Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 07, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | TearLab Corp | |
Entity Central Index Key | 1,299,139 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 10,796,998 | |
Trading Symbol | TEAR | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash | $ 6,367 | $ 7,272 |
Accounts receivable, net | 1,272 | 1,536 |
Inventory | 1,855 | 1,998 |
Prepaid expenses and other current assets | 448 | 690 |
Total current assets | 9,942 | 11,496 |
Fixed assets, net | 2,178 | 2,739 |
Intangible assets, net | 5 | 10 |
Other non-current assets | 180 | 100 |
Total assets | 12,305 | 14,345 |
Current liabilities | ||
Accounts payable | 459 | 1,720 |
Accrued liabilities | 2,306 | 2,859 |
Deferred rent and revenue | 21 | 42 |
Current portion of long-term debt | 7,240 | |
Total current liabilities | 10,026 | 4,621 |
Long-term debt, net of current portion | 22,311 | 28,290 |
Total liabilities | 32,337 | 32,911 |
Commitments and contingencies (Note 8) | ||
Stockholder's deficit | ||
Capital stock | ||
Preferred stock, $0.001 par value, 10,000,000 authorized, 776 and 2,012 issued and outstanding at June 30, 2018 and December 31, 2017, respectively | ||
Common stock, $0.001 par value, 40,000,000 authorized, 10,796,998 and 7,986,998 issued and outstanding at June 30, 2018 and December 31, 2017, respectively | 11 | 8 |
Additional paid-in capital | 510,310 | 510,235 |
Accumulated deficit | (530,353) | (528,809) |
Total stockholders’ deficit | (20,032) | (18,566) |
Total liabilities and stockholders’ deficit | $ 12,305 | $ 14,345 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
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 issued | 776 | 2,012 |
Preferred stock, shares outstanding | 776 | 2,012 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 10,796,998 | 7,986,998 |
Common stock, shares outstanding | 10,796,998 | 7,986,998 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue | ||||
Product sales | $ 5,679 | $ 6,229 | $ 11,454 | $ 12,357 |
Reader equipment rentals | 734 | 785 | 1,405 | 1,358 |
Total revenue | 6,413 | 7,014 | 12,859 | 13,715 |
Cost of goods sold | ||||
Cost of goods sold (excluding amortization of intangible assets) | 2,355 | 2,682 | 4,190 | 5,224 |
Cost of goods sold – reader equipment depreciation | 265 | 446 | 553 | 912 |
Gross profit | 3,793 | 3,886 | 8,116 | 7,579 |
Operating expenses | ||||
Sales and marketing | 959 | 3,304 | 1,978 | 6,636 |
Clinical, regulatory and research & development | 996 | 1,110 | 2,038 | 2,675 |
General and administrative | 1,340 | 2,309 | 3,385 | 4,496 |
Total operating expenses | 3,295 | 6,723 | 7,401 | 13,807 |
Income (loss) from operations | 498 | (2,837) | 715 | (6,228) |
Other income (expense) | ||||
Interest income (expense) | (1,149) | (1,048) | (2,254) | (2,076) |
Other, net | (10) | (9) | (5) | (11) |
Total other income (expense) | (1,159) | (1,057) | (2,259) | (2,087) |
Net loss and comprehensive loss | $ (661) | $ (3,894) | $ (1,544) | $ (8,315) |
Weighted average shares outstanding - basic and fully diluted | 10,609,131 | 5,731,293 | 10,070,652 | 5,551,334 |
Net loss per share - basic and fully diluted | $ (0.06) | $ (0.68) | $ (0.15) | $ (1.50) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
OPERATING ACTIVITIES | ||
Net loss for the period | $ (1,544) | $ (8,315) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Stock-based compensation | 80 | 535 |
Depreciation of fixed assets | 679 | 1,026 |
Amortization of intangible assets | 6 | 30 |
Deferred interest on long-term debt | 1,838 | 612 |
Amortization of debt discount | 419 | 310 |
Loss on disposal of fixed assets | 1 | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 263 | 152 |
Inventory | 143 | 313 |
Prepaid expenses and other assets | 243 | 134 |
Other non-current assets | (80) | 121 |
Accounts payable | (1,261) | 1,129 |
Accrued liabilities | (552) | (722) |
Deferred rent/revenue | (21) | (23) |
Cash provided by (used in) operating activities | 214 | (4,698) |
INVESTING ACTIVITIES | ||
Additions to fixed assets | (119) | (570) |
Cash used in investing activities | (119) | (570) |
FINANCING ACTIVITIES | ||
Payment on term loan | (1,000) | |
Repurchase of fractional shares upon reverse stock split | (3) | |
Proceeds from the issuance of employee stock purchase plan shares | 35 | |
Cash provided by (used in) financing activities | (1,000) | 32 |
Decrease in cash and cash equivalents during the period | (905) | (5,236) |
Cash, beginning of period | 7,272 | 15,471 |
Cash, end of period | 6,367 | 10,235 |
Supplemental cash flow information | ||
Cash paid for interest | $ 1,155 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 1. BASIS OF PRESENTATION Nature of Operations TearLab Corporation 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. Liquidity and Going Concern 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. The Company has sustained substantial losses of $1,544 and $8,315 for the six months ended June 30, 2018 and 2017, respectively. Based on the Company’s expected rate of cash consumption in the latter quarters of 2018, the Company estimates it will need additional capital in the first quarter of 2019 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 2019 without violating an existing covenant on the Term Loan Agreement, including the inability to make our debt payments due within twelve months (see Note 5). 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 | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. SIGNIFICANT ACCOUNTING POLICIES The Condensed Consolidated Balance Sheet at December 31, 2017 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, 2017. The audited financial statements for the year ended December 31, 2017, filed with the SEC with the Company’s annual report on Form 10-K on March 5, 2018 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 On January 1, 2018 the Company adopted Topic 606 – Revenue from Contracts with Customers Revenue Recognition There was no net reduction to opening retained earnings as a result of adopting Topic 606 and no impact to revenues for the three or six months ended June 30, 2018. Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this occurs with the transfer of control of our products or services. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services which includes estimates of variable consideration that results from returns, rebates or test card replacements. The Company records allowances for returns or rebates and reports revenue net of such amounts, which was immaterial for the six months ended June 30, 2018. Sales and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. The Company’s payment terms are typically upon shipment or net 30. The Company sells its proprietary TearLab® Osmolality System and related test cards to external customers, who are primarily eye care professionals, for use in osmolality 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 to 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 to sell the reader equipment and disposable test cards at their stand-alone selling price with no contractual future purchase commitment (referred to as “Purchase Agreements”). Use, Masters, and Flex 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. Two performance obligations exist under these contracts, related to the customers’ right to use the reader equipment and orders of test cards. As the customer has the ability and right to operate the reader equipment in a manner it determines as well as obtain the output from using the reader equipment, the revenue related to the reader equipment use performance obligation is recognized in accordance with ASC 840 – Leases, wherein revenue related to the reader equipment is recognized over the defined contract term. Revenue related to disposable test cards is recognized as the disposable test cards are shipped. Based on the nature of these contracts, which provide terms for the future purchase of test cards but do not contractually obligate the customer to do so, each purchase of test cards is treated as its own distinct contract with a performance obligation to provide the test cards ordered, memorialized by the customers’ purchase order/request. 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 standalone selling price, which is estimated using the selling prices of the reader device and test cards under Purchase Agreements, discussed further below. 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. Purchase Agreements Revenue recognition for Purchase Agreements is based on the individual performance obligations determined to exist in the contract. Since the reader equipment and the test cards are separate and distinct delivered items, the delivery of each are considered separate performance obligations. The reader equipment and test cards are separately identified under the Purchase Agreements and are sold at their standalone selling price. The Company recognizes revenue for each of the performance obligations only when it determines that all applicable recognition criteria have been met, which is usually upon shipment to the customer. Under Purchase Agreements, the customer is not contractually obligated to purchase additional test cards, and each subsequent order of test cards represents a separate and distinct contract with the performance obligation to provide the test cards ordered. Amounts billed to customers for shipping and handling of a sales transaction are included as revenue. The Company recognized revenue from shipping and handling of $38 and $45 for the three months ended June 30, 2018 and 2017, respectively. The Company recognized revenue from shipping and handling of $77 and $89 for the six months ended June 30, 2018 and 2017, respectively. The following table presents our revenues disaggregated by revenue source. Sales and usage-based taxes are excluded from revenues: Three months ended Six months ended June 30, June 30, 2018 2017 2018 2017 Product Sales $ 5,679 $ 6,229 $ 11,454 $ 12,357 Reader Equipment Rentals 734 785 1,405 1,358 $ 6,413 $ 7,014 $ 12,859 $ 13,715 Arrangements with Multiple Performance Obligations Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the separate prices charged to customers for the reader device and test cards under Purchase Agreements. Return Reserve Although the Company 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 revenue at the time of shipment based on historical experience. The reserve of $6 and $9 as of June 30, 2018 and December 31, 2017, respectively, has been recorded as a reduction of revenue and is included in accounts receivable. Practical Expedients and Exemptions We generally expense outside sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses. We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. Recent Accounting Pronouncements In June 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-07, “Compensation – Stock Compensation (Topic 718).” ASU 2018-07 simplifies the accounting for nonemployee share-based payment transactions. This ASU is effective for public entities for interim and annual reporting periods beginning after December 15, 2018. The Company is currently evaluating the potential impact of this guidance and does not believe that it will have a material impact on the Company’s financial statements. On January 1, 2018, we adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, In July 2017, the FASB issued ASU No. 2017-11- Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception (“ASU 2017-11”). Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity In February 2016, the FASB issued ASU 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. |
Balance Sheet Details
Balance Sheet Details | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Details | 3. BALANCE SHEET DETAILS Accounts Receivable June 30, 2018 December 31, 2017 Trade receivables $ 1,614 $ 2,044 Allowance for doubtful accounts (342 ) (508 ) $ 1,272 $ 1,536 Inventory Inventory is recorded at the lower of cost or net realizable value and consists of finished goods. Inventory is accounted for on a first-in, first-out basis. June 30, 2018 December 31, 2017 Finished goods $ 1,856 $ 2,125 Inventory reserves (1 ) (127 ) $ 1,855 $ 1,998 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 June 30, 2018 December 31, 2017 Prepaid trade shows $ - $ 14 Prepaid insurance 153 313 Manufacturing deposits 170 - Subscriptions 91 311 Other fees and services 34 52 $ 448 $ 690 Fixed Assets, Net June 30, 2018 December 31, 2017 Capitalized TearLab equipment $ 7,098 $ 8,437 Leasehold improvements 13 60 Computer equipment and software 884 915 Furniture and office equipment 436 436 Medical equipment 1,262 1,180 $ 9,693 $ 11,028 Less accumulated depreciation (7,515 ) (8,289 ) $ 2,178 $ 2,739 Depreciation expense was $679 and $1,026 for the six months ended June 30, 2018 and 2017, respectively, and $326 and $505, respectively, for the three months ended June 30, 2018 and 2017. Accrued Liabilities June 30, 2018 December 31, 2017 Due to professionals $ 13 $ 193 Due to employees and directors 889 944 Sales and use tax liabilities 245 253 Royalty liability 420 447 Warranty 115 131 Restructuring 44 200 Other 580 691 $ 2,306 $ 2,859 The change in royalty liability is attributable to an amended patent license and royalty agreement with the University of California San Diego with an effective date of July 1, 2017, which reduced the royalty to 3% from 5.5% (see Note 8). |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2018 | |
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. Amortization expense for the three months ended June 30, 2018 and 2017 was $3 and $15, respectively. Amortization expense for the six months ended June 30, 2018 and 2017 was $6 and $30, respectively. Intangible assets subject to amortization consist of the following: Remaining Gross Net Book Useful Life Value at Accumulated Value at (Years) June 30, 2018 Amortization June 30, 2018 TearLab® technology 0 $ 12,172 $ (12,172 ) $ - Patents and trademarks 1 271 (266 ) 5 Prescriber list 0 90 (90 ) - Total $ 12,533 $ (12,528 ) $ 5 Net Book Gross Value at Accumulated Value at December 31, 2017 Amortization December 31, 2017 TearLab® technology $ 12,172 $ (12,172 ) $ - Patents and trademarks 271 (261 ) 10 Prescriber list 90 (90 ) - Total $ 12,533 $ (12,523 ) $ 10 The estimated amortization expense for the intangible assets for the remainder of 2018 and thereafter is as follows: Amortization of intangible assets Remainder of 2018 $ 3 Thereafter 2 $ 5 |
Term Loan
Term Loan | 6 Months Ended |
Jun. 30, 2018 | |
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 December 31, 2020 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 Amendment No. 2 to the 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 Condensed Consolidated Balance Sheets as of June 30, 2018 and 2017. 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. On April 7, 2016, the Company entered into Amendment No. 4 the Term Loan Agreement and the Company issued CRG additional warrants to purchase 35,000 common shares of the Company’s stock at $15.00 per share, which expires 5 years after issuance. On October 12, 2017, the Company entered into Amendment No. 5 to the Term Loan Agreement. This amendment reduced the exercise price of all of the CRG Warrants from $15.00 per share to $1.50 per share and provided broad anti-dilution protection such that the CRG Warrants maintained the same 1.22% ownership following any capital raises the Company completed through March 31, 2018. On April 4, 2018 with an effective date of March 31, 2018, the Company entered into Amendment No. 6 to the Term Loan Agreement. Pursuant to the terms of this amendment, the cash interest payments due in 2018 will be deferred and added to the principal balance under the Loan Agreement at the end of each quarter. This amendment also provided for an additional facility fee equal to 3% of the sum of the aggregate amount of the principal drawn under the Term Loan Agreement and any PIK loans issued, so that the total facility fee shall be 9.5%, applicable to the entire balance, (the “Facility Fee”). The Facility Fee is being accrued to interest expense using the effective interest method. In addition, this amendment reduced the minimum liquidity covenant to $3 million. Concurrent with the reduction of the liquidity covenant the Company agreed to repay CRG $1.0 million of principal on the Term Loan Agreement in April 2018. Lastly, this amendment reduced the strike price of the existing CRG Warrants to $0.44 per share (see Note 6). The Amendment was accounted for as a modification in accordance with U.S. GAAP. 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.As part of Amendment No. 5 to the Term Loan Agreement, discussed above, and Company and CRG agreed to change the required minimum revenue levels. The amended minimum revenue is $25,000 for 2018, $38,000 for 2019 and $45,000 for 2020. If the Company does not have annual revenue greater than 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 June 30, 2018, the Company was in compliance with all of the covenants. 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 Condensed Consolidated Balance Sheets 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 June 30, 2018 and related maturities of outstanding principal: Principal balance outstanding $ 24,000 PIK interest 4,961 Facility fee 1,055 less discount on term loan: deferred financing fees, net (252 ) detachable warrants, net (213 ) $ 29,551 Less, current portion of term loan 7,240 Total term loan 22,311 Principal due for each of the next 3 years and in the aggregate: 2018 - 2019 14,481 2020 15,535 Total principal due 30,016 Less: discount on term loan (465 ) Total term loan $ 29,551 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | 6. STOCKHOLDERS’ EQUITY (a) Authorized Share Capital On October 12, 2017, the stockholders of the Company approved an amendment to the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 9,500,000 to 40,000,000. 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. 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. (b) Common and Preferred Shares On December 8, 2017, the Company issued 2,013,636 shares of common stock, 2,114 shares of Series A Convertible Preferred Stock (“Preferred Stock”), Series A warrants to purchase 6,818,181 shares of common Stock (“Series A Warrants”) and Series B warrants to purchase 6,818,181 shares of common stock (“Series B Warrants”) for gross proceeds of $3,000, less issuance costs of $596. Additionally, the Company granted the placement agent compensation warrants to purchase 477,273 shares of common stock. The Preferred Stock is convertible, subject to certain limitations, into an aggregate of 4,804,545 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, Preferred Stock and the Series A Warrants and Series B Warrants are all included in equity in the Company’s consolidated balance sheets as of June 30, 2018 and December 31, 2017. The net proceeds were allocated to common stock, Preferred Stock, Series A Warrants and Series B Warrants based on their relative fair values as follows: Common stock $ 327 Preferred stock 781 Series A warrants 804 Series B warrants 492 Net proceeds $ 2,404 As of June 30, 2018, 1,338 shares of Series A Preferred Stock have been converted into 3,040,909 shares of common stock. As of June 30, 2018 all Series B warrants expired with no warrants exercised. (c) Stock Incentive Plan On June 23, 2017 the Company’s stockholders approved an amendment to the 2002 Stock Incentive Plan (the “Stock Incentive Plan”), to increase the total number of shares reserved for issuance to 1,070,000 from 720,000. Stock Incentive Plan shares are available for grant to employees, directors and consultants. Shares granted under the Stock Incentive Plan may be incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock or restricted share units. 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. Share-based payment transactions with employees are recognized in the financial statements based on their fair value and recognized as 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 Six months ended June 30, June 30, 2018 2017 2018 2017 Sales and marketing $ 20 $ 111 $ 38 $ 257 Clinical, regulatory and research and development 8 41 16 84 General and administrative 44 94 26 194 Stock-based compensation expense before income taxes $ 72 $ 246 $ 80 $ 535 (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 28,601 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 invest 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 June 30, 2018 and 2017, the Company recorded $0 and $2 of expense, respectively, under the ESPP. During the six months ended June 30, 2018 and 2017, the Company recorded $0 and $5 of expense, respectively, under the ESPP. During the six months ended June 30, 2018 and 2017, the Company issued 0 and 7,512 shares of common stock, respectively, under the ESPP. In early 2018, the Company terminated the Employee Stock Purchase Plan. (e) Warrants On October 8, 2015, as part of Amendment No. 2 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 “2015 CRG Warrants”). The 2015 CRG Warrants are exercisable any time prior to October 8, 2020. The 2015 CRG Warrants are classified as equity on the Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017. The 2015 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 six months ended June 30, 2018 or 2017. On April 8, 2016, as part of Amendment No. 4 to the Term Loan Agreement, the exercise price of the 2015 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” and, together with the 2015 CRG Warrants, the “CRG Warrants”). The modification to the terms of the 2015 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. On October 12, 2017, as part of Amendment No. 5 to the Term Loan Agreement, the exercise price of the CRG Warrants was changed to allow the holder to purchase common shares in the Company at a price of $1.50 per share as well as provide broad anti-dilution protection such that the CRG Warrants shall maintain the same 1.22% ownership following any capital raises the Company completed through March 31, 2018. The modification to the terms of the CRG Warrants resulted in a change in fair value of $44 which was included as interest expense. The 2015 CRG Warrants change in fair value was calculated using the Black-Scholes Merton model with both exercise prices, assuming volatility of 94%, an expected life of 2.99 years, a risk-free interest rate of 1.70% and 0% dividend yield. The 2016 CRG Warrants change in fair value was calculated using the Black-Scholes Merton model with both exercise prices, assuming volatility of 90%, an expected life of 3.48 years, a risk-free interest rate of 1.80% and 0% dividend yield. On December 8, 2017, the Company issued Series A Warrants to purchase 6,818,181 shares of common stock for $0.44 per share and Series B Warrants to purchase 6,818,181 shares of common stock for $0.44 per share in conjunction with shares of common stock and Series A Convertible Preferred stock issued on that same date. The Series A Warrants were exercisable immediately and expire 5 years after the issuance 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 88%, an expected life of 5 years, a risk free interest rate of 2.14% and a 0% dividend yield and are classified as equity on the Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017. The Series B Warrants were exercisable immediately and expired 6 months after the issuance date. Fair value of the Series B Warrants for purposes of allocating the net proceeds of the equity offering, was determined using the Black-Scholes Merton model assuming a volatility of 158.6%, an expected life of 6 months, a risk free rate of 1.45% and a 0% dividend yield and are classified as equity on the Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017. All Series B Warrants expired on June 7, 2018 with no warrants exercised. In addition, we granted the placement agent compensation warrants to purchase 477,273 shares of common stock at $0.55 per share. The compensation warrants are in the same form as Series A Warrants, excluding the exercise price, and will terminate on the five year anniversary date. The placement agent warrants are classified as equity on the Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017. In connection with the December 2017 offering the Company issued CRG additional warrants to purchase 83,240 shares of common stock at an exercise price of $1.50 (“2017 CRG Warrants”) as a result of triggering the anti-dilution clause of Amendment No. 5 to the Term Loan Agreement (see Footnote 5 for additional information). The anti-dilution clause is considered down-round protection, however the Company early adopted ASU 2017-11 and therefore the down-round feature is excluded from the consideration of whether the 2017 CRG Warrants are indexed to the Company’s own stock and therefore the 2017 CRG Warrants warrants are not required to be liabilities under the guidance. The 2017 CRG Warrants are classified as equity on the Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017 and were valued at $30 upon issuance using the Black-Scholes Merton model assuming volatility of 88%, an expected life of 5 years, a risk-free interest rate of 2.14% and 0% dividend yield. In March 2018, in connection with Amendment No. 6 to the Term Loan Agreement, the CRG warrants and the 2017 CRG Warrants had a change in strike price to $0.44. The modification to the terms of the CRG Warrants and the 2017 CRG Warrants resulted in a change in fair value of $10 which was included as interest expense. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 6 Months Ended |
Jun. 30, 2018 | |
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: (in thousands of shares) As of June 30, 2018 2017 Stock options 599 707 Warrants 8,702 1,324 ESPP shares - 7 Convertible preferred shares 1 - Total 9,302 2,038 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
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, 2019. 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. On May 1, 2018 with an effective date of July 1, 2017 the Company entered into a Restated License Agreement (the “Agreement”) to its exclusive license agreement for the commercial development of the invention disclosed in UCSD Disclosure Docket No. SD2002-180 and titled “Volume Independent Tear Film Osmometer” (UCSD License Agreement #2003-03-0433), dated as of March 12, 2003, as amended by Amendment 1, dated as of June 9, 2003, Amendment 2, dated as of September 5, 2005, Amendment 3, dated as of July 7, 2006, Amendment 4, dated as of October 9, 2006, and Amendment 5, dated as of July 9, 2007, by and among the Company and The Regents of the University of California (collectively the “Existing License”) to amend certain terms related to royalties under the Agreement and treatment upon a change of control transaction. The Company is required to make royalty payments of anywhere from 3% to 4.25% based on quarterly net sales. Additionally, the Company is required to pay a royalty of 20% of any sublicense fees it receives. Should a change of control transaction occur during the term of the agreement the royalty rates would range anywhere from 3.5% to 4.75% based on quarterly net sales and the Company would have to make a milestone payment of $0.5 million. In addition, if the Company has not commenced commercial sales of the TearLab Discovery TM TM Effective October 1, 2006, the Company entered into a second patent license and royalty agreement with the University 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 June 30, 2018 are as follows: 2018 $ 35 2019 35 2020 35 2021 35 2022 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 and 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 August 2011 agreement between MiniFAB and the Company. 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 We are not currently a party to any litigation, nor are we aware of any pending or threatened litigation against us, that we believe would materially affect our business, operating results, financial condition or cash flows. Our industry is characterized by frequent claims and litigation including securities litigation, claims regarding patent and other intellectual property rights and claims for product liability. As a result, in the future, we may be involved in various legal proceedings from time to time. We initiated a patent infringement lawsuit against i-Med Pharma, Inc. in February 2016 alleging infringement of our Canadian patent. In February 2018, the Federal Court of Canada issued a ruling in favor of i-Med Pharma, Inc. which invalidated specific claims in our Canadian patent which were alleged to be infringed. We are appealing this ruling to the Canadian Federal Appellate Court. As part of the ruling, the Federal Court ruling awarded costs to i-Med Pharma, Inc., for $0.5 million. The final $0.2 million was paid in April 2018. We do not believe the outcome of this litigation will materially affect our business, operating results, financial condition or cash flows. |
Restructuring Costs
Restructuring Costs | 6 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Costs | 9. RESTRUCTURING COSTS On December 15, 2017 the Company approved a new business model to maintain its current customer and annuity revenue base, focus resources on the development and generation of clinical data for our next generation TearLab Discovery TM Employee Costs Other Costs Total Accrued obligations as of December 31, 2017 $ 97 $ 103 $ 200 Settlement of obligations (97 ) (59 ) (156 ) Accrued obligations as of June 30, 2018 $ 0 $ 44 $ 44 |
Related Party
Related Party | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party | 10. RELATED PARTY The Company has an agreement with the Chief Scientific Officer whereas if the Company enters into an agreement with UCSD to reduce the overall royalty rate the Company shall pay to the Chief Scientific Officer a royalty on net sales equal to one and a half percent of the percent change in the UCSD royalty rate. The restated UCSD patent license and royalty agreement (see Note 8) resulted in a royalty due at a rate of 0.68%. As of June 30, 2018 the Company recorded a related party royalty accrual of $178, covering the period of July 1, 2017 to June 30, 2018. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. SUBSEQUENT EVENTS On August 9, 2018 the Company entered into an addendum to the 2016 Manufacturing and Supply and Development Agreement with MiniFab (Note 8). The amendment fixes the price of the osmolarity test cards at their current price until the earlier of: the average monthly order volume of osmolarity cards on a rolling six month average falls below 20,000 cards; or the aggregate product volume in the calendar year commencing 12 months after the launch of the Discovery TM TM On May 1, 2018 with an effective date of July 1, 2018 the Company entered into a new operating lease agreement for the Corporate Headquarters located at 150 La Terraza Blvd., Suite 101 Escondido, CA 92025 and occupying approximately 6,120 square feet. The lease will be recognized on a straight line basis over the term of the lease for rental of office space from unrelated parties. The initial term of the lease is 5 years and 5 months and includes, periodic rent increases, and a renewal option. |
Significant Accounting Polici17
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
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 On January 1, 2018 the Company adopted Topic 606 – Revenue from Contracts with Customers Revenue Recognition There was no net reduction to opening retained earnings as a result of adopting Topic 606 and no impact to revenues for the three or six months ended June 30, 2018. Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this occurs with the transfer of control of our products or services. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services which includes estimates of variable consideration that results from returns, rebates or test card replacements. The Company records allowances for returns or rebates and reports revenue net of such amounts, which was immaterial for the six months ended June 30, 2018. Sales and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. The Company’s payment terms are typically upon shipment or net 30. The Company sells its proprietary TearLab® Osmolality System and related test cards to external customers, who are primarily eye care professionals, for use in osmolality 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 to 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 to sell the reader equipment and disposable test cards at their stand-alone selling price with no contractual future purchase commitment (referred to as “Purchase Agreements”). |
Use, Masters, and Flex Agreements | Use, Masters, and Flex 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. Two performance obligations exist under these contracts, related to the customers’ right to use the reader equipment and orders of test cards. As the customer has the ability and right to operate the reader equipment in a manner it determines as well as obtain the output from using the reader equipment, the revenue related to the reader equipment use performance obligation is recognized in accordance with ASC 840 – Leases, wherein revenue related to the reader equipment is recognized over the defined contract term. Revenue related to disposable test cards is recognized as the disposable test cards are shipped. Based on the nature of these contracts, which provide terms for the future purchase of test cards but do not contractually obligate the customer to do so, each purchase of test cards is treated as its own distinct contract with a performance obligation to provide the test cards ordered, memorialized by the customers’ purchase order/request. 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 standalone selling price, which is estimated using the selling prices of the reader device and test cards under Purchase Agreements, discussed further below. 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. |
Purchase Agreements | Purchase Agreements Revenue recognition for Purchase Agreements is based on the individual performance obligations determined to exist in the contract. Since the reader equipment and the test cards are separate and distinct delivered items, the delivery of each are considered separate performance obligations. The reader equipment and test cards are separately identified under the Purchase Agreements and are sold at their standalone selling price. The Company recognizes revenue for each of the performance obligations only when it determines that all applicable recognition criteria have been met, which is usually upon shipment to the customer. Under Purchase Agreements, the customer is not contractually obligated to purchase additional test cards, and each subsequent order of test cards represents a separate and distinct contract with the performance obligation to provide the test cards ordered. Amounts billed to customers for shipping and handling of a sales transaction are included as revenue. The Company recognized revenue from shipping and handling of $38 and $45 for the three months ended June 30, 2018 and 2017, respectively. The Company recognized revenue from shipping and handling of $77 and $89 for the six months ended June 30, 2018 and 2017, respectively. The following table presents our revenues disaggregated by revenue source. Sales and usage-based taxes are excluded from revenues: Three months ended Six months ended June 30, June 30, 2018 2017 2018 2017 Product Sales $ 5,679 $ 6,229 $ 11,454 $ 12,357 Reader Equipment Rentals 734 785 1,405 1,358 $ 6,413 $ 7,014 $ 12,859 $ 13,715 |
Arrangements with Multiple Performance Obligations | Arrangements with Multiple Performance Obligations Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the separate prices charged to customers for the reader device and test cards under Purchase Agreements. |
Return Reserve | Return Reserve Although the Company 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 revenue at the time of shipment based on historical experience. The reserve of $6 and $9 as of June 30, 2018 and December 31, 2017, respectively, has been recorded as a reduction of revenue and is included in accounts receivable. |
Practical Expedients and Exemptions | Practical Expedients and Exemptions We generally expense outside sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses. We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-07, “Compensation – Stock Compensation (Topic 718).” ASU 2018-07 simplifies the accounting for nonemployee share-based payment transactions. This ASU is effective for public entities for interim and annual reporting periods beginning after December 15, 2018. The Company is currently evaluating the potential impact of this guidance and does not believe that it will have a material impact on the Company’s financial statements. On January 1, 2018, we adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, In July 2017, the FASB issued ASU No. 2017-11- Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception (“ASU 2017-11”). Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity In February 2016, the FASB issued ASU 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. |
Significant Accounting Polici18
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Disaggregated Revenues | The following table presents our revenues disaggregated by revenue source. Sales and usage-based taxes are excluded from revenues: Three months ended Six months ended June 30, June 30, 2018 2017 2018 2017 Product Sales $ 5,679 $ 6,229 $ 11,454 $ 12,357 Reader Equipment Rentals 734 785 1,405 1,358 $ 6,413 $ 7,014 $ 12,859 $ 13,715 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accounts Receivable | Accounts Receivable June 30, 2018 December 31, 2017 Trade receivables $ 1,614 $ 2,044 Allowance for doubtful accounts (342 ) (508 ) $ 1,272 $ 1,536 |
Schedule of Inventory | Inventory Inventory is recorded at the lower of cost or net realizable value and consists of finished goods. Inventory is accounted for on a first-in, first-out basis. June 30, 2018 December 31, 2017 Finished goods $ 1,856 $ 2,125 Inventory reserves (1 ) (127 ) $ 1,855 $ 1,998 |
Summary of Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets June 30, 2018 December 31, 2017 Prepaid trade shows $ - $ 14 Prepaid insurance 153 313 Manufacturing deposits 170 - Subscriptions 91 311 Other fees and services 34 52 $ 448 $ 690 |
Schedule of Fixed Assets | Fixed Assets, Net June 30, 2018 December 31, 2017 Capitalized TearLab equipment $ 7,098 $ 8,437 Leasehold improvements 13 60 Computer equipment and software 884 915 Furniture and office equipment 436 436 Medical equipment 1,262 1,180 $ 9,693 $ 11,028 Less accumulated depreciation (7,515 ) (8,289 ) $ 2,178 $ 2,739 |
Schedule of Accrued Liabilities | Accrued Liabilities June 30, 2018 December 31, 2017 Due to professionals $ 13 $ 193 Due to employees and directors 889 944 Sales and use tax liabilities 245 253 Royalty liability 420 447 Warranty 115 131 Restructuring 44 200 Other 580 691 $ 2,306 $ 2,859 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Amortization of Intangible Assets | Intangible assets subject to amortization consist of the following: Remaining Gross Net Book Useful Life Value at Accumulated Value at (Years) June 30, 2018 Amortization June 30, 2018 TearLab® technology 0 $ 12,172 $ (12,172 ) $ - Patents and trademarks 1 271 (266 ) 5 Prescriber list 0 90 (90 ) - Total $ 12,533 $ (12,528 ) $ 5 Net Book Gross Value at Accumulated Value at December 31, 2017 Amortization December 31, 2017 TearLab® technology $ 12,172 $ (12,172 ) $ - Patents and trademarks 271 (261 ) 10 Prescriber list 90 (90 ) - Total $ 12,533 $ (12,523 ) $ 10 |
Schedule of Estimated Amortization Expense of Intangible Assets | The estimated amortization expense for the intangible assets for the remainder of 2018 and thereafter is as follows: Amortization of intangible assets Remainder of 2018 $ 3 Thereafter 2 $ 5 |
Term Loan (Tables)
Term Loan (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Term Loan | The following is a summary of the Term Loan Agreement as of June 30, 2018 and related maturities of outstanding principal: Principal balance outstanding $ 24,000 PIK interest 4,961 Facility fee 1,055 less discount on term loan: deferred financing fees, net (252 ) detachable warrants, net (213 ) $ 29,551 Less, current portion of term loan 7,240 Total term loan 22,311 |
Schedule of Maturities of Outstanding Principal of Term Loan | Principal due for each of the next 3 years and in the aggregate: 2018 - 2019 14,481 2020 15,535 Total principal due 30,016 Less: discount on term loan (465 ) Total term loan $ 29,551 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Schedule of Common and Preferred Shares | The net proceeds were allocated to common stock, Preferred Stock, Series A Warrants and Series B Warrants based on their relative fair values as follows: Common stock $ 327 Preferred stock 781 Series A warrants 804 Series B warrants 492 Net proceeds $ 2,404 |
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 Six months ended June 30, June 30, 2018 2017 2018 2017 Sales and marketing $ 20 $ 111 $ 38 $ 257 Clinical, regulatory and research and development 8 41 16 84 General and administrative 44 94 26 194 Stock-based compensation expense before income taxes $ 72 $ 246 $ 80 $ 535 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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: (in thousands of shares) As of June 30, 2018 2017 Stock options 599 707 Warrants 8,702 1,324 ESPP shares - 7 Convertible preferred shares 1 - Total 9,302 2,038 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Payments | Future minimum royalty payments under this agreement as of June 30, 2018 are as follows: 2018 $ 35 2019 35 2020 35 2021 35 2022 35 Thereafter 210 Total $ 385 |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Expenses Related to Restructuring | The following table summarizes the activity related to the restructuring during the six months ended June 30, 2018: Employee Costs Other Costs Total Accrued obligations as of December 31, 2017 $ 97 $ 103 $ 200 Settlement of obligations (97 ) (59 ) (156 ) Accrued obligations as of June 30, 2018 $ 0 $ 44 $ 44 |
Basis of Presentation (Details
Basis of Presentation (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Net income (loss) | $ 661 | $ 3,894 | $ 1,544 | $ 8,315 |
Significant Accounting Polici27
Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Shipping and handling fee | $ 2,355 | $ 2,682 | $ 4,190 | $ 5,224 | |
Reserve of product sales | 6 | $ 9 | |||
Shipping and Handling [Member] | |||||
Shipping and handling fee | $ 38 | $ 45 | $ 77 | $ 89 |
Significant Accounting Polici28
Significant Accounting Policies - Schedule of Disaggregated Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Accounting Policies [Abstract] | ||||
Product sales | $ 5,679 | $ 6,229 | $ 11,454 | $ 12,357 |
Reader equipment rentals | 734 | 785 | 1,405 | 1,358 |
Total revenue | $ 6,413 | $ 7,014 | $ 12,859 | $ 13,715 |
Balance Sheet Details (Details
Balance Sheet Details (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Depreciation expense | $ 326 | $ 505 | $ 679 | $ 1,026 |
Minimum [Member] | ||||
Royalty percentage | 3.00% | |||
Maximum [Member] | ||||
Royalty percentage | 5.50% |
Balance Sheet Details - Schedul
Balance Sheet Details - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Trade receivables | $ 1,614 | $ 2,044 |
Allowance for doubtful accounts | (342) | (508) |
Accounts receivable net | $ 1,272 | $ 1,536 |
Balance Sheet Details - Sched31
Balance Sheet Details - Schedule of Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finished goods | $ 1,856 | $ 2,125 |
Inventory reserves | (1) | (127) |
Inventory net | $ 1,855 | $ 1,998 |
Balance Sheet Details - Summary
Balance Sheet Details - Summary of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid trade shows | $ 14 | |
Prepaid insurance | 153 | 313 |
Manufacturing deposits | 170 | |
Subscriptions | 91 | 311 |
Other fees and services | 34 | 52 |
Prepaid expense and other current assets | $ 448 | $ 690 |
Balance Sheet Details - Sched33
Balance Sheet Details - Schedule of Fixed Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Property plant and equipment, gross | $ 9,693 | $ 11,028 |
Less accumulated depreciation | (7,515) | (8,289) |
Property plant and equipment net | 2,178 | 2,739 |
Capitalized TearLab Equipment [Member] | ||
Property plant and equipment, gross | 7,098 | 8,437 |
Leasehold Improvements [Member] | ||
Property plant and equipment, gross | 13 | 60 |
Computer Equipment and Software [Member] | ||
Property plant and equipment, gross | 884 | 915 |
Furniture and Office Equipment [Member] | ||
Property plant and equipment, gross | 436 | 436 |
Medical Equipment [Member] | ||
Property plant and equipment, gross | $ 1,262 | $ 1,180 |
Balance Sheet Details - Sched34
Balance Sheet Details - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Due to professionals | $ 13 | $ 193 |
Due to employees and directors | 889 | 944 |
Sales and use tax liabilities | 245 | 253 |
Royalty liability | 420 | 447 |
Warranty | 115 | 131 |
Restructuring | 44 | 200 |
Other | 580 | 691 |
Accrued liabilities current | $ 2,306 | $ 2,859 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 3 | $ 15 | $ 6 | $ 30 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Gross Value | $ 12,533 | $ 12,533 |
Accumulated Amortization | (12,528) | (12,523) |
Net Book Value | $ 5 | 10 |
TearLabTechnology [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 | (266) | (261) |
Net Book Value | $ 5 | 10 |
Prescriber List [Member] | ||
Remaining Useful Life (Years) | 0 years | |
Gross Value | $ 90 | 90 |
Accumulated Amortization | (90) | (90) |
Net Book Value |
Intangible Assets - Schedule 37
Intangible Assets - Schedule of Estimated Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Total | $ 5 | $ 10 |
Indefinite-lived Intangible Assets [Member] | ||
Remainder of 2018 | 3 | |
Thereafter | 2 | |
Total | $ 5 |
Term Loan (Details Narrative)
Term Loan (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Apr. 04, 2018 | Oct. 06, 2015 | Mar. 04, 2015 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Oct. 12, 2017 | Apr. 08, 2016 | Apr. 07, 2016 | Mar. 31, 2016 | Oct. 08, 2015 |
Long-term debt | $ 22,311 | $ 28,290 | |||||||||
Warrants exercise price | $ 0.44 | ||||||||||
Financing and legal fees to long-term debt | 1,055 | ||||||||||
CRG Warrants [Member] | |||||||||||
Warrants to purchase common shares | 35,000 | 35,000 | |||||||||
Warrants exercise price | $ 15 | $ 50 | |||||||||
Term Loan Agreement [Member] | CRG LP Additional Warrants [Member] | |||||||||||
Warrants to purchase common shares | 35,000 | 35,000 | |||||||||
Warrants exercise price | $ 1.50 | $ 15 | $ 15 | ||||||||
Warrants term | 5 years | ||||||||||
Ownership percentage | 1.22% | ||||||||||
CRG LP [Member] | Term Loan Agreement [Member] | |||||||||||
Facility fee percentage on principal | 3.00% | ||||||||||
Minimum liquidity covenant amount | $ 3,000 | ||||||||||
CRG LP [Member] | CRG Warrants [Member] | Term Loan Agreement [Member] | |||||||||||
Warrants exercise price | $ 0.44 | ||||||||||
Term Loan Agreement [Member] | CRG LP [Member] | |||||||||||
Long-term debt | $ 35,000 | ||||||||||
Proceeds from issuance of long-term debt | $ 15,000 | ||||||||||
Debt instrument date | Dec. 31, 2020 | ||||||||||
Debt instrument interest rate percentage | 13.00% | ||||||||||
Warrants to purchase common shares | 35,000 | ||||||||||
Warrants exercise price | $ 50 | ||||||||||
Warrants term | 5 years | ||||||||||
Ownership percentage | 1.22% | ||||||||||
Facility fee percentage on principal | 9.50% | ||||||||||
Payment of liquidity covenant | $ 1,000 | ||||||||||
Financing and legal fees to long-term debt | 606 | ||||||||||
Percentage of prepayment fee | 5.00% | ||||||||||
Percentage of reduction in annual prepayment fee | 1.00% | ||||||||||
Term Loan Agreement [Member] | CRG LP [Member] | Maximum [Member] | |||||||||||
Warrants exercise price | $ 15 | ||||||||||
Term Loan Agreement [Member] | CRG LP [Member] | Minimum [Member] | |||||||||||
Warrants exercise price | $ 1.50 | ||||||||||
Term Loan Agreement [Member] | CRG LP [Member] | 2018 [Member] | |||||||||||
Term loan minimum annual revenue threshold | 25,000 | ||||||||||
Term Loan Agreement [Member] | CRG LP [Member] | 2019 [Member] | |||||||||||
Term loan minimum annual revenue threshold | 38,000 | ||||||||||
Term Loan Agreement [Member] | CRG LP [Member] | 2020 [Member] | |||||||||||
Term loan minimum annual revenue threshold | $ 45,000 | ||||||||||
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 | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Principal balance outstanding | $ 24,000 | |
PIK interest | 4,961 | |
Facility fee | 1,055 | |
Deferred financing fees, net | (252) | |
Detachable warrants, net | (213) | |
Total | 29,551 | |
Less, current portion of term loan | 7,240 | |
Total term loan | $ 22,311 | $ 28,290 |
Term Loan - Schedule of Maturit
Term Loan - Schedule of Maturities of Outstanding Principal of Term Loan (Details) $ in Thousands | Jun. 30, 2018USD ($) |
Debt Disclosure [Abstract] | |
2,018 | |
2,019 | 14,481 |
2,020 | 15,535 |
Total principal due | 30,016 |
Less: discount on term loan | (465) |
Total term loan | $ 29,551 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Dec. 08, 2017 | Oct. 12, 2017 | Jun. 23, 2017 | Feb. 27, 2017 | May 09, 2016 | Apr. 08, 2016 | Oct. 08, 2015 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Mar. 31, 2018 | Apr. 07, 2016 |
Common stock shares authorized | 40,000,000 | 40,000,000 | 40,000,000 | |||||||||||
Common stock par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Preferred stock shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||
Preferred stock par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Reserve stock split | 1-for-10 reverse stock split | |||||||||||||
Stock issued during period, shares new issue | 2,013,636 | |||||||||||||
Preferred stock, issued | 776 | 776 | 2,012 | |||||||||||
Proceeds from issuance or sale of equity | $ 2,404 | |||||||||||||
Allocated share-based compensation expense | $ 72 | $ 246 | 80 | $ 535 | ||||||||||
Class of warrant or right exercise price of warrants or rights | $ 0.44 | |||||||||||||
Fair value of warrants | 10 | |||||||||||||
Common Stock [Member] | ||||||||||||||
Proceeds from issuance or sale of equity | $ 327 | |||||||||||||
Common stock, conversion basis | 3,040,909 | |||||||||||||
2002 Stock Incentive Plan [Member] | ||||||||||||||
Share-based compensation expiration period | 10 years | |||||||||||||
Expected weighted-average period | 5 years | |||||||||||||
2002 Stock Incentive Plan [Member] | Employees, Directors and Consultants [Member] | ||||||||||||||
Share-based compensation number of shares reserved for issuance | 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 | 28,601 | 28,601 | ||||||||||||
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 | $ 0 | $ 2 | $ 0 | $ 5 | ||||||||||
Stock issued during period number of shares of employee stock purchase plans | 0 | 7,512 | ||||||||||||
Term Loan Agreement [Member] | Tranche One [Member] | ||||||||||||||
Proceeds from issuance of long-term debt | $ 10,000 | |||||||||||||
Series A Convertible Preferred Stock [Member] | ||||||||||||||
Preferred stock, issued | 2,114 | |||||||||||||
Common stock, conversion basis | 1,338 | |||||||||||||
Series A Warrants [Member] | ||||||||||||||
Preferred stock, issued | 6,818,181 | |||||||||||||
Series A Warrants [Member] | Black-Scholes Merton Model [Member] | ||||||||||||||
Class of warrant or right number of securities called by warrants or rights | 6,818,181 | 1,253,500 | ||||||||||||
Expected weighted-average period | 5 years | 6 years | ||||||||||||
Class of warrant or right exercise price of warrants or rights | $ 0.44 | $ 11.25 | ||||||||||||
Fair value assumptions, volatility percentage | 88.00% | 76.00% | ||||||||||||
Fair value assumptions, risk-free interest rate | 2.14% | 1.30% | ||||||||||||
Fair value assumptions, dividend yield | 0.00% | 0.00% | ||||||||||||
Warrant expiration date, description | expire 5 years after the issuance date | Expire 5 years after the Initial Exercise Date | ||||||||||||
Series B Warrants [Member] | ||||||||||||||
Preferred stock, issued | 6,818,181 | |||||||||||||
Proceeds from issuance or sale of equity | $ 3,000 | |||||||||||||
Payments of stock issuance costs | $ 596 | |||||||||||||
Series B Warrants [Member] | Black-Scholes Merton Model [Member] | ||||||||||||||
Class of warrant or right number of securities called by warrants or rights | 6,818,181 | |||||||||||||
Expected weighted-average period | 6 months | |||||||||||||
Class of warrant or right exercise price of warrants or rights | $ 0.44 | |||||||||||||
Fair value assumptions, volatility percentage | 158.60% | |||||||||||||
Fair value assumptions, risk-free interest rate | 1.45% | |||||||||||||
Fair value assumptions, dividend yield | 0.00% | |||||||||||||
Warrant expiration date, description | expire 6 months after the issuance date | |||||||||||||
Placement Agent Warrants [Member] | ||||||||||||||
Class of warrant or right number of securities called by warrants or rights | 477,273 | |||||||||||||
Common Stock [Member] | ||||||||||||||
Common stock, conversion basis | 4,804,545 | |||||||||||||
CRG Warrants [Member] | ||||||||||||||
Class of warrant or right number of securities called by warrants or rights | 35,000 | 35,000 | ||||||||||||
Expected weighted-average period | 5 years | |||||||||||||
Class of warrant or right exercise price of warrants or rights | $ 15 | $ 50 | ||||||||||||
Warrants exercisable date | Oct. 8, 2020 | |||||||||||||
Fair value of warrants | $ 290 | |||||||||||||
Fair value assumptions, volatility percentage | 73.00% | |||||||||||||
Fair value assumptions, risk-free interest rate | 1.71% | |||||||||||||
Fair value assumptions, dividend yield | 0.00% | |||||||||||||
CRG Warrants [Member] | Black-Scholes Merton Model [Member] | ||||||||||||||
Class of warrant or right number of securities called by warrants or rights | 83,240 | 83,240 | ||||||||||||
Expected weighted-average period | 5 years | 5 years | ||||||||||||
Class of warrant or right exercise price of warrants or rights | $ 1.50 | $ 1.50 | ||||||||||||
Fair value of warrants | $ 30 | $ 30 | ||||||||||||
Fair value assumptions, volatility percentage | 88.00% | 88.00% | ||||||||||||
Fair value assumptions, risk-free interest rate | 2.14% | 2.14% | ||||||||||||
Fair value assumptions, dividend yield | 0.00% | 0.00% | ||||||||||||
CRG Warrants [Member] | Black-Scholes Merton Model [Member] | Term Loan Agreement [Member] | ||||||||||||||
Expected weighted-average period | 3 years 5 months 23 days | 5 years | ||||||||||||
Fair value of warrants | $ 106 | |||||||||||||
Fair value assumptions, volatility percentage | 90.00% | 76.00% | ||||||||||||
Fair value assumptions, risk-free interest rate | 1.80% | 1.30% | ||||||||||||
Fair value assumptions, dividend yield | 0.00% | 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 | ||||||||||||
Expected weighted-average period | 2 years 11 months 26 days | |||||||||||||
Class of warrant or right exercise price of warrants or rights | $ 1.50 | $ 15 | $ 15 | |||||||||||
Fair value of warrants | $ 44 | |||||||||||||
Fair value assumptions, volatility percentage | 94.00% | |||||||||||||
Fair value assumptions, risk-free interest rate | 1.70% | |||||||||||||
Fair value assumptions, dividend yield | 0.00% | |||||||||||||
Ownership percentage | 1.22% | |||||||||||||
CRG LP Additional Warrants [Member] | Black-Scholes Merton Model [Member] | Term Loan Agreement [Member] | ||||||||||||||
Expected weighted-average period | 4 years 6 months | |||||||||||||
Fair value of warrants | $ 54 | |||||||||||||
Fair value assumptions, volatility percentage | 76.00% | |||||||||||||
Fair value assumptions, risk-free interest rate | 1.06% | |||||||||||||
Fair value assumptions, dividend yield | 0.00% | |||||||||||||
Warrants [Member] | Black-Scholes Merton Model [Member] | ||||||||||||||
Class of warrant or right number of securities called by warrants or rights | 477,273 | 477,273 | ||||||||||||
Class of warrant or right exercise price of warrants or rights | $ 0.55 | $ 0.55 | ||||||||||||
Warrants [Member] | Black-Scholes Merton Model [Member] | Valuation Technique, Option Pricing Model [Member] | Expected Term [Member] | ||||||||||||||
Expected weighted-average period | 5 years | |||||||||||||
Minimum [Member] | ||||||||||||||
Common stock shares authorized | 9,500,000 | |||||||||||||
Minimum [Member] | 2002 Stock Incentive Plan [Member] | ||||||||||||||
Share-based compensation common stock purchase price percentage | 10.00% | |||||||||||||
Maximum [Member] | ||||||||||||||
Common stock shares authorized | 40,000,000 | |||||||||||||
Maximum [Member] | 2002 Stock Incentive Plan [Member] | ||||||||||||||
Share-based compensation common stock purchase price percentage | 110.00% | |||||||||||||
Maximum [Member] | 2002 Stock Incentive Plan [Member] | Officer Director Or Consultant [Member] | ||||||||||||||
Percentage of options exercisable at a rate | 20.00% | 20.00% | ||||||||||||
Maximum [Member] | 2002 Stock Incentive Plan [Member] | Non-Statutory Stock Options [Member] | ||||||||||||||
Share-based compensation common stock purchase price percentage | 85.00% | |||||||||||||
Maximum [Member] | 2002 Stock Incentive Plan [Member] | Employees, Directors and Consultants [Member] | ||||||||||||||
Share-based compensation number of shares reserved for issuance | 1,070,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Common and Preferred Shares (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Proceeds from issuance or sale of equity | $ 2,404 |
Common Stock [Member] | |
Proceeds from issuance or sale of equity | 327 |
Preferred Stock [Member] | |
Proceeds from issuance or sale of equity | 781 |
Series A Warrants [Member] | |
Proceeds from issuance or sale of equity | 804 |
Series B Warrants [Member] | |
Proceeds from issuance or sale of equity | $ 492 |
Stockholders' Equity - Schedu43
Stockholders' Equity - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Stock-based compensation expense before income taxes | $ 72 | $ 246 | $ 80 | $ 535 |
Sales and Marketing [Member] | ||||
Stock-based compensation expense before income taxes | 20 | 111 | 38 | 257 |
Clinical, Regulatory and Research and Development [Member] | ||||
Stock-based compensation expense before income taxes | 8 | 41 | 16 | 84 |
General and Administrative [Member] | ||||
Stock-based compensation expense before income taxes | $ 44 | $ 94 | $ 26 | $ 194 |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Antidilutive securities number of shares | 9,302,000 | 2,038,000 |
Stock Options [Member] | ||
Antidilutive securities number of shares | 599,000 | 707,000 |
Warrant [Member] | ||
Antidilutive securities number of shares | 8,702,000 | 1,324,000 |
ESPP Shares [Member] | ||
Antidilutive securities number of shares | 7,000 | |
Convertible Preferred Shares [Member] | ||
Antidilutive securities number of shares | 1,000 |
Commitments and Contingencies45
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | May 01, 2018 | Mar. 07, 2016 | Oct. 01, 2006 | Jun. 30, 2018 |
Royalty payment, percentage | 30.00% | |||
Royalty payments | $ 35 | |||
Maximum royalty payable on sale of combined products | 5.50% | |||
Royalty payment, 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. | |||
i-Med Pharma, Inc. [Member] | ||||
Loss contingency damages paid | $ 500 | |||
Restated License Agreement [Member] | ||||
Royalty payment, percentage | 20.00% | |||
Revenue milestone payments | $ 500 | |||
Revenue milestone payment percentage | 1.25% | |||
Restated License Agreement [Member] | Minimum [Member] | ||||
Royalty payment, percentage | 3.00% | 3.50% | ||
Restated License Agreement [Member] | Maximum [Member] | ||||
Royalty payment, percentage | 4.25% | 4.75% | ||
Supply Agreement [Member] | MiniFAB [Member] | ||||
Minimum percentage of purchase | 50.00% | |||
April 2018 [Member] | i-Med Pharma, Inc. [Member] | ||||
Loss contingency damages paid | $ 200 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Payments (Details) $ in Thousands | Jun. 30, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 35 |
2,019 | 35 |
2,020 | 35 |
2,021 | 35 |
2,022 | 35 |
Thereafter | 210 |
Total | $ 385 |
Restructuring Costs (Details Na
Restructuring Costs (Details Narrative) $ in Thousands | Dec. 15, 2017USD ($) |
Restructuring and Related Activities [Abstract] | |
Restructuring expenses | $ 322 |
Restructuring Costs - Schedule
Restructuring Costs - Schedule of Expenses Related to Restructuring (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Accrued obligations | $ 200 |
Settlement of obligations | (156) |
Accrued obligations | 44 |
Employee Costs [Member] | |
Accrued obligations | 97 |
Settlement of obligations | (97) |
Accrued obligations | 0 |
Other Costs [Member] | |
Accrued obligations | 103 |
Settlement of obligations | (59) |
Accrued obligations | $ 44 |
Related Party (Details Narrativ
Related Party (Details Narrative) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Related Party Transactions [Abstract] | |
Royalty rate | 0.68% |
Accrual of royalties | $ 178 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] | Jul. 01, 2018ft² |
Lease description | On May 1, 2018 with an effective date of July 1, 2018 the Company entered into a new operating lease agreement for the Corporate Headquarters located at 150 La Terraza Blvd., Suite 101 Escondido, CA 92025 and occupying approximately 6,120 square feet. |
Area of land for lease | 6,120 |
Lease term | 5 years 5 months |