6 | Commitments and Contingencies | |
We are subject to legal proceedings and claims in the ordinary course of our business. These claims potentially cover a variety of allegations spanning our entire business. Information regarding the material pending legal proceedings to which we are a party or to which any of our property is subject and other material legal proceedings may be found in Part I, Item 3 of our 2013 Form 10-K. There have been no material changes to such proceedings. | ||
Stockholders_Equity
Stockholders' Equity | 3 Months Ended | |
Mar. 31, 2014 | ||
Equity [Abstract] | ' | |
Stockholders Equity Note Disclosure [Text Block] | ' | |
7 | Stockholders’ Equity | |
Our Fifth Amended and Restated Certificate of Incorporation, which was adopted in connection with our initial public offering, authorized up to 80,000,000 shares of capital stock, of which 75,000,000 shares were designated as common stock, $0.0001 par value per share (“Common Stock”) and 5,000,000 shares were designated as preferred stock, $0.0001 par value per share. On April 17, 2014 the Certificate of Incorporation was amended to authorize up to 155,000,000 shares of capital stock, of which 150,000,000 shares were designated Common Stock and 5,000,000 shares were designated as preferred stock. At March 31, 2014 and December 31, 2013, there were 47,872,699 and 46,156,921 shares of Common Stock issued and outstanding, respectively, and there were no shares of preferred stock issued and outstanding. | ||
Stock Purchase Agreement | ||
On December 3, 2013, we entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which we have the right to sell to Lincoln Park up to $7.0 million in shares of our Common Stock, subject to certain limitations. Pursuant to the Purchase Agreement, we have the right, on any business day and as often as every other business day over the 36-month term of the Purchase Agreement, at our sole discretion and subject to certain conditions, to direct Lincoln Park to purchase up to 100,000 shares of Common Stock, which amount may be increased, in accordance with the Purchase Agreement. The purchase price of shares of Common Stock related to the future funding will be based upon the prevailing market prices of the Common Stock at the time of sales, and shares will be sold to Lincoln Park on any date that the closing price of the Common Stock is above the floor price as set forth in the Purchase Agreement. In addition, we 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 a threshold price as set forth in the Purchase Agreement. | ||
As consideration for its commitment to purchase Common Stock pursuant to the Purchase Agreement, we issued to Lincoln Park 182,609 shares of Common Stock immediately upon entering the Purchase Agreement and will issue up to 60,870 shares pro rata as and when Lincoln Park purchases Common Stock under the Purchase Agreement. We will not receive any cash proceeds from the issuance of these commitment shares. As of March 31, 2014, 204,420 commitment shares were issued to Lincoln Park. | ||
During the three months ended March 31, 2014, we sold 1.7 million shares of Common Stock to Lincoln Park for an aggregate purchase price of $1.8 million. As of March 31, 2014, we had sold 2.4 million shares of our Common Stock to Lincoln Park for approximately $2.5 million, leaving approximately $4.5 million for potential future issuance. | ||
Warrant Agreement | ||
In connection with the Credit Facility, we issued to Hercules the Warrant. The aggregate number of shares issuable upon exercise is limited to 1,176,471. The Warrant is exercisable until the fifth anniversary of the Credit Facility Closing Date and will be exercised automatically on a net issuance basis if not exercised prior to the expiration date. See further details for the Common Stock Warrant Liability under Note 5. | ||
Stock_Incentive_Plans_and_Stoc
Stock Incentive Plans and Stock-Based Compensation | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | |||||||||||||
Compensation and Employee Benefit Plans [Text Block] | ' | |||||||||||||
8 | Stock Incentive Plans and Stock-Based Compensation | |||||||||||||
We have an employee stock purchase plan and other long-term incentive plans, which provide for the grant of awards in the form of incentive stock options, nonqualified stock options and restricted stock units (RSUs), to eligible employees, directors, and consultants. We established the Baxano Surgical, Inc. 2007 Stock Incentive Plan (as amended, the “2007 Plan”) in October 2007. Under the 2007 Plan, we may grant options to employees, directors or service providers and contractors for a maximum of 7,600,000 shares of Common Stock. Share-based compensation expense was $0.4 million and $0.3 million for the three months ended March 31, 2014 and 2013, respectively. | ||||||||||||||
Stock Option Program | ||||||||||||||
The following table is a summary of stock option activity for the three months ended March 31, 2014: | ||||||||||||||
Shares | Weighted | Weighted | Aggregate | |||||||||||
Average | Average | Intrinsic | ||||||||||||
Exercise | Remaining | Value | ||||||||||||
Price | Contractual | |||||||||||||
Term (Years) | ||||||||||||||
Outstanding as of December 31, 2013 | 3,985,590 | $ | 3.31 | 7.7 | $ | 11,125 | ||||||||
Options granted | 122,000 | |||||||||||||
Options exercised | - | |||||||||||||
Options expired or canceled | -42,564 | |||||||||||||
Options forfeited | -197,060 | |||||||||||||
Outstanding as of March 31, 2014 | 3,867,966 | $ | 3.26 | 7.5 | $ | 12,189 | ||||||||
Exercisable at March 31, 2014 | 2,045,612 | $ | 4.22 | 6.3 | ||||||||||
Vested and expected to vest as of March 31, 2014 | 3,712,691 | $ | 3.31 | 7.4 | ||||||||||
The aggregate intrinsic value in the table above represents the difference between the $1.08 closing price of our Common Stock as reported by The NASDAQ Global Market on March 31, 2014 and the weighted average exercise price, multiplied by the number of options outstanding or exercisable. We do not record the aggregate intrinsic value for financial accounting purposes and the value changes based upon changes in the fair value of our Common Stock. No stock options were exercised during the three months ended March 31, 2014. | ||||||||||||||
The following weighted-average assumptions were used to estimate the fair value of stock options granted during the three months ended March 31, 2014: | ||||||||||||||
Risk-free interest rate | 1.6 | % | ||||||||||||
Expected term | 6 | |||||||||||||
Expected volatility | 79.6 | % | ||||||||||||
Expected dividend yield | 0 | % | ||||||||||||
Restricted Stock Unit Retention Program | ||||||||||||||
On January 2, 2014, our Compensation Committee of the Board of Directors approved the terms of the 2014 Restricted Stock Unit Retention Program (the “RSU Program”) and the grant of restricted stock units (“RSUs”) to all our executives and management pursuant to the RSU Program and our 2007 Stock Incentive Plan, as amended. Each award amount equals a number of stock-settled RSUs reflecting one times the employee’s current salary at a target value of $3.00 per share of Common Stock. A portion of the RSU awards is subject to time-based vesting and a portion of the RSU awards is subject to performance-based vesting as outlined below: | ||||||||||||||
⋅ | 75% is time-based (25% vests on first anniversary of grant date, 37.5% vests on second and third anniversaries of grant date); | |||||||||||||
⋅ | 25% is performance-based (100% vests upon the achievement of a 30% increase in Company revenue year-over-year for two successive quarters by the end of fiscal 2016). | |||||||||||||
The following table is a summary of restricted stock activity for the three months ended March 31, 2014: | ||||||||||||||
Outstanding as of December 31, 2013 | - | |||||||||||||
Granted | 3,055,997 | |||||||||||||
Forfeited | -203,272 | |||||||||||||
Outstanding as of March 31, 2014 | 2,852,725 | |||||||||||||
Income_Taxes
Income Taxes | 3 Months Ended | |
Mar. 31, 2014 | ||
Income Tax Disclosure [Abstract] | ' | |
Income Tax Disclosure [Text Block] | ' | |
9 | Income Taxes | |
No provisions for federal or state income taxes have been recorded as we have incurred net operating losses since inception. | ||
Other_Condensed_Consolidated_B
Other Condensed Consolidated Balance Sheet Information | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ' | |||||||
Condensed Financial Information of Parent Company Only Disclosure [Text Block] | ' | |||||||
10 | Other Condensed Consolidated Balance Sheet Information | |||||||
Information regarding other accounts on our condensed consolidated balance sheets is as follows (in thousands): | ||||||||
Property and equipment, net | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Furniture and fixtures | $ | 495 | $ | 484 | ||||
Equipment | 6,814 | 6,459 | ||||||
Computer software | 496 | 496 | ||||||
Leasehold improvements | 1,080 | 1,080 | ||||||
Capital leases of buildings | 51 | 51 | ||||||
Construction in process | 11 | - | ||||||
8,947 | 8,570 | |||||||
Less: accumulated depreciation and amortization | -6,234 | -5,523 | ||||||
$ | 2,713 | $ | 3,047 | |||||
Accrued expenses | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Accrued payroll, bonuses, and employee benefits | $ | 2,175 | $ | 2,343 | ||||
Legal and professional fees | 382 | 638 | ||||||
Interest payable | 101 | 100 | ||||||
Royalties | 284 | 243 | ||||||
Business taxes and licenses | 80 | 122 | ||||||
Travel and entertainment | 112 | 48 | ||||||
Other | 99 | 99 | ||||||
Total accrued expenses | $ | 3,233 | $ | 3,593 | ||||
Subsequent_Events
Subsequent Events | 3 Months Ended | ||
Mar. 31, 2014 | |||
Subsequent Events [Abstract] | ' | ||
Subsequent Events [Text Block] | ' | ||
11 | Subsequent Events | ||
Increase in Authorized Shares of Common Stock | |||
On April 17, 2014, our stockholders approved an amendment to our Fifth Amended and Restated Certificate of Incorporation to increase the number of authorized shares of our Common Stock from 75,000,000 to 150,000,000. The amendment became effective on April 17, 2014 upon filing with the Delaware Secretary of State. | |||
Private Placement Transaction | |||
On March 11, 2014, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain institutional investors (the “Purchasers”) whereby we agreed to sell approximately $10.0 million in aggregate principal amount of subordinated convertible debentures (the “Debentures”), together with warrants (the “Warrants”) to purchase 9,428,000 shares of our Common Stock in a private placement transaction (the “Private Placement Transaction”). The closing of the full amount of securities in the Private Placement Transaction was subject to stockholder approval, which was attained at our 2014 annual meeting of stockholders on April 17, 2014. The Private Placement closed on April 22, 2014 (the “Private Placement Closing Date”). | |||
The three-year Debentures will be convertible into shares of Common Stock at an initial conversion price of $1.06 per share, for an aggregate of approximately 9,428,000 shares of Common Stock. The Debentures bear interest at a rate of 6% per annum, payable monthly in cash or, at our discretion provided certain conditions (“Equity Conditions”) are met each payment period, in shares of Common Stock at a price equal to 90% of a calculated market price per share. In connection with the purchase of the Debentures, the selling stockholders received five-year Warrants to purchase an aggregate of approximately 9,428,000 shares of Common Stock, which were exercisable immediately upon issuance at an exercise price of $1.19 per share. | |||
The Debentures are subordinated to the Credit Facility and pursuant to a subordination agreement with Hercules (the “Subordination Agreement”), cash payments by us to the Purchasers under the transaction documents related to the Private Placement Transaction are subject to a $1.5 million cap for so long as the Credit Facility remains outstanding (with any amounts in excess of that cap to be held in abeyance for the Purchasers until the Credit Facility is no longer outstanding). In connection with obtaining Hercules’ consent for the Private Placement Transaction, we paid Hercules a one-time non-refundable cash facility fee in the amount of $300,000. | |||
In connection with the Private Placement Transaction, we entered into a registration rights agreement (the “Registration Rights Agreement”) with each Purchaser. Pursuant to the Registration Rights Agreement, the Company agreed to file a resale registration statement (the “Registration Statement”) with respect to the resale of the shares of Common Stock issuable in the Private Placement Transaction, not later than ten calendar days following the Closing Date and to use its commercially reasonable efforts to cause the Registration Statement to be declared effective by the SEC not later than 30 calendar days after the Closing Day (or 60 calendar days following the Closing Date, if the SEC comments upon the Registration Statement). If the Company is unable to timely satisfy such deadlines, it could incur liquidated damages of up to 12% of the offering proceeds. We filed the Registration Statement on May 2, 2014, to satisfy the filing part of this obligation. | |||
The Debentures also contain certain cross default provisions with respect to the Credit Facility. The Debentures contain no financial covenants. For one year after the date of issuance, the conversion price of the Debentures and the exercise price of the Warrants are subject to adjustment upon the issuance of any Common Stock or securities convertible into Common Stock below the then-existing conversion or exercise price, as applicable, subject to certain exceptions. In the event of certain change in control transactions, the holders of the Debentures and Warrants will be entitled to (i) receive upon conversion or exercise the same kind and amount of securities, cash or property which the holders would have received had they converted or exercised their Debentures or Warrants, as applicable, immediately prior to such transaction and (ii) have their securities assumed by the surviving entity. In addition, if such a transaction involves cash consideration, is a going private transaction, or involves securities not listed on the NYSE or NASDAQ, the holders of the Warrants will be entitled to have their Warrants repurchased at a calculated Black-Scholes value of such Warrants at any time within 60 days after the transaction. Subject to limited exceptions, the Company will not permit the conversion of the Debentures or exercise of the Warrants of any Purchaser, if after such conversion or exercise such Purchaser would beneficially own more than 4.99% of the outstanding shares of Common Stock. | |||
The Debentures contain customary debt instrument covenants and representations, including limitations on our ability to: | |||
· | Incur additional indebtedness, other than specified permitted indebtedness; | ||
· | Incur specified liens, other than specified permitted liens; | ||
· | Redeem, repurchase or declare cash dividends or cash distributions on our capital stock, subject to certain exceptions; | ||
· | Make transfers of our assets in excess of $500,000 in any 12-month period, subject to certain exceptions; and | ||
· | Engage in any material line of business substantially different from the lines of business currently conducted by us. | ||
Upon the occurrence of an “Event of Default,” the interest rate on the Debentures increases to 15% and we can be required to redeem the Debentures in whole or in part in cash at 110% of the outstanding balance. Events of Default under each Debenture include: | |||
· | Failure to file the Registration Statement (as defined below) or for it to be declared effective within specified time periods; | ||
· | Lapse of the effectiveness or unavailability of the Registration Statement for specified time periods; | ||
· | Suspension or removal from the NASDAQ Global Market or other permissible trading market for specified time periods; | ||
· | Failure to timely deliver, or remove restrictive legends from, shares upon conversion of the Debentures or exercise of the Warrants; | ||
· | Failure to pay principal, interest, late charges and other amounts due under the Debenture; | ||
· | Certain events of bankruptcy or insolvency of the Company; | ||
· | Judgments against the Company of over $1.0 million not covered by insurance; | ||
· | Failure to make payment with respect to any indebtedness in excess of $500,000 to any third party or the occurrence of a default or event of default under any agreement binding the Company having a material adverse effect on the Company; | ||
· | Breaches of representations, warranties or covenants included in any of the transaction documents related to the Private Placement Transaction; and | ||
· | Any event occurs that would have a material adverse effect on the Company or its prospects. | ||
Avance™ MIS Pedicle Screw System | |||
In April 2014, we received U.S. Food and Drug Administration 510(k) clearance (k133743) of our Avance MIS Pedicle Screw System, which may be used as an adjunct to fusion in numerous degenerative and complex spinal pathologies. Avance provides a quick and easy-to-use, percutaneous pedicle screw system to address single, complex and multi-level spinal pathologies with minimal tissue disruption and trauma. The Avance system will be in limited market release in the second and third quarter of 2014 and is planned for full launch in the fourth quarter of 2014. | |||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Basis of Accounting, Policy [Policy Text Block] | ' | |||||||
Basis of Presentation | ||||||||
We have prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X issued by the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such SEC rules and regulations. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC on March 10, 2014 (“2013 Form 10-K”). The Company’s historical results are not necessarily indicative of future operating results, and the results for the three months ended March 31, 2014 are not necessarily indicative of results to be expected for the full year or for any other period. | ||||||||
In our opinion, the accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as our annual audited consolidated financial statements and contain all material adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of Company’s management necessary to present fairly our financial condition, results of operations, and cash flows for the periods presented. These principles require 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The principal estimates relate to accounts receivable reserves, inventory valuation, valuation of warrant stock-based compensation, accrued expenses, valuation of warrant for common stock and income tax valuation. Actual results could differ from those estimates. The condensed consolidated balance sheet that we have presented as of December 31, 2013 has been derived from the audited consolidated financial statements on that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. | ||||||||
Our financial statements are prepared on the basis that our business would continue as a going concern in accordance with U.S. GAAP. This basis of presentation assumes that we will continue in operation for the foreseeable future and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business. However, our independent registered public accounting firm has indicated in its audit report on our fiscal 2013 financial statements, included in our 2013 Form 10-K, that our recurring losses from operations raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts of liabilities that might result from the outcome of this uncertainty. To meet our capital needs, we are considering multiple alternatives, including, but not limited to, additional equity financings, debt financings and other funding transactions. There can be no assurance that we will be able to complete any such transaction on acceptable terms or otherwise. If we are unable to obtain the necessary capital, we will need to pursue a plan to license or sell our assets, cease operations and/or seek bankruptcy protection. | ||||||||
Inventory, Policy [Policy Text Block] | ' | |||||||
Inventories | ||||||||
The following table presents the components of inventories (in thousands): | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Finished goods | $ | 4,880 | $ | 4,607 | ||||
Raw materials | 1,760 | 1,584 | ||||||
Work-in-process | 817 | 846 | ||||||
Total inventories, net | $ | 7,457 | $ | 7,037 | ||||
Segment Reporting, Policy [Policy Text Block] | ' | |||||||
Segment and Geographic Reporting | ||||||||
We apply the relevant guidance which establishes standards for the reporting by business enterprises of information about operating segments, products and services, geographic areas, and major customers. We have determined that we did not have any separately reportable segments. All our products provide surgical treatment for the lumbar region of the spine. Long-lived assets are primarily located in the United States. | ||||||||
The following table summarizes revenue by geographic area (in thousands): | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
United States | $ | 4,263 | $ | 2,594 | ||||
Europe | 92 | 482 | ||||||
Asia | 57 | 23 | ||||||
$ | 4,412 | $ | 3,099 | |||||
Earnings Per Share, Policy [Policy Text Block] | ' | |||||||
Net Loss per Common Share | ||||||||
We calculate basic earnings per share based upon the weighted average number of common shares outstanding. We calculate diluted earnings per share based upon the weighted average number of common shares outstanding plus the dilutive effect of common share equivalents calculated using the treasury stock method. Our potential dilutive common shares, which consist of shares issuable upon the exercise of stock options, restricted stock units and warrants, have not been included in the computation of diluted net loss per common share for all periods as the result would be anti-dilutive. The following table sets forth the potential shares of common stock that are not included in the calculation of diluted net loss per share as the result would be anti-dilutive as of the end of each period presented: | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Weighted average stock options and restricted stock units outstanding | 6,622,186 | 3,579,814 | ||||||
Common stock warrants | 882,353 | - | ||||||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | |||||||
Recently Issued Accounting Standards | ||||||||
As of March 31, 2014 there were no applicable pronouncements that have not yet been implemented. There were no new accounting pronouncements during the three months ended March 31, 2014 that are expected to have a material impact on our consolidated financial statements or related disclosures. | ||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Schedule of Inventory, Current [Table Text Block] | ' | |||||||
The following table presents the components of inventories (in thousands): | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Finished goods | $ | 4,880 | $ | 4,607 | ||||
Raw materials | 1,760 | 1,584 | ||||||
Work-in-process | 817 | 846 | ||||||
Total inventories, net | $ | 7,457 | $ | 7,037 | ||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | ' | |||||||
The following table summarizes revenue by geographic area (in thousands): | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
United States | $ | 4,263 | $ | 2,594 | ||||
Europe | 92 | 482 | ||||||
Asia | 57 | 23 | ||||||
$ | 4,412 | $ | 3,099 | |||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | ' | |||||||
The following table sets forth the potential shares of common stock that are not included in the calculation of diluted net loss per share as the result would be anti-dilutive as of the end of each period presented: | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Weighted average stock options and restricted stock units outstanding | 6,622,186 | 3,579,814 | ||||||
Common stock warrants | 882,353 | - | ||||||
Merger_Tables
Merger (Tables) | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Business Combinations [Abstract] | ' | ||||
Business Acquisition, Pro Forma Information [Table Text Block] | ' | ||||
The following table presents the pro forma results for the three months ended March 31, 2013 (in thousands, except per share data): | |||||
Revenue | $ | 6,052 | |||
Operating loss | $ | -10,638 | |||
Net loss | $ | -10,640 | |||
Net loss per common share | $ | -0.24 | |||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||
Schedule of Intangible Assets and Goodwill [Table Text Block] | ' | |||||||
Intangible assets as of March 31, 2014 consisted of the following (in thousands): | ||||||||
Amortization | ||||||||
Period (Years) | ||||||||
Trademark | $ | 830 | Indefinite | |||||
Product trademarks | 1,530 | 15-17 | ||||||
Technology | 13,001 | 15-17 | ||||||
Customer relationships | 475 | 10 | ||||||
15,836 | ||||||||
Less: accumulated amortization | -621 | |||||||
$ | 15,215 | |||||||
Long_Term_Debt_and_Credit_Faci1
Long Term Debt and Credit Facilities (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Schedule of Long-term Debt Instruments [Table Text Block] | ' | |||||||
The following table presents the components of long-term debt (in thousands): | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Advance | $ | 7,500 | $ | 7,500 | ||||
Final payment | 263 | 263 | ||||||
Debt discounts, including common stock warrant | -856 | -932 | ||||||
Total long-term debt | 6,907 | 6,831 | ||||||
Less: Current portion of long-term debt | -1,242 | -563 | ||||||
Total long-term debt, net of current portion | $ | 5,665 | $ | 6,268 | ||||
Stock_Incentive_Plans_and_Stoc1
Stock Incentive Plans and Stock-Based Compensation (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | |||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | ' | |||||||||||||
Stock Option Program | ||||||||||||||
The following table is a summary of stock option activity for the three months ended March 31, 2014: | ||||||||||||||
Shares | Weighted | Weighted | Aggregate | |||||||||||
Average | Average | Intrinsic | ||||||||||||
Exercise | Remaining | Value | ||||||||||||
Price | Contractual | |||||||||||||
Term (Years) | ||||||||||||||
Outstanding as of December 31, 2013 | 3,985,590 | $ | 3.31 | 7.7 | $ | 11,125 | ||||||||
Options granted | 122,000 | |||||||||||||
Options exercised | - | |||||||||||||
Options expired or canceled | -42,564 | |||||||||||||
Options forfeited | -197,060 | |||||||||||||
Outstanding as of March 31, 2014 | 3,867,966 | $ | 3.26 | 7.5 | $ | 12,189 | ||||||||
Exercisable at March 31, 2014 | 2,045,612 | $ | 4.22 | 6.3 | ||||||||||
Vested and expected to vest as of March 31, 2014 | 3,712,691 | $ | 3.31 | 7.4 | ||||||||||
Schedule Of Risk Free Rate [Table Text Block] | ' | |||||||||||||
The following weighted-average assumptions were used to estimate the fair value of stock options granted during the three months ended March 31, 2014: | ||||||||||||||
Risk-free interest rate | 1.6 | % | ||||||||||||
Expected term | 6 | |||||||||||||
Expected volatility | 79.6 | % | ||||||||||||
Expected dividend yield | 0 | % | ||||||||||||
Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block] | ' | |||||||||||||
The following table is a summary of restricted stock activity for the three months ended March 31, 2014: | ||||||||||||||
Outstanding as of December 31, 2013 | - | |||||||||||||
Granted | 3,055,997 | |||||||||||||
Forfeited | -203,272 | |||||||||||||
Outstanding as of March 31, 2014 | 2,852,725 | |||||||||||||
Other_Condensed_Consolidated_B1
Other Condensed Consolidated Balance Sheet Information (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ' | |||||||
Property, Plant and Equipment [Table Text Block] | ' | |||||||
Property and equipment, net | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Furniture and fixtures | $ | 495 | $ | 484 | ||||
Equipment | 6,814 | 6,459 | ||||||
Computer software | 496 | 496 | ||||||
Leasehold improvements | 1,080 | 1,080 | ||||||
Capital leases of buildings | 51 | 51 | ||||||
Construction in process | 11 | - | ||||||
8,947 | 8,570 | |||||||
Less: accumulated depreciation and amortization | -6,234 | -5,523 | ||||||
$ | 2,713 | $ | 3,047 | |||||
Schedule of Accrued Liabilities [Table Text Block] | ' | |||||||
Accrued expenses | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Accrued payroll, bonuses, and employee benefits | $ | 2,175 | $ | 2,343 | ||||
Legal and professional fees | 382 | 638 | ||||||
Interest payable | 101 | 100 | ||||||
Royalties | 284 | 243 | ||||||
Business taxes and licenses | 80 | 122 | ||||||
Travel and entertainment | 112 | 48 | ||||||
Other | 99 | 99 | ||||||
Total accrued expenses | $ | 3,233 | $ | 3,593 | ||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory [Line Items] | ' | ' |
Finished goods | $4,880 | $4,607 |
Raw materials | 1,760 | 1,584 |
Work-in-process | 817 | 846 |
Total inventories, net | $7,457 | $7,037 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 1) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Segment Reporting Information [Line Items] | ' | ' |
Revenue | $4,412 | $3,099 |
United States [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenue | 4,263 | 2,594 |
Europe [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenue | 92 | 482 |
Asia [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenue | $57 | $23 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 2) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Warrant [Member] | ' | ' |
Net Loss Per Common Share [Line Items] | ' | ' |
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount (in shares) | 882,353 | 0 |
Stock Options And Restricted Stock Units [Member] | ' | ' |
Net Loss Per Common Share [Line Items] | ' | ' |
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount (in shares) | 6,622,186 | 3,579,814 |
Merger_Details
Merger (Details) (USD $) | 3 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2013 |
Business Acquisition, Pro Forma Information [Line Items] | ' |
Revenues | $6,052 |
Operating loss | -10,638 |
Net loss | ($10,640) |
Net loss per common share (in dollars per share) | ($0.24) |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Intangible Assets By Major Class [Line Items] | ' |
Trademark | 830 |
Product trademarks | 1,530 |
Technology | 13,001 |
Customer relationships | 475 |
Total intangible assets, Gross | 15,836 |
Less accumulated amortization | -621 |
Total intangible assets, Net | 15,215 |
Customer Relationships [Member] | ' |
Intangible Assets By Major Class [Line Items] | ' |
Amortization period | '10 Years |
Trademarks and Trade Names [Member] | ' |
Intangible Assets By Major Class [Line Items] | ' |
Amortization period | 'Indefinite |
Product Trademark [Member] | Maximum [Member] | ' |
Intangible Assets By Major Class [Line Items] | ' |
Amortization period | '17 Years |
Product Trademark [Member] | Minimum [Member] | ' |
Intangible Assets By Major Class [Line Items] | ' |
Amortization period | '15 Years |
Technology [Member] | Maximum [Member] | ' |
Intangible Assets By Major Class [Line Items] | ' |
Amortization period | '17 Years |
Technology [Member] | Minimum [Member] | ' |
Intangible Assets By Major Class [Line Items] | ' |
Amortization period | '15 Years |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets (Details Textual) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Dec. 31, 2013 | |
Indefinite-lived Intangible Assets [Line Items] | ' | ' |
Goodwill | $8,463,000 | $8,463,000 |
Amortization of Intangible Assets | $300,000 | ' |
Long_Term_Debt_and_Credit_Faci2
Long Term Debt and Credit Facilities (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ' | ' |
Advance | $7,500 | $7,500 |
Final payment | 263 | 263 |
Debt discounts, including common stock warrant | -856 | -932 |
Total long-term debt | 6,907 | 6,831 |
Less: Current portion of long-term debt | -1,242 | -563 |
Total long-term debt, net of current portion | $5,665 | $6,268 |
Long_Term_Debt_and_Credit_Faci3
Long Term Debt and Credit Facilities (Details Textual) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Dec. 31, 2013 | |
Debt Instrument [Line Items] | ' | ' |
Line Of Credit, Availability Of Third Advance, Dependent Upon Achieving Gross Commercial Revenue | $5,000,000 | ' |
Amount To Be Achieved In Gross Commercial Revenue, For Availability Of Third Advance | 7,000,000 | ' |
Amount To Be Raised In Capital To Receive Third Advance | 15,000,000 | ' |
Line of Credit Facility, Expiration Period | '39 months | ' |
Line of Credit Facility, Interest Rate Description | 'The Credit Facility has a term of 39 months and accrues interest at a rate equal to the prime rate plus 7.75% (with the prime rate subject to a floor of 4.75%), calculated on an actual/360 basis and payable monthly in arrears. Amounts outstanding during an event of default accrue interest at a rate of 3% in excess of the above rate, and past due amounts are subject to a 5% late charge. Outstanding principal will amortize in the 30-month period preceding maturity, payable in equal installments of principal and interest (subject to recalculation upon a change in prime rates). | ' |
Line Of Credit Facility Commitment Fee Percentage Description | 'Any advance may be prepaid in whole or in part at any time, subject to a prepayment fee of 1-2% if prepaid more than one year after closing. In addition, a fee equal to 3.50% of all advances made under the Credit Facility will be payable upon the final principal payment or prepayment in full of the advances. The Credit Facility is secured by a lien on substantially all of our assets. | ' |
Common Stock Exercise Price | $1.02 | ' |
Aggregate Common Shares Exercisable limit | 1,176,471 | ' |
Fair Value Stock Price | $1.08 | ' |
Fair Value Assumptions, Risk Free Interest Rate | 1.70% | ' |
Fair Value Assumptions, Expected Volatility Rate | 72.60% | ' |
Fair Value Assumptions, Expected Term | '4 years 8 months 12 days | ' |
Derivative Liability, Fair Value, Gross Liability | 52,000 | ' |
Warrant Liability, Common Stock, Shares | 882,353 | ' |
Warrant Liability, Fair Value | 700,000 | ' |
Hercules Technology [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Line of Credit Facility, Maximum Borrowing Capacity | ' | 15,000,000 |
Line Of Credit Advance Transaction One | ' | 7,500,000 |
Line Of Credit, Availability Of Second Advance, Dependent Upon Achieving Gross Commercial Revenue | ' | 2,500,000 |
Amount To Be Achieved In Gross Commercial Revenue, For Availability Of Second Advance | ' | 6,000,000 |
Debt Instrument, Debt Default, Description of Violation or Event of Default | 'The events of default under the Loan Agreement include, without limitation, (1) a material adverse change in our ability to perform our obligations under the Loan Agreement, or in the value of our collateral, and (2) an event of default under any other of our indebtedness in excess of $150,000. If an event of default occurs, Hercules is entitled to take enforcement action, including acceleration of amounts due under the Loan Agreement. | ' |
Warrant One [Member] | Hercules Technology [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Value Of Common Shares Exercisable | 900,000 | ' |
Warrant Two [Member] | Hercules Technology [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Value Of Common Shares Exercisable | $300,000 | ' |
Stockholders_Equity_Details_Te
Stockholders' Equity (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 |
Class of Stock [Line Items] | ' | ' |
Aggregate Common Shares Exercisable limit | 1,176,471 | ' |
Common Stock, Shares, Issued | 47,872,699 | 46,156,921 |
Common Stock, Shares, Outstanding | 47,872,699 | 46,156,921 |
Common Stock, Shares Authorized | 75,000,000 | 75,000,000 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Par or Stated Value Per Share | $0.00 | $0.00 |
Common Stock, Par or Stated Value Per Share | $0.00 | $0.00 |
Shares Authorized | 80,000,000 | ' |
Subsequent Event [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Common Stock, Shares Authorized | 150,000,000 | ' |
Preferred Stock, Shares Authorized | 5,000,000 | ' |
Shares Authorized | 155,000,000 | ' |
Lincoln Park Capital Fund, LLC [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Right To Sell Common Stock, Value, As Per Purchase Agreement | ' | $7 |
Right To Sell Common Stock, Shares, As Per Purchase Agreement | ' | 100,000 |
Commitment Shares Issued | 204,420 | 182,609 |
Stock Issuable On Prorata Basis | ' | 60,870 |
Sale Of Common Stock | 1,700,000 | ' |
Gross Proceeds From Sale Of Common Stock | 1.8 | ' |
Sale Of Common Stock Total | 2,400,000 | ' |
Gross Proceeds From Sale Of Common Stock Total | 2.5 | ' |
Common Stock, Shares Reserved for Future Issuance, Value | $4.50 | ' |
Stock_Incentive_Plans_and_Stoc2
Stock Incentive Plans and Stock-Based Compensation (Details) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number of shares outstanding | 3,985,590 | ' |
Number of shares options granted | 122,000 | ' |
Number of shares options exercised | 0 | ' |
Number of shares options expired | -42,564 | ' |
Number of shares options forfeited | -197,060 | ' |
Number of shares outstanding | 3,867,966 | 3,985,590 |
Number of shares options exercisable | 2,045,612 | ' |
Number of shares options vested and expected to vest | 3,712,691 | ' |
Weighted average exercise price outstanding | $3.31 | ' |
Weighted average exercise price outstanding | $3.26 | $3.31 |
Weighted average exercise price exercisable | $4.22 | ' |
Weighted average exercise price vested and expected to vest | $3.31 | ' |
Weighted average remaining contractual term outstanding | '7 years 6 months | '7 years 8 months 12 days |
Weighted average remaining contractual term exercisable | '6 years 3 months 18 days | ' |
Weighted average remaining contractual term vested and expected to vest, | '7 years 4 months 24 days | ' |
Aggregate intrinsic value outstanding | $11,125 | ' |
Aggregate intrinsic value outstanding | $12,189 | $11,125 |
Stock_Incentive_Plans_and_Stoc3
Stock Incentive Plans and Stock-Based Compensation (Details 1) | 3 Months Ended |
Mar. 31, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions Risk Free Interest Rate [Line Items] | ' |
Risk-free interest rate | 1.60% |
Expected term | '6 years |
Expected volatility | 79.60% |
Expected dividend yield | 0.00% |
Stock_Incentive_Plans_and_Stoc4
Stock Incentive Plans and Stock-Based Compensation (Details 2) (Restricted Stock Units (RSUs) [Member]) | 3 Months Ended |
Mar. 31, 2014 | |
Restricted Stock Units (RSUs) [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Outstanding as of December 31, 2013 | 0 |
Granted | 3,055,997 |
Forfeited | -203,272 |
Outstanding as of March 31, 2014 | 2,852,725 |
Stock_Incentive_Plans_and_Stoc5
Stock Incentive Plans and Stock-Based Compensation (Details Textual) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Stock Incentive Plans And Stock Based Compensation [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $4.22 | ' |
Share-based Compensation, Total | $385 | $317 |
Closing Price Of Common Stock | $1.08 | ' |
Restricted Stock Units (RSUs) [Member] | ' | ' |
Stock Incentive Plans And Stock Based Compensation [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $3 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | 'A portion of the RSU awards is subject to time-based vesting and a portion of the RSU awards is subject to performance-based vesting as outlined below: 75% is time-based (25% vests on first anniversary of grant date, 37.5% vests on second and third anniversaries of grant date); 25% is performance-based (100% vests upon the achievement of a 30% increase in company revenue year-over-year for two successive quarters by the end of fiscal 2016). | ' |
Stock Incentive Plan 2007 [Member] | ' | ' |
Stock Incentive Plans And Stock Based Compensation [Line Items] | ' | ' |
Share Based Compensation Arrangement By Share Based Payment Award, Maximum Number Of Shares Available Under Plan | 7,600,000 | ' |
Other_Condensed_Consolidated_B2
Other Condensed Consolidated Balance Sheet Information (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ' | ' |
Furniture and fixtures | $495 | $484 |
Equipment | 6,814 | 6,459 |
Computer software | 496 | 496 |
Leasehold improvements | 1,080 | 1,080 |
Capital leases of buildings | 51 | 51 |
Construction in process | 11 | 0 |
Property, Plant and Equipment, Gross, Total | 8,947 | 8,570 |
Less: accumulated depreciation and amortization | -6,234 | -5,523 |
Property, Plant and Equipment, Net, Total | $2,713 | $3,047 |
Other_Condensed_Consolidated_B3
Other Condensed Consolidated Balance Sheet Information (Details 1) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accrued Expenses And Other Liabilities [Line Items] | ' | ' |
Accrued payroll, bonuses, and employee benefits | $2,175 | $2,343 |
Legal and professional fees | 382 | 638 |
Interest payable | 101 | 100 |
Royalties | 284 | 243 |
Business taxes and licenses | 80 | 122 |
Travel and entertainment | 112 | 48 |
Other | 99 | 99 |
Total accrued expenses | $3,233 | $3,593 |
Subsequent_Events_Details_Text
Subsequent Events (Details Textual) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 |
Subsequent Event [Member] | Subsequent Event [Member] | |||
Convertible Subordinated Debt [Member] | ||||
Subsequent Event [Line Items] | ' | ' | ' | ' |
Common Stock, Shares Authorized | 75,000,000 | 75,000,000 | 150,000,000 | ' |
Debt Instrument, Face Amount | $7,500,000 | $7,500,000 | ' | $10,000,000 |
Warrants To Purchase Common Stock, Shares | ' | ' | ' | 9,428,000 |
Debt Instrument, Term | ' | ' | ' | '3 years |
Debt Instrument, Convertible, Conversion Price | ' | ' | ' | $1.06 |
Debt Conversion, Converted Instrument, Shares Issued | ' | ' | ' | 9,428,000 |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | ' | 6.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | ' | ' | ' | 90.00% |
Class of Warrant or Right, Exercise Price of Warrants or Rights | ' | ' | ' | 1.19 |
Warrants Term | ' | ' | ' | '5 years |
Credit Facility Cap Amount | ' | ' | ' | 1,500,000 |
Non-Refundable Cash Facility Fee | ' | ' | ' | $300,000 |
Percentage Of Liquidation Damages Based On Offering Proceeds | ' | ' | ' | 12.00% |
Debt Conversion Or Warrant Exercise Exceptions | ' | ' | ' | 'Subject to limited exceptions, the Company will not permit the conversion of the Debentures or exercise of the Warrants of any Purchaser, if after such conversion or exercise such Purchaser would beneficially own more than 4.99% of the outstanding shares of Common Stock. |
Debt Instrument, Covenant Description | ' | ' | ' | 'The Debentures contain customary debt instrument covenants and representations, including limitations on our ability to: Incur additional indebtedness, other than specified permitted indebtedness; Incur specified liens, other than specified permitted liens; Redeem, repurchase or declare cash dividends or cash distributions on our capital stock, subject to certain exceptions; Make transfers of our assets in excess of $500,000 in any 12-month period, subject to certain exceptions; and Engage in any material line of business substantially different from the lines of business currently conducted by us. |
Debt Instrument, Debt Default, Description of Violation or Event of Default | ' | ' | ' | 'Upon the occurrence of an “Event of Default,” the interest rate on the Debentures increases to 15% and we can be required to redeem the Debentures in whole or in part in cash at 110% of the outstanding balance. Events of Default under each Debenture include: Failure to file the Registration Statement (as defined below) or for it to be declared effective within specified time periods; Lapse of the effectiveness or unavailability of the Registration Statement for specified time periods; Suspension or removal from the NASDAQ Global Market or other permissible trading market for specified time periods; Failure to timely deliver, or remove restrictive legends from, shares upon conversion of the Debentures or exercise of the Warrants; Failure to pay principal, interest, late charges and other amounts due under the Debenture; Certain events of bankruptcy or insolvency of the Company; Judgments against the Company of over $1.0 million not covered by insurance; Failure to make payment with respect to any indebtedness in excess of $500,000 to any third party or the occurrence of a default or event of default under any agreement binding the Company having a material adverse effect on the Company; Breaches of representations, warranties or covenants included in any of the transaction documents related to the Private Placement Transaction; and Any event occurs that would have a material adverse effect on the Company or its prospects. |