Sonoma Pharmaceuticals (SNOA) 10-Q 14 Feb 19 2019 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Dec. 31, 2018	Feb. 11, 2019
Document And Entity Information
Entity Registrant Name	Sonoma Pharmaceuticals, Inc.
Entity Central Index Key	1,367,083
Document Type	10-Q
Document Period End Date	Dec. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--03-31
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		11,972,328
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,019
Entity Emerging Growth Company	false
Entity Small Business	true

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Dec. 31, 2018	Mar. 31, 2018
Current assets:
Cash and cash equivalents	$ 6,496	$ 10,066
Accounts receivable, net	3,121	1,537
Inventories	3,215	2,865
Prepaid expenses and other current assets	1,526	1,547
Current portion of deferred consideration, net of discount	221	239
Total current assets	14,579	16,254
Property and equipment, net	817	1,136
Deferred consideration, net of discount, less current portion	1,123	1,322
Other assets	526	494
Total assets	17,045	19,206
Current liabilities:
Accounts payable	1,101	1,272
Accrued expenses and other current liabilities	1,535	1,406
Deferred revenue	174	147
Deferred revenue Invekra	55	59
Current portion of long-term debt	8	230
Current portions of capital leases	182	147
Common stock liability	270	0
Total current liabilities	3,325	3,261
Long-term deferred revenue	366	443
Long-term debt, less current portion	14	32
Long-term capital leases, less current portion	0	144
Total liabilities	3,705	3,880
Commitments and Contingencies (Note 5)
Stockholders' Equity
Convertible preferred stock, $0.0001 par value; 714,286 shares authorized at December 31, 2018 and March 31, 2018, respectively, 1.55 shares issued and outstanding at December 31, 2018 and no shares issued and outstanding at March 31, 2018	0	0
Common stock, $0.0001 par value; 24,000,000 and 12,000,000 shares authorized at December 31, 2018 and March 31, 2018, respectively, 11,972,328 and 6,171,736 shares issued and outstanding at December 31, 2018 and March 31, 2018, respectively	2	1
Additional paid-in capital	183,772	176,740
Accumulated deficit	(166,016)	(157,440)
Accumulated other comprehensive loss	(4,418)	(3,975)
Total stockholders' equity	13,340	15,326
Total liabilities and stockholders' equity	$ 17,045	$ 19,206

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Dec. 31, 2018	Mar. 31, 2018
Statement of Financial Position [Abstract]
Convertible preferred stock par value	$ 0.0001	$ 0.0001
Convertible preferred stock shares authorized	714,286	714,286
Convertible preferred stock shares issued	2	0
Convertible preferred stock shares outstanding	2	0
Common stock par value	$ .0001	$ 0.0001
Common stock shares authorized	24,000,000	12,000,000
Common stock shares issued	11,972,328	6,171,736
Common stock shares outstanding	11,972,328	6,171,736

Condensed Consolidated Statemen

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Total revenues	$ 5,280	$ 4,843	$ 14,588	$ 13,003
Total cost of revenues	2,433	2,475	7,583	7,025
Gross profit	2,847	2,368	7,005	5,978
Operating expenses
Research and development	451	349	1,191	1,099
Selling, general and administrative	4,746	5,219	14,368	14,319
Total operating expenses	5,197	5,568	15,559	15,418
Loss from operations	(2,350)	(3,200)	(8,554)	(9,440)
Interest expense	(7)	(11)	(26)	(31)
Interest income	37	14	139	85
Other income (expense), net	22	10	(135)	(179)
Net loss	$ (2,298)	$ (3,187)	$ (8,576)	$ (9,565)
Net loss per share: basic and diluted	$ (0.26)	$ (0.73)	$ (1.20)	$ (2.21)
Weighted-average number of shares used in per share calculations: basic and diluted	8,739	4,392	7,152	4,333
Other comprehensive loss
Net loss	$ (2,298)	$ (3,187)	$ (8,576)	$ (9,565)
Foreign currency translation adjustments	(291)	(377)	(443)	(222)
Comprehensive loss	(2,589)	(3,564)	(9,019)	(9,787)
Product [Member]
Total revenues	5,045	4,647	13,775	12,394
Total cost of revenues	2,269	2,308	7,006	6,529
Service [Member]
Total revenues	235	196	813	609
Total cost of revenues	$ 164	$ 167	$ 577	$ 496

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities
Net loss	$ (8,576)	$ (9,565)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	347	366
Stock-based compensation	1,275	1,530
Service provider fees settled with common stock	59	62
Changes in operating assets and liabilities:
Accounts receivable	(1,628)	(500)
Inventories	(514)	(521)
Prepaid expenses and other current assets	75	(951)
Accounts payable	(150)	151
Accrued expenses and other current liabilities	150	174
Deferred revenue	(9)	(137)
Net cash used in operating activities	(8,971)	(9,391)
Cash flows from investing activities:
Purchases of property and equipment	(86)	(178)
Deposits	(37)	(15)
Net cash provided by investing activities	(123)	(193)
Cash flows from financing activities:
Net proceeds from sale of common stock in connection with at market issuances	957	968
Net proceeds from sale of common and preferred stock units	4,742	0
Proceeds from exercise of common stock purchase warrants	0	52
Proceeds from common stock liability	270	0
Principal payments on capital leases	(109)	(97)
Principal payments on long-term debt	(288)	(121)
Net cash provided by financing activities	5,572	802
Effect of exchange rate on cash and cash equivalents	(48)	(54)
Net decrease in cash and cash equivalents	(3,570)	(8,836)
Cash and cash equivalents, beginning of period	10,066	17,461
Cash and cash equivalents, end of period	6,496	8,625
Supplemental disclosure of cash flow information:
Cash paid for interest	26	31
Non-cash operating and financing activities:
Automobiles financed using capital leases	$ 0	$ 180

1. Organization and Recent Deve

1. Organization and Recent Developments	9 Months Ended
	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Recent Developments	Note 1. Organization and Recent Developments Organization Sonoma Pharmaceuticals, Inc. (the “Company”) was incorporated under the laws of the State of California in April 1999 and was reincorporated under the laws of the State of Delaware in December 2006. The Company’s principal office is located in Petaluma, California. The Company is a specialty pharmaceutical company dedicated to identifying, developing and commercializing unique, differentiated therapies to patients living with chronic skin conditions. The Company believes its products, which are sold throughout the United States and internationally, have improved patient outcomes by treating and reducing certain skin diseases including acne, atopic dermatitis, scarring, infections, itch, pain and harmful inflammatory responses. Basis of Presentation The accompanying unaudited condensed consolidated financial statements as of December 31, 2018 and for the three and nine months then ended have been prepared in accordance with the accounting principles generally accepted in the United States of America for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and on the same basis as the Company prepares its annual audited consolidated financial statements. The condensed consolidated balance sheet as of December 31, 2018, the condensed consolidated statements of comprehensive loss for the three and nine months ended December 31, 2018 and 2017 and the cash flows for the nine months ended December 31, 2018 and 2017 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of the consolidated financial position, operating results and cash flows for the periods presented. The results for the three and nine months ended December 31, 2018 are not necessarily indicative of results to be expected for the year ending March 31, 2019 or for any future interim period. The condensed consolidated balance sheet at March 31, 2018 has been derived from audited consolidated financial statements. These unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended March 31, 2018, and notes thereto included in the Company’s annual report on Form 10-K, which was filed with the SEC on June 26, 2018.

2. Liquidity and Financial Cond

2. Liquidity and Financial Condition	9 Months Ended
	Dec. 31, 2018
Liquidity And Financial Condition
Liquidity and Financial Condition	Note 2. Liquidity and Financial Condition The Company reported a net loss of $8,576,000 for the nine months ended December 31, 2018. At December 31, 2018 and March 31, 2018, the Company’s accumulated deficit amounted to $166,016,000 and $157,440,000, respectively. The Company had working capital of $11,254,000 and $12,993,000 as of December 31, 2018 and March 31, 2018, respectively. On November 16, 2018, the Company entered into a placement agency agreement with Dawson James Securities, Inc. with respect to the issuance and sale of an aggregate of up to 7,300,000 units with each unit consisting of one share of common stock, par value $0.0001 per share or, in lieu of common stock, if purchasing common stock would result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% of the outstanding common stock, shares of Series C convertible preferred stock (“Series C”) convertible into shares of common stock, together with one half of one warrant to purchase one share of common stock at an exercise price equal to $1.00 per whole share, in a public offering. The public offering price for each unit was $1.00. On November 21, 2018, at closing of the offering, the Company sold 4,564,400 shares of common stock, 9.65 shares of Series C (convertible into 965,000 shares of common stock) and 2,764,700 warrants for gross proceeds of $5,530,000 and net proceeds of $4,742,000 after deducting placement agent commissions and other estimated offering expenses. On December 8, 2017, the Company entered into an At Market Issuance Sales Agreement with B. Riley FBR, Inc. under which the Company may issue and sell shares of common stock having an aggregate offering price of up to $5,000,000 from time to time through B. Riley acting as its sales agent. The Company will pay B. Riley a commission rate equal to 3.0% of the gross proceeds from the sale of any shares of common stock sold through B. Riley as agent. For the period of April 1, 2018 through October 3, 2018, the Company sold 267,394 shares of common stock for gross proceeds of $999,000 and net proceeds of $957,000 after deducting commissions and other offering expenses. In addition, on October 4, 2018, the Company sold 113,000 shares of common stock, at a price of $2.39 per share, through its At Market Issuance Sales Agreement with B. Riley FBR, Inc. for gross proceeds of $270,000 and net proceeds of $262,000 after deducting commissions and other offering expenses. This sale exceeded the aggregate market value of the Company’s securities sold during the period of twelve calendar months prior to the sale of one-third of the aggregate market value of its common stock held by non-affiliates, and thus, the 113,000 shares of common stock were unregistered. The Company could be liable in the event claims or suits for rescission are brought and successfully concluded for failure to register these securities or for acts or omissions constituting offenses under the Securities Act, the Securities Exchange Act of 1934, or applicable state securities laws. The Company could be liable for damages and penalties assessed by the SEC and state securities regulators. The Company expects to continue incurring losses for the foreseeable future and will need to raise additional capital to pursue its product development initiatives, to penetrate markets for the sale of its products and to continue as a going concern. The Company cannot provide any assurances that it will be able to raise additional capital. Management believes that the Company has access to additional capital resources through possible public or private equity offerings, debt financings, corporate collaborations or other means; however, the Company cannot provide any assurances that other new financings will be available on commercially acceptable terms, if needed. If the economic climate in the U.S. deteriorates, the Company’s ability to raise additional capital could be negatively impacted. If the Company is unable to secure additional capital, it may be required take additional measures to reduce costs in order to conserve its cash in amounts sufficient to sustain operations and meet its obligations. These measures could cause significant delays in the Company’s continued efforts to commercialize its products, which is critical to the realization of its business plan and the future operations of the Company. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern.

3. Summary of Significant Accou

3. Summary of Significant Accounting Policies	9 Months Ended
	Dec. 31, 2018
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Note 3. Summary of Significant Accounting Policies Use of Estimates The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the dates of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. Significant estimates and assumptions include reserves and write-downs related to receivables and inventories, the recoverability of long-lived assets, the valuation allowance relating to the Company’s deferred tax assets, the valuation of equity and derivative instruments, debt discounts, the valuation of investments, the determination of the relative selling prices of the components sold to Invekra, and the estimated amortization periods of upfront product licensing fees received from customers. Periodically, the Company evaluates and adjusts estimates accordingly. Net Loss per Share The Company computes basic net loss per share by dividing net loss per share available to common stockholders by the weighted average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “treasury stock” and/or “if converted” methods as applicable. The computation of basic loss per share for the three and nine months ended December 31, 2018 and 2017 excludes the potentially dilutive securities summarized in the table below because their inclusion would be anti-dilutive. December 31, 2018 2017 Restricted stock units 34,000 33,000 Options to purchase common stock 1,441,000 1,385,000 Warrants to purchase common stock 4,209,000 1,333,000 Series C 155,000 – Common Stock Units (1) 415,000 – 6,254,000, 2,751,000 (1) Each unit consists of one share of common stock, par value $0.0001 per share, and one half of one warrant to purchase one share of common stock. Revenue Recognition On April 1, 2018, the Company adopted Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers Topic 606” (“Topic 606”) using the modified retrospective method. There was no impact to the Company upon the adoption of Topic 606. Revenue is recognized when the entity transfers promised goods or services to the customer, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under the agreement, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. The Company derives the majority of its revenue through sales of its products to a customer base, including hospitals, medical centers, doctors, pharmacies, distributors and wholesalers. The Company sells products directly to end users and to distributors. The Company also has entered into agreements to license its technology and products. The Company also provides regulatory compliance testing and quality assurance services to medical device and pharmaceutical companies. The Company considers customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with a customer. For each contract, the Company considers the promise to transfer products, each of which are distinct, to be the identified performance obligations. In determining the transaction price the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which it expects to be entitled. For all of its sales to non-consignment distribution channels, revenue is recognized when control of the product is transferred to the customer (i.e. when our performance obligation is satisfied), which typically occurs when title passes to the customer upon shipment but could occur when the customer receives the product based on the terms of the agreement with the customer. For product sales to its value-added resellers, non-stocking distributors and end-user customers, the Company grants return privileges to its customers, and because the Company has a long history with its customers, the Company is able to estimate the amount of product that will be returned. Sales incentives and other programs that the Company may make available to these customers are considered to be a form of variable consideration, and the Company maintains estimated accruals and allowances using the expected value method. The Company has entered into consignment arrangements, in which goods are left in the possession of another party to sell. recognizes revenue based on a variable percentage of a fixed price. Revenue recognized varies depending on whether a patient is covered by insurance or is not covered by insurance Sales to stocking distributors are made under terms with fixed pricing and limited rights of return (known as “stock rotation”) of the Company’s products held in their inventory. Revenue from sales to distributors is recognized upon the transfer of control to the distributor. The Company assessed the promised goods and services in the technical support to Invekra for a ten-year period as being a distinct service that Invekra can benefit from on its own and is separately identifiable from any other promises within the contract. Given that the distinct service is not substantially the same as other goods and services within the Invekra contract, the Company accounted for the distinct service as a performance obligation. Revenue from testing contracts is recognized as tests are completed and a final report is sent to the customer. Disaggregation of Revenue The following table presents the Company’s disaggregated revenues by revenue source: Three Months Ended December 31, Nine Months Ended December 31, 2018 2017 2018 2017 Product Human Skin Care $ 4,497,000 $ 4,358,000 $ 12,125,000 $ 11,297,000 Animal Skin Care 548,000 289,000 1,650,000 1,097,000 5,045,000 4,647,000 13,775,000 12,394,000 Service 235,000 196,000 813,000 609,000 Total $ 5,280,000 $ 4,843,000 $ 14,588,000 $ 13,003,000 Accounts Receivable Trade accounts receivable are recorded net of allowances for cash discounts for prompt payment, doubtful accounts, and sales returns. Estimates for cash discounts and sales returns are based on analysis of contractual terms and historical trends. The Company’s policy is to reserve for uncollectible accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable. The Company periodically reviews its accounts receivable to determine whether an allowance for doubtful accounts is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Other factors that the Company considers include its existing contractual obligations, historical payment patterns of its customers and individual customer circumstances, an analysis of the number of days sales are outstanding by customer and geographic region, and a review of the local economic environment and its potential impact on government funding and reimbursement practices. Account balances deemed to be uncollectible are charged to the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts represents probable credit losses of $16,000 and $17,000 at December 31, 2018 and March 31, 2018, respectively. Additionally, at December 31, 2018 and March 31, 2018 the Company had allowances of $1,834,000 and $1,275,000, respectively, related to potential discounts, returns, distributor fees and rebates. The allowances are included in Accounts Receivable, net in the accompanying condensed consolidated balance sheets. Inventories Inventories are stated at the lower of cost, cost being determined on a standard cost basis (which approximates actual cost on a first-in, first-out basis), or net realizable value. Due to changing market conditions, estimated future requirements, age of the inventories on hand and production of new products, the Company regularly reviews inventory quantities on hand and records a provision to write down excess and obsolete inventory to its estimated net realizable value. The Company recorded a provision to reduce the carrying amounts of inventories to their net realizable value in the amount of $124,000 and $111,000 at December 31, 2018 and March 31, 2018, respectively, which is included in cost of product revenues on the Company’s accompanying condensed consolidated statements of comprehensive loss. Subsequent Events Management has evaluated subsequent events or transactions occurring through the date the condensed consolidated financial statements were issued. Adoption of Recent Accounting Standards Financial Instruments On April 1, 2018, the Company adopted ASU No. 2016-01, Financial Instruments-Overall Statement of Cash Flows On April 1, 2018, the Company adopted ASU No. 2016-15, Statement of Cash Flows (Topic 230) On April 1, 2018, the Company adopted ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash Business Combinations On April 1, 2018, the Company adopted ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business Stock Compensation On April 1, 2018, the Company adopted ASU No. 2017-09, Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting Recent Accounting Standards Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842) Codification Improvements to Topic 842, Leases Leases - Targeted Improvements. ASU No. 2018-10 provides certain amendments that affect narrow aspects of the guidance issued in ASU No. 2016-02. Reporting Comprehensive Income In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income Stock Compensation In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Accounting standards that have been issued or proposed by the FASB, the SEC or other standard setting bodies that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

4. Condensed Consolidated Balan

4. Condensed Consolidated Balance Sheets	9 Months Ended
	Dec. 31, 2018
Disclosure Text Block Supplement [Abstract]
Condensed Consolidated Balance Sheets	Note 4. Condensed Consolidated Balance Sheets Inventories Inventories consist of the following: December 31, March 31, 2018 2018 Raw materials $ 1,819,000 $ 1,619,000 Finished goods 1,396,000 1,246,000 $ 3,215,000 $ 2,865,000

5. Commitments and Contingencie

5. Commitments and Contingencies	9 Months Ended
	Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Note 5. Commitments and Contingencies Legal Matters On March 17, 2017, the Company filed a lawsuit against Collidion, Inc. and several of its former employees, officers and directors, alleging the misappropriation of its confidential, proprietary and trade secret information as well as breach of fiduciary duties in the United States District Court for the Northern District of California, San Francisco Division. On September 26, 2018, the Company settled the lawsuit to the satisfaction of all parties. There has been no finding of wrongdoing against any party. Aside from the lawsuit described above, on occasion, the Company may be involved in legal matters arising in the ordinary course of business including matters involving proprietary technology. While management believes that such matters are currently insignificant, matters arising in the ordinary course of business for which the Company is or could become involved in litigation may have a material adverse effect on its business and financial condition of comprehensive loss. Employment Matters Potential Severance Payments As of December 31, 2018, the Company had employment agreements in place with four of its key executives. The agreements provide, among other things, for the payment of up to twelve months of severance compensation for terminations under certain circumstances. Three of the employment agreements have a provision for severance compensation. At December 31, 2018, potential severance payments to key executives would be $704,000, if triggered. Appointment of Chief Executive Office and Interim Financial Officer On December 11, 2018, the Company’s Board appointed Mr. Frederick (Bubba) Sandford as its Chief Executive Officer and Interim Chief Financial Officer for an initial term of nine months, subject to a mutual extension of an additional three months. Mr. Sandford was appointed as a Class III director of the Board on December 14, 2018. In connection with Mr. Sandford’s appointment as the Company’s Chief Executive Officer and Interim Chief Financial Officer, the Company entered into an employment agreement with him, in which the Company agreed to pay him a base annual salary of $350,000 per year. The Company also agreed to pay him a performance bonus of a maximum of 60% of his base annual salary for achieving certain agreed upon targets. In addition, pursuant to the agreement, Mr. Sandford was granted 450,000 stock options to purchase the Company’s common stock, of which 400,000 stock options were treated as an inducement grant and 50,000 stock options were from the Company’s equity incentive plan. The Company granted the options on January 10, 2019 with an exercise price of $0.717 per share, and will become 100% exercisable nine months after date of grant and have a maximum term of ten years. Upon termination, the options are exercisable for up to twelve months from the termination date and in no event later than ten years from the grant date. Resignation of Chief Executive Officer, President and Director and Chief Financial Officer and Secretary On December 12, 2018, Jim Schutz and Robert Miller resigned from their positions as the Company’s Chief Executive Officer and President and Chief Financial Officer and Secretary, respectively. On the same date, Mr. Schutz also resigned from the Board. In connection with Mr. Schutz’s resignation, the Company entered into a separation and mutual release agreement with Mr. Schutz on December 13, 2018, in which the Company agreed to pay him severance, consisting of $250,000, to be paid in two equal installments with the first half paid on December 14, 2018 and the second half to be paid with the next payroll after three months, $38,461 to compensate him for his unused paid time off, and continuation of dental, vision and health insurance until December 31, 2018. Mr. Schutz’s outstanding equity awards were accelerated to December 12, 2018 and remained exercisable until January 14, 2019. Mr. Schutz also agreed to aid with the transition for 30 calendar days. The options expired unexercised on January 14, 2019. In connection with Mr. Miller’s resignation, the Company entered into a separation and mutual release agreement with Mr. Miller on December 13, 2018, in which the Company agreed to pay him severance, consisting of $225,000, to be paid in two equal installments with the and the second half to be paid with the next payroll after three months, $38,461 to compensate him for his unused paid time off, and continuation of dental, vision and health insurance until December 31, 2018. Mr. Miller’s outstanding equity awards were accelerated to December 12, 2018 and remained exercisable until January 14, 2019. Other Matters Sale of Unregistered Shares On October 4, 2018, the Company sold 113,000 shares of common stock, at a price of $2.39 per share, through its At Market Issuance Sales Agreement with B. Riley FBR, Inc. for gross proceeds of $270,000 and net proceeds of $262,000 after deducting commissions and other offering expenses. This sale exceeded the aggregate market value of the Company’s securities sold during the period of twelve calendar months prior to the sale of one-third of the aggregate market value of its common stock held by non-affiliates, and thus, the 113,000 shares of common stock were unregistered. The Company could be liable in the event claims or suits for rescission are brought and successfully concluded for failure to register these securities or for acts or omissions constituting offenses under the Securities Act, the Securities Exchange Act of 1934, or applicable state securities laws. The Company could be liable for damages and penalties assessed by the SEC and state securities regulators. Accordingly, at December 31, 2018, the Company recorded a $270,000 liability in the accompanying condensed consolidated balance sheet. Nasdaq Listing On January 4, 2019, the Company received a letter from the Listing Qualifications staff of The Nasdaq Stock Market LLC, notifying the Company that, for the previous 30 consecutive business days, the Company failed to comply with Nasdaq Listing Rule 5550(a)(2), which requires the Company to maintain a minimum bid price of $1.00 per share for its common stock. In accordance with Listing Rule 5810(c)(3)(C), Nasdaq has granted the Company a period of 180 calendar days, or until July 3, 2019, to regain compliance with the Rule. The Company may regain compliance with the Rule at any time during this compliance period if the minimum bid price for its common stock is at least $1.00 for a minimum of ten consecutive business days. The letter has no effect on the listing or trading of the Company’s common stock at this time. However, there can be no assurances that the Company will be able to regain compliance with Listing Rule 5550(a)(2). In the event the Company does not regain compliance with the Listing Rule prior to the expiration of the compliance period, the Company may be eligible for additional time. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and will need to provide written notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse split, if necessary. If the Company meets these requirements, Nasdaq will inform the Company that it has been granted an additional 180 calendar days. However, if it appears to the Staff of Nasdaq that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible, Nasdaq will provide notice that our securities will be subject to delisting.

6. Stockholders' Equity

6. Stockholders' Equity	9 Months Ended
	Dec. 31, 2018
Stockholders' Equity
Stockholders' Equity	Note 6. Stockholders’ Equity Authorized Capital At the annual meeting, the Company’s stockholders approved an amendment to its Restated Certificate of Incorporation, as amended, to increase the number of authorized common stock, $0.0001 par value per share, from 12,000,000 to a total of 24,000,000 shares. Effective September 13, 2018, the Company filed a certificate of amendment with the Secretary of State of the State of Delaware in order to effect an increase of the total number of shares of common stock authorized for issuance to 24,000,000. Additionally, the Company is authorized to issue 714,286 shares of convertible preferred stock with a par value of $0.0001 per share. Sale of Common and Preferred Stock Units On November 16, 2018, the Company entered into a placement agency agreement with Dawson James Securities, Inc. with respect to the issuance and sale of an aggregate of up to 7,300,000 units, each unit consisting of one share of common stock, par value $0.0001 per share or, in lieu of common stock, if purchasing common stock would result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% of the outstanding common stock, shares of Series C convertible into shares of common stock, together with one half of one warrant to purchase one share of common stock at an exercise price equal to $1.00 per whole share, in a public offering. The public offering price for each unit was $1.00. The warrants offered in the public offering are Series C warrants and will terminate on the fifth anniversary of the date of issuance. Each full warrant will entitle the holder to purchase one share of common stock at an initial exercise price of $1.00 per share. The closing of the offering occurred on November 21, 2018 and at such closing the Company sold 4,564,400 shares of common stock, 9.65 shares of Series C (convertible into 965,000 shares of common stock) and 2,764,700 warrants for gross proceeds of $5,530,000. The net proceeds to the Company from the sale of the shares of common stock, or preferred stock, and the warrants was $4,742,000, after deducting placement agent commissions and other estimated offering expenses payable by the Company. Pursuant to the placement agency agreement, the Company agreed to pay Dawson James Securities, Inc. a cash fee equal to 8% of the aggregate gross proceeds raised in this offering. The Company also agreed to pay fees and expenses of the placement agent, not to exceed $167,500, and to issue to Dawson James Securities, Inc., on the closing date, a unit purchase option for the purchase of up to 276,470 units, equal to 5% of the aggregate number of units sold in the public offering, with an exercise price of $1.25, or 125% of the price per unit. The Benchmark Company, LLC provided certain financial advisory services. As compensation for services provided, the Company made a cash payment of $74,000 and on November 16, 2018 issued 68,750 common stock purchase warrants. The common stock purchase warrants have an exercise price of $1.00 per share, become exercisable on the 180th day after the date of issuance and expire on November 16, 2023. During the three months ended December 31, 2018, investors who participated in the transaction converted 8.10 shares of Series C into 810,000 shares of common stock. Common Stock Issued to Services Providers The Company entered into an agreement with Actual, Inc., for certain marketing and branding consulting services. In connection with the agreement, the Company pays a portion of the service fees in common stock. On July 27, 2017, the Company issued 2,570 shares of restricted common stock valued at $6.74 per share, and on August 22, 2017, the Company issued 3,133 shares of restricted common stock valued at $5.53 per share. The aggregate fair market value of the common stock issued was $35,000. The Company has determined that the fair value of the common stock was more readily determinable than the fair value of the services rendered. On July 12, 2018, the Company issued 17,741 shares of restricted common stock valued at $2.48 per share. The aggregate fair market value of the common stock issued was $44,000. The Company has determined that the fair value of the common stock was more readily determinable than the fair value of the services rendered. Accordingly, during the three and nine months ended December 31, 2017, the Company recorded $28,000 and $62,000, respectively, of expense related to common stock issued. During the nine months ended December 31, 2018, the Company recorded $44,000 of expense related to common stock issued. The expense was recorded as selling, general and administrative expense in the accompanying condensed consolidated statement of comprehensive loss. The Company entered into an agreement with The Benchmark Company, LLC for certain finance related consulting services. In connection with the agreement, the Company pays a portion of the service fees in common stock. On July 31, 2018, the Company issued 6,881 shares of restricted common stock valued at $2.18 per share. The aggregate fair market value of the common stock issued was $15,000. The Company has determined that the fair value of the common stock was more readily determinable than the fair value of the services rendered. Accordingly, during the nine months ended December 31, 2018, the Company recorded $15,000 of expense related to common stock issued. The expense was recorded as selling, general and administrative expense in the accompanying condensed consolidated statement of comprehensive loss.

7. Stock-Based Compensation

7. Stock-Based Compensation	9 Months Ended
	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract]
Stock-Based Compensation	Note 7. Stock-Based Compensation The weighted average grant date fair values of options granted during the nine months ended December 31, 2018 and 2017 was $2.20 and $6.01, respectively. During the three months ended December 31, 2018, the Company did not grant any stock options. Share-based awards compensation expense is as follows: Three Months Nine Months Ended Ended December 31, December 31, 2018 2017 2018 2017 Cost of service revenue $ 24,000 $ 43,000 $ 89,000 $ 136,000 Research and development 26,000 38,000 87,000 128,000 Selling, general and administrative 352,000 584,000 1,099,000 1,266,000 Total stock-based compensation $ 402,000 $ 665,000 $ 1,275,000 $ 1,530,000 At December 31, 2018, there were unrecognized compensation costs of $976,000 related to stock options, which is expected to be recognized over a weighted-average amortization period of 1.31 years. At December 31, 2017, there were unrecognized compensation costs of $2,636,000 related to stock options, which is expected to be recognized over a weighted-average amortization period of 2.20 years. At December 31, 2018, there were unrecognized compensation costs of $78,000 related to restricted stock, which is expected to be recognized over a weighted-average amortization period of 1.49 years. At December 31, 2017, there were unrecognized compensation costs of $178,000 related to restricted stock, which is expected to be recognized over a weighted-average amortization period of 1.66. No income tax benefit has been recognized relating to stock-based compensation expense and no tax benefits have been realized from exercised stock options. Stock-Based Award Activity Stock options award activity is as follows: Number of Shares Weighted- Average Exercise Price Weighted- Average Contractual Term Aggregate Intrinsic Value Outstanding at April 1, 2018 1,393,000 $ 12.70 Options granted 159,000 2.64 Options forfeited (48,000 ) 6.69 Options expired (63,000 ) 11.91 Outstanding at December 31, 2018 1,441,000 $ 11.83 4.79 $ – Exercisable at December 31, 2018 1,103,000 $ 13.53 3.73 $ – The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the underlying stock options and the fair value of the Company’s common stock, or $0.71 per share at December 31, 2018. Restricted stock award activity is as follows: Number of Shares Weighted Average Award Date Fair Value per Share Unvested restricted stock awards outstanding at April 1, 2018 32,000 $ 6.46 Restricted stock awards granted 27,000 1.90 Restricted stock awards forfeited (4,000 ) 6.97 Restricted stock awards vested (21,000 ) 5.91 Unvested restricted stock awards outstanding at December 31, 2018 34,000 $ 3.18 The Company did not capitalize any cost associated with stock-based compensation. The Company issues new shares of common stock upon exercise of stock options or release of restricted stock awards. The Company issues new shares of common stock upon exercise of stock based awards.

8. Income Taxes

8. Income Taxes	9 Months Ended
	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Income Taxes	Note 8. Income Taxes The Company has completed a study to assess whether a change in control has occurred or whether there have been multiple changes of control since the Company’s formation through March 31, 2018. The Company determined, based on the results of the study, no change in control occurred for purposes of Internal Revenue Code Section 382. The Company, after considering all available evidence, fully reserved for these and its other deferred tax assets since it is more likely than not such benefits will not be realized in future periods. The Company has incurred losses for both financial reporting and income tax purposes for the year ended March 31, 2018. Accordingly, the Company is continuing to fully reserve for its deferred tax assets. The Company will continue to evaluate its deferred tax assets to determine whether any changes in circumstances could affect the realization of their future benefit. If it is determined in future periods that portions of the Company’s deferred income tax assets satisfy the realization standards, the valuation allowance will be reduced accordingly. The Company only recognizes tax benefits from an uncertain tax position if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. To date, the Company has not recognized such tax benefits in its consolidated financial statements. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Act. The Tax Act reduces the federal corporate income tax rate from 35% to 21%, effective January 1, 2018, which the Company expects will positively impact its future effective tax rate and after-tax earnings in the United States. The Company recognized a decrease related to its federal deferred tax assets and deferred tax liabilities, before the valuation allowance. Because a change in the valuation allowance completely offsets the change in deferred taxes, there was no impact on the consolidated financial statements related to the rate change. The Company may also be affected by certain other aspects of the Tax Act, including, without limitation, provisions regarding repatriation of accumulated foreign earnings and deductibility of capital expenditures. However, these assessments are based on preliminary review and analysis of the Tax Act and are subject to change as the Company continues to evaluate these highly complex rules as additional interpretive guidance is issued. The Company is also in the process of determining the impacts of the new Global Intangibles Low-Taxed Income (“GILTI”) tax law and has not yet included any potential GILTI tax or elected any related accounting policy. Also on December 22, 2017, the SEC staff issued Staff Accounting Bulletin 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which provides guidance on accounting for the impact of the Tax Act. As permitted by SAB 118, both of the tax benefits recorded by the Company for the fiscal year ended March 31, 2018 represent provisional amounts based on its current best estimates. Any adjustments made to those provisional amounts will be included in income from operations and recorded as an adjustment to tax expense through the fiscal year ending March 31, 2019. The recorded, provisional amounts reflect assumptions made based upon our current interpretation of the Tax Act, and may change as the Company receives additional clarification and guidance in the form of technical corrections to the Tax Act or regulations issued by the U.S. Treasury. The Company does not have any tax positions for which it is reasonably possible the total amount of gross unrecognized tax benefits will increase or decrease within twelve months of March 31, 2018. The unrecognized tax benefits may increase or change during the next year for items that arise in the ordinary course of business.

9. Segment and Geographic Infor

9. Segment and Geographic Information	9 Months Ended
	Dec. 31, 2018
Segment Reporting [Abstract]
Segment and Geographic Information	Note 9. Segment and Geographic Information The Company generates product revenues from products which are sold into the human and animal healthcare markets, and the Company generates service revenues from laboratory testing services which are provided to medical device manufacturers. Additionally, the Company provides technical services to Invekra. The following table presents the Company’s disaggregated product revenues by geographic region: Three Months Ended December 31, Nine Months Ended December 31, 2018 2017 2018 2017 United States $ 2,977,000 $ 2,883,000 $ 7,374,000 $ 7,010,000 Latin America 929,000 772,000 3,005,000 2,095,000 Europe and Rest of the World 1,139,000 992,000 3,396,000 3,289,000 Total $ 5,045,000 $ 4,647,000 $ 13,775,000 $ 12,394,000 The Company’s service revenues amounted to $235,000 and $196,000 for the three months ended December 31, 2018 and 2017, respectively. During the three months ended December 31, 2018 and 2017, the Company recorded service revenue related to technical services provided to Invekra in the amount of $14,000 in each period. The Company’s service revenues amounted to $813,000 and $609,000 for the nine months ended December 31, 2018 and 2017, respectively. During the nine months ended December 31, 2018 and 2017, the Company recorded service revenue related to technical services provided to Invekra in the amount of $42,000 and $39,000, respectively.

10. Significant Customer Concen

10. Significant Customer Concentrations	9 Months Ended
	Dec. 31, 2018
Risks and Uncertainties [Abstract]
Significant Customer Concentrations	Note 10. Significant Customer Concentrations For the three months ended December 31, 2018 one customer represented 14% of net revenue. For the three months ended December 31, 2017, one customer represented 21% of net revenue, one customer represented 16% of net revenue, one customer represented 14% of net revenue and one customer represented 12% of net revenue. For the nine months ended December 31, 2018, one customer represented 17% of net revenue and one customer represented 10% of net revenue. For the nine months ended December 31, 2017, one customer represented 21% of net revenue, one customer represented 16% of net revenue, one customer represented 13% of net revenue and one customer represented 12% of net revenue. At December 31, 2018, one customer represented 12% of the net accounts receivable balance. At March 31, 2018, one customer represented 36%, and one customer represented 18% of the net accounts receivable balance.

11. Subsequent Events

11. Subsequent Events	9 Months Ended
	Dec. 31, 2018
Subsequent Events [Abstract]
Subsequent Events	Note 11. Subsequent Events None.

3. Summary of Significant Acc_2

3. Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Dec. 31, 2018
Accounting Policies [Abstract]
Use of Estimates	Use of Estimates The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the dates of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. Significant estimates and assumptions include reserves and write-downs related to receivables and inventories, the recoverability of long-lived assets, the valuation allowance relating to the Company’s deferred tax assets, the valuation of equity and derivative instruments, debt discounts, the valuation of investments, the determination of the relative selling prices of the components sold to Invekra, and the estimated amortization periods of upfront product licensing fees received from customers. Periodically, the Company evaluates and adjusts estimates accordingly.
Net Loss per Share	Net Loss per Share The Company computes basic net loss per share by dividing net loss per share available to common stockholders by the weighted average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “treasury stock” and/or “if converted” methods as applicable. The computation of basic loss per share for the three and nine months ended December 31, 2018 and 2017 excludes the potentially dilutive securities summarized in the table below because their inclusion would be anti-dilutive. December 31, 2018 2017 Restricted stock units 34,000 33,000 Options to purchase common stock 1,441,000 1,385,000 Warrants to purchase common stock 4,209,000 1,333,000 Series C 155,000 – Common Stock Units (1) 415,000 – 6,254,000, 2,751,000 (1) Each unit consists of one share of common stock, par value $0.0001 per share, and one half of one warrant to purchase one share of common stock.
Revenue Recognition	Revenue Recognition On April 1, 2018, the Company adopted Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers Topic 606” (“Topic 606”) using the modified retrospective method. There was no impact to the Company upon the adoption of Topic 606. Revenue is recognized when the entity transfers promised goods or services to the customer, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under the agreement, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. The Company derives the majority of its revenue through sales of its products to a customer base, including hospitals, medical centers, doctors, pharmacies, distributors and wholesalers. The Company sells products directly to end users and to distributors. The Company also has entered into agreements to license its technology and products. The Company also provides regulatory compliance testing and quality assurance services to medical device and pharmaceutical companies. The Company considers customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with a customer. For each contract, the Company considers the promise to transfer products, each of which are distinct, to be the identified performance obligations. In determining the transaction price the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which it expects to be entitled. For all of its sales to non-consignment distribution channels, revenue is recognized when control of the product is transferred to the customer (i.e. when our performance obligation is satisfied), which typically occurs when title passes to the customer upon shipment but could occur when the customer receives the product based on the terms of the agreement with the customer. For product sales to its value-added resellers, non-stocking distributors and end-user customers, the Company grants return privileges to its customers, and because the Company has a long history with its customers, the Company is able to estimate the amount of product that will be returned. Sales incentives and other programs that the Company may make available to these customers are considered to be a form of variable consideration, and the Company maintains estimated accruals and allowances using the expected value method. The Company has entered into consignment arrangements, in which goods are left in the possession of another party to sell. recognizes revenue based on a variable percentage of a fixed price. Revenue recognized varies depending on whether a patient is covered by insurance or is not covered by insurance Sales to stocking distributors are made under terms with fixed pricing and limited rights of return (known as “stock rotation”) of the Company’s products held in their inventory. Revenue from sales to distributors is recognized upon the transfer of control to the distributor. The Company assessed the promised goods and services in the technical support to Invekra for a ten-year period as being a distinct service that Invekra can benefit from on its own and is separately identifiable from any other promises within the contract. Given that the distinct service is not substantially the same as other goods and services within the Invekra contract, the Company accounted for the distinct service as a performance obligation. Revenue from testing contracts is recognized as tests are completed and a final report is sent to the customer. Disaggregation of Revenue The following table presents the Company’s disaggregated revenues by revenue source: Three Months Ended December 31, Nine Months Ended December 31, 2018 2017 2018 2017 Product Human Skin Care $ 4,497,000 $ 4,358,000 $ 12,125,000 $ 11,297,000 Animal Skin Care 548,000 289,000 1,650,000 1,097,000 5,045,000 4,647,000 13,775,000 12,394,000 Service 235,000 196,000 813,000 609,000 Total $ 5,280,000 $ 4,843,000 $ 14,588,000 $ 13,003,000
Accounts Receivable	Accounts Receivable Trade accounts receivable are recorded net of allowances for cash discounts for prompt payment, doubtful accounts, and sales returns. Estimates for cash discounts and sales returns are based on analysis of contractual terms and historical trends. The Company’s policy is to reserve for uncollectible accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable. The Company periodically reviews its accounts receivable to determine whether an allowance for doubtful accounts is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Other factors that the Company considers include its existing contractual obligations, historical payment patterns of its customers and individual customer circumstances, an analysis of the number of days sales are outstanding by customer and geographic region, and a review of the local economic environment and its potential impact on government funding and reimbursement practices. Account balances deemed to be uncollectible are charged to the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts represents probable credit losses of $16,000 and $17,000 at December 31, 2018 and March 31, 2018, respectively. Additionally, at December 31, 2018 and March 31, 2018 the Company had allowances of $1,834,000 and $1,275,000, respectively, related to potential discounts, returns, distributor fees and rebates. The allowances are included in Accounts Receivable, net in the accompanying condensed consolidated balance sheets.
Inventories	Inventories Inventories are stated at the lower of cost, cost being determined on a standard cost basis (which approximates actual cost on a first-in, first-out basis), or net realizable value. Due to changing market conditions, estimated future requirements, age of the inventories on hand and production of new products, the Company regularly reviews inventory quantities on hand and records a provision to write down excess and obsolete inventory to its estimated net realizable value. The Company recorded a provision to reduce the carrying amounts of inventories to their net realizable value in the amount of $124,000 and $111,000 at December 31, 2018 and March 31, 2018, respectively, which is included in cost of product revenues on the Company’s accompanying condensed consolidated statements of comprehensive loss.
Subsequent Events	Subsequent Events Management has evaluated subsequent events or transactions occurring through the date the condensed consolidated financial statements were issued.
Adoption of Recent Accounting Standards	Adoption of Recent Accounting Standards Financial Instruments On April 1, 2018, the Company adopted ASU No. 2016-01, Financial Instruments-Overall Statement of Cash Flows On April 1, 2018, the Company adopted ASU No. 2016-15, Statement of Cash Flows (Topic 230) On April 1, 2018, the Company adopted ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash Business Combinations On April 1, 2018, the Company adopted ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business Stock Compensation On April 1, 2018, the Company adopted ASU No. 2017-09, Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting
Recent Accounting Standards	Recent Accounting Standards Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842) Codification Improvements to Topic 842, Leases Leases - Targeted Improvements. ASU No. 2018-10 provides certain amendments that affect narrow aspects of the guidance issued in ASU No. 2016-02. Reporting Comprehensive Income In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income Stock Compensation In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Accounting standards that have been issued or proposed by the FASB, the SEC or other standard setting bodies that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

3. Summary of Significant Acc_3

3. Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Dec. 31, 2018
Accounting Policies [Abstract]
Schedule of antidilutive shares	December 31, 2018 2017 Restricted stock units 34,000 33,000 Options to purchase common stock 1,441,000 1,385,000 Warrants to purchase common stock 4,209,000 1,333,000 Series C 155,000 – Common Stock Units (1) 415,000 – 6,254,000, 2,751,000 (1) Each unit consists of one share of common stock, par value $0.0001 per share, and one half of one warrant to purchase one share of common stock.
Disaggregated Revenue by Source	Three Months Ended December 31, Nine Months Ended December 31, 2018 2017 2018 2017 Product Human Skin Care $ 4,497,000 $ 4,358,000 $ 12,125,000 $ 11,297,000 Animal Skin Care 548,000 289,000 1,650,000 1,097,000 5,045,000 4,647,000 13,775,000 12,394,000 Service 235,000 196,000 813,000 609,000 Total $ 5,280,000 $ 4,843,000 $ 14,588,000 $ 13,003,000

4. Condensed Consolidated Bal_2

4. Condensed Consolidated Balance Sheets (Tables)	9 Months Ended
	Dec. 31, 2018
Inventory Disclosure [Abstract]
Schedule of inventories	December 31, March 31, 2018 2018 Raw materials $ 1,819,000 $ 1,619,000 Finished goods 1,396,000 1,246,000 $ 3,215,000 $ 2,865,000

7. Stock-Based Compensation (Ta

7. Stock-Based Compensation (Tables)	9 Months Ended
	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract]
Share-based compensation expense	Three Months Nine Months Ended Ended December 31, December 31, 2018 2017 2018 2017 Cost of service revenue $ 24,000 $ 43,000 $ 89,000 $ 136,000 Research and development 26,000 38,000 87,000 128,000 Selling, general and administrative 352,000 584,000 1,099,000 1,266,000 Total stock-based compensation $ 402,000 $ 665,000 $ 1,275,000 $ 1,530,000
Schedule of option activity	Number of Shares Weighted- Average Exercise Price Weighted- Average Contractual Term Aggregate Intrinsic Value Outstanding at April 1, 2018 1,393,000 $ 12.70 Options granted 159,000 2.64 Options forfeited (48,000 ) 6.69 Options expired (63,000 ) 11.91 Outstanding at December 31, 2018 1,441,000 $ 11.83 4.79 $ – Exercisable at December 31, 2018 1,103,000 $ 13.53 3.73 $ –
Restricted Stock Award Activity	Number of Shares Weighted Average Award Date Fair Value per Share Unvested restricted stock awards outstanding at April 1, 2018 32,000 $ 6.46 Restricted stock awards granted 27,000 1.90 Restricted stock awards forfeited (4,000 ) 6.97 Restricted stock awards vested (21,000 ) 5.91 Unvested restricted stock awards outstanding at December 31, 2018 34,000 $ 3.18

9. Segment and Geographic Inf_2

9. Segment and Geographic Information (Tables)	9 Months Ended
	Dec. 31, 2018
Segment Reporting [Abstract]
Segment and Geographic Information	Three Months Ended December 31, Nine Months Ended December 31, 2018 2017 2018 2017 United States $ 2,977,000 $ 2,883,000 $ 7,374,000 $ 7,010,000 Latin America 929,000 772,000 3,005,000 2,095,000 Europe and Rest of the World 1,139,000 992,000 3,396,000 3,289,000 Total $ 5,045,000 $ 4,647,000 $ 13,775,000 $ 12,394,000

2. Liquidity and Financial Co_2

2. Liquidity and Financial Condition (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended		8 Months Ended	9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Oct. 04, 2018	Oct. 03, 2018	Nov. 21, 2018	Dec. 31, 2018	Dec. 31, 2017	Mar. 31, 2018
Net loss	$ (2,298,000)	$ (3,187,000)				$ (8,576,000)	$ (9,565,000)
Accumulated deficit	(166,016,000)					(166,016,000)		$ (157,440,000)
Working capital	$ 11,254,000					11,254,000		$ 12,993,000
Proceeds from sale of equity, net						4,742,000	0
Proceeds from sale of stock, net						957,000	968,000
Proceeds from sale of other equity, gross						$ 270,000	$ 0
At Market Issuance [Member]
Stock issued new, shares			113,000	267,394
Proceeds from sale of equity, gross				$ 999,000
Proceeds from sale of stock, net				$ 957,000
Proceeds from sale of other equity, gross			$ 270,000
Proceeds from sale of other equity, net			$ 262,000
Public Offering [Member]
Proceeds from sale of equity, gross					$ 5,530,000
Proceeds from sale of equity, net					$ 4,742,000
Public Offering [Member] | Common Stock [Member]
Stock issued new, shares					4,564,400
Public Offering [Member] | Series C Preferred Stock [Member]
Stock issued new, shares					10
Public Offering [Member] | Warrants [Member]
Stock issued new, shares					2,764,700

3. Summary of Significant Acc_4

3. Summary of Significant Accounting Policies (Details - Antidilutive shares) - shares	9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Antidilutive shares	6,254,000	2,751,000
Restricted Stock Units (RSUs) [Member]
Antidilutive shares	34,000	33,000
Stock Options [Member]
Antidilutive shares	1,441,000	1,385,000
Warrants [Member]
Antidilutive shares	4,209,000	1,333,000
Series C Preferred Stock [Member]
Antidilutive shares	155,000	0
Common Stock Unit [Member]
Antidilutive shares	415,000	0

3. Summary of Significant Acc_5

3. Summary of Significant Accounting Policies (Details - Disaggregated Revenues) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Revenues	$ 5,280,000	$ 4,843,000	$ 14,588,000	$ 13,003,000
Human Skin Care [Member]
Revenues	4,497,000	4,358,000	12,125,000	11,297,000
Animal Skin Care [Member]
Revenues	548,000	289,000	1,650,000	1,097,000
Service [Member]
Revenues	235,000	196,000	813,000	609,000
Product [Member]
Revenues	$ 5,045,000	$ 4,647,000	$ 13,775,000	$ 12,394,000

3. Summary of Significant Acc_6

3. Summary of Significant Accounting Policies (Details Narrative) - USD ($)	Dec. 31, 2018	Mar. 31, 2018
Accounting Policies [Abstract]
Allowance for doubtful accounts	$ 16,000	$ 17,000
Allowance for potential discounts, returns, distributor fees and rebates	1,834,000	1,275,000
Inventory reserves	$ 124,000	$ 111,000

4. Condensed Consolidated Bal_3

4. Condensed Consolidated Balance Sheets (Details) - USD ($)	Dec. 31, 2018	Mar. 31, 2018
Inventories Details
Raw materials, net	$ 1,819,000	$ 1,619,000
Finished goods, net	1,396,000	1,246,000
Inventories, net	$ 3,215,000	$ 2,865,000

5. Commitments and Contingenc_2

5. Commitments and Contingencies (Details Narrative) - USD ($)	9 Months Ended
	Jan. 10, 2019	Dec. 31, 2018	Dec. 31, 2017
Potential severerance payments		$ 704,000
Option exercise price		$ 2.64
Proceeds from sale of other equity, gross		$ 270,000	$ 0
Chief Executive Officer [Member]
Options granted	450,000
Option exercise price	$ 0.717
Option vesting period	9 months
Option exercise term	10 years
Former CEO [Member] | Unused Benefits [Member]
Severance payments		38,461
Former CEO [Member] | Salary [Member]
Severance payments		250,000
Former CFO [Member] | Unused Benefits [Member]
Severance payments		38,461
Former CFO [Member] | Salary [Member]
Severance payments		$ 225,000

6. Stockholders' Equity (Detail

6. Stockholders' Equity (Details Narrative) - USD ($)	3 Months Ended		8 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Nov. 21, 2018	Nov. 16, 2018	Dec. 31, 2018	Dec. 31, 2017	Mar. 31, 2018
Convertible preferred stock authorized	714,286				714,286		714,286
Convertible preferred stock par value	$ 0.0001				$ 0.0001		$ 0.0001
Common stock par value	$ .0001				$ .0001		$ 0.0001
Common stock shares authorized	24,000,000				24,000,000		12,000,000
Stock based compensation	$ 402,000	$ 665,000			$ 1,275,000	$ 1,530,000
Proceeds from sale of equity, net					$ 4,742,000	$ 0
Warrants issued					27,000
Public Offering [Member]
Proceeds from sale of equity, gross			$ 5,530,000
Proceeds from sale of equity, net			$ 4,742,000
Public Offering [Member] | Common Stock [Member]
Stock issued new, shares			4,564,400
Common stock issued upon conversion					810,000
Public Offering [Member] | Series C Preferred Stock [Member]
Stock issued new, shares			10
Preferred shares converted					8
Public Offering [Member] | Warrants [Member]
Stock issued new, shares			2,764,700
Actual, Inc. [Member]
Stock issued for services, shares		5,703				5,703
Stock issued for services, value		$ 35,000				$ 35,000
Stock based compensation		$ 28,000			$ 44,000	$ 62,000
Actual, Inc. [Member] | July 12, 2018 [Member]
Stock issued for services, shares					17,741
Stock issued for services, value					$ 44,000
Actual, Inc. [Member] | July 27, 2017 [Member]
Stock issued for services, shares						2,570
Actual, Inc. [Member] | August 22, 2017 [Member]
Stock issued for services, shares						3,133
Benchmark Company [Member]
Stock issued for services, shares					6,881
Stock issued for services, value					$ 15,000
Stock based compensation					$ 15,000
Dawson James Securities [Member] | Public Offering [Member]
Payment of stock issuance costs				$ 74,000
Warrants issued				68,750
Warrant exercise price				$ 1
Warrant exercisable term				180 days
Warrant expiration date				Nov. 16, 2023

7. Stock-Based Compensation (De

7. Stock-Based Compensation (Details-Stock-based compensation) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Total stock-based compensation	$ 402,000	$ 665,000	$ 1,275,000	$ 1,530,000
Cost of revenues [Member]
Total stock-based compensation	24,000	43,000	89,000	136,000
Research and development [Member]
Total stock-based compensation	26,000	38,000	87,000	128,000
Selling, general and administrative [Member]
Total stock-based compensation	$ 352,000	$ 584,000	$ 1,099,000	$ 1,266,000

7. Stock-Based Compensation (_2

7. Stock-Based Compensation (Details-Option activity)	9 Months Ended
	Dec. 31, 2018USD ($)$ / sharesshares
Options
Outstanding at beginning of period | shares	1,393,000
Granted | shares	159,000
Forfeited | shares	(48,000)
Expired | shares	(63,000)
Outstanding at end of period | shares	1,441,000
Exercisable at end of period | shares	1,103,000
Weighted Average Exercise Price
Outstanding at beginning of period | $ / shares	$ 12.70
Granted | $ / shares	2.64
Forfeited | $ / shares	6.69
Expired | $ / shares	11.91
Outstanding at end of period | $ / shares	11.83
Exercisable at end of period | $ / shares	$ 13.53
Weighted Average Contractual Term
Outstanding at end of period	4 years 9 months 14 days
Exercisable at end of period	3 years 8 months 23 days
Aggregate Intrinsic Value
Outstanding at end of period | $	$ 0
Exercisable at end of period | $	$ 0

7. Stock-Based Compensation (_3

7. Stock-Based Compensation (Details-Restricted stock activity)	9 Months Ended
	Dec. 31, 2018$ / sharesshares
Restricted stock award activity
Unvested restricted stock awards, beginning balance | shares	32,000
Restricted stock awards granted | shares	27,000
Restricted stock awards forfeited | shares	(4,000)
Restricted stock awards vested | shares	(21,000)
Unvested restricted stock awards, ending balance | shares	34,000
Weighted average award date fair value per share, outstanding beginning balance | $ / shares	$ 6.46
Weighted average award date fair value per share, granted | $ / shares	1.90
Weighted average award date fair value per share, forfeited | $ / shares	6.97
Weighted average award date fair value per share, vested | $ / shares	5.91
Weighted average award date fair value per share, outstanding ending balance | $ / shares	$ 3.18

7. Stock-Based Compensation (_4

7. Stock-Based Compensation (Details Narrative) - USD ($)	9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Stock Options [Member]
Weighted average grant date fair values of options granted	$ 2.20	$ 6.01
Unrecognized compensation costs - Options	$ 976,000	$ 2,636,000
Weighted average amortization period	1 year 3 months 22 days	2 years 2 months 12 days
Aggregate intrinsic value per share	$ 0.71
Restricted Stock [Member]
Unrecognized compensation costs - Restricted Stock Awards	$ 78,000	$ 178,000
Weighted average amortization period		1 year 5 months 26 days

8. Income Taxes (Details Narrat

8. Income Taxes (Details Narrative) - USD ($)	9 Months Ended	12 Months Ended
	Dec. 31, 2018	Mar. 31, 2018
Income Tax Disclosure [Abstract]
Income tax rate	21.00%	35.00%
Unrecognized tax benefits	$ 0

9. Segment and Geographic Inf_3

9. Segment and Geographic Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Revenues	$ 5,280,000	$ 4,843,000	$ 14,588,000	$ 13,003,000
Product [Member]
Revenues	5,045,000	4,647,000	13,775,000	12,394,000
Product [Member] | UNITED STATES
Revenues	2,977,000	2,883,000	7,374,000	7,010,000
Product [Member] | Latin America [Member]
Revenues	929,000	772,000	3,005,000	2,095,000
Product [Member] | Europe and Rest of the World [Member]
Revenues	$ 1,139,000	$ 992,000	$ 3,396,000	$ 3,289,000

9. Segment and Geographic Inf_4

9. Segment and Geographic Information (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Revenues	$ 5,280,000	$ 4,843,000	$ 14,588,000	$ 13,003,000
Service [Member]
Revenues	235,000	196,000	813,000	609,000
Service [Member] | Technical Services [Member] | Invekra [Member]
Revenues	$ 14,000	$ 14,000	$ 42,000	$ 39,000

10. Significant Customer Conc_2

10. Significant Customer Concentrations (Details Narrative)	3 Months Ended		9 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Mar. 31, 2018
Revenues [Member] | Customer A [Member]
Concentration risk percentage	14.00%	21.00%	17.00%	21.00%
Revenues [Member] | Customer B [Member]
Concentration risk percentage		16.00%	10.00%	16.00%
Revenues [Member] | Customer C [Member]
Concentration risk percentage		14.00%		13.00%
Revenues [Member] | Customer D [Member]
Concentration risk percentage		12.00%		12.00%
Accounts Receivable [Member] | Customer A [Member]
Concentration risk percentage			12.00%		36.00%
Accounts Receivable [Member] | Customer B [Member]
Concentration risk percentage					18.00%