Vivani Medical (VANI) 10-Q 16 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 06, 2015
Document Information [Line Items]
Entity Registrant Name	SECOND SIGHT MEDICAL PRODUCTS INC
Entity Central Index Key	1,266,806
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		35,851,400
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,015

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash	$ 268,658	$ 619,411
Money market funds	21,400,465	33,999,563
Accounts receivable	1,307,903	707,648
Inventories, net	8,137,965	5,721,991
Prepaid expenses and other current assets	751,389	927,575
Total current assets	31,866,380	41,976,188
Property and equipment, net	1,350,916	1,004,646
Deposits and other assets	70,193	88,610
Total assets	33,287,489	43,069,444
Current liabilities:
Accounts payable	544,445	513,106
Accrued expenses	1,881,597	1,412,383
Accrued compensation expense	2,249,917	1,361,894
Accrued clinical trial expense	556,833	488,910
Deferred revenue	783,453	599,904
Deferred grant revenue	2,767,141	4,075,000
Total current liabilities	$ 8,783,386	$ 8,451,197
Commitments and contingencies
Stockholders' equity:
Preferred stock, no par value, 10,000,000 shares authorized; none outstanding	$ 0	$ 0
Common stock, no par value; 200,000,000 shares authorized; shares issued and outstanding: 35,851,400 and 35,241,428 at September 30, 2015 and December 31, 2014, respectively	165,641,563	163,171,005
Common stock to be issued	114,333	166,250
Additional paid-in capital	26,507,980	24,590,368
Notes receivable to finance stock option exercises	(5,007)	(171,436)
Accumulated other comprehensive loss	(546,136)	(473,972)
Accumulated deficit	(167,208,630)	(152,663,968)
Total stockholders' equity	24,504,103	34,618,247
Total liabilities and stockholders' equity	$ 33,287,489	$ 43,069,444

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Preferred stock, no par value
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares outstanding	0	0
Preferred Stock, Shares Issued	0	0
Common stock, no par value
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	35,851,400	35,241,428
Common stock, shares outstanding	35,851,400	35,241,428

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Statement [Abstract]
Net sales	$ 2,226,800	$ 609,429	$ 6,587,981	$ 1,877,632
Cost of sales	757,101	416,632	3,622,240	2,137,119
Gross profit (loss)	1,469,699	192,797	2,965,741	(259,487)
Operating expenses:
Research and development, net of grants	592,820	1,419,992	2,489,441	3,679,667
Clinical and regulatory	984,193	630,427	2,543,013	1,937,562
Selling and marketing	2,132,111	1,607,106	6,425,062	4,690,195
General and administrative	2,422,964	2,184,326	6,078,885	5,101,504
Total operating expenses	6,132,088	5,841,851	17,536,401	15,408,928
Loss from operations	(4,662,389)	(5,649,054)	(14,570,660)	(15,668,415)
Interest income	84	2,808	1,232	8,417
Other income (expense), net	(3,645)	(6)	24,766	11,820
Interest expense on convertible promissory notes	0	(558,033)	0	(1,655,903)
Amortization of discount on convertible promissory notes	0	(1,440,016)	0	(4,320,048)
Net loss	$ (4,665,950)	$ (7,644,301)	$ (14,544,662)	$ (21,624,129)
Net loss per common share - basic and diluted	$ (0.13)	$ (0.31)	$ (0.41)	$ (0.91)
Weighted average common shares outstanding - basic and diluted	35,835,578	24,503,399	35,555,110	23,647,632

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Statement of Comprehensive Income [Abstract]
Net loss	$ (4,665,950)	$ (7,644,301)	$ (14,544,662)	$ (21,624,129)
Other comprehensive loss:
Foreign currency translation adjustments	(69,556)	(61,117)	(72,164)	(137,357)
Comprehensive loss	$ (4,735,506)	$ (7,705,418)	$ (14,616,826)	$ (21,761,486)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net loss	$ (14,544,662)	$ (21,624,129)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization of property and equipment	231,477	209,290
Stock-based compensation	1,917,612	1,115,981
Stock grant in connection with services by a director	0	175,000
Forgiveness of notes receivable related to stock option exercise	0	422,643
Amortization of discount on convertible notes payable	0	4,320,048
Non-cash interest accrued on convertible notes payable	0	1,655,903
Common stock issuable for services	233,083	95,000
Changes in operating assets and liabilities:
Accounts receivable	(600,255)	(277,616)
Inventories	(2,415,974)	(2,852,315)
Prepaid expenses and other assets	194,603	(451,931)
Accounts payable	31,339	118,021
Accrued expenses	469,214	502,008
Accrued compensation expenses	888,023	57,146
Accrued clinical trial expenses	67,923	0
Deferred revenue	183,549	537,930
Deferred grant revenue	(1,307,859)	0
Net cash used in operating activities	(14,651,927)	(15,997,021)
Cash flows from investing activities:
Purchases of property and equipment	(577,747)	(442,323)
Proceeds from money market funds	12,599,098	7,914,273
Net cash provided by investing activities	12,021,351	7,471,950
Cash flows from financing activities:
Proceeds from sale of common stock	0	9,098,971
Proceeds from exercise of options and warrants	2,475,671	478,295
Payment of employment taxes related to stock option exercises	(123,684)	0
Net cash provided by financing activities	2,351,987	9,577,266
Effect of exchange rate changes on cash	(72,164)	(137,357)
Cash:
Net (decrease) increase	(350,753)	914,838
Balance at beginning of period	619,411	62,565
Balance at end of period	268,658	977,403
Non-cash financing and investing activities:
Common stock issued as finder's fee in connection with private placement of common stock	0	450,688
Common stock issued for professional services rendered in connection with the Company's prospectus	$ 0	$ 75,005

Organization and Business Opera

Organization and Business Operations	9 Months Ended
	Sep. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Business Operations	1. Organization and Business Operations Organization and Business Operations Second Sight Medical Products, Inc. (“Second Sight” or the “Company”), was founded in 1998 and is incorporated in the State of California. Second Sight develops, manufactures and markets implantable prosthetic devices that can restore some functional vision to patients blinded by outer retinal degenerations, such as Retinitis Pigmentosa. In 2007, Second Sight formed Second Sight (Switzerland) Sarl, initially to manage clinical trials for its products in Europe, and later to manage sales and marketing in Europe and the Middle East. As the laws of Switzerland require at least two corporate stockholders, Second Sight (Switzerland) Sarl is 99.5% owned directly by the Company and 0.5% owned by an executive of Second Sight, who is acting as a nominee of the Company. Accordingly, Second Sight (Switzerland) Sarl is considered 100% owned for financial statement purposes and is consolidated with Second Sight for all periods presented. The Company’s consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, the Company has experienced recurring operating losses and negative operating cash flows since inception and expects to incur continuing operating losses and negative operating cash flows through 2016 and likely thereafter. Since its inception, the Company has generated limited revenues from the sale of products and has financed its operations primarily through the issuance of common stock, convertible debt (which has been converted into common stock), and research grants primarily from government agencies. The Company’s initial public offering (“IPO”) in November 2014 has provided it with sufficient financial resources to fund its operations into the fourth quarter of 2016. In order to continue business operations past that point, the Company currently anticipates that it will need to raise additional debt and/or equity capital during the next several months. However, there can be no assurances that the Company will be able to secure any such additional financing on acceptable terms and conditions, or at all. If cash resources become insufficient to satisfy the Company’s ongoing cash requirements, the Company would be required to scale back or discontinue its technology and product development programs and/or clinical trials, or obtain funds, if available (although there can be no certainty), through strategic alliances that may require the Company to relinquish rights to its products, or to discontinue its operations entirely.

Basis of Presentation, Signific

Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements	2. Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission for Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet at December 31, 2014 has been derived from the Company’s audited consolidated financial statements. In the opinion of management, these financial statements reflect all normal recurring and other adjustments necessary for a fair presentation. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year or any other future periods. Significant Accounting Policies The Company’s significant accounting policies are set forth in Note 2 in its Annual Report on Form 10-K for the year ended December 31, 2014. Recent Accounting Pronouncements In February 2015, the FASB issued Accounting Standards Update No. 2015-02 (ASU 2015-02), Consolidation (Topic 810). Management does not believe that any recently issued, but not yet effective, accounting standards, if adopted, will have a material effect on the financial statements.

Concentration of Risk

Concentration of Risk	9 Months Ended
	Sep. 30, 2015
Risks and Uncertainties [Abstract]
Concentration of Risk	3. Concentration of Risk Credit Risk Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash, money market funds, and trade accounts receivable. The Company maintains cash and money market funds with financial institutions that management deems reputable, and at times, cash balances may be in excess of Federal Deposit Insurance Corporation and Securities Investor Protection Corporation insurance limits. The Company also maintains a cash balance at a bank in Switzerland, which is insured up to an amount specified by the deposit insurance agency of Switzerland. The Company has not experienced any losses with respect to its cash and money market funds to date. The Company extends differing levels of credit to customers, and typically does not require collateral. Customer Concentration During the three and nine months ended September 30, 2015 and 2014 (unaudited), the following customers comprised more than 10% of revenues : Three Months September 30, 2015 Three Months September 30, 2014 Nine Months September 30, 2015 Nine Months September 30, 2014 Customer 1 13 % 17 % 10 % 30 % Customer 2 13 % 0 % 8 % 0 % Customer 3 12 % 0 % 15 % 0 % Customer 4 6 % 25 % 2 % 8 % Customer 5 0 % 24 % 0 % 18 % Customer 6 0 % 18 % 1 % 6 % Customer 7 0 % 16 % 0 % 8 % Customer 8 0 % 0 % 0 % 11 % As of September 30, 2015 and December 31, 2014, the following customers comprised more than 10% of accounts receivable: September 30, December 31, 2015 2014 (unaudited) Customer 1 23 % 0 % Customer 2 20 % 32 % Customer 3 15 % 13 % Customer 4 12 % 0 % Customer 5 0 % 20 % Customer 6 0 % 13 % Geographic Concentration During the three and nine months ended September 30, 2015 and 2014 (unaudited), regional revenue, based on customer locations which comprised more than 10% of revenues, consisted of the following: Three Months September 30, 2015 Three Months September 30, 2014 Nine Months September 30, 2015 Nine Months September 30, 2014 United States 56 % 43 % 46 % 47 % Canada 13 % 25 % 6 % 18 % Italy 12 % 0 % 20 % 0 % France 11 % 0 % 18 % 0 % Germany 4 % 31 % 5 % 23 % Spain 0 % 1 % 1 % 11 % Sources of Supply Several of the components, materials and services used in the Company’s current Argus II product are available from only one supplier, and substitutes for these items cannot be obtained easily or would require substantial design or manufacturing modifications. Any significant problem experienced by one of the Company’s sole source suppliers could result in a delay or interruption in the supply of components to the Company until that supplier cures the problem or an alternative source of the component is located and qualified. Even where the Company could qualify alternative suppliers, the substitution of suppliers may be at a higher cost and could cause time delays that impede the commercial production of the Argus II, reduce gross profit margins and impact the Company’s abilities to deliver its products as may be timely required to meet demand. Foreign Operations The accompanying condensed consolidated financial statements as of September 30, 2015 (unaudited) and December 31, 2014 include assets amounting to $3,717,000 and $2,091,000, respectively, relating to operations of the Company in Switzerland. It is possible that unanticipated events in foreign countries could disrupt the Company’s operations.

Money Market Funds

Money Market Funds	9 Months Ended
	Sep. 30, 2015
Fair Value Disclosures [Abstract]
Money Market Funds	4. Money Market Funds The authoritative guidance with respect to fair value establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels, and requires that assets and liabilities carried at fair value be classified and disclosed in one of three categories, as presented below. Disclosure as to transfers in and out of Levels 1 and 2, and activity in Level 3 fair value measurements, is also required. Level 1. Observable inputs such as quoted prices in active markets for an identical asset or liability that the Company has the ability to access as of the measurement date. Financial assets and liabilities utilizing Level 1 inputs include active-exchange traded securities and exchange-based derivatives. Level 2. Inputs, other than quoted prices included within Level 1, which are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Financial assets and liabilities utilizing Level 2 inputs include fixed income securities, non-exchange based derivatives, mutual funds, and fair-value hedges. Level 3. Unobservable inputs in which there is little or no market data for the asset or liability which requires the reporting entity to develop its own assumptions. Financial assets and liabilities utilizing Level 3 inputs include infrequently-traded non-exchange-based derivatives and commingled investment funds, and are measured using present value pricing models. Money market funds are the only financial instrument that is measured and recorded at fair value on the Company’s balance sheet, and they are considered Level 1 valuation securities. The following table presents money market funds at their level within the fair value hierarchy at September 30, 2015 and December 31, 2014. Total Level 1 Level 2 Level 3 September 30, 2015 (unaudited): Money market funds $ 21,400,465 $ 21,400,465 $ — $ — December 31, 2014: Money market funds $ 33,999,563 $ 33,999,563 $ — $ —

Selected Balance Sheet Detail

Selected Balance Sheet Detail	9 Months Ended
	Sep. 30, 2015
Selected Balance Sheet Detail
Selected Balance Sheet Detail	5. Selected Balance Sheet Detail Inventories, net Inventories consisted of the following: September 30, December 31, 2015 2014 (unaudited) Raw materials $ 539,631 $ 610,434 Work in process 4,241,822 4,729,235 Finished goods 3,696,952 1,748,966 8,478,405 7,088,635 Allowance for excess and obsolescence (340,440 ) (1,366,644 ) Inventories, net $ 8,137,965 $ 5,721,991 Property and equipment, net of accumulated depreciation and amortization Property and equipment consisted of the following: September 30, December 31, 2015 2014 (unaudited) Laboratory equipment $ 3,414,871 $ 3,285,842 Computer hardware and software 1,891,823 1,700,612 Leasehold improvements 422,455 362,408 Furniture, fixtures and equipment 135,333 135,303 5,864,482 5,484,165 Accumulated depreciation and amortization (4,513,566 ) (4,479,519 ) Property and equipment, net $ 1,350,916 $ 1,004,646

Long Term Investor Right

Long Term Investor Right	9 Months Ended
	Sep. 30, 2015
Contractors [Abstract]
Long Term Investor Right	6. Long Term Investor Right Investors who purchased shares in the Company’s IPO, and who complied with certain terms and conditions, such as holding their IPO shares in their name during the twenty-four month period following the closing of the IPO, are entitled under certain conditions to receive up to one additional share for each share they purchased in the IPO. For a more complete discussion of the Long Term Investor Right, see Note 2 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. As of September 30, 2015, the Company identified investors who had perfected and maintained Long Term Investor Rights in an aggregate of 1,423,161 shares of common stock that were acquired as part of the Company’s IPO. The highest average closing price for the Company’s common stock on NASDAQ during any consecutive 90 day period ended on or before September 30, 2015 was $13.96. Based on this average closing stock price, an investor who purchased shares as part of the IPO, and who has perfected its Long Term Investor Right, would be entitled to 0.2894 shares for each share purchased in the IPO, rounded up to the next whole share, which represents an aggregate maximum of 411,914 shares that are potentially issuable by the Company pursuant to the Long Term Investor Right at such date. The actual number of common shares issuable pursuant to the Long Term Investor Right is dependent on the future stock price of the Company over the two year period subsequent to the November 24, 2014 closing date of the IPO, and could be as high as 411,914 shares and as low as zero shares. The Long Term Investor Right is an equity instrument that is being accounted for as a component of the actual price per common share paid by the investor in the IPO. For basic earnings per share, the common shares associated with the Long Term Investor Right are treated as contingently issuable shares and are not included in basic earnings per share until the actual number of shares can be calculated and the shares have been issued.

Equity Securities

Equity Securities	9 Months Ended
	Sep. 30, 2015
Equity [Abstract]
Equity Securities	7. Equity Securities Common Stock Issuable Non-employee members of the Board of Directors are paid for their services in common stock on June 1 of each year based on the average closing prices for the immediately preceding twenty trading days. In June 2015, the Company issued 23,136 shares to Directors for services rendered through May 2015. As of September 30, 2015, the Company accrued $114,333 for these services, which equates to 12,757 shares based on the $8.96 average closing prices for the immediately preceding twenty trading days. These shares have not yet been issued and are excluded from the calculation of weighted average common shares outstanding for EPS purposes. Potentially Dilutive Common Stock Equivalents At September 30, 2015 and 2014 (unaudited), the Company excluded the outstanding securities summarized below, which entitle the holders thereof to ultimately acquire shares of common stock, from its calculations of earnings per share and weighted average shares outstanding, as their effect would have been anti-dilutive. September 30, 2015 September 30, 2014 Long Term Investor Rights 411,914 — Underwriter’s warrants 802,000 — Convertible notes payable — 6,579,832 Warrants associated with convertible debt 1,038,403 1,180,766 Common stock options 3,504,695 3,252,144 Restricted stock units 190,000 — Employee stock purchase plan 75,000 — Total 6,022,012 11,012,742

Warrants

Warrants	9 Months Ended
	Sep. 30, 2015
Warrants and Rights Note Disclosure [Abstract]
Warrants	8. Warrants A summary of warrant activity for the nine months ended September 30, 2015 (unaudited) is presented below. Weighted Average Weighted Remaining Number of Average Contractual Shares Exercise Price Life (in Years) Warrants outstanding at December 31, 2014 1,983,707 $ 7.54 3.75 Granted — Exercised (143,304 ) $ 5.13 Forfeited or expired — Warrants outstanding at September 30, 2015 1,840,403 $ 7.72 3.06 Warrants exercisable at September 30, 2015 1,840,403 $ 7.72 3.06 The intrinsic value of warrants outstanding at September 30, 2015 was approximately $1.0 million based on the closing market price of the Company’s common stock on such date. During the nine months ended September 30, 2015, warrants representing 143,304 shares (including a cashless exercise of 3,000 warrants resulting in the issuance of 839 shares) of common stock were exercised for proceeds of $0.7 million.

Stock-Based Compensation

Stock-Based Compensation	9 Months Ended
	Sep. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation	9. Stock-Based Compensation Under the 2003 Plan, as restated in June 2011, and amended in 2015, the Company is authorized to issue stock options covering up to 6,000,000 common shares. A summary of stock option activity for the nine months ended September 30, 2015 (unaudited) is presented below. Weighted Average Weighted Remaining Number of Average Contractual Shares Exercise Price Life (in Years) Options outstanding at December 31, 2014 3,251,627 $ 6.07 5.60 Granted 981,848 $ 12.41 Exercised (535,845 ) $ 4.85 Forfeited or expired (192,935 ) $ 6.94 Options outstanding at September 30, 2015 3,504,695 $ 7.99 Options exercisable at September 30, 2015 1,598,802 $ 5.42 4.05 The estimated aggregate intrinsic value of stock options exercisable at September 30, 2015 was approximately $1.4 million based on the closing market price of the Company’s common stock on such date. As of September 30, 2015, there was $12.2 million of total unrecognized compensation cost related to outstanding stock options that will be recognized over a weighted average period of 3.40 years. The following table summarizes Restricted Stock Unit (RSU) activity for the nine months ended September 30, 2015 (unaudited): Number Weighted Outstanding as of December 31, 2014 — $ — Awarded 190,000 12.43 Vested — — Forfeited/canceled — — Outstanding as of September 30, 2015 190,000 $ 12.43 The weighted average remaining contractual life and expense recognition period of the outstanding RSUs as of September 30, 2014 was 3.88 years. On January 1, 2015, the Company’s current Chairman, who at that time was the Chief Executive Officer exercised stock options expiring on that date on a cashless basis to purchase 59,063 shares of common stock at an exercise price of $4.75 per share. Based on the closing market price of the Company’s common stock of $10.26 on December 31, 2014, the Chief Executive Officer tendered 27,344 shares of common stock that he owned to satisfy the aggregate exercise price and surrendered 12,055 shares of common stock to satisfy the related $123,684 of income and payroll tax withholding amounts related to the transaction. On June 2, 2015 and June 3, 2015 the Company’s current Chairman, who at that time was the Chief Executive Officer exercised stock options on a cashless basis to purchase 150,000 shares of common stock at an exercise price of $4.75 per share. Related to these exercises, the Chief Executive Officer tendered 50,753 shares of common stock that he owned to satisfy the aggregate exercise price. During the nine months ended September 30, 2015, the Company granted stock options to purchase 981,848 shares of common stock to certain employees and contractors. The options are exercisable for a period of ten years from the date of grant at $9.01 to $13.90 per share, which was the fair value of the Company’s common stock on such dates. The options vest over a period of either four or five years. The fair value of these options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $6,126,285 ($6.24 average per share). On a weighted average basis, assumptions used in the model were an expected term of 6.38 years, volatility of 49.3%, a risk-free interest rate of 2.16% and an expected dividend rate of 0%. On May 15, 2015 shareholders approved (1) an increase of 2,000,000 shares in the number of shares available for option awards under the 2011 Equity Incentive Plan, and (2) an Employee Stock Purchase Plan, with an initial 250,000 shares with annual increases of shares available equal to the lesser of (i) 1% of outstanding shares or (ii) 100,000 shares. The Company adopted an employee stock purchase plan in June, 2015 for all eligible employees. Under the plan, shares of the Company’s common stock may be purchased at six-month intervals at 85% of the lower of the closing fair market value of the common stock (i) on the first trading day of the offering period or (ii) on the last trading day of the purchase period. An employee may purchase in any one calendar year shares of common stock having an aggregate fair market value of up to $25,000 determined as of the first trading day of the offering period. Additionally, a participating employee may not purchase more than 100,000 shares of common stock in any one offering period. At September 30, 2015, 250,000 shares were reserved for future issuance. The total stock-based compensation recognized for stock-based awards in the condensed consolidated statements of operations for the three and nine months ended September 30, 2015 and 2014 (unaudited) is as follows: Three Months Ended September 30, 2015 Three Months Ended September 30, 2014 Nine Months Ended September 30, 2015 Nine Months Ended September 30, 2014 Cost of sales $ 103,303 $ 70,131 $ 264,925 $ 132,467 Research and development 98,810 43,833 216,772 181,467 Clinical and regulatory 84,217 37,988 205,391 71,753 Selling and marketing 126,640 46,755 312,159 88,313 General and administrative 443,314 93,510 918,365 641,981 Total $ 856,284 $ 292,217 $ 1,917,612 $ 1,115,981

Employment Agreement

Employment Agreement	9 Months Ended
	Sep. 30, 2015
Employment Agreement
Employment Agreement	10. Employment Agreement On June 19, 2015 the Company entered into an at will employment agreement with Will McGuire to become the Company’s President and Chief Executive Officer. The Company has agreed to pay Mr. McGuire an annual salary of $390,000 and he will also be entitled to receive performance bonuses which will be based on performance standards and goals established by the Company’s Board of Directors. Upon termination without cause, Mr. McGuire will be entitled to receive severance consisting of his salary for a period of 12 months following such termination and his pro-rated target bonus through the balance of the calendar year in which such termination occurs. As part of the agreement, the Company agreed to grant Mr. McGuire, effective on his official start date as an employee, options to purchase 420,000 shares of the Company’s common stock, the fair value of which was determined to be $2,574,000, of which $78,000 was recognized during the three and nine months ended September 30, 2015 and 190,000 RSU the fair value of which was determined to be $2,362,000, of which $71,000 was recognized during the three and nine months ended September 30, 2015. The RSU were priced at $12.43 which was the closing price of the Company’s stock on Nasdaq on August 17, 2015. The options and RSU will vest over four years, with 25% vesting on the first anniversary of the grant date, and the remainder vesting thereafter in twelve equal installments of 6.25% on the quarterly anniversaries of the grant date.

Litigation, Claims and Assessme

Litigation, Claims and Assessments	9 Months Ended
	Sep. 30, 2015
Litigation Settlement [Abstract]
Litigation, Claims and Assessments	11. Litigation, Claims and Assessments Thirteen oppositions have been filed by a third-party in the European Patent Office, each challenging the validity of a European patent owned or exclusively licensed by the Company. The outcome of the challenges is not certain, however, if successful, they may affect the Company’s ability to block competitors from utilizing some of its patented technology in Europe. Management of the Company does not believe a successful challenge will have a material effect on its ability to manufacture and sell its products, or otherwise have a material effect on its operations. The Company may be party to litigation arising in the ordinary course of business. It is management’s opinion that the outcome of such matters will not have a material effect on the Company’s financial statements.

Basis of Presentation, Signif18

Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements (Policies)	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission for Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet at December 31, 2014 has been derived from the Company’s audited consolidated financial statements. In the opinion of management, these financial statements reflect all normal recurring and other adjustments necessary for a fair presentation. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year or any other future periods.
Significant Accounting Policies	The Company’s significant accounting policies are set forth in Note 2 in its Annual Report on Form 10-K for the year ended December 31, 2014.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In February 2015, the FASB issued Accounting Standards Update No. 2015-02 (ASU 2015-02), Consolidation (Topic 810). Management does not believe that any recently issued, but not yet effective, accounting standards, if adopted, will have a material effect on the financial statements.

Concentration of Risk (Tables)

Concentration of Risk (Tables)	9 Months Ended
	Sep. 30, 2015
Risks and Uncertainties [Abstract]
Summary of customer concentration of risk in revenue	During the three and nine months ended September 30, 2015 and 2014 (unaudited), the following customers comprised more than 10% of revenues : Three Months September 30, 2015 Three Months September 30, 2014 Nine Months September 30, 2015 Nine Months September 30, 2014 Customer 1 13 % 17 % 10 % 30 % Customer 2 13 % 0 % 8 % 0 % Customer 3 12 % 0 % 15 % 0 % Customer 4 6 % 25 % 2 % 8 % Customer 5 0 % 24 % 0 % 18 % Customer 6 0 % 18 % 1 % 6 % Customer 7 0 % 16 % 0 % 8 % Customer 8 0 % 0 % 0 % 11 %
Summary of customer concentration of risk in accounts receivable	As of September 30, 2015 and December 31, 2014, the following customers comprised more than 10% of accounts receivable: September 30, December 31, 2015 2014 (unaudited) Customer 1 23 % 0 % Customer 2 20 % 32 % Customer 3 15 % 13 % Customer 4 12 % 0 % Customer 5 0 % 20 % Customer 6 0 % 13 %
Summary of geographic concentration of risk in revenue	During the three and nine months ended September 30, 2015 and 2014 (unaudited), regional revenue, based on customer locations which comprised more than 10% of revenues, consisted of the following: Three Months September 30, 2015 Three Months September 30, 2014 Nine Months September 30, 2015 Nine Months September 30, 2014 United States 56 % 43 % 46 % 47 % Canada 13 % 25 % 6 % 18 % Italy 12 % 0 % 20 % 0 % France 11 % 0 % 18 % 0 % Germany 4 % 31 % 5 % 23 % Spain 0 % 1 % 1 % 11 %

Money Market Funds (Tables)

Money Market Funds (Tables)	9 Months Ended
	Sep. 30, 2015
Fair Value Disclosures [Abstract]
Summary of money market fund	The following table presents money market funds at their level within the fair value hierarchy at September 30, 2015 and December 31, 2014. Total Level 1 Level 2 Level 3 September 30, 2015 (unaudited): Money market funds $ 21,400,465 $ 21,400,465 $ — $ — December 31, 2014: Money market funds $ 33,999,563 $ 33,999,563 $ — $ —

Selected Balance Sheet Detail (

Selected Balance Sheet Detail (Tables)	9 Months Ended
	Sep. 30, 2015
Selected Balance Sheet Detail
Summary of inventory	Inventories consisted of the following: September 30, December 31, 2015 2014 (unaudited) Raw materials $ 539,631 $ 610,434 Work in process 4,241,822 4,729,235 Finished goods 3,696,952 1,748,966 8,478,405 7,088,635 Allowance for excess and obsolescence (340,440 ) (1,366,644 ) Inventories, net $ 8,137,965 $ 5,721,991
Summary of property and equipment	Property and equipment consisted of the following: September 30, December 31, 2015 2014 (unaudited) Laboratory equipment $ 3,414,871 $ 3,285,842 Computer hardware and software 1,891,823 1,700,612 Leasehold improvements 422,455 362,408 Furniture, fixtures and equipment 135,333 135,303 5,864,482 5,484,165 Accumulated depreciation and amortization (4,513,566 ) (4,479,519 ) Property and equipment, net $ 1,350,916 $ 1,004,646

Equity Securities (Tables)

Equity Securities (Tables)	9 Months Ended
	Sep. 30, 2015
Equity [Abstract]
Summary of potentially dilutive securities	September 30, 2015 September 30, 2014 Long Term Investor Rights 411,914 — Underwriter’s warrants 802,000 — Convertible notes payable — 6,579,832 Warrants associated with convertible debt 1,038,403 1,180,766 Common stock options 3,504,695 3,252,144 Restricted stock units 190,000 — Employee stock purchase plan 75,000 — Total 6,022,012 11,012,742

Warrants (Tables)

Warrants (Tables)	9 Months Ended
	Sep. 30, 2015
Warrants and Rights Note Disclosure [Abstract]
Summary of warrant activity	A summary of warrant activity for the nine months ended September 30, 2015 (unaudited) is presented below. Weighted Average Weighted Remaining Number of Average Contractual Shares Exercise Price Life (in Years) Warrants outstanding at December 31, 2014 1,983,707 $ 7.54 3.75 Granted — Exercised (143,304 ) $ 5.13 Forfeited or expired — Warrants outstanding at September 30, 2015 1,840,403 $ 7.72 3.06 Warrants exercisable at September 30, 2015 1,840,403 $ 7.72 3.06

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of stock option activity	A summary of stock option activity for the nine months ended September 30, 2015 (unaudited) is presented below. Weighted Average Weighted Remaining Number of Average Contractual Shares Exercise Price Life (in Years) Options outstanding at December 31, 2014 3,251,627 $ 6.07 5.60 Granted 981,848 $ 12.41 Exercised (535,845 ) $ 4.85 Forfeited or expired (192,935 ) $ 6.94 Options outstanding at September 30, 2015 3,504,695 $ 7.99 Options exercisable at September 30, 2015 1,598,802 $ 5.42 4.05
Summarizes Restricted Stock	The following table summarizes Restricted Stock Unit (RSU) activity for the nine months ended September 30, 2015 (unaudited): Number Weighted Outstanding as of December 31, 2014 — $ — Awarded 190,000 12.43 Vested — — Forfeited/canceled — — Outstanding as of September 30, 2015 190,000 $ 12.43
Summary of stock-based compensation	The total stock-based compensation recognized for stock-based awards in the condensed consolidated statements of operations for the three and nine months ended September 30, 2015 and 2014 (unaudited) is as follows: Three Months Ended September 30, 2015 Three Months Ended September 30, 2014 Nine Months Ended September 30, 2015 Nine Months Ended September 30, 2014 Cost of sales $ 103,303 $ 70,131 $ 264,925 $ 132,467 Research and development 98,810 43,833 216,772 181,467 Clinical and regulatory 84,217 37,988 205,391 71,753 Selling and marketing 126,640 46,755 312,159 88,313 General and administrative 443,314 93,510 918,365 641,981 Total $ 856,284 $ 292,217 $ 1,917,612 $ 1,115,981

Organization and Business Ope25

Organization and Business Operations (Details Narrative)	Sep. 30, 2015
Ownership by the Company	99.50%
Executive [Member]
Ownership by the Company	0.50%

Concentration of Risk (Details)

Concentration of Risk (Details) - Sales Revenue, Net [Member]	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Customer 1 [Member]
Percentage	13.00%	17.00%	10.00%	30.00%
Customer 2 [Member]
Percentage	13.00%	0.00%	8.00%	0.00%
Customer 3 [Member]
Percentage	12.00%	0.00%	15.00%	0.00%
Customer 4 [Member]
Percentage	6.00%	25.00%	2.00%	8.00%
Customer 5 [Member]
Percentage	0.00%	24.00%	0.00%	18.00%
Customer 6 [Member]
Percentage	0.00%	18.00%	1.00%	6.00%
Customer 7 [Member]
Percentage	0.00%	16.00%	0.00%	8.00%
Customer 8 [Member]
Percentage	0.00%	0.00%	0.00%	11.00%

Concentration of Risk (Details

Concentration of Risk (Details 1) - Accounts Receivable [Member]	Sep. 30, 2015	Dec. 31, 2014
Customer 1 [Member]
Percentage	23.00%	0.00%
Customer 2 [Member]
Percentage	20.00%	32.00%
Customer 3 [Member]
Percentage	15.00%	13.00%
Customer 4 [Member]
Percentage	12.00%	0.00%
Customer 5 [Member]
Percentage	0.00%	20.00%
Customer 6 [Member]
Percentage	0.00%	13.00%

Concentration of Risk (Detail28

Concentration of Risk (Details 2)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
United States [Member]
Regional revenue by customer location	56.00%	43.00%	46.00%	47.00%
Canada [Member]
Regional revenue by customer location	13.00%	25.00%	6.00%	18.00%
Italy [Member]
Regional revenue by customer location	12.00%	0.00%	20.00%	0.00%
France [Member]
Regional revenue by customer location	11.00%	0.00%	18.00%	0.00%
Germany [Member]
Regional revenue by customer location	4.00%	31.00%	5.00%	23.00%
Spain [Member]
Regional revenue by customer location	0.00%	1.00%	1.00%	11.00%

Concentration of Risk (Detail29

Concentration of Risk (Details Narrative) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Assets	$ 33,287,489	$ 43,069,444
Switzerland [Member]
Assets	$ 3,717,000	$ 2,091,000

Money Market Funds (Details)

Money Market Funds (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Money market funds	$ 21,400,465	$ 33,999,563
Level 1 [Member]
Money market funds	$ 21,400,465	$ 33,999,563
Level 2 [Member]
Money market funds
Level 3 [Member]
Money market funds

Selected Balance Sheet Detail31

Selected Balance Sheet Detail (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Selected Balance Sheet Detail
Raw materials	$ 539,631	$ 610,434
Work in process	4,241,822	4,729,235
Finished goods	3,696,952	1,748,966
Inventory, Gross	8,478,405	7,088,635
Allowance for excess and obsolescence	(340,440)	(1,366,644)
Inventories, net	$ 8,137,965	$ 5,721,991

Selected Balance Sheet Detail32

Selected Balance Sheet Detail (Detail 1) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Property and equipment, Gross	$ 5,864,482	$ 5,484,165
Accumulated depreciation and amortization	(4,513,566)	(4,479,519)
Property and equipment, net	1,350,916	1,004,646
Laboratory equipment [Member]
Property and equipment, Gross	3,414,871	3,285,842
Computer hardware and software [Member]
Property and equipment, Gross	1,891,823	1,700,612
Leasehold Improvements [Member]
Property and equipment, Gross	422,455	362,408
Furniture, fixtures and equipment [Member]
Property and equipment, Gross	$ 135,333	$ 135,303

Long Term Investor Right (Detai

Long Term Investor Right (Details Narrative)	Sep. 30, 2015$ / sharesshares
Contractors [Abstract]
Shares of common stock acquired perfected and maintained by investors since IPO	1,423,161
Highest average closing price on NASDAQ during any consecutive 90 day | $ / shares	$ 13.96
Actual number of common shares issuable pursuant to Long Term Investor Right, maximum	411,914
Actual number of common shares issuable pursuant to Long Term Investor Right, minimum	0

Equity Securities (Details)

Equity Securities (Details) - shares	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Total	6,022,012	11,012,742
Long Term Investor Rights [Member]
Total	411,914
Underwriter's Warrants [Member]
Total	802,000
Convertible notes payable [Member]
Total		6,579,832
Warrants associated with convertible debt [Member]
Total	1,038,403	1,180,766
Common stock options [Member]
Total	3,504,695	3,252,144
Restricted stock units [Member]
Total	190,000
Employee stock purchase plan [Member]
Total	75,000

Equity Securities (Details Narr

Equity Securities (Details Narrative) - USD ($)	1 Months Ended
	Jun. 30, 2015	Sep. 30, 2015
Equity [Abstract]
Shares issued for services to directors	23,136
Accrued services, Value		$ 114,333
Accrued services, Shares		12,757
Accrued services, Closing price per share		$ 8.96

Warrants (Details)

Warrants (Details) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Number of Shares
Options outstanding at December 31, 2014	3,251,627
Granted	981,848
Exercised	(535,845)
Forfeited or expired	192,935
Options outstanding at September 30, 2015	3,504,695	3,251,627
Options exercisable at September 30, 2015	1,598,802
Weighted Average Exercise Price
Options outstanding at December 31, 2014	$ 6.07
Granted	12.41
Exercised	4.85
Forfeited or expired	6.94
Options outstanding at September 30, 2015	7.99	$ 6.07
Options exercisable at September 30, 2015	$ 5.42
Weighted Average Remaining Contractual Life (in Years)
Options outstanding		5 years 7 months 6 days
Options outstanding at June 30, 2015	4 years 18 days
Warrant [Member]
Number of Shares
Options outstanding at December 31, 2014	1,983,707
Granted
Exercised	(143,304)
Forfeited or expired
Options outstanding at September 30, 2015	1,840,403	1,983,707
Options exercisable at September 30, 2015	1,840,403
Weighted Average Exercise Price
Options outstanding at December 31, 2014	$ 7.54
Granted
Exercised	$ 5.13
Forfeited or expired
Options outstanding at September 30, 2015	$ 7.72	$ 7.54
Options exercisable at September 30, 2015	$ 7.72
Weighted Average Remaining Contractual Life (in Years)
Options outstanding	3 years 22 days	3 years 9 months
Options outstanding at June 30, 2015	3 years 22 days

Warrants (Details Narrative)

Warrants (Details Narrative)	9 Months Ended
	Sep. 30, 2015USD ($)shares
Intrinsic value of warrants outstanding | $	$ 1,400,000
Warrants exercised, shares	535,845
Warrant [Member]
Intrinsic value of warrants outstanding | $	$ 1,000,000
Warrants exercised, shares	143,304
Warrants exercised, Amount | $	$ 700,000
Warrants exercised, cashless shares	3,000
Warrants exercised, Issuance of shares	839

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Number of Shares
Options outstanding at December 31, 2014	3,251,627
Granted	981,848
Exercised	(535,845)
Forfeited or expired	(192,935)
Options outstanding at September 30, 2015	3,504,695	3,251,627
Options exercisable at September 30, 2015	1,598,802
Weighted Average Exercise Price
Options outstanding at December 31, 2014	$ 6.07
Granted	12.41
Exercised	4.85
Forfeited or expired	6.94
Options outstanding at September 30, 2015	7.99	$ 6.07
Options exercisable at September 30, 2015	$ 5.42
Weighted Average Remaining Contractual Life (in Years)
Options outstanding at September 30, 2015		5 years 7 months 6 days
Options exercisable at September 30, 2015	4 years 18 days

Stock-Based Compensation (Det39

Stock-Based Compensation (Details 1)	9 Months Ended
	Sep. 30, 2015$ / sharesshares
Number of Awards
Awarded	981,848
Weighted Average Grant Date Fair Value Per Share
Awarded | $ / shares	$ 6.24
Restricted stock units [Member]
Number of Awards
Outstanding as of December 31, 2014
Awarded	190,000
Vested
Forfeited/canceled
Outstanding as of September 30, 2015	190,000
Weighted Average Grant Date Fair Value Per Share
Outstanding as of December 31, 2014 | $ / shares	$ 12.43
Awarded | $ / shares	$ 12.43
Vested | $ / shares
Forfeited/canceled | $ / shares
Outstanding as of September 30, 2015 | $ / shares	$ 12.43

Stock-Based Compensation (Det40

Stock-Based Compensation (Details 2) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Stock-based compensation, Total	$ 856,284	$ 292,217	$ 1,917,612	$ 1,115,981
Cost of sales [Member]
Stock-based compensation, Total	103,303	70,131	264,925	132,467
Research and development [Member]
Stock-based compensation, Total	98,810	43,833	216,772	181,467
Clinical and regulatory [Member]
Stock-based compensation, Total	84,217	37,988	205,391	71,753
Selling and marketing [Member]
Stock-based compensation, Total	126,640	46,755	312,159	88,313
General and administrative [Member]
Stock-based compensation, Total	$ 443,314	$ 93,510	$ 918,365	$ 641,981

Stock-Based Compensation (Det41

Stock-Based Compensation (Details Narrative) - USD ($)	Jun. 02, 2015	Jun. 30, 2015	Jan. 02, 2015	Sep. 30, 2015	Dec. 31, 2014	Jun. 30, 2011
Authorized shares				200,000,000	200,000,000
Estimated aggregate intrinsic value of stock options exercisabl				$ 1,400,000
Unrecognized compensation cost related to outstanding stock options				$ 12,200,000
Weighted average period, stock options				3 years 4 months 24 days
Weighted average remaining contractual life and expense recognition period					5 years 7 months 6 days
Exercised stock options on cashless basis to purchase, shares				535,845
Granted stock options to purchase				981,848
Options vested perioid				Either four or five years
Expected term				6 years 4 months 17 days
volatility				49.30%
Risk-free interest rate				2.16%
Expected dividend rate				0.00%
Fair value of options				$ 6,126,285
Fair value of options, average per share				$ 6.24
Share-based Compensation Arrangement by Share-based Payment Award, Description				Shareholders approved (1) an increase of 2,000,000 shares in the number of shares available for option awards under the 2011 Equity Incentive Plan, and (2) an Employee Stock Purchase Plan, with an initial 250,000 shares with annual increases of shares available equal to the lesser of (i) 1% of outstanding shares or (ii) 100,000 shares.
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent				85.00%
Common Stock, Capital Shares Reserved for Future Issuance				250,000
Fair value of common stock		$ 25,000
Maximum number of shares purchased by a employee		100,000
2003 Plan [Member]
Authorized shares						6,000,000
Chief Executive Officer [Member]
Exercised stock options on cashless basis to purchase, shares	150,000		59,063		27,344
Exercise price,stock option	$ 4.75		$ 4.75		$ 10.26
Surrendered stock options to purchase	50,753				12,055
Satisfy Income and payroll tax					$ 123,684
Employees [Member]
Granted stock options to purchase				981,848
Exercise ranges of stock options, Minimum				$ 9.01
Exercise ranges of stock options, Maximum				$ 13.90
Options exercisable period				10 years

Employment Agreement (Details N

Employment Agreement (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended	9 Months Ended
	Jun. 19, 2015	Sep. 30, 2015	Sep. 30, 2015
Granted stock options to purchase			981,848
Option vesting period			12 months
Option vesting percentage			6.25%
Fair value of options, average per share			$ 6.24
Restricted stock units [Member]
Granted stock options to purchase			190,000
Granted stock options to purchase fair value			$ 2,362,000
Granted stock options to purchase fair recognised value		$ 71,000	$ 71,000
Option vesting period			4 years
Option vesting percentage			25.00%
Fair value of options, average per share			$ 12.43
Common Stock [Member]
Granted stock options to purchase			420,000
Granted stock options to purchase fair value			$ 2,574,000
Granted stock options to purchase fair recognised value		$ 78,000	$ 78,000
Option vesting period			4 years
Option vesting percentage			25.00%
Will McGuire [Member]
Officer's annual salary	$ 390,000
Termination Allowances Description	Upon termination without cause, Mr. McGuire will be entitled to receive severance consisting of his salary for a period of 12 months following such termination and his pro-rated target bonus through the balance of the calendar year in which such termination occurs.