Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2014 | 5-May-14 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'TearLab Corp | ' |
Document Type | '10-Q | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Common Stock, Shares Outstanding | ' | 33,585,401 |
Amendment Flag | 'false | ' |
Entity Central Index Key | '0001299139 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Document Period End Date | 31-Mar-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ' | ' |
Cash | $32,023 | $37,778 |
Accounts receivable, net | 3,050 | 3,524 |
Inventory | 1,177 | 885 |
Prepaid expenses and other current assets | 636 | 699 |
Total current assets | 36,886 | 42,886 |
Fixed assets, net | 4,043 | 3,429 |
Patents and trademarks, net | 101 | 108 |
Intangible assets, net | 4,755 | 3,494 |
Other non-current assets | 47 | 40 |
Total assets | 45,832 | 49,957 |
Current liabilities | ' | ' |
Accounts payable | 1,773 | 631 |
Accrued liabilities | 3,488 | 3,844 |
Deferred Rent | 101 | 67 |
Obligations under warrants | 1,124 | 4,047 |
Total current liabilities | 6,486 | 8,589 |
Stockholders’ equity | ' | ' |
Preferred Stock, $0.001 par value, authorized 10,000,000, none outstanding | 0 | 0 |
Common stock, $0.001 par value, 65,000,000 authorized, 33,577,068 and 33,288,701 issued and outstanding at March 31, 2014 and December 31, 2013, respectively | 34 | 33 |
Additional paid-in capital | 480,706 | 477,172 |
Accumulated deficit | -441,394 | -435,837 |
Total stockholders’ equity | 39,346 | 41,368 |
Total liabilities and stockholders’ equity | $45,832 | $49,957 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Preferred stock par value (in Dollars per share) | $0.00 | $0.00 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in Dollars per share) | $0.00 | $0.00 |
Common stock, authorized | 65,000,000 | 65,000,000 |
Common stock, issued | 33,577,068 | 33,288,701 |
Common stock, outstanding | 33,577,068 | 33,288,701 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements Of Operations And Comprehensive Loss (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Revenue | $4,211,000 | $2,475,000 |
Cost of goods sold (excluding amortization of intangible assets) | 2,199,000 | 1,416,000 |
Gross profit | 2,012,000 | 1,059,000 |
Operating expenses | ' | ' |
General and administrative | 3,127,000 | 1,448,000 |
Clinical, regulatory and research & development | 575,000 | 208,000 |
Sales and marketing | 3,928,000 | 2,262,000 |
Amortization of intangible assets | 303,000 | 303,000 |
Total operating expenses | 7,933,000 | 4,221,000 |
Loss from operations | -5,921,000 | -3,162,000 |
Other income (expense) | ' | ' |
Interest income | 7,000 | 6,000 |
Changes in fair value of warrant obligations | 307,000 | -5,404,000 |
Other, net | 50,000 | -14,000 |
Total other income (expense) | 364,000 | -5,412,000 |
Net loss and comprehensive loss | ($5,557,000) | ($8,574,000) |
Weighted average shares outstanding - basic (in Shares) | 33,550,404 | 28,756,475 |
Net loss per share – basic (in Dollars per share) | ($0.17) | ($0.30) |
Weighted average shares outstanding - diluted (in Shares) | 33,732,227 | 28,756,475 |
Net loss per share – diluted (in Dollars per share) | ($0.17) | ($0.30) |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements Of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
OPERATING ACTIVITIES | ' | ' |
Net loss for the period | ($5,557,000) | ($8,574,000) |
Adjustments to reconcile net loss to cash used in operating activities: | ' | ' |
Stock-based compensation | 813,000 | 280,000 |
Depreciation of fixed assets | 297,000 | 66,000 |
Amortization of patents and trademarks | 7,000 | 7,000 |
Amortization of intangible assets | 303,000 | 303,000 |
Changes in fair value of warrant obligations | -307,000 | 5,404,000 |
Loss on disposal of fixed assets | 2,000 | ' |
Net change in working capital and non-current asset balances related to operations | 860,000 | -250,000 |
Cash used in operating activities | -3,582,000 | -2,764,000 |
INVESTING ACTIVITIES | ' | ' |
Additions to fixed assets, net of proceeds | -880,000 | -433,000 |
Cash paid for business acquisition | -1,400,000 | ' |
Cash used in investing activities | -2,280,000 | -433,000 |
FINANCING ACTIVITIES | ' | ' |
Proceeds from warrants exercised | ' | 13,000 |
Proceeds from the exercise of options | 137,000 | 11,000 |
Cost of issuance of shares | -30,000 | ' |
Cash provided by financing activities | 107,000 | 24,000 |
Net decrease in cash and cash equivalents during the period | -5,755,000 | -3,173,000 |
Cash, beginning of period | 37,778,000 | 15,437,000 |
Cash, end of period | $32,023,000 | $12,264,000 |
Note_1_Basis_of_Presentation
Note 1 - Basis of Presentation | 3 Months Ended | |
Mar. 31, 2014 | ||
Disclosure Text Block [Abstract] | ' | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | ' | |
1 | BASIS OF PRESENTATION | |
Nature of Operations | ||
TearLab Corporation (formerly OccuLogix, Inc.) ("TearLab" or the "Company"), a Delaware corporation, is an ophthalmic device company that is commercializing a proprietary in vitro diagnostic tear testing platform, the TearLab® test for dry eye disease, or DED, which enables eye care practitioners to test for highly sensitive and specific biomarkers using nanoliters of tear film at the point-of-care. | ||
The accompanying condensed consolidated financial statements include the accounts of the Company and all of its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated on consolidation. | ||
The consolidated balance sheet at December 31, 2013 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. | ||
The accompanying condensed consolidated financial statements have been prepared on the going concern basis, which assumes that the Company will continue to operate as a going concern and which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. However, the Company has sustained substantial losses of $5.5 million for the three months ended March 31, 2014 and $29.0 million for the year ended December 31, 2013. The Company's working capital surplus at March 31, 2014 is $30.4 million. Based on the Company’s annual operating plan approved by the Board of Directors, management believes the Company’s existing cash and cash equivalents of $32.0 million at March 31, 2014 combined with anticipated cash flows provided by sales of its products in 2014 will be sufficient to fund its cash requirements through at least March 31, 2015. |
Note_2_Significant_Accounting_
Note 2 - Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2014 | |
Accounting Policies [Abstract] | ' |
Significant Accounting Policies [Text Block] | ' |
2. SIGNIFICANT ACCOUNTING POLICIES | |
These unaudited interim condensed consolidated financial statements have been prepared using significant accounting policies that are consistent with the policies used in preparing the Company’s audited consolidated financial statements for the year ended December 31, 2013. Management believes that all adjustments necessary for the fair presentation of results, consisting of normally recurring items, have been included in the unaudited condensed consolidated financial statements for the interim periods presented. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The principal areas of judgment relate to revenue and inventory reserves, impairment of long-lived and intangible assets, and the fair value of stock options and warrants. | |
Revenue recognition | |
Revenue is recognized when all four of the following criteria are met: (i) persuasive evidence that an arrangement exists; (ii) delivery of the products has occurred; (iii) the selling price is fixed or determinable; and (iv) collectability is reasonably assured. The Company’s timing of revenue recognition is impacted by factors such as passage of title, payments and customer acceptance. Amounts received in excess of revenue recognizable are deferred. | |
The Company enters into contracts where revenue is derived from multiple deliverables containing a mix of products, which generally includes either the sale or the right to use a TearLab Osmolarity System and sales of a fixed number of test cards. The Company has multiple revenue programs, in which it either sells readers and test cards as a combined unit with no future commitments on behalf of the client, provides the use of readers to large practices with an expectation of purchasing certain levels of test cards or allows the customer to use the readers with a commitment to fulfill a minimum purchase obligation, typically over a three year period. Revenue recognition for contracts with multiple deliverables is based on the individual units of accounting determined to exist in the contract. A delivered item is considered a separate unit of accounting when the delivered item has value to the customer on a stand-alone basis. Items are considered to have stand-alone value when they are sold separately by any vendor or when the customer could resell the item on a stand-alone basis When multiple elements have stand alone value, consideration is allocated at the inception of the contract to all deliverables based on their relative selling price. The relative selling price for each deliverable is determined using vendor specific objective evidence (VSOE) of selling price or third-party evidence of selling price if VSOE does not exist. If neither VSOE nor third-party evidence exists, the Company uses its best estimate of the selling price for the deliverable. When no stand-alone value to the elements exists, as is currently the case for the TearLab reader when sold together with related disposables, arrangement consideration is recognized on the combined unit of accounting. The Company recognizes revenue for each of the elements only when it determines that all applicable recognition criteria have been met. | |
The TearLab® Osmolarity System for Dry Eye Disease (“DED”) consists of hardware and related disposable test cards. In 2013 and 2014, the Company’s revenues have been derived primarily from programs where customers are given the use of a TearLab Osmolarity System in exchange for various programs to purchase test cards. The Company’s sales are currently direct to customers in the United States, Canada and the United Kingdom and to distributors in Europe and Asia. The Company records revenue when all of its obligations are completed which is generally upon shipment of the Company’s products. | |
Although the Company typically has a no return policy for its products, the Company has established a return reserve for product sales that contain an implicit right of return. The Company reserves for estimated returns or refunds by reducing revenues at the time of shipment based on historical experience. The reserve of $142,000 and $173,000 as of March 31, 2014 and December 31, 2013, respectively, has reduced revenue and is included in accounts receivable. | |
Warrant liabilities | |
The Company issued several rounds of warrants related to various debt and equity transactions which occurred in 2011. The Company accounts for its warrants issued in accordance with the US GAAP accounting guidance under Accounting Standards Codification (ASC) 815 applicable to derivative instruments, which requires every derivative instrument within its scope to be recorded on the balance sheet as either an asset or liability measured at its fair value, with changes in fair value recognized in earnings. Based on this guidance, the Company determined that the Company's warrants do not meet the criteria for classification as equity. Accordingly, the Company classified the warrants as current liabilities. The warrants are subject to re-measurement at each balance sheet date, with any change in fair value recognized as a component of other income (expense), net in the statements of operations and comprehensive loss. The Company estimated the fair value of these warrants at the respective balance sheet dates using the Black-Scholes option-pricing model, based on the market value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrant, risk-free interest rates and expected dividends on and expected volatility of the price of the underlying common stock. There is a degree of subjectivity involved when using option pricing models to estimate warrant liability and the assumptions used in the Black-Scholes option-pricing model are judgmental. | |
Acquisition | |
On March 14, 2014, the Company acquired the net assets of the OcuHub business unit from AOAExcel, Inc., the for-profit subsidiary of the American Optometric Association ("AOA") in an all cash transaction for $1.4 million and a working capital deficit of $201,000. Of the net purchase price, $1,564,000 was preliminarily allocated to intangible assets, $38,000 to property, plant and equipment, $30,000 to prepaid expense and $230,000 to accrued liabilities. The acquisition was accounted for as a business combination in accordance with the authoritative guidance. The preliminary allocation of initial purchase price is based on our preliminary valuation of the fair value of tangible and intangible assets acquired and liabilities assumed as of the Closing, and these estimates are subject to adjustments. The fair value assigned to intangible assets has been determined primarily by using a variation of the income approach known as the discounted cash flow method, which estimates the value based on the present value of the after-tax free cash flows attributable to owning the intangible asset. | |
Recent Accounting Pronouncements | |
In July 2013, the FASB issued authoritative guidance for the Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, which provides explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryfoward exists. The guidance is effective prospectively for fiscal years and interim periods within those years, beginning after December 15, 2013, with early adoption permitted. The Company adopted this guidance January 1, 2014 and the adoption of this authoritative guidance did not have an impact on the Company's condensed consolidated financial statements or related financial statement disclosures. |
Note_3_Balance_Sheet_Details
Note 3 - Balance Sheet Details | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Disclosure Text Block Supplement [Abstract] | ' | ||||||||
Supplemental Balance Sheet Disclosures [Text Block] | ' | ||||||||
3. BALANCE SHEET DETAILS | |||||||||
Accounts receivable | |||||||||
(in thousands) | March 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Trade receivables | $ | 3,471 | $ | 3, 939 | |||||
Allowance for doubtful accounts | (421 | ) | (415 | ) | |||||
$ | 3,050 | $ | 3,524 | ||||||
Inventory | |||||||||
Inventory is recorded at the lower of cost or market and consists of finished goods. Inventory is accounted for on a first-in, first-out basis. | |||||||||
(in thousands) | March 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Finished goods | $ | 1,189 | $ | 899 | |||||
Inventory reserves | (12 | ) | (14 | ) | |||||
$ | 1,177 | $ | 885 | ||||||
The Company evaluates inventory for estimated excess quantities and obsolescence, based on expected future sales levels and projections of future demand, and establishes inventory reserves for obsolete and excess inventories. In addition, the Company assesses the impact of changing technology and market conditions. The Company has entered into a long term purchase commitment to buy the test cards from MiniFAB (Note 11). The purchase commitment contains required minimum annual purchases and a total purchase commitment under the manufacturing agreement. As part of its analysis of excess or obsolete inventories, the Company considers future annual minimum purchases, estimated future usage and the expiry dating of the cards to determine if any inventory reserve needed. The usage of the minimum purchase commitments is predicated upon significant increases in revenues from TearLab products as compared to 2013 and prior years. | |||||||||
Prepaid expenses and other current assets | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Prepaid trade shows | $ | 179 | $ | 162 | |||||
Prepaid insurance | 175 | 227 | |||||||
Manufacturing deposits | 43 | 104 | |||||||
Subscriptions | 93 | 86 | |||||||
Other fees and services | 146 | 120 | |||||||
$ | 636 | $ | 699 | ||||||
Fixed assets | |||||||||
(in thousands) | March 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Furniture and office equipment | $ | 259 | $ | 221 | |||||
Leasehold improvements | 47 | 47 | |||||||
Computer equipment and software | 384 | 386 | |||||||
Capitalized TearLab equipment | 4,515 | 3,640 | |||||||
Medical equipment | 401 | 401 | |||||||
5,606 | 4,695 | ||||||||
Less accumulated depreciation | (1,563 | ) | (1,266 | ) | |||||
$ | 4,043 | $ | 3,429 | ||||||
Depreciation expense was $297,000 and $66,000 during the three months ended March 31, 2014 and 2013, respectively. | |||||||||
Patents and trademarks | |||||||||
(in thousands) | March 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Patents | $ | 236 | $ | 236 | |||||
Trademarks | 32 | 32 | |||||||
268 | 268 | ||||||||
Accumulated amortization | (167 | ) | (160 | ) | |||||
$ | 101 | $ | 108 | ||||||
Amortization expense of patents and trademarks was $7,000 and $7,000 during the three months ended March 31, 2014 and 2013, respectively. | |||||||||
Accrued liabilities | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Due to professionals | $ | 669 | $ | 616 | |||||
Due to employees and directors | 1,461 | 1,503 | |||||||
Sales and use tax liabilities | 447 | 527 | |||||||
Royalty liability | 253 | 281 | |||||||
Readers and test cards in transit | 239 | 368 | |||||||
Other | 419 | 549 | |||||||
$ | 3,488 | $ | 3,844 | ||||||
Note_4_Intangible_Assets
Note 4 - Intangible Assets | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Disclosure Text Block [Abstract] | ' | ||||||||||||||||
Intangible Assets Disclosure [Text Block] | ' | ||||||||||||||||
4. INTANGIBLE ASSETS | |||||||||||||||||
The Company's intangible assets consist of the value of TearLab® Technology acquired in the acquisition of TearLab Research and the value of the OcuHub platform technology acquired in the acquisition of the OcuHub business unit from AOAExcel. The TearLab Technology consists of a disposable lab card and card reader, supported by an array of patents and patent applications that are either held or in-licensed by the Company. The TearLab Technology is being amortized using the straight-line method over an estimated useful life of 10 years. The OcuHub platform technology consists of the right to access and commercialize the OcuHub cloud-based technology platform which facilitates an effective and efficient shared care model providing secure connectivity between doctors, patients, institutions and payers. The OcuHub platform technology is being amortized using the straight-line method over an estimated useful life of 5 years. Amortization expense for the three months ended March 31, 2014 and 2013 was $303,000 and $303,000 respectively. | |||||||||||||||||
Intangible assets subject to amortization consist of the following: | |||||||||||||||||
31-Mar-14 | 31-Dec-13 | ||||||||||||||||
Cost | Accumulated Amortization | Cost | Accumulated Amortization | ||||||||||||||
TearLab® technology | $ | 12,172 | $ | 8,981 | $ | 12,172 | $ | 8,678 | |||||||||
OcuHub platform technology | 1,564 | - | - | - | |||||||||||||
$ | 13,736 | $ | 8,981 | $ | 12,172 | $ | 8,678 | ||||||||||
Amortization of intangible assets | |||||||||||||||||
($ 000’s) | |||||||||||||||||
Remainder of 2014 | $ | 1,145 | |||||||||||||||
2015 | 1,527 | ||||||||||||||||
2016 | 1,379 | ||||||||||||||||
2017 | 313 | ||||||||||||||||
2018 | 313 | ||||||||||||||||
2019 | 78 | ||||||||||||||||
$ | 4,755 | ||||||||||||||||
Note_5_Related_Party_Transacti
Note 5 - Related Party Transactions | 3 Months Ended |
Mar. 31, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions Disclosure [Text Block] | ' |
5. RELATED PARTY TRANSACTIONS | |
On August 20, 2009, the Company entered into a distribution agreement with Science with Vision Inc., pursuant to which Science with Vision obtained exclusive Canadian distribution rights with respect to the Company’s products. The Company began selling products through the Canadian distributor in 2010. The Company’s chairman of the board of directors and chief executive officer has a material financial interest in Science with Vision. Sales to this distributor for the three months ended March 31 2013 was $0, and the outstanding accounts receivable balances due at December 31, 2013 was $0. On September 3, 2013, the Company and Science with Vision Inc. agreed to terminate the distribution agreement including exclusive distribution rights of TearLab products in Canada. In consideration of the termination agreement, the Company agreed to a one-time payment to Science with Vision Inc. of $200,000 Canadian dollars and a royalty on all sales in Canada of products for which Science with Vision Inc. had exclusive distribution rights. The one-time payment resulted in a charge of $190,000 USD during the quarter ended September 30, 2013 and is recorded within sales and marketing expense. Royalties are recorded as cost of goods sold in the income statement in the period in which revenue is recognized for the associated products sold. The Company’s chairman of the board of directors and chief executive officer has a material financial interest in Science with Vision. |
Note_6_Fair_Value_Measurements
Note 6 - Fair Value Measurements | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Fair Value Disclosures [Abstract] | ' | ||||
Fair Value Disclosures [Text Block] | ' | ||||
6. FAIR VALUE MEASUREMENTS | |||||
The Company measures certain assets and liabilities in accordance with authoritative guidance which requires fair value measurements be classified and disclosed in one of the following three categories: | |||||
● | Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. | ||||
● | Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. | ||||
● | Level 3: Unobservable inputs are used when little or no market data is available. | ||||
Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. The Company did not have any assets or liabilities in Level 1 and Level 2 and no transfers to or from Level 3 of the fair value measurement hierarchy during the three months ended March 31, 2014. | |||||
At March 31, 2014, the Company has a liability for warrants to purchase 219,604 shares of common stock at an exercise price of $1.86 per share valued at $1,124,000 (Note 7). The warrant liability is classified as a Level 3 fair value measurement. | |||||
The following table provides a reconciliation for the warrant liability measured at fair value using significant unobservable inputs (Level 3) for the three months ended March 31, 2014 (in thousands): | |||||
Fair Value Measurements | |||||
Using Significant | |||||
Unobservable Inputs (Level 3) | |||||
Balance of warrant liability at January 1, 2014 | $ | 4,047 | |||
Warrant exercises | (2,616 | ) | |||
Change in fair value of warrant liability included in other (income) / expense | (307 | ) | |||
Balance of warrant liability at March 31, 2014 | $ | 1,124 | |||
Note_7_Stockholders_Equity
Note 7 - Stockholders’ Equity | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||
Stockholders' Equity Note Disclosure [Text Block] | ' | ||||||||
7. STOCKHOLDERS’ EQUITY | |||||||||
(a ) Authorized share capital | |||||||||
The total number of authorized shares of common stock of the Company is 65,000,000. Each share of common stock has a par value of $0.001 per share. The total number of authorized shares of preferred stock of the Company is 10,000,000. Each share of preferred stock has a par value of $0.001 per share. | |||||||||
(b) Common stock | |||||||||
The Company has funded operations over the years through the issuance of equity in public and private offerings including on July 30, 2013, the Company closed an underwritten public offering of 2.99 million shares of its common stock at a price to the public of $13.50 per share. The Company received gross proceeds of $40,365,000, with associated costs of $3,055,000. | |||||||||
(c) Stock Incentive Plan | |||||||||
The Company has a stock incentive plan, the 2002 Stock Incentive Plan (the "Stock Incentive Plan"),. Under which the Stock Incentive Plan, up to 5,200,000 options are available for grant to employees, directors and consultants. Options granted under the Stock Incentive Plan may be either incentive stock options or non-statutory stock options. Under the terms of the Stock Incentive Plan, the exercise price per share for an incentive stock option shall not be less than the fair market value of a share of stock on the effective date of grant and the exercise price per share for non-statutory stock options shall not be less than 85% of the fair market value of a share of stock on the date of grant. No option granted to a holder of more than 10% of the Company's common stock shall have an exercise price per share less than 110% of the fair market value of a share of stock on the effective date of grant. | |||||||||
Options granted are typically service-based options. Generally, options expire 10 years after the date of grant. No incentive stock options granted to a 10% owner optionee shall be exercisable after the expiration of five years after the effective date of grant of such option, no option has been granted to a prospective employee, prospective consultant or prospective director prior to the date on which such person commences service, and with the exception of an option granted to an officer, director or consultant, no option shall become exercisable at a rate less than 20% per annum over a period of five years from the effective date of grant of such option unless otherwise approved by the Board. | |||||||||
The Company accounts for stock-based compensation under the authoritative guidance which requires that share-based payment transactions with employees be recognized in the financial statements based on their fair value and recognized as compensation expense over the requisite service period. The amount of expense recognized during the period is affected by subjective assumptions, including: estimates of the Company’s future volatility, the expected term for its stock options, option exercise behavior, the number of options expected to ultimately vest, and the timing of vesting for the Company’s share-based awards. | |||||||||
The following table sets forth the total stock-based compensation expense resulting from stock options included in the Company's condensed consolidated statements of operations and comprehensive loss (in thousands): | |||||||||
Three months ended | |||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
General and administrative | $ | 527 | $ | 32 | |||||
Clinical, regulatory and research and development | 41 | 2 | |||||||
Sales and marketing | 245 | 246 | |||||||
Stock-based compensation expense before income taxes | $ | 813 | $ | 280 | |||||
(d) Warrants | |||||||||
On June 13, 2011, the Company issued shares of its common stock as well as warrants (“Financing Warrants”) to purchase 109,375 shares of its common stock in consideration of conversion and retirement of the Company’s outstanding July and August 2009 debt obligations. The exercise price of the Financing Warrants is $1.60 per common share representing the price per share equal to the closing bid price per share of the Company’s common stock on the NASDAQ stock market on July 15, 2009. There were 74,063 of these warrants outstanding at March 31, 2014 and December 31, 2013. | |||||||||
On June 30, 2011, the Company closed a private placement financing in which 3,846,154 shares of common stock and warrants (“2011 Warrants”) to purchase 3,846,154 shares of common stock for gross proceeds of approximately $7,000,000 were issued. The investors purchased the shares and warrants for $1.82 per unit (each unit consisting of one share and one warrant to purchase shares of common stock). The exercise price of the warrants is $1.86 per share. The warrants are exercisable at any time from the date of issuance until June 30, 2016. The Company’s estimated the fair value of the warrants at the date of issuance using the Black Scholes option model with a 101% volatility, 5.0 years expected life and a risk-free interest rate of 1.76%. The fair value of $5,518,000 was classified as a current liability as the Company determined that these warrants do not meet the criteria for classification as equity. | |||||||||
The Company accounts for the 2011 Warrants in accordance with applicable guidance to derivatives. The Company determined that the 2011 Warrants do not meet the criteria for classification as equity. Accordingly, the Company classified the 2011 Warrants as current liabilities at March 31, 2014. | |||||||||
The Company initially allocated the total proceeds received, pursuant to the Securities Purchase Agreement, to the shares of common stock and warrants issued based on their relative fair values. This resulted in an allocation of $3,012,000 of proceeds to warrant liability. The Company remeasures the fair value of the warrants at the end of each reporting period, resulting in an adjustment to the warrant obligations, with any gain or loss recorded in earnings of the applicable reporting period. | |||||||||
The estimated fair value of the 2011 Warrants at March 31, 2014 was determined using the Black-Scholes option-pricing model with the following assumptions: | |||||||||
Volatility | 72 | % | |||||||
Expected life of Warrants (years) | 2.25 | ||||||||
Risk-free interest rate | 0.56 | % | |||||||
Dividend yield | 0 | % | |||||||
The fair value of the 2011 warrants is highly sensitive to the changes in the Company’s stock price and stock price volatility. | |||||||||
During the three months ended March 31, 2014 certain holders of 2011 Warrants exercised 304,945 warrants. The Company received $0 in proceeds from the cashless exercises during the three month period ended March 31, 2014. The Company is required to record the outstanding warrants at fair value at the time of exercise, before moving the fair value into additional paid-in capital, resulting in an adjustment to the warrant obligations, with any gain or loss recorded in earnings of the applicable reporting period. The Company, therefore, estimated the fair value of the exercised 2011 Warrants at their respective exercise dates to be $2,616,000 an increase of $263,000 from the previous value at December 31, 2013. This increase was recorded as an expense in other income (expense) in the condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2014 | |||||||||
The Company recorded the outstanding warrants at fair value at the end of each reporting period, resulting in an adjustment to the warrant obligations, with any gain or loss recorded in earnings of the applicable reporting period. The Company estimated the fair value of the remaining warrants as of March 31, 2014 to be $1,124,000, a decrease of $570,000 from the previous value at December 31, 2013. This amount was recorded as income to other income (expense) in the condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2014. | |||||||||
The following table provides activity for the Warrants outstanding through March 31, 2014 (in thousands, except weighted average exercise prices): | |||||||||
Number of warrants outstanding | Weighted average exercise price | ||||||||
Outstanding, December 31, 2013 | 599 | $ | 1.83 | ||||||
Exercised | (305 | ) | 1.86 | ||||||
Expired | — | — | |||||||
Outstanding, March 31, 2014 | 294 | $ | 1.79 | ||||||
Note_8_Comprehensive_Income_Lo
Note 8 - Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2014 | |
Disclosure Text Block [Abstract] | ' |
Comprehensive Income (Loss) Note [Text Block] | ' |
8. COMPREHENSIVE INCOME (LOSS) | |
For the three months ended March 31, 2014 and 2013, comprehensive loss was equal to net loss for each period. |
Note_9_Net_Income_Loss_Per_Sha
Note 9 - Net Income (Loss) Per Share | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Earnings Per Share [Text Block] | ' | ||||||||
9. NET INCOME (LOSS) PER SHARE | |||||||||
Basic income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares and vested restricted stock units outstanding. Diluted income (loss) per share is computed by dividing net income (loss), less any dilutive amounts recorded during the period for the change in fair value of warrant liabilities, by the weighted average number of common shares and vested restricted stock units outstanding and the weighted average number of dilutive common stock equivalents, from stock options, warrants, and non-vested restricted stock units. Common stock equivalents are only included in the diluted earnings per share calculation when their effect is dilutive. Diluted loss per share for the three months ended March 31, 2014 includes the dilutive impact of the gain recorded from the Company's June 30, 2011 warrants. | |||||||||
The following securities were not included in the calculation of diluted earnings per share because their effects were anti-dilutive (in thousands): | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
Stock options | 5,572 | 4,563 | |||||||
Warrants | 74 | 2,176 | |||||||
Total | 5,646 | 6,739 | |||||||
Note_10_Condensed_Consolidated
Note 10 - Condensed Consolidated Statements Of Cash Flows | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Supplemental Cash Flow Elements [Abstract] | ' | ||||||||
Cash Flow, Supplemental Disclosures [Text Block] | ' | ||||||||
10. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
The net change in working capital and non-current asset balances related to operations consists of the following: | |||||||||
Three months ended March 31, | |||||||||
($ 000’s) | |||||||||
2014 | 2013 | ||||||||
Accounts receivable, net | $ | 474 | $ | (877 | ) | ||||
Inventory | (292 | ) | (105 | ) | |||||
Prepaid expenses and other assets | 92 | 13 | |||||||
Other non-current assets | (7 | ) | - | ||||||
Accounts payable | 911 | 737 | |||||||
Accrued liabilities | (352 | ) | (18 | ) | |||||
Deferred rent/revenue | 34 | — | |||||||
$ | 860 | $ | (250 | ) | |||||
The following table lists those items that have been excluded from the condensed consolidated statements of cash flows as they relate to non-cash transactions and additional cash flow information: | |||||||||
Three months ended | |||||||||
March 31, | |||||||||
($ 000’s) | |||||||||
2014 | 2013 | ||||||||
Reclass of warrant liabilities to Stockholders Equity upon exercise of warrants | 2,616 | 26 | |||||||
Additions to fixed assets included in accounts payable and accrued liabilities | 4 | - | |||||||
Note_11_Commitments_and_Contin
Note 11 - Commitments and Contingencies | 3 Months Ended | |
Mar. 31, 2014 | ||
Commitments and Contingencies Disclosure [Abstract] | ' | |
Commitments and Contingencies Disclosure [Text Block] | ' | |
11 | COMMITMENTS AND CONTINGENCIES | |
On August 1, 2011, the Company, through its subsidiary, TearLab Research, Inc., entered into a manufacturing and development agreement, or the Manufacturing Agreement, with MiniFAB (Aust) Pty Ltd, or MiniFAB. Pursuant to the terms of the Manufacturing Agreement, MiniFAB will manufacture and supply test cards for the Company. The Manufacturing Agreement specifies minimum order quantities that will require the Company to purchase approximately $18.2 million (AUD$19.7 million) in test cards from MiniFAB for the years from 2014 through the end of 2015 of which $2.3 million (AUD $2.5 million) has been on order as of March 31,2014. The Company is also subject to annual minimum order commitments under the Manufacturing Agreement. The Manufacturing Agreement has a ten year initial term and may be terminated by either party if the other party is in breach or becomes insolvent. If terminated for any reason other than default by MiniFAB, the Company will be obligated to pay a termination fee based on the cost of products manufactured by MiniFAB, but not yet invoiced, repayment of capital invested by MiniFAB, less depreciation calculated in accordance with Australian accounting standards, and the expected profit to MiniFAB had the remaining minimum order quantities been purchased by the Company. | ||
The Company has evaluated its 2014 outstanding purchase commitment with MiniFab to determine the potential amount of liability the Company may be obligated to pay if it doesn’t meet its annual order commitment. Having reviewed the submitted orders for test cards to MiniFAB for the three months ended March 31, 2014, if the Company does not: 1) order the sufficient additional test cards to meet the 2014 minimum order commitment under the agreement or 2) seek to modify the existing minimum order quantity with MiniFab, the Company will be subject to liquidated damages estimated at $6.3 million (AUD $6.8 million). |
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
Accounting Policies [Abstract] | ' |
Revenue Recognition, Policy [Policy Text Block] | ' |
Revenue recognition | |
Revenue is recognized when all four of the following criteria are met: (i) persuasive evidence that an arrangement exists; (ii) delivery of the products has occurred; (iii) the selling price is fixed or determinable; and (iv) collectability is reasonably assured. The Company’s timing of revenue recognition is impacted by factors such as passage of title, payments and customer acceptance. Amounts received in excess of revenue recognizable are deferred. | |
The Company enters into contracts where revenue is derived from multiple deliverables containing a mix of products, which generally includes either the sale or the right to use a TearLab Osmolarity System and sales of a fixed number of test cards. The Company has multiple revenue programs, in which it either sells readers and test cards as a combined unit with no future commitments on behalf of the client, provides the use of readers to large practices with an expectation of purchasing certain levels of test cards or allows the customer to use the readers with a commitment to fulfill a minimum purchase obligation, typically over a three year period. Revenue recognition for contracts with multiple deliverables is based on the individual units of accounting determined to exist in the contract. A delivered item is considered a separate unit of accounting when the delivered item has value to the customer on a stand-alone basis. Items are considered to have stand-alone value when they are sold separately by any vendor or when the customer could resell the item on a stand-alone basis When multiple elements have stand alone value, consideration is allocated at the inception of the contract to all deliverables based on their relative selling price. The relative selling price for each deliverable is determined using vendor specific objective evidence (VSOE) of selling price or third-party evidence of selling price if VSOE does not exist. If neither VSOE nor third-party evidence exists, the Company uses its best estimate of the selling price for the deliverable. When no stand-alone value to the elements exists, as is currently the case for the TearLab reader when sold together with related disposables, arrangement consideration is recognized on the combined unit of accounting. The Company recognizes revenue for each of the elements only when it determines that all applicable recognition criteria have been met. | |
The TearLab® Osmolarity System for Dry Eye Disease (“DED”) consists of hardware and related disposable test cards. In 2013 and 2014, the Company’s revenues have been derived primarily from programs where customers are given the use of a TearLab Osmolarity System in exchange for various programs to purchase test cards. The Company’s sales are currently direct to customers in the United States, Canada and the United Kingdom and to distributors in Europe and Asia. The Company records revenue when all of its obligations are completed which is generally upon shipment of the Company’s products. | |
Although the Company typically has a no return policy for its products, the Company has established a return reserve for product sales that contain an implicit right of return. The Company reserves for estimated returns or refunds by reducing revenues at the time of shipment based on historical experience. The reserve of $142,000 and $173,000 as of March 31, 2014 and December 31, 2013, respectively, has reduced revenue and is included in accounts receivable. | |
Derivatives, Policy [Policy Text Block] | ' |
Warrant liabilities | |
The Company issued several rounds of warrants related to various debt and equity transactions which occurred in 2011. The Company accounts for its warrants issued in accordance with the US GAAP accounting guidance under Accounting Standards Codification (ASC) 815 applicable to derivative instruments, which requires every derivative instrument within its scope to be recorded on the balance sheet as either an asset or liability measured at its fair value, with changes in fair value recognized in earnings. Based on this guidance, the Company determined that the Company's warrants do not meet the criteria for classification as equity. Accordingly, the Company classified the warrants as current liabilities. The warrants are subject to re-measurement at each balance sheet date, with any change in fair value recognized as a component of other income (expense), net in the statements of operations and comprehensive loss. The Company estimated the fair value of these warrants at the respective balance sheet dates using the Black-Scholes option-pricing model, based on the market value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrant, risk-free interest rates and expected dividends on and expected volatility of the price of the underlying common stock. There is a degree of subjectivity involved when using option pricing models to estimate warrant liability and the assumptions used in the Black-Scholes option-pricing model are judgmental. | |
Business Combinations Policy [Policy Text Block] | ' |
Acquisition | |
On March 14, 2014, the Company acquired the net assets of the OcuHub business unit from AOAExcel, Inc., the for-profit subsidiary of the American Optometric Association ("AOA") in an all cash transaction for $1.4 million and a working capital deficit of $201,000. Of the net purchase price, $1,564,000 was preliminarily allocated to intangible assets, $38,000 to property, plant and equipment, $30,000 to prepaid expense and $230,000 to accrued liabilities. The acquisition was accounted for as a business combination in accordance with the authoritative guidance. The preliminary allocation of initial purchase price is based on our preliminary valuation of the fair value of tangible and intangible assets acquired and liabilities assumed as of the Closing, and these estimates are subject to adjustments. The fair value assigned to intangible assets has been determined primarily by using a variation of the income approach known as the discounted cash flow method, which estimates the value based on the present value of the after-tax free cash flows attributable to owning the intangible asset. | |
New Accounting Pronouncements, Policy [Policy Text Block] | ' |
Recent Accounting Pronouncements | |
In July 2013, the FASB issued authoritative guidance for the Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, which provides explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryfoward exists. The guidance is effective prospectively for fiscal years and interim periods within those years, beginning after December 15, 2013, with early adoption permitted. The Company adopted this guidance January 1, 2014 and the adoption of this authoritative guidance did not have an impact on the Company's condensed consolidated financial statements or related financial statement disclosures. |
Note_3_Balance_Sheet_Details_T
Note 3 - Balance Sheet Details (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Note 3 - Balance Sheet Details (Tables) [Line Items] | ' | ||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | ' | ||||||||
(in thousands) | March 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Trade receivables | $ | 3,471 | $ | 3, 939 | |||||
Allowance for doubtful accounts | (421 | ) | (415 | ) | |||||
$ | 3,050 | $ | 3,524 | ||||||
Schedule of Inventory, Current [Table Text Block] | ' | ||||||||
(in thousands) | March 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Finished goods | $ | 1,189 | $ | 899 | |||||
Inventory reserves | (12 | ) | (14 | ) | |||||
$ | 1,177 | $ | 885 | ||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | ' | ||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Prepaid trade shows | $ | 179 | $ | 162 | |||||
Prepaid insurance | 175 | 227 | |||||||
Manufacturing deposits | 43 | 104 | |||||||
Subscriptions | 93 | 86 | |||||||
Other fees and services | 146 | 120 | |||||||
$ | 636 | $ | 699 | ||||||
Property, Plant and Equipment [Table Text Block] | ' | ||||||||
(in thousands) | March 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Furniture and office equipment | $ | 259 | $ | 221 | |||||
Leasehold improvements | 47 | 47 | |||||||
Computer equipment and software | 384 | 386 | |||||||
Capitalized TearLab equipment | 4,515 | 3,640 | |||||||
Medical equipment | 401 | 401 | |||||||
5,606 | 4,695 | ||||||||
Less accumulated depreciation | (1,563 | ) | (1,266 | ) | |||||
$ | 4,043 | $ | 3,429 | ||||||
Schedule of Accrued Liabilities [Table Text Block] | ' | ||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Due to professionals | $ | 669 | $ | 616 | |||||
Due to employees and directors | 1,461 | 1,503 | |||||||
Sales and use tax liabilities | 447 | 527 | |||||||
Royalty liability | 253 | 281 | |||||||
Readers and test cards in transit | 239 | 368 | |||||||
Other | 419 | 549 | |||||||
$ | 3,488 | $ | 3,844 | ||||||
Patents and Trademarks [Member] | ' | ||||||||
Note 3 - Balance Sheet Details (Tables) [Line Items] | ' | ||||||||
Schedule of Finite-Lived Intangible Assets [Table Text Block] | ' | ||||||||
(in thousands) | March 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Patents | $ | 236 | $ | 236 | |||||
Trademarks | 32 | 32 | |||||||
268 | 268 | ||||||||
Accumulated amortization | (167 | ) | (160 | ) | |||||
$ | 101 | $ | 108 |
Note_4_Intangible_Assets_Table
Note 4 - Intangible Assets (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Disclosure Text Block [Abstract] | ' | ||||||||||||||||
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | ' | ||||||||||||||||
31-Mar-14 | 31-Dec-13 | ||||||||||||||||
Cost | Accumulated Amortization | Cost | Accumulated Amortization | ||||||||||||||
TearLab® technology | $ | 12,172 | $ | 8,981 | $ | 12,172 | $ | 8,678 | |||||||||
OcuHub platform technology | 1,564 | - | - | - | |||||||||||||
$ | 13,736 | $ | 8,981 | $ | 12,172 | $ | 8,678 | ||||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | ' | ||||||||||||||||
Amortization of intangible assets | |||||||||||||||||
($ 000’s) | |||||||||||||||||
Remainder of 2014 | $ | 1,145 | |||||||||||||||
2015 | 1,527 | ||||||||||||||||
2016 | 1,379 | ||||||||||||||||
2017 | 313 | ||||||||||||||||
2018 | 313 | ||||||||||||||||
2019 | 78 | ||||||||||||||||
$ | 4,755 |
Note_6_Fair_Value_Measurements1
Note 6 - Fair Value Measurements (Tables) | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Fair Value Disclosures [Abstract] | ' | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | ' | ||||
Fair Value Measurements | |||||
Using Significant | |||||
Unobservable Inputs (Level 3) | |||||
Balance of warrant liability at January 1, 2014 | $ | 4,047 | |||
Warrant exercises | (2,616 | ) | |||
Change in fair value of warrant liability included in other (income) / expense | (307 | ) | |||
Balance of warrant liability at March 31, 2014 | $ | 1,124 |
Note_7_Stockholders_Equity_Tab
Note 7 - Stockholders’ Equity (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Note 7 - Stockholders’ Equity (Tables) [Line Items] | ' | ||||||||
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block] | ' | ||||||||
Three months ended | |||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
General and administrative | $ | 527 | $ | 32 | |||||
Clinical, regulatory and research and development | 41 | 2 | |||||||
Sales and marketing | 245 | 246 | |||||||
Stock-based compensation expense before income taxes | $ | 813 | $ | 280 | |||||
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | ' | ||||||||
Number of warrants outstanding | Weighted average exercise price | ||||||||
Outstanding, December 31, 2013 | 599 | $ | 1.83 | ||||||
Exercised | (305 | ) | 1.86 | ||||||
Expired | — | — | |||||||
Outstanding, March 31, 2014 | 294 | $ | 1.79 | ||||||
2007 Warrants [Member] | ' | ||||||||
Note 7 - Stockholders’ Equity (Tables) [Line Items] | ' | ||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | ' | ||||||||
Volatility | 72 | % | |||||||
Expected life of Warrants (years) | 2.25 | ||||||||
Risk-free interest rate | 0.56 | % | |||||||
Dividend yield | 0 | % |
Note_9_Net_Income_Loss_Per_Sha1
Note 9 - Net Income (Loss) Per Share (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | ' | ||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
Stock options | 5,572 | 4,563 | |||||||
Warrants | 74 | 2,176 | |||||||
Total | 5,646 | 6,739 |
Note_10_Condensed_Consolidated1
Note 10 - Condensed Consolidated Statements Of Cash Flows (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Supplemental Cash Flow Elements [Abstract] | ' | ||||||||
Cash Flow, Operating Capital [Table Text Block] | ' | ||||||||
Three months ended March 31, | |||||||||
($ 000’s) | |||||||||
2014 | 2013 | ||||||||
Accounts receivable, net | $ | 474 | $ | (877 | ) | ||||
Inventory | (292 | ) | (105 | ) | |||||
Prepaid expenses and other assets | 92 | 13 | |||||||
Other non-current assets | (7 | ) | - | ||||||
Accounts payable | 911 | 737 | |||||||
Accrued liabilities | (352 | ) | (18 | ) | |||||
Deferred rent/revenue | 34 | — | |||||||
$ | 860 | $ | (250 | ) | |||||
Schedule of Other Significant Noncash Transactions [Table Text Block] | ' | ||||||||
Three months ended | |||||||||
March 31, | |||||||||
($ 000’s) | |||||||||
2014 | 2013 | ||||||||
Reclass of warrant liabilities to Stockholders Equity upon exercise of warrants | 2,616 | 26 | |||||||
Additions to fixed assets included in accounts payable and accrued liabilities | 4 | - |
Note_1_Basis_of_Presentation_D
Note 1 - Basis of Presentation (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Disclosure Text Block [Abstract] | ' | ' | ' | ' |
Net Income (Loss) Attributable to Parent | ($5,557,000) | ($8,574,000) | ($29,000,000) | ' |
Working Capital | 30,400,000 | ' | ' | ' |
Cash and Cash Equivalents, at Carrying Value | $32,023,000 | $12,264,000 | $37,778,000 | $15,437,000 |
Note_2_Significant_Accounting_1
Note 2 - Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended |
Mar. 31, 2014 | Dec. 31, 2013 | Mar. 14, 2014 | |
OcuHub Business Unit [Member] | |||
Note 2 - Significant Accounting Policies (Details) [Line Items] | ' | ' | ' |
Revenue Recognition, Sales Returns, Reserve for Sales Returns | $142,000 | $173,000 | ' |
Business Combination, Consideration Transferred | ' | ' | 1,400,000 |
Acquired Working Capital Deficit | ' | ' | 201,000 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | ' | ' | 1,564,000 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | ' | ' | 38,000 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets | ' | ' | 30,000 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other | ' | ' | $230,000 |
Note_3_Balance_Sheet_Details_D
Note 3 - Balance Sheet Details (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Note 3 - Balance Sheet Details (Details) [Line Items] | ' | ' |
Depreciation | $297,000 | $66,000 |
Amortization Of Patents And Trademarks | 7,000 | 7,000 |
Patents and Trademarks [Member] | ' | ' |
Note 3 - Balance Sheet Details (Details) [Line Items] | ' | ' |
Amortization Of Patents And Trademarks | $7,000 | $7,000 |
Note_3_Balance_Sheet_Details_D1
Note 3 - Balance Sheet Details (Details) - Accounts Receivable, Net (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounts Receivable, Net [Abstract] | ' | ' |
Trade receivables | $3,471 | $3,939 |
Allowance for doubtful accounts | -421 | -415 |
$3,050 | $3,524 |
Note_3_Balance_Sheet_Details_D2
Note 3 - Balance Sheet Details (Details) - Inventory (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory [Abstract] | ' | ' |
Finished goods | $1,189 | $899 |
Inventory reserves | -12 | -14 |
$1,177 | $885 |
Note_3_Balance_Sheet_Details_D3
Note 3 - Balance Sheet Details (Details) - Prepaid Expenses (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Prepaid Expenses [Abstract] | ' | ' |
Prepaid trade shows | $179 | $162 |
Prepaid insurance | 175 | 227 |
Manufacturing deposits | 43 | 104 |
Subscriptions | 93 | 86 |
Other fees and services | 146 | 120 |
$636 | $699 |
Note_3_Balance_Sheet_Details_D4
Note 3 - Balance Sheet Details (Details) - Fixed Assets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ' | ' |
Property plant and equipment | $5,606 | $4,695 |
Less accumulated depreciation | -1,563 | -1,266 |
4,043 | 3,429 | |
Furniture and Fixtures [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property plant and equipment | 259 | 221 |
Leasehold Improvements [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property plant and equipment | 47 | 47 |
Computer Equipment and Software [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property plant and equipment | 384 | 386 |
Capitalized TearLab Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property plant and equipment | 4,515 | 3,640 |
Medical Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property plant and equipment | $401 | $401 |
Note_3_Balance_Sheet_Details_D5
Note 3 - Balance Sheet Details (Details) - Patents and Trademarks (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-lived intangible assets | $268 | $268 |
Accumulated amortization | -8,981 | -8,678 |
101 | 108 | |
Patents [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-lived intangible assets | 236 | 236 |
Trademarks [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-lived intangible assets | 32 | 32 |
Patents and Trademarks [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Accumulated amortization | ($167) | ($160) |
Note_3_Balance_Sheet_Details_D6
Note 3 - Balance Sheet Details (Details) - Accrued Liabilities (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accrued Liabilities [Abstract] | ' | ' |
Due to professionals | $669 | $616 |
Due to employees and directors | 1,461 | 1,503 |
Sales and use tax liabilities | 447 | 527 |
Royalty liability | 253 | 281 |
Readers and test cards in transit | 239 | 368 |
Other | 419 | 549 |
$3,488 | $3,844 |
Note_4_Intangible_Assets_Detai
Note 4 - Intangible Assets (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Note 4 - Intangible Assets (Details) [Line Items] | ' | ' |
Finite-Lived Intangible Asset, Useful Life | '10 years | ' |
Amortization of Intangible Assets | $303,000 | $303,000 |
Ocuhub Platform Technology [Member] | ' | ' |
Note 4 - Intangible Assets (Details) [Line Items] | ' | ' |
Finite-Lived Intangible Asset, Useful Life | '5 years | ' |
Note_4_Intangible_Assets_Detai1
Note 4 - Intangible Assets (Details) - Intangible Assets Subject to Amortization (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | $13,736 | $12,172 |
Accumulated Amortization | 8,981 | 8,678 |
TearLab Technology [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | 12,172 | 12,172 |
Accumulated Amortization | 8,981 | 8,678 |
Ocuhub Platform Technology [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | $1,564 | ' |
Note_4_Intangible_Assets_Detai2
Note 4 - Intangible Assets (Details) - Intangible Asset Estimated Future Amortization Expense (USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
Intangible Asset Estimated Future Amortization Expense [Abstract] | ' |
Remainder of 2014 | $1,145 |
2015 | 1,527 |
2016 | 1,379 |
2017 | 313 |
2018 | 313 |
2019 | 78 |
$4,755 |
Note_5_Related_Party_Transacti1
Note 5 - Related Party Transactions (Details) (Science With Vision Inc. [Member]) | 0 Months Ended | 3 Months Ended | ||
Sep. 03, 2013 | Sep. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | |
Termination Of Distribution Agreement [Member] | Termination Of Distribution Agreement [Member] | USD ($) | USD ($) | |
CAD | USD ($) | |||
Note 5 - Related Party Transactions (Details) [Line Items] | ' | ' | ' | ' |
Revenue from Related Parties | ' | ' | $0 | ' |
Due from Related Parties, Current | ' | ' | ' | 0 |
Related Party Transaction, Expenses from Transactions with Related Party | 200,000 | $190,000 | ' | ' |
Note_6_Fair_Value_Measurements2
Note 6 - Fair Value Measurements (Details) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Note 6 - Fair Value Measurements (Details) [Line Items] | ' |
Warrants and Rights Outstanding | $1,124,000 |
Warrants 1 [Member] | ' |
Note 6 - Fair Value Measurements (Details) [Line Items] | ' |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 219,604 |
Investment Warrants, Exercise Price | $1.86 |
Warrants and Rights Outstanding | $1,124,000 |
Note_6_Fair_Value_Measurements3
Note 6 - Fair Value Measurements (Details) - Reconciliation for All Liabilities Measured at Fair Value Using Significant Unobservable Inputs (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Reconciliation for All Liabilities Measured at Fair Value Using Significant Unobservable Inputs [Abstract] | ' |
Balance of warrant liability at | $4,047 |
Warrant exercises | -2,616 |
Change in fair value of warrant liability included in other (income) / expense | -307 |
Balance of warrant liability at | $1,124 |
Note_7_Stockholders_Equity_Det
Note 7 - Stockholders’ Equity (Details) (USD $) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | ||||||||||||
Jul. 30, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Jun. 30, 2011 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Jun. 13, 2011 | Jul. 15, 2009 | Jun. 30, 2011 | Jun. 30, 2011 | Jun. 30, 2011 | Mar. 31, 2014 | Dec. 31, 2013 | Jun. 07, 2013 | Jun. 30, 2011 | |
Estimated Fair Value [Member] | Combined Common Stock and Warrant Unit [Member] | Exercised [Member] | Non-Statutory Stock Options [Member] | Options Granted to Holder of More Than 10% of Company's Common Stock [Member] | Employee Stock Option [Member] | Employee Stock Option [Member] | Financing Warrants [Member] | Financing Warrants [Member] | Financing Warrants [Member] | 2011 Warrants [Member] | 2011 Warrants [Member] | 2011 Warrants [Member] | 2011 Warrants [Member] | Warrant Liability [Member] | Employees Directors and Consultants Member] | Shares Per Unit [Member] | |||||
Exercised [Member] | 2011 Warrants [Member] | 2011 Warrants [Member] | Minimum [Member] | Minimum [Member] | Shares Per Unit [Member] | Private Placement Financing [Member] | |||||||||||||||
2011 Warrants [Member] | |||||||||||||||||||||
Note 7 - Stockholders’ Equity (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Shares Authorized | ' | 65,000,000 | 65,000,000 | 65,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Par or Stated Value Per Share (in Dollars per share) | ' | $0.00 | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock, Shares Authorized | ' | 10,000,000 | 10,000,000 | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock, Par or Stated Value Per Share (in Dollars per share) | ' | $0.00 | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, New Issues | 2,990,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,846,154 | ' | ' | ' | ' | 1 |
Sale of Stock, Price Per Share (in Dollars per share) | $13.50 | ' | ' | ' | ' | $1.82 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from Issuance of Common Stock (in Dollars) | $40,365,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $7,000,000 | ' | ' | ' | ' |
Payments of Stock Issuance Costs (in Dollars) | 3,055,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,200,000 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | ' | ' | ' | ' | ' | ' | ' | 85.00% | 110.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 109,375 | ' | 1 | 3,846,154 | ' | ' | ' | ' | ' |
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per Item) | ' | 1.79 | 1.79 | 1.83 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.6 | ' | ' | 1.86 | ' | ' | ' | ' |
Class of Warrant or Right, Outstanding | ' | 294,000 | 294,000 | 599,000 | ' | ' | ' | ' | ' | ' | ' | 74,063 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair Value Assumptions, Expected Volatility Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 101.00% | ' | ' | ' | ' |
Fair Value Assumptions, Expected Term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' |
Fair Value Assumptions, Risk Free Interest Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.76% | ' | ' | ' | ' |
Warrants and Rights Outstanding (in Dollars) | ' | 1,124,000 | 1,124,000 | ' | 2,616,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,518,000 | ' | ' | ' | ' |
Proceeds from Warrant Exercises (in Dollars) | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,012,000 | ' | ' |
Warrants Exercised | ' | 305,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 304,945 | ' | ' | ' |
Increase (Decrease) in Derivative Liabilities (in Dollars) | ' | ' | $570,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $263,000 | ' | ' | ' |
Note_7_Stockholders_Equity_Det1
Note 7 - Stockholders’ Equity (Details) - Total Stock-Based Compensation Expense Resulting from Stock Options (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Stock-based compensation expense | $813 | $280 |
General and Administrative Expense [Member] | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Stock-based compensation expense | 527 | 32 |
Research and Development Expense [Member] | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Stock-based compensation expense | 41 | 2 |
Selling and Marketing Expense [Member] | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Stock-based compensation expense | $245 | $246 |
Note_7_Stockholders_Equity_Det2
Note 7 - Stockholders’ Equity (Details) - Estimated Fair Value Assumptions | 3 Months Ended |
Mar. 31, 2014 | |
Estimated Fair Value Assumptions [Abstract] | ' |
Volatility | 72.00% |
Expected life of Warrants (years) | '2 years 3 months |
Risk-free interest rate | 0.56% |
Dividend yield | 0.00% |
Note_7_Stockholders_Equity_Det3
Note 7 - Stockholders’ Equity (Details) - Activity for the Warrants Outstanding (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 |
Activity for the Warrants Outstanding [Abstract] | ' | ' |
Number of warrants outstanding | 294 | 599 |
Weighted average exercise price (in Dollars per Item) | 1.79 | 1.83 |
Exercised | -305 | ' |
Exercised (in Dollars per share) | $1.86 | ' |
Note_9_Net_Income_Loss_Per_Sha2
Note 9 - Net Income (Loss) Per Share (Details) - Outstanding Common Stock Equivalents Not Included in the Calculation of Net Income or Loss Per Share | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Outstanding Common Stock Equivalents | 5,646 | 6,739 |
Employee Stock Option [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Outstanding Common Stock Equivalents | 5,572 | 4,563 |
Warrant [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Outstanding Common Stock Equivalents | 74 | 2,176 |
Note_10_Condensed_Consolidated2
Note 10 - Condensed Consolidated Statements Of Cash Flows (Details) - Net Change in Non-Cash Working Capital Balances Related to Operations (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Net Change in Non-Cash Working Capital Balances Related to Operations [Abstract] | ' | ' |
Accounts receivable, net | $474 | ($877) |
Inventory | -292 | -105 |
Prepaid expenses and other assets | 92 | 13 |
Other non-current assets | -7 | ' |
Accounts payable | 911 | 737 |
Accrued liabilities | -352 | -18 |
Deferred rent/revenue | 34 | ' |
$860 | ($250) |
Note_10_Condensed_Consolidated3
Note 10 - Condensed Consolidated Statements Of Cash Flows (Details) - Significant Non-Cash Transactions (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Significant Non-Cash Transactions [Abstract] | ' | ' |
Reclass of warrant liabilities to Stockholders Equity upon exercise of warrants | $2,616 | $26 |
Additions to fixed assets included in accounts payable and accrued liabilities | $4 | ' |
Note_11_Commitments_and_Contin1
Note 11 - Commitments and Contingencies (Details) | 3 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2014 | Aug. 01, 2011 | Aug. 01, 2011 |
USD ($) | AUD | USD ($) | AUD | |
Commitments and Contingencies Disclosure [Abstract] | ' | ' | ' | ' |
Purchase Commitment, Remaining Minimum Amount Committed | $2.30 | 2.5 | $18.20 | 19.7 |
Long-term Purchase Commitment, Time Period | 'ten | 'ten | ' | ' |
Loss Contingency, Estimate of Possible Loss | $6.30 | 6.8 | ' | ' |