Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 08, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | TearLab Corp | |
Entity Central Index Key | 1,299,139 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 5,735,732 | |
Trading Symbol | TEAR | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash | $ 13,032 | $ 15,471 |
Accounts receivable, net | 2,266 | 2,279 |
Inventory | 3,324 | 3,193 |
Prepaid expenses and other current assets | 1,216 | 1,226 |
Total current assets | 19,838 | 22,169 |
Fixed assets, net | 3,880 | 4,178 |
Intangible assets, net | 44 | 60 |
Other non-current assets | 220 | 220 |
Total assets | 23,982 | 26,627 |
Current liabilities | ||
Accounts payable | 2,745 | 1,858 |
Accrued liabilities | 4,082 | 3,958 |
Deferred rent | 70 | 83 |
Total current liabilities | 6,897 | 5,899 |
Long-term debt | 26,906 | 26,449 |
Total liabilities | 33,803 | 32,348 |
Stockholders’ deficit | ||
Preferred Stock, $0.001 par value, 10,000,000 authorized, 757 and 2,764 issued and outstanding at March 31, 2017 and December 31, 2016, respectively | ||
Common stock, $0.001 par value, 9,500,000 authorized, 5,634,756 and 5,360,198 issued and outstanding at March 31, 2017 and December 31, 2016, respectively | 6 | 5 |
Additional paid-in capital | 507,302 | 506,982 |
Accumulated deficit | (517,129) | (512,708) |
Total stockholders’ deficit | (9,821) | (5,721) |
Total liabilities and stockholders’ deficit | $ 23,982 | $ 26,627 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding | 757 | 2,764 |
Preferred stock, shares issued | 757 | 2,764 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 9,500,000 | 9,500,000 |
Common stock, shares issued | 5,634,756 | 5,360,198 |
Common stock, shares outstanding | 5,634,756 | 5,360,198 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Revenue | |||
Product sales | $ 5,987 | $ 5,502 | |
Reader equipment rentals | 714 | 1,265 | |
Total revenue | 6,701 | 6,767 | |
Cost of goods sold | |||
Cost of goods sold (excluding amortization of intangible assets) | 2,542 | 2,540 | |
Cost of goods sold - reader equipment depreciation | 466 | 554 | |
Gross profit | 3,693 | 3,673 | |
Operating expenses | |||
Sales and marketing | 3,332 | 4,636 | |
Clinical, regulatory and research & development | 1,564 | 1,138 | |
General and administrative | 2,187 | 3,931 | |
Amortization of intangible assets | 304 | ||
Total operating expenses | 7,083 | 10,009 | |
Loss from operations | (3,390) | (6,336) | |
Other income (expense) | |||
Interest income (expense) | (1,028) | (883) | |
Changes in fair value of warrant obligations | 27 | ||
Other, net | (3) | (62) | |
Total other income (expense) | (1,031) | (918) | |
Net loss and comprehensive loss | $ (4,421) | $ (7,254) | |
Weighted average shares outstanding - basic and fully diluted | 5,367,311 | 3,382,567 | |
Net loss per share | $ (0.82) | [1] | $ (2.14) |
Weighted average shares outstanding - diluted | 5,367,311 | [1] | 3,382,567 |
Net loss per share – diluted | $ (0.82) | [1] | $ (2.14) |
[1] | Restated for a 1-for-10 reverse stock split effected February 27, 2017. |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
OPERATING ACTIVITIES | ||
Net loss for the period | $ (4,421) | $ (7,254) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Stock-based compensation | 289 | 714 |
Depreciation of fixed assets | 521 | 620 |
Amortization of intangible assets | 15 | 315 |
Changes in fair value of warrant obligations | (27) | |
Deferred interest on long-term debt | 302 | 292 |
Amortization of debt discount | 154 | 43 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 13 | (5) |
Inventory | (131) | 338 |
Prepaid expenses and other assets | 10 | (475) |
Other non-current assets | (32) | |
Accounts payable | 889 | 721 |
Accrued liabilities | 123 | (1,385) |
Deferred rent/revenue | (12) | (3) |
Cash used in operating activities | (2,248) | (6,138) |
INVESTING ACTIVITIES | ||
Additions to fixed assets, net of proceeds | (223) | (500) |
Cash used in investing activities | (223) | (500) |
FINANCING ACTIVITIES | ||
Repurchase of fractional shares upon reverse stock split | (3) | |
Proceeds from the issuance of employee stock purchase plan shares | 35 | |
Cash provided by financing activities | 32 | |
Increase (decrease) in cash and cash equivalents during the period | (2,439) | (6,638) |
Cash, beginning of period | 15,471 | 13,838 |
Cash, end of period | 13,032 | 7,200 |
Supplemental cash flow information | ||
Cash paid for interest | $ 571 | $ 552 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 1. BASIS OF PRESENTATION Nature of Operations TearLab Corporation (formerly OccuLogix, Inc.) The accompanying condensed consolidated financial statements include the accounts of the Company and all of its wholly owned subsidiaries. On April 8, 2016, OcuHub Holdings, Inc., a wholly-owned subsidiary of the Company, completed the sale of 10,167.5 units of OcuHub LLC (“OcuHub”), reducing OcuHub Holdings, Inc.’s ownership in OcuHub to 10.5% on a fully-diluted basis. Prior to the sale, the accounts of OcuHub were included in the condensed consolidated financial statements. Intercompany accounts and transactions have been eliminated on consolidation. On February 23, 2017, the Company’s stockholders authorized the board of directors to implement a reverse stock split, along with a corresponding reduction in the number of shares authorized. On February 27, 2017, the Company effected a 1-for-10 reverse stock split of its common stock. All common stock share amounts and prices per share of common stock in these Consolidated Financial Statements have been retroactively adjusted to reflect the reverse stock split. Liquidity and Going Concern The accompanying 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. The Company has sustained substantial losses of $4,421 and $7,254 for the three months ended March 31, 2017 and 2016, respectively. Based on the Company’s current rate of cash consumption, the Company estimates it will need additional capital in the first quarter of 2018 and its prospects for obtaining that capital are uncertain. The Company may be able to raise either additional debt financing or additional equity financing. However, the Company can make no assurances that it will be able to raise the required additional capital, either through debt or equity financing, on acceptable terms or at all. Unless the Company succeeds in raising additional capital or significantly reduces the cash consumed in the operations of the Company, the Company anticipates that it will be unable to continue operations through the end of the first quarter of 2018 without violating an existing covenant on the Term Loan Agreement (defined below). As a result of the Company’s historical losses and financial condition, there is substantial doubt about the Company’s ability to continue as a going concern. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. SIGNIFICANT ACCOUNTING POLICIES The consolidated balance sheet at December 31, 2016 has been derived from the audited consolidated 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 (“U.S. GAAP”) for complete financial statements. 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, 2016. The audited financial statements for the year ended December 31, 2016, filed with the SEC with the Company’s annual report on Form 10-K on March 10, 2017 include a summary of significant accounting policies and should be read in conjunction with this Form 10-Q. 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. Use of Estimates 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. The principal areas of judgment relate to revenue and inventory reserves, allowance for doubtful accounts, 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 records revenue when all of its obligations are completed, which is generally upon shipment of the Company’s products. Amounts received in excess of revenue recognizable are deferred. The Company sells its proprietary TearLab® Osmolarity System and related test cards to external customers, who are primarily eye care professionals, for use in osmolarity testing procedures. Revenue is primarily derived from the sale of disposable test cards. Products are generally shipped from a distribution and warehousing facility located in San Diego, California. The Company’s sales are currently direct to customers in the United States and distributors in the rest of the world. The Company enters into contracts where revenue is derived either from agreements whereby the customer is provided the right to use the TearLab® Osmolarity System (reader equipment) at no separate cost to the customer in consideration for a minimum or implied purchase commitment of disposable test cards over the related contract term (referred to as either “Use Agreements”, “Masters Agreements” or “Flex Agreements”), or from agreements with sales of multiple deliverables, such as the reader equipment and disposable test cards (referred to as “Purchase Agreements”). Purchase commitments for Use Agreements and Flex Agreements are expressed in the agreement for a specified period of time (generally one to three years). The purchase commitment for Masters Agreements is implied for large physician practices with an expectation of purchasing certain levels of test cards. The Company recovers the cost of providing the reader equipment in the amount charged for disposable test cards. These agreements are treated as operating leases as collectability of the minimum lease payments is not reasonably predictable at the outset of the arrangement. Accordingly, revenue is recognized over the defined contract term as disposable test cards are shipped. Revenue under such agreements is allocated between the lease of the reader equipment and the sale of the disposables based upon each component’s relative fair value. When reader equipment is placed with a customer at no separate cost, the Company retains title to the equipment and it remains capitalized on the Company’s Consolidated Balance Sheet as equipment classified within fixed assets, net. The equipment is depreciated on a straight-line basis once shipped to a customer location over its estimated useful life and depreciation expense is included in cost of goods sold within the Consolidated Statements of Operations and Comprehensive Loss. Revenue recognition for Purchase Agreements 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. Considering that test cards are essential to the operation of a TearLab reader, there is no alternative vendor for the test cards and no indication that a secondary market for the TearLab readers is established, the deliverables under the contracts do not meet criteria for separation under the multiple-element arrangements guidance. Consideration is allocated at the inception of the contract to all deliverables based on their relative selling price as determined by the selling price of similar individual items on a stand-alone basis. The Company recognizes revenue for each of the elements only when it determines that all applicable recognition criteria have been met. Although the Company typically has a no return policy for its products, the Company has established a 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 $11 and $13 as of March 31, 2017 and December 31, 2016, respectively, has reduced revenue and is included in accounts receivable. Recent accounting pronouncements In August 2016, the Financial Accountings Standards Board (the “FASB”) issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (“ASU 2016-15”), to reduce diversity in practice of how certain transactions are classified in the statement of cash flows. ASU 2016-15 is effective for fiscal and interim periods beginning after December 15, 2017. The Company is currently evaluating the impact the adoption of the new standard will have on its financial statements. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (“ASU 2016-02”). ASU 2016-02 establishes a right-of-use model that requires a lessee to record an asset and liability on the balance sheet for all leases with terms longer than twelve months. ASU 2016-02 is effective for fiscal years and interim periods beginning after December 15, 2018. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the impact of the new standard on its financial statements. In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Inventory- Simplifying the Measurement of Inventory (“ASU 2015-11”). ASU 2015-11 became effective January 1, 2017. Under ASU 2015-11, the Company measures inventory at the lower of cost or net realizable value, where net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 was applied prospectively beginning January 1, 2017. The change to lower of cost or net realizable value had no impact on the Company’s financial statements. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. Early application is not permitted. On April 1, 2015, the FASB voted to propose a deferral of the effective date of the standard by one year which would result in the new standard being effective for the Company at the beginning of its first quarter of fiscal year 2018. The Company expects to finalize its assessment of the impact of the new standard on its financial statements in 2017 so it can implement ASU 2014-09, on a modified retrospective basis, in the first quarter of 2018. The Company does not expect the guidance to have a material impact on the amounts reported in the financial statements, but will impact certain disclosures regarding the Company’s recognition of revenue transactions. |
Balance Sheet Details
Balance Sheet Details | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Details | 3. BALANCE SHEET DETAILS Accounts receivable March 31, 2017 December 31, 2016 Trade receivables $ 2,810 $ 2,928 Allowance for doubtful accounts (544 ) (649 ) $ 2,266 $ 2,279 Inventory Inventory is recorded at the lower of cost and net realizable value and consists of finished goods. Inventory is accounted for on a first-in, first-out basis. March 31, 2017 December 31, 2016 Finished goods $ 3,341 $ 3,210 Inventory reserves (17 ) (17 ) $ 3,324 $ 3,193 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 8). 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 is needed. Prepaid expenses and other current assets March 31, 2017 December 31, 2016 Prepaid trade shows 253 $ 217 Prepaid insurance 278 326 Manufacturing deposits 282 282 Subscriptions 299 297 Other fees and services 96 66 Other current assets 8 38 $ 1,216 $ 1,226 Fixed assets March 31, 2017 December 31, 2016 Capitalized TearLab equipment $ 9,013 $ 9,095 Leasehold improvements 60 60 Computer equipment and software 920 932 Furniture and office equipment 272 271 Medical equipment 747 500 $ 11,012 $ 10,858 Less accumulated depreciation (7,132 ) (6,680 ) $ 3,880 $ 4,178 Depreciation expense was $521 and $620 during the three months ended March 31, 2017 and 2016, respectively. Accrued liabilities March 31, 2017 December 31, 2016 Due to professionals $ 118 $ 81 Due to employees and directors 2,175 2,200 Sales and use tax liabilities 225 247 Royalty liability 402 854 Warranty 123 124 Other 1,039 452 $ 4,082 $ 3,958 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 4. INTANGIBLE ASSETS The Company’s intangible assets consist of the value of TearLab® Technology acquired in the acquisition of TearLab Research, Inc., a wholly-owned subsidiary of the Company and a prescriber list. The TearLab Technology, which 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, was fully amortized in November 2016. Amortization expense for the three months ended March 31, 2017 and 2016 was $15 and $315, respectively. Intangible assets subject to amortization consist of the following: Remaining Useful Life Gross Value at Accumulated Net Book Value at (Years) March 31, 2017 Amortization March 31, 2017 TearLab® technology 0 $ 12,172 $ (12,172 ) $ - Patents and trademarks 1 271 (249 ) 22 Prescriber list 1 90 (68 ) 22 Total $ 12,533 $ (12,489 ) $ 44 Gross Value at Accumulated Net Book Value at December 31, 2016 Amortization December 2016 TearLab® technology $ 12,172 $ (12,172 ) $ - Patents and trademarks 271 (245 ) 26 Prescriber list 90 (56 ) 34 Total $ 12,533 $ (12,473 ) $ 60 The estimated amortization expense for the intangible assets for the remainder of 2017 and thereafter is as follows: Amortization of intangible assets Remainder of 2017 $ 44 $ 44 |
Term Loan
Term Loan | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Term Loan | 5. TERM LOAN On March 4, 2015, the Company executed a term loan agreement (the “Term Loan Agreement”) with CRG LP and certain of its affiliate funds (“CRG”) as lenders providing the Company with access of up to $35,000 under the arrangement. The Company received $15,000 in gross proceeds under the arrangement on March 4, 2015, and an additional $10,000 on October 6, 2015. The Term Loan Agreement matures on March 31, 2021 and bears interest at 13% per annum, with quarterly payments of interest only for the first four years. While interest on the loan is accrued at 13% per annum, the Company may elect to make interest-only payments at 8.5% per annum. The unpaid interest of 4.5% is added to the principal of the loan and is subject to additional accrued interest (“PIK interest”). The accrued interest can be deferred and paid together with the principal in the fifth and sixth years. As part of the amended Term Loan Agreement, and funding of the second tranche, CRG received 35,000 warrants dated as of October 6, 2015 to purchase common shares of the Company at a price of $50.00 per share (the “CRG Warrants”). The CRG Warrants have a five-year life. The CRG Warrants are classified as equity on the Consolidated Balance Sheets as of March 31, 2017 and 2016. The CRG Warrants were valued at their issuance date using the Black-Scholes Merton model. The related reduction of the long-term debt will be amortized over the life of the debt. The loan is collateralized by all assets of the Company. Additionally, the terms of the Term Loan Agreement contain various affirmative and negative covenants agreed to by the Company. Among them, the Company must attain minimum certain annual revenue and minimum cash threshold levels. On April 7, 2016, the Company amended the Term Loan Agreement to change the required minimum revenue levels. The amended minimum revenue is $31,000 for 2017, $36,000 for 2018, $45,000 for 2019 and $55,000 for 2020. The minimum cash balance required is $5,000 subject to certain conditions. The amendment also reduced the exercise price of the CRG Warrants from $50.00 per share to $15.00 per share and the Company issued CRG additional warrants to purchase 35,000 common shares of the Company’s stock at $15.00 per share, which expire 5 years after issuance. If the Company does not have annual revenue greater or equal to the annual revenue covenant in a calendar year, the Company will have the right within 90 days of the end of the respective calendar year to raise subordinated debt or equity (the “CRG Equity Cure”) equal to twice the difference between the annual revenue and the revenue covenant, with the total proceeds from this financing to be used to reduce the principal of the Term Loan Agreement. In the event of a default, the Company may be required to repay any outstanding amounts earlier than anticipated, and CRG may foreclose on their security interest in the Company’s assets. At March 31, 2017, the Company was in compliance with all of the covenants. As part of the amended Term Loan Agreement, on the earlier of the maturity date or the date the term loan is paid off in full, the Company will pay a facility fee equal to 6.5% of the aggregate principal amount of the loan, excluding accrued PIK interest (the “Facility Fee”). The Facility Fee is being accrued to interest expense using the effective interest method. The Company incurred financing and legal fees associated with the debt of $606, which were recorded as a direct discount to the debt and are being amortized using the effective interest method. The Company presents the debt issuance costs related to the recognized debt liability on the Consolidated Balance Sheet as a reduction of the liability. The Term Loan Agreement provided for prepayment fees of 5% of the outstanding balance of the loan if the loan was repaid prior to March 31, 2016. The prepayment fee is reduced 1% per year for each subsequent year until maturity. The following is a summary of the Term Loan Agreement as of March 31, 2017 and related maturities of outstanding principal: Prinicpal balance outstanding $ 25,000 PIK interest 2,179 Facility fee 428 less discount on term loan: deferred financing fees, net (404 ) detachable warrants, net (297 ) Total term loan $ 26,906 Principal due for each of the next 5 years and in the aggregate thereafter: 2017 - 2018 - 2019 10,192 2020 13,590 2021 3,825 Total principal due 27,607 Less: discount on term loan (701 ) Total term loan $ 26,906 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | 6. STOCKHOLDERS’ EQUITY (a) Authorized share capital On February 23, 2017, the Company’s stockholders authorized the board of directors to implement a reverse stock split, along with a corresponding reduction in the number of shares authorized. On February 27, 2017, the Company effected a 1-for-10 reverse stock split of its common stock. All common stock share amounts and prices per share of common stock have been retroactively adjusted to reflect the reverse stock split. On June 24, 2016, the Company’s stockholders approved an amendment to the Company’s certificate of incorporation to increase the total number of authorized shares of common stock of the Company to 9,500,000 from 6,500,000. 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 and preferred shares On May 9, 2016 the Company issued 1,861,090 shares of common stock, 3,291.8 shares of Series A Convertible Preferred Stock (“Preferred Stock”) and Series A warrants to purchase 1,150,000 shares of common stock (“Series A Warrants”) for gross proceeds of $17,250, less issuance costs of $1,793. Additionally, the Company granted the placement agent warrants to purchase 103,500 shares of common stock with an exercise price of $11.25 per share. The Preferred Stock is convertible, subject to certain limitations, into an aggregate of 438,910 shares of common stock, contains no voting rights, participates in any common stock dividends, and is treated as if converted upon any ordinary liquidation event. The common stock, the Series A Convertible Preferred Stock, and the Series A Warrants are all included in equity in the Company’s Consolidated Balance Sheets as of December 31, 2016. The net proceeds were allocated to common stock, Preferred Stock, and Series A Warrants based on their relative fair values, as follows: Common stock $ 9,632 Preferred stock 2,275 Series A warrants 3,550 Net proceeds $ 15,457 On August 2, 2016, 527.5 shares of Series A Convertible Preferred stock was converted into 70,333 shares of common stock. On March 31, 2017, 2,007 shares of Series A Convertible Preferred stock was converted into 267,600 shares of Common stock. On April 3, 2017, subsequent to the March 31, 2017 balance sheet date, the remaining 757 shares of Series A Convertible Preferred stock were converted into 100,976 shares of common stock. (c) Stock Incentive Plan The Company has a stock incentive plan, the 2002 Stock Incentive Plan (the “Stock Incentive Plan”), under which up to 720,000 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 incentive 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 awards and share-based payment transactions with employees based on the fair value of the award at the time of grant and recognizes compensation expense over the vesting 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 and the employee stock purchase plan included in the Company’s condensed consolidated statements of operations and comprehensive loss (in thousands): Three months ended March 31, 2017 2016 Sales and marketing $ 146 $ 136 Clinical, regulatory and research and development 43 83 General and administrative 100 495 Stock-based compensation expense before income taxes $ 289 $ 714 (d) Employee Stock Purchase Plan In July 2014, the Company’s Board of Directors adopted the 2014 Employee Stock Purchase Plan (the “ESPP”) which was approved by the Company’s stockholders in June 2014 at the Company’s Annual Meeting of Stockholders. A total of 67,150 shares of the Company’s common stock are reserved for issuance under the plan, which permits eligible employees to purchase common stock at a discount through payroll deductions. The price at which stock is purchased under the ESPP is equal to 90% of the fair market value of the common stock on the first or the last day of the offering period, whichever is lower. Generally, each offering under the ESPP will be for a period of six months as determined by the Company’s Board of Directors. Employees may invest up to 20% of their gross compensation through payroll deductions. In no event may an employee purchase more than $25 worth of stock in the plan during each calendar year or purchase more than 500 shares per offering period. During the three months ended March 31, 2017 and 2016, the Company recorded $3 of expense, respectively, under the ESPP. During the three months ended March 31, 2017 and 2016, the Company issued 7,512 and 6,774 shares of common stock under the ESPP, respectively. (e) Warrants On October 8, 2015, as part of the second amendment to the Term Loan Agreement and funding of the $10,000 tranche, CRG received warrants to purchase 35,000 common shares in the Company at a price of $50.00 per share (the “CRG Warrants”). The CRG Warrants are exercisable any time prior to October 8, 2020. The CRG Warrants are classified as equity on the Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016. The CRG Warrants were valued at $290 upon issuance using the Black-Scholes Merton model assuming volatility of 73%, an expected life of 5.0 years, a risk-free interest rate of 1.71%, and 0% dividend yield. No CRG Warrants were exercised during the three months ended March 31, 2017 or 2016. On April 8, 2016, the Company further amended its Term Loan Agreement. As part of the amendment, the exercise price of the CRG Warrants was changed to allow the holder to purchase 35,000 common shares in the Company at a price of $15.00 per share and CRG was issued an additional 35,000 warrants to purchase common shares at an exercise price of $15.00 (the “2016 CRG Warrants”). The modification to the terms of the CRG Warrants resulted in a change in fair value of $54 which was included as interest expense. The change in fair value was calculated using the Black-Scholes Merton model with both exercise prices, assuming volatility of 76%, an expected life of 4.5 years, a risk-free interest rate of 1.06%, and 0% dividend yield. The 2016 CRG Warrants were valued at $106 upon issuance using the Black-Scholes Merton model assuming volatility of 76%, an expected life of 5.0 years, a risk-free interest rate of 1.30% and 0% dividend yield. On May 9, 2016, the Company issued Series A Warrants to purchase 1,253,500 shares of common stock for $11.25 per common share attached to shares of common and Series A Convertible Preferred Stock issued on the same date. The Series A Warrants can be exercised after May 9, 2017 (the “Initial Exercise Date”) and expire 5 years after the Initial Exercise Date. Fair value of the Series A Warrants, for purposes of allocating the net proceeds of the equity offering, was determined using the Black-Scholes Merton model assuming volatility of 76%, an expected life of 6.0 years, a risk-free interest rate of 1.30%, and 0% dividend yield. (f) Exchange Right In August 2014, the Company sold membership units in OcuHub in exchange for 2% ownership of OcuHub LLC. In connection with the sale of the membership units, the new members received an exchange right allowing the units to be exchanged upon written notice and during a specified exchange window for shares in the Company’s common stock. On March 31, 2016, the members exchanged the ownership interest in OcuHub LLC for 385,800 shares of the Company’s common stock. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | 7. NET INCOME LOSS) PER SHARE Basic earnings per share (“EPS”) excludes dilutive securities and is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding for the year. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted and the resulting additional shares are dilutive because their inclusion decreases the amount of EPS. The following securities were not included in the calculation of diluted earnings per share because their effects were anti-dilutive: Three Months Ended (in thousands of shares) March 31, 2017 2016 Stock options 706 638 Warrants 1,324 64 ESPP shares 3 8 Convertible preferred shares 102 - Total 2,135 710 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. COMMITMENTS AND CONTINGENCIES Commitments The Company has commitments relating to operating leases recognized on a straight line basis over the term of the lease for rental of office space and equipment from unrelated parties, expiring at various times through June 30, 2018. The Company leases office facilities under an operating lease agreement. The initial term of the lease is five years and includes periodic rent increases and a renewal option. Effective October 1, 2006, the Company entered into a patent license and royalty agreement with theUniversity of California San Diego to obtain a second exclusive license to make, use, sell, offer for sale, and import existing TearLab technology. The Company is required to make royalty payments of $35 or 5.5% of gross sales per year, whichever is higher. Additionally, the Company is required to pay a royalty of 30% of any sublicense fees it receives prior to receiving FDA approval and 25% of any sub-license fees it receives after FDA approval. Future minimum royalty payments under this agreement as of March 31, 2017 are as follows: 2017 $ 35 2018 35 2019 35 2020 35 2021 35 Thereafter 210 Total $ 385 On March 12, 2003, the Company entered into a patent license and royalty agreement with the University of California San Diego to obtain an exclusive license to make, use, sell, offer for sale, and import TearLab technology in development. Starting in 2009, the Company was required to make minimum royalty payments of $35 or 5.5% of gross sales per year, whichever is higher. However, if this new technology is combined with existing technology, the maximum royalty payable on the sale of the combined products would be 5.5% of gross sales per year. As the new technology is currently in development, there is no revenue and the minimum royalty payment of $35 is applicable. Future minimum royalty payments under this agreement as of March 31, 2017 are as follows: 2017 $ 35 2018 35 2019 35 2020 35 2021 35 Thereafter 210 Total $ 385 On March 7, 2016, the Company, through its subsidiary, TearLab Research, Inc., entered into a supply and development agreement (“Supply Agreement”) with MiniFAB (Aust) Pty Ltd (“MiniFAB”). The agreement is an exclusive supply agreement through June 2021, for the purchase and delivery of individual osmolarity test cards with the freight costs borne by MiniFab. The Company has the benefit of a lower purchase price that will remain in place until the earlier of, the Company reaches an annual volume of 4.5 million test cards or March 31, 2018. Certain savings from freight costs will remain in place throughout the agreement. The Supply Agreement requires, in any given 6 calendar months, the Company must place aggregate purchase orders equal to at least 50% of the orders forecasted for that 6 month period at its onset. The Supply Agreement can be extended by either party for a term of five years with the option for the Company to buyout the exclusive supply provision during any extended term. This Supply Agreement replaces the July 2011 agreement between MiniFAB and the Company. In April 2014, the Company guaranteed a marketing agreement entered into by OcuHub. The underlying marketing agreement calls for an annual marketing fee of $100, with payments due quarterly through March 31, 2019. If OcuHub fails to perform its obligations under the terms of the marketing agreement, the Company would be required to make the $25 quarterly payments, through the March 31, 2019 initial term of the agreement. The Company has not accrued for any liability under the guarantee. In the normal course of business, the Company enters into purchase obligations for future goods and services needed for the operations of the business. Such commitments are not in excess of expected requirements and are not reasonably likely to result in performance penalties or payments that would have a material adverse effect on the Company’s liquidity. Contingencies During the ordinary course of business activities, the Company may be contingently liable for litigation and a party to claims. Currently the Company is not party to any litigation. |
Significant Accounting Polici14
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. The principal areas of judgment relate to revenue and inventory reserves, allowance for doubtful accounts, impairment of long-lived and intangible assets, and the fair value of stock options and warrants. |
Revenue Recognition | 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 records revenue when all of its obligations are completed, which is generally upon shipment of the Company’s products. Amounts received in excess of revenue recognizable are deferred. The Company sells its proprietary TearLab® Osmolarity System and related test cards to external customers, who are primarily eye care professionals, for use in osmolarity testing procedures. Revenue is primarily derived from the sale of disposable test cards. Products are generally shipped from a distribution and warehousing facility located in San Diego, California. The Company’s sales are currently direct to customers in the United States and distributors in the rest of the world. The Company enters into contracts where revenue is derived either from agreements whereby the customer is provided the right to use the TearLab® Osmolarity System (reader equipment) at no separate cost to the customer in consideration for a minimum or implied purchase commitment of disposable test cards over the related contract term (referred to as either “Use Agreements”, “Masters Agreements” or “Flex Agreements”), or from agreements with sales of multiple deliverables, such as the reader equipment and disposable test cards (referred to as “Purchase Agreements”). Purchase commitments for Use Agreements and Flex Agreements are expressed in the agreement for a specified period of time (generally one to three years). The purchase commitment for Masters Agreements is implied for large physician practices with an expectation of purchasing certain levels of test cards. The Company recovers the cost of providing the reader equipment in the amount charged for disposable test cards. These agreements are treated as operating leases as collectability of the minimum lease payments is not reasonably predictable at the outset of the arrangement. Accordingly, revenue is recognized over the defined contract term as disposable test cards are shipped. Revenue under such agreements is allocated between the lease of the reader equipment and the sale of the disposables based upon each component’s relative fair value. When reader equipment is placed with a customer at no separate cost, the Company retains title to the equipment and it remains capitalized on the Company’s Consolidated Balance Sheet as equipment classified within fixed assets, net. The equipment is depreciated on a straight-line basis once shipped to a customer location over its estimated useful life and depreciation expense is included in cost of goods sold within the Consolidated Statements of Operations and Comprehensive Loss. Revenue recognition for Purchase Agreements 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. Considering that test cards are essential to the operation of a TearLab reader, there is no alternative vendor for the test cards and no indication that a secondary market for the TearLab readers is established, the deliverables under the contracts do not meet criteria for separation under the multiple-element arrangements guidance. Consideration is allocated at the inception of the contract to all deliverables based on their relative selling price as determined by the selling price of similar individual items on a stand-alone basis. The Company recognizes revenue for each of the elements only when it determines that all applicable recognition criteria have been met. Although the Company typically has a no return policy for its products, the Company has established a 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 $11 and $13 as of March 31, 2017 and December 31, 2016, respectively, has reduced revenue and is included in accounts receivable. |
Recent Accounting Pronouncements | Recent accounting pronouncements In August 2016, the Financial Accountings Standards Board (the “FASB”) issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (“ASU 2016-15”), to reduce diversity in practice of how certain transactions are classified in the statement of cash flows. ASU 2016-15 is effective for fiscal and interim periods beginning after December 15, 2017. The Company is currently evaluating the impact the adoption of the new standard will have on its financial statements. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (“ASU 2016-02”). ASU 2016-02 establishes a right-of-use model that requires a lessee to record an asset and liability on the balance sheet for all leases with terms longer than twelve months. ASU 2016-02 is effective for fiscal years and interim periods beginning after December 15, 2018. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the impact of the new standard on its financial statements. In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Inventory- Simplifying the Measurement of Inventory (“ASU 2015-11”). ASU 2015-11 became effective January 1, 2017. Under ASU 2015-11, the Company measures inventory at the lower of cost or net realizable value, where net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 was applied prospectively beginning January 1, 2017. The change to lower of cost or net realizable value had no impact on the Company’s financial statements. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. Early application is not permitted. On April 1, 2015, the FASB voted to propose a deferral of the effective date of the standard by one year which would result in the new standard being effective for the Company at the beginning of its first quarter of fiscal year 2018. The Company expects to finalize its assessment of the impact of the new standard on its financial statements in 2017 so it can implement ASU 2014-09, on a modified retrospective basis, in the first quarter of 2018. The Company does not expect the guidance to have a material impact on the amounts reported in the financial statements, but will impact certain disclosures regarding the Company’s recognition of revenue transactions. |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accounts Receivable | March 31, 2017 December 31, 2016 Trade receivables $ 2,810 $ 2,928 Allowance for doubtful accounts (544 ) (649 ) $ 2,266 $ 2,279 |
Schedule of Inventory | March 31, 2017 December 31, 2016 Finished goods $ 3,341 $ 3,210 Inventory reserves (17 ) (17 ) $ 3,324 $ 3,193 |
Summary of Prepaid Expenses and Other Current Assets | March 31, 2017 December 31, 2016 Prepaid trade shows 253 $ 217 Prepaid insurance 278 326 Manufacturing deposits 282 282 Subscriptions 299 297 Other fees and services 96 66 Other current assets 8 38 $ 1,216 $ 1,226 |
Schedule of Fixed Assets | March 31, 2017 December 31, 2016 Capitalized TearLab equipment $ 9,013 $ 9,095 Leasehold improvements 60 60 Computer equipment and software 920 932 Furniture and office equipment 272 271 Medical equipment 747 500 $ 11,012 $ 10,858 Less accumulated depreciation (7,132 ) (6,680 ) $ 3,880 $ 4,178 |
Schedule of Accrued Liabilities | March 31, 2017 December 31, 2016 Due to professionals $ 118 $ 81 Due to employees and directors 2,175 2,200 Sales and use tax liabilities 225 247 Royalty liability 402 854 Warranty 123 124 Other 1,039 452 $ 4,082 $ 3,958 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Amortization of Intangible Assets | Intangible assets subject to amortization consist of the following: Remaining Useful Life Gross Value at Accumulated Net Book Value at (Years) March 31, 2017 Amortization March 31, 2017 TearLab® technology 0 $ 12,172 $ (12,172 ) $ - Patents and trademarks 1 271 (249 ) 22 Prescriber list 1 90 (68 ) 22 Total $ 12,533 $ (12,489 ) $ 44 Gross Value at Accumulated Net Book Value at December 31, 2016 Amortization December 2016 TearLab® technology $ 12,172 $ (12,172 ) $ - Patents and trademarks 271 (245 ) 26 Prescriber list 90 (56 ) 34 Total $ 12,533 $ (12,473 ) $ 60 |
Schedule of Estimated Amortization Expense of Intangible Assets | The estimated amortization expense for the intangible assets for the remainder of 2017 and thereafter is as follows: Amortization of intangible assets Remainder of 2017 $ 44 $ 44 |
Term Loan (Tables)
Term Loan (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Term Loan | The following is a summary of the Term Loan Agreement as of March 31, 2017 and related maturities of outstanding principal: Prinicpal balance outstanding $ 25,000 PIK interest 2,179 Facility fee 428 less discount on term loan: deferred financing fees, net (404 ) detachable warrants, net (297 ) Total term loan $ 26,906 |
Schedule of Maturities of Outstanding Principal of Term Loan | Principal due for each of the next 5 years and in the aggregate thereafter: 2017 - 2018 - 2019 10,192 2020 13,590 2021 3,825 Total principal due 27,607 Less: discount on term loan (701 ) Total term loan $ 26,906 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Schedule of Common and Preferred Shares | The net proceeds were allocated to common stock, Preferred Stock, and Series A Warrants based on their relative fair values, as follows: Common stock $ 9,632 Preferred stock 2,275 Series A warrants 3,550 Net proceeds $ 15,457 |
Schedule of Stock-Based Compensation Expense | The following table sets forth the total stock-based compensation expense resulting from stock options and the employee stock purchase plan included in the Company’s condensed consolidated statements of operations and comprehensive loss (in thousands): Three months ended March 31, 2017 2016 Sales and marketing $ 146 $ 136 Clinical, regulatory and research and development 43 83 General and administrative 100 495 Stock-based compensation expense before income taxes $ 289 $ 714 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following securities were not included in the calculation of diluted earnings per share because their effects were anti-dilutive: Three Months Ended (in thousands of shares) March 31, 2017 2016 Stock options 706 638 Warrants 1,324 64 ESPP shares 3 8 Convertible preferred shares 102 - Total 2,135 710 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
2006 Agreement [Member] | |
Schedule of Future Minimum Payments | Future minimum royalty payments under this agreement as of March 31, 2017 are as follows: 2017 $ 35 2018 35 2019 35 2020 35 2021 35 Thereafter 210 Total $ 385 |
2003 Agreement [Member] | |
Schedule of Future Minimum Payments | Future minimum royalty payments under this agreement as of March 31, 2017 are as follows: 2017 $ 35 2018 35 2019 35 2020 35 2021 35 Thereafter 210 Total $ 385 |
Basis of Presentation (Details
Basis of Presentation (Details Narrative) - USD ($) $ in Thousands | Feb. 27, 2017 | Apr. 08, 2016 | Mar. 31, 2017 | Mar. 31, 2016 |
Reserve stock split | 1-for-10 reverse stock split | |||
Net income (loss) | $ 4,421 | $ 7,254 | ||
OcuHub Business Inc [Member] | ||||
Owned subsidiary, in units | 10,167.5 | |||
Ownership percentage | 10.50% |
Significant Accounting Polici22
Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||
Reserve of product sales | $ 11 | $ 13 |
Balance Sheet Details (Details
Balance Sheet Details (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Depreciation expense | $ 521 | $ 620 |
Balance Sheet Details - Schedul
Balance Sheet Details - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Trade receivables | $ 2,810 | $ 2,928 |
Allowance for doubtful accounts | (544) | (649) |
Accounts receivable net | $ 2,266 | $ 2,279 |
Balance Sheet Details - Sched25
Balance Sheet Details - Schedule of Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finished goods | $ 3,341 | $ 3,210 |
Inventory reserves | (17) | (17) |
Inventory net | $ 3,324 | $ 3,193 |
Balance Sheet Details - Summary
Balance Sheet Details - Summary of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid trade shows | $ 253 | $ 217 |
Prepaid insurance | 278 | 326 |
Manufacturing deposits | 282 | 282 |
Subscriptions | 299 | 297 |
Other fees and services | 96 | 66 |
Other current assets | 8 | 38 |
Prepaid expense and other current assets | $ 1,216 | $ 1,226 |
Balance Sheet Details - Sched27
Balance Sheet Details - Schedule of Fixed Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Property plant and equipment, gross | $ 11,012 | $ 10,858 |
Less accumulated depreciation | (7,132) | (6,680) |
Property plant and equipment net | 3,880 | 4,178 |
Capitalized TearLab Equipment [Member] | ||
Property plant and equipment, gross | 9,013 | 9,095 |
Leasehold Improvements [Member] | ||
Property plant and equipment, gross | 60 | 60 |
Computer Equipment and Software [Member] | ||
Property plant and equipment, gross | 920 | 932 |
Furniture and Office Equipment [Member] | ||
Property plant and equipment, gross | 272 | 271 |
Medical Equipment [Member] | ||
Property plant and equipment, gross | $ 747 | $ 500 |
Balance Sheet Details - Sched28
Balance Sheet Details - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Due to professionals | $ 118 | $ 81 |
Due to employees and directors | 2,175 | 2,200 |
Sales and use tax liabilities | 225 | 247 |
Royalty liability | 402 | 854 |
Warranty | 123 | 124 |
Other | 1,039 | 452 |
Accrued liabilities current | $ 4,082 | $ 3,958 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 15 | $ 315 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Gross Value | $ 12,533 | $ 12,533 |
Accumulated Amortization | (12,489) | (12,473) |
Net Book Value | $ 44 | 60 |
TearLab Technology [Member] | ||
Remaining Useful Life (Years) | 0 years | |
Gross Value | $ 12,172 | 12,172 |
Accumulated Amortization | (12,172) | (12,172) |
Net Book Value | ||
Patents and Trademarks [Member] | ||
Remaining Useful Life (Years) | 1 year | |
Gross Value | $ 271 | 271 |
Accumulated Amortization | (249) | (245) |
Net Book Value | $ 22 | 26 |
Prescriber List [Member] | ||
Remaining Useful Life (Years) | 1 year | |
Gross Value | $ 90 | 90 |
Accumulated Amortization | (68) | (56) |
Net Book Value | $ 22 | $ 34 |
Intangible Assets - Schedule 31
Intangible Assets - Schedule of Estimated Amortization Expense for Intangible Assets (Details) - Indefinite-lived Intangible Assets [Member] $ in Thousands | Mar. 31, 2017USD ($) |
Remainder of 2017 | $ 44 |
Total | $ 44 |
Term Loan (Details Narrative)
Term Loan (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Oct. 06, 2015 | Mar. 04, 2015 | Mar. 31, 2017 | Dec. 31, 2016 | Apr. 08, 2016 |
Long-term debt | $ 26,906 | $ 26,449 | |||
Term Loan Agreement [Member] | CRG LP Additional Warrants [Member] | |||||
Warrants to purchase common shares | 35,000 | 35,000 | |||
Warrants exercise price | $ 15 | $ 15 | |||
Term Loan Agreement [Member] | CRG LP Additional Warrants [Member] | Minimum [Member] | |||||
Warrants exercise price | 50 | ||||
Term Loan Agreement [Member] | CRG LP Additional Warrants [Member] | Maximum [Member] | |||||
Warrants exercise price | $ 15 | ||||
Black-Scholes Merton Model [Member] | Term Loan Agreement [Member] | CRG LP Additional Warrants [Member] | |||||
Warrants term | 5 years | ||||
Term Loan Agreement [Member] | |||||
Minimum cash balance | $ 5,000 | ||||
Term Loan Agreement [Member] | CRG LP [Member] | |||||
Long-term debt | $ 35,000 | ||||
Proceeds from issuance of long-term debt | $ 15,000 | ||||
Debt instrument date | Mar. 31, 2021 | ||||
Debt instrument interest rate percentage | 13.00% | ||||
Warrants to purchase common shares | 35,000 | ||||
Warrants exercise price | $ 50 | ||||
Warrants term | 5 years | ||||
Financing and legal fees to long-term debt | $ 606 | ||||
Facility fee percentage on principal | 6.50% | ||||
Percentage of prepayment fee | 5.00% | ||||
Percentage of reduction in annual prepayment fee | 1.00% | ||||
Term Loan Agreement [Member] | CRG LP [Member] | 2017 [Member] | |||||
Term loan minimum annual revenue threshold | $ 31,000 | ||||
Term Loan Agreement [Member] | CRG LP [Member] | 2018 [Member] | |||||
Term loan minimum annual revenue threshold | 36,000 | ||||
Term Loan Agreement [Member] | CRG LP [Member] | 2019 [Member] | |||||
Term loan minimum annual revenue threshold | 45,000 | ||||
Term Loan Agreement [Member] | CRG LP [Member] | 2020 [Member] | |||||
Term loan minimum annual revenue threshold | $ 55,000 | ||||
Term Loan Agreement [Member] | CRG LP [Member] | Interest-Only Payment [Member] | |||||
Debt instrument interest rate percentage | 8.50% | ||||
Term Loan Agreement [Member] | CRG LP [Member] | Unpaid Interest With Principal [Member] | |||||
Debt instrument interest rate percentage | 4.50% | ||||
Term Loan Agreement [Member] | CRG LP [Member] | Second Tranche [Member] | |||||
Proceeds from issuance of long-term debt | $ 10,000 |
Term Loan - Schedule of Term Lo
Term Loan - Schedule of Term Loan (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Principle balance outstanding | $ 25,000 | |
PIK interest | 2,179 | |
Facility fee | 428 | |
Deferred financing fees, net | (404) | |
Fair value of detachable warrants, net | (297) | |
Total term loan | $ 26,906 | $ 26,449 |
Term Loan - Schedule of Maturit
Term Loan - Schedule of Maturities of Outstanding Principal of Term Loan (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
2,017 | ||
2,018 | ||
2,019 | 10,192 | |
2,020 | 13,590 | |
2,021 | 3,825 | |
Total principal due | 27,607 | |
Less: discount on term loan | (701) | |
Total term loan | $ 26,906 | $ 26,449 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Feb. 27, 2017 | Aug. 02, 2016 | May 09, 2016 | Apr. 08, 2016 | Oct. 08, 2015 | Mar. 31, 2016 | Aug. 31, 2014 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Jun. 24, 2016 |
Reserve stock split | 1-for-10 reverse stock split | ||||||||||
Common stock shares authorized | 9,500,000 | 9,500,000 | 9,500,000 | ||||||||
Common stock shares authorized previously | 6,500,000 | ||||||||||
Common stock par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Preferred stock shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||
Preferred stock par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Stock issued during period, shares new issue | 1,861,090 | ||||||||||
Preferred stock, issued | 757 | 2,764 | |||||||||
Proceeds from issuance or sale of equity | $ 15,457 | ||||||||||
Allocated share-based compensation expense | $ 289 | $ 714 | |||||||||
Term Loan Agreement [Member] | Tranche One [Member] | |||||||||||
Proceeds from issuance of long-term debt | $ 10,000 | ||||||||||
OcuHub Business Inc [Member] | |||||||||||
Stock issued during period, shares new issue | 385,800 | ||||||||||
Membership unit percentage | 2.00% | ||||||||||
Stock Incentive Plan [Member] | |||||||||||
Share-based compensation expiration period | 10 years | ||||||||||
Percentage of ownership exercisable options expire | 10.00% | ||||||||||
Weighted-average fair value of stock options granted | $ 4.30 | ||||||||||
Expected weighted-average period | 6 years | ||||||||||
Stock Incentive Plan [Member] | Maximum [Member] | |||||||||||
Share-based compensation common stock purchase price percentage | 110.00% | ||||||||||
Stock Incentive Plan [Member] | Maximum [Member] | Officer Director Or Consultant [Member] | |||||||||||
Percentage of options exercisable at a rate | 20.00% | ||||||||||
Stock Incentive Plan [Member] | Minimum [Member] | |||||||||||
Share-based compensation common stock purchase price percentage | 10.00% | ||||||||||
Stock Incentive Plan [Member] | Non-Statutory Stock Options [Member] | Maximum [Member] | |||||||||||
Share-based compensation common stock purchase price percentage | 85.00% | ||||||||||
Stock Incentive Plan [Member] | Employees, Directors and Consultants [Member] | |||||||||||
Share-based compensation number of shares available for grant | 720,000 | ||||||||||
Employee Stock Purchase Plan 2014 [Member] | |||||||||||
Share-based compensation common stock purchase price percentage | 90.00% | ||||||||||
Common stock capital shares reserved for future issuance | 67,150 | ||||||||||
Employee stock purchase plan offering period | 6 months | ||||||||||
Share-based compensation employee stock purchase plan contribution percentage | 20.00% | ||||||||||
Share-based compensation employee stock purchase plan contribution maximum amount | $ 25 | ||||||||||
Share-based compensation employee stock purchase plan contribution maximum number of shares | 500 | ||||||||||
Allocated share-based compensation expense | $ 3 | $ 3 | |||||||||
Stock issued during period number of shares of employee stock purchase plans | 7,512 | 6,774 | |||||||||
Series A Convertible Preferred Stock [Member] | |||||||||||
Number of preferred stock converted into common stock | 527.5 | ||||||||||
Number of preferred stock converted into common stock, shares | 70,333 | 2,007 | |||||||||
Series A Convertible Preferred Stock [Member] | April 3, 2017 [Member] | |||||||||||
Number of preferred stock converted into common stock, shares | 757 | ||||||||||
Common Stock [Member] | |||||||||||
Proceeds from issuance or sale of equity | $ 9,632 | ||||||||||
Number of preferred stock converted into common stock, shares | 267,600 | ||||||||||
Common Stock [Member] | April 3, 2017 [Member] | |||||||||||
Number of preferred stock converted into common stock, shares | 100,976 | ||||||||||
Series A Convertible Preferred Stock [Member] | |||||||||||
Preferred stock, issued | 3,291.8 | ||||||||||
Series A Warrants [Member] | |||||||||||
Preferred stock, issued | 1,150,000 | ||||||||||
Proceeds from issuance or sale of equity | $ 17,250 | ||||||||||
Payments of stock issuance costs | $ 1,793 | ||||||||||
Series A Warrants [Member] | Black-Scholes Merton Model [Member] | |||||||||||
Common stock par value | $ 11.25 | ||||||||||
Stock issued during period, shares new issue | 1,253,500 | ||||||||||
Fair value assumptions expected volatility rate | 76.00% | ||||||||||
Fair value assumptions expected term | 6 years | ||||||||||
Fair value assumptions risk free interest rate | 1.30% | ||||||||||
Fair value assumptions dividend yield | 0.00% | ||||||||||
Placement Agent Warrants [Member] | |||||||||||
Preferred stock, issued | 103,500 | ||||||||||
Share issued price per share | $ 11.25 | ||||||||||
Common Stock [Member] | |||||||||||
Common stock, conversion basis | 438,910 | ||||||||||
CRG Warrants [Member] | |||||||||||
Common stock par value | $ 15 | ||||||||||
Stock issued during period, shares new issue | 35,000 | ||||||||||
Class of warrant or right number of securities called by warrants or rights | 35,000 | ||||||||||
Class of warrant or right exercise price of warrants or rights | $ 50 | ||||||||||
Fair value of warrants | $ 290 | ||||||||||
Warrants exercisable date | Oct. 8, 2020 | ||||||||||
Fair value assumptions expected volatility rate | 73.00% | ||||||||||
Fair value assumptions expected term | 5 years | ||||||||||
Fair value assumptions risk free interest rate | 1.71% | ||||||||||
Fair value assumptions dividend yield | 0.00% | ||||||||||
CRG Warrants [Member] | Term Loan Agreement [Member] | Black-Scholes Merton Model [Member] | |||||||||||
Fair value of warrants | $ 106 | ||||||||||
Fair value assumptions expected volatility rate | 76.00% | ||||||||||
Fair value assumptions expected term | 5 years | ||||||||||
Fair value assumptions risk free interest rate | 1.30% | ||||||||||
Fair value assumptions dividend yield | 0.00% | ||||||||||
CRG LP Additional Warrants [Member] | Term Loan Agreement [Member] | |||||||||||
Class of warrant or right number of securities called by warrants or rights | 35,000 | 35,000 | |||||||||
Class of warrant or right exercise price of warrants or rights | $ 15 | $ 15 | |||||||||
CRG LP Additional Warrants [Member] | Term Loan Agreement [Member] | Black-Scholes Merton Model [Member] | |||||||||||
Fair value of warrants | $ 54 | ||||||||||
Fair value assumptions expected volatility rate | 76.00% | ||||||||||
Fair value assumptions expected term | 4 years 6 months | ||||||||||
Fair value assumptions risk free interest rate | 1.06% | ||||||||||
Fair value assumptions dividend yield | 0.00% | ||||||||||
CRG LP Additional Warrants [Member] | Term Loan Agreement [Member] | Maximum [Member] | |||||||||||
Class of warrant or right exercise price of warrants or rights | $ 15 | ||||||||||
CRG LP Additional Warrants [Member] | Term Loan Agreement [Member] | Minimum [Member] | |||||||||||
Class of warrant or right exercise price of warrants or rights | $ 50 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Common and Preferred Shares (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Proceeds from issuance or sale of equity | $ 15,457 |
Common Stock [Member] | |
Proceeds from issuance or sale of equity | 9,632 |
Series A Convertible Preferred Stock [Member] | |
Proceeds from issuance or sale of equity | 2,275 |
Series A Warrants [Member] | |
Proceeds from issuance or sale of equity | $ 3,550 |
Stockholders' Equity - Schedu37
Stockholders' Equity - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Stock-based compensation expense before income taxes | $ 289 | $ 714 |
Sales and Marketing [Member] | ||
Stock-based compensation expense before income taxes | 146 | 83 |
Clinical, Regulatory and Research and Development [Member] | ||
Stock-based compensation expense before income taxes | 43 | 495 |
General and Administrative [Member] | ||
Stock-based compensation expense before income taxes | $ 100 | $ 136 |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Antidilutive securities number of shares | 2,135,000 | 710,000 |
Stock Options [Member] | ||
Antidilutive securities number of shares | 706,000 | 638,000 |
Warrants [Member] | ||
Antidilutive securities number of shares | 1,324,000 | 64,000 |
ESPP Shares [Member] | ||
Antidilutive securities number of shares | 3,000 | 8,000 |
Convertible Preferred Shares [Member] | ||
Antidilutive securities number of shares | 102,000 |
Commitments and Contingencies39
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | Mar. 07, 2016 | Mar. 12, 2003 | Apr. 30, 2014 | Mar. 31, 2017 | Apr. 30, 2016 |
Lease expiration date | Jun. 30, 2018 | ||||
Royalty payments | $ 35 | $ 35 | |||
Royalty payment, percentage | 5.50% | 5.50% | |||
Royalty description | The Company is required to pay a royalty of 30% of any sublicense fees it receives prior to receiving FDA approval and 25% of any sub-license fees it receives after FDA approval. | ||||
Maximum royalty payable on sale of combined products | 5.50% | ||||
Supply Agreement [Member] | MiniFAB [Member] | |||||
Purchase commitment remaining minimum amount committed annual volume | annual volume of 4.5 million test cards or March 31, 2018 | ||||
Minimum percentage of purchase | 50.00% | ||||
Marketing Agreement [Member] | OcuHub Business Inc [Member] | |||||
Marketing fee payments due | Mar. 31, 2019 | ||||
Annual marketing fee | $ 100 | ||||
Marketing agreement, quarterly payments | $ 25 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Payments (Details) $ in Thousands | Mar. 31, 2017USD ($) |
2006 Agreement [Member] | |
2,017 | $ 35 |
2,018 | 35 |
2,019 | 35 |
2,020 | 35 |
2,021 | 35 |
Thereafter | 210 |
Total | 385 |
2003 Agreement [Member] | |
2,017 | 35 |
2,018 | 35 |
2,019 | 35 |
2,020 | 35 |
2,021 | 35 |
Thereafter | 210 |
Total | $ 385 |