ReShape Lifesciences 10-Q 13 Aug 20 2020 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2020	Aug. 11, 2020
Cover [Abstract]
Document Type	10-Q
Document Period End Date	Jun. 30, 2020
Entity Registrant Name	RESHAPE LIFESCIENCES INC.
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Interactive Data Current	Yes
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		5,586,554
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001371217
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 1,526	$ 2,935
Restricted cash	50	50
Accounts and other receivables (net of allowance for doubtful accounts of $894 and $709 respectively)	2,883	4,096
Finished goods inventory	1,501	1,317
Inventory (Note 3)	2,080	1,317
Prepaid expenses and other current assets (Note 3)	2,006	1,711
Total current assets	8,545	10,109
Property and equipment, net	99	16
Operating lease right-of-use assets (Note 6)	613	758
Other intangible assets, net	27,841	28,674
Other assets	46	99
Total assets	37,144	39,656
Current liabilities:
Accounts payable	4,123	4,263
Accrued and other liabilities (Note 3)	3,009	3,821
Warranty liability, current	315	105
Debt, current portion, net of deferred financing costs	4,597	1,909
Operating lease liabilities, current (Note 6)	303	291
Total current liabilities	12,347	10,389
Debt, noncurrent portion	3,434	2,728
Operating lease liabilities, noncurrent (Note 6)	323	477
Warranty liability, noncurrent	1,185	1,253
Deferred income taxes	702	702
Total liabilities	17,991	15,549
Commitments, contingencies (Note 12)
Stockholders’ equity:
Common stock, $0.001 par value; 275,000,000 shares authorized at June 30, 2020 and December 31, 2019; 5,586,554 and 391,739 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively	5
Additional paid-in capital	520,288	517,311
Accumulated deficit	(501,112)	(493,197)
Accumulated other comprehensive loss	(29)	(8)
Total stockholders’ equity	19,153	24,107
Total liabilities and stockholders’ equity	37,144	39,656
Series B convertible preferred stock
Stockholders’ equity:
Preferred stock, 5,000,000 shares authorized:
Series C convertible preferred stock
Stockholders’ equity:
Preferred stock, 5,000,000 shares authorized:	$ 1	$ 1

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Allowance for bad debts	$ 894	$ 709
Preferred stock, authorized	5,000,000	5,000,000
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	275,000,000	275,000,000
Common stock, shares issued	5,586,554	5,586,554
Common stock, shares outstanding	391,739	391,739
Series B convertible preferred stock
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, issued	3	3
Preferred stock outstanding	3	3
Series C convertible preferred stock
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, issued	95,388	95,388
Preferred stock outstanding	95,388	95,388

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Condensed Consolidated Statements of Operations
Revenue	$ 1,702	$ 4,450	$ 4,491	$ 7,524
Cost of revenue	865	1,593	2,150	2,436
Gross profit	837	2,857	2,341	5,088
Operating expenses:
Sales and marketing	831	1,271	2,285	2,388
General and administrative	2,539	5,521	5,375	9,825
Research and development	465	960	1,761	2,016
Impairment of intangible assets		6,588		6,588
Total operating expenses	3,835	14,340	9,421	20,817
Operating loss	(2,998)	(11,483)	(7,080)	(15,729)
Other expense (income), net:
Interest expense, net	789	213	893	316
Loss on extinguishment of debt		71		71
Warrant expense		4,127		4,257
(Gain) loss on foreign currency exchange	(133)		10
Other, net		612		609
Loss before income tax provision	(3,654)	(16,506)	(7,983)	(20,982)
Income tax benefit	(50)	(586)	(68)	(586)
Net loss attributable to common shareholders	$ (3,604)	$ (15,920)	$ (7,915)	$ (20,396)
Net loss per share - basic and diluted:
Net loss per share - basic and diluted (in dollars per share)	$ (0.52)	$ (150.24)	$ (1.15)	$ (233.29)
Shares used to compute basic and diluted net loss per share	6,911,497	105,962	6,885,368	87,428

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Condensed Consolidated Statements of Comprehensive Loss
Net loss	$ (3,604)	$ (15,920)	$ (7,915)	$ (20,396)
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	27		(21)
Other comprehensive loss, net of tax	27		(21)
Comprehensive loss	$ (3,577)	$ (15,920)	$ (7,936)	$ (20,396)

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Preferred StockSeries B convertible preferred stock	Preferred StockSeries C convertible preferred stock	Preferred StockSeries E convertible preferred stock	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)	Total
Balance at Dec. 31, 2018		$ 1			$ 450,652	$ (418,990)		$ 31,663
Balance (in shares) at Dec. 31, 2018	159	95,388		73,092
Changes in Stockholders' (Deficit) Equity
Net loss						(20,396)		(20,396)
Stock-based compensation expense					1,984			1,984
Issuance of warrants expense					130			130
Institutional exercise of warrants					283			283
Institutional exercise of warrants (Shares)				130,000
Warrant adjustment					(312)			(312)
Conversion of common stock into convertible preferred stock			$ 12		(12)
Conversion of common stock into convertible preferred stock (in shares)			1,192,000	(9,933)
Conversion of convertible preferred stock into common stock			$ (12)		12
Conversion of convertible preferred stock into common stock (in shares)	(156)		(1,192,000)	10,973
Issuance of common stock upon exercise of warrants, net of issuance costs					40			40
Issuance of common stock upon exercise of warrants, net of issuance costs (in shares)				33,417
Balance at Jun. 30, 2019		$ 1			452,777	(439,386)		13,392
Balance (in shares) at Jun. 30, 2019	3	95,388		237,549
Balance at Mar. 31, 2019		$ 1	$ 12		452,026	(423,466)		28,573
Balance (in shares) at Mar. 31, 2019	3	95,388	1,192,000	64,199
Changes in Stockholders' (Deficit) Equity
Net loss						(15,920)		(15,920)
Stock-based compensation expense					728			728
Institutional exercise of warrants					283			283
Institutional exercise of warrants (Shares)				130,000
Warrant adjustment					(312)			(312)
Conversion of common stock into convertible preferred stock (in shares)			(1,192,000)	9,933
Conversion of convertible preferred stock into common stock			$ (12)		12
Issuance of common stock upon exercise of warrants, net of issuance costs					40			40
Issuance of common stock upon exercise of warrants, net of issuance costs (in shares)				33,417
Balance at Jun. 30, 2019		$ 1			452,777	(439,386)		13,392
Balance (in shares) at Jun. 30, 2019	3	95,388		237,549
Balance at Dec. 31, 2019		$ 1			517,311	(493,197)	$ (8)	24,107
Balance (in shares) at Dec. 31, 2019	3	95,388		391,739
Changes in Stockholders' (Deficit) Equity
Net loss						(7,915)		(7,915)
Other comprehensive loss, net of tax							(21)	(21)
Stock-based compensation expense					774			774
Issuance of warrants expense					1,393			1,393
Institutional exercise of warrants				$ 5	605			610
Institutional exercise of warrants (Shares)				5,085,834
Cashless exercise of warrants (Shares)				58,981
Common stock issued for professional services					205			205
Common stock issued for professional services (Shares)				50,000
Balance at Jun. 30, 2020		$ 1		$ 5	520,288	(501,112)	(29)	19,153
Balance (in shares) at Jun. 30, 2020	3	95,388		5,586,554
Balance at Mar. 31, 2020		$ 1			519,131	(497,508)	(56)	21,568
Balance (in shares) at Mar. 31, 2020	3	95,388		391,739
Changes in Stockholders' (Deficit) Equity
Net loss						(3,604)		(3,604)
Other comprehensive loss, net of tax							27	27
Stock-based compensation expense					347			347
Institutional exercise of warrants				$ 5	605			610
Institutional exercise of warrants (Shares)				5,085,834
Cashless exercise of warrants (Shares)				58,981
Common stock issued for professional services					205			205
Common stock issued for professional services (Shares)				50,000
Balance at Jun. 30, 2020		$ 1		$ 5	$ 520,288	$ (501,112)	$ (29)	$ 19,153
Balance (in shares) at Jun. 30, 2020	3	95,388		5,586,554

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities:
Net loss	$ (7,915)	$ (20,396)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense	5	30
Amortization of intangible assets	833	833
Impairment of intangible assets		6,588
Noncash interest expense	117	797
Fair value adjustment to embedded derivative		(481)
Loss on extinguishment of debt		71
Stock-based compensation	774	1,983
Bad debt expense	185	151
Provision for inventory excess and obsolescence	188
Warrant expense		4,257
Amortization of deferred debt issuance costs	756
Deferred income tax benefit		(586)
Other noncash items	20	14
Change in operating assets and liabilities:
Accounts and other receivables	1,028	(3,860)
Inventory	(950)	(363)
Prepaid expenses and other current assets	(90)	(1,034)
Accounts payable and accrued liabilities	(958)	3,397
Warranty liability	142
Other	53
Net cash used in operating activities	(5,812)	(8,599)
Cash flows from investing activities:
Capital expenditures	(82)
Cash used in investing activities:	(82)
Cash flows from financing activities:
Proceeds from issuance of subordinated convertible debentures		2,000
Payments of financing costs	(59)	(21)
Repayment of subordinated convertible debentures		(2,200)
Proceeds from institutional exercise of warrants	610	40
Proceeds from credit agreement	3,000	7,616
Proceeds from PPP loan	955
RepaymentsOfDebt		(29)
Net cash provided by financing activities	4,506	7,406
Effect of currency exchange rate changes on cash and cash equivalents	(21)
Net decrease in cash, cash equivalents and restricted cash	(1,409)	(1,193)
Cash, cash equivalents and restricted cash at beginning of period	2,985	5,548
Cash, cash equivalents and restricted cash at end of period	1,576	4,355
Noncash investing and financing activities:
Relative fair value of warrants classified as debt issuance costs	1,393
Capital expenditures accruals	$ 6
Conversion of common stock to convertible preferred stock		$ (1)

Basis of Presentation

Basis of Presentation	6 Months Ended
	Jun. 30, 2020
Basis of Presentation
Basis of Presentation	(1) Basis of Presentation The accompanying interim condensed consolidated financial statements and related disclosures of Reshape Lifesciences Inc. (the “Company”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed on April 30, 2020. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") have been condensed or omitted. In the opinion of management, the interim consolidated condensed financial statements reflect all adjustments considered necessary for a fair statement of the interim periods. All such adjustments are of a normal, recurring nature. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. Reverse Stock Splits During the year ended December 31, 2019, the Company’s board of directors and stockholders approved the following reverse stock split: · 1-for-120 reverse split of the Company ’ s outstanding common stock that became effective after the close of market on November 11, 2019. In addition, the Company ’ s certificate of incorporation was amended to change the common stock and preferred stock par value from $0.01 per share to $0.001 per share. The reverse stock split in 2019 did not change the number of common or preferred shares authorized by the Company’s certificate of incorporation. All par value, share and per-share amounts have been retroactively adjusted to reflect the reverse stock split for all periods presented. Fair Value of Financial Instruments The carrying amounts of cash equivalents, accounts receivable, accounts payable and certain accrued and other liabilities approximate fair value due to their short-term maturities. Refer to Note 5 regarding the fair value of debt instruments and Note 8 regarding fair value measurements and inputs of warrants. Net Loss Per Share The following table sets forth the potential shares of common stock that are not included in the calculation of diluted net loss per share because to do so would be anti-dilutive as of the end of each period presented: June 30, 2020 2019 Stock options 46 190 Convertible preferred stock 1,288 1,288 Warrants 8,283,447 2,022,576 Recent Accounting Pronouncements New accounting standards adopted by the Company in 2020 are discussed below or in the related notes, where appropriate. In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement , which modifies the disclosure requirements on fair value measurements and is intended to improve the effectiveness of disclosures, including the consideration of costs and benefits. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The adoption of this guidance did not have a material impact on the Company’s financial statements. New accounting standards not yet adopted are discussed below. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments, which is intended to provide financial statement users with more useful information about expected credit losses on financial assets held by a reporting entity at each reporting date. In May 2019, the FASB issued ASU No. 2019-05, which amended the new standard by providing targeted transition relief. The new guidance replaces the existing incurred loss impairment methodology with a methodology that requires consideration of a broader range of reasonable and supportable forward-looking information to estimate all expected credit losses. In November 2019, the FASB issued ASU No. 2019-11, which amended the new standard by providing additional clarification. This guidance is effective for the fiscal years and interim periods within those years beginning after December 15, 2022. The Company is currently evaluating the impact the guidance will have on its consolidated financial statements.

Liquidity and Management_s Plan

Liquidity and Management’s Plans	6 Months Ended
	Jun. 30, 2020
Liquidity and Management’s Plans
Liquidity and Management’s Plans	(2) Liquidity and Management’s Plans The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company currently does not generate revenue sufficient to offset operating costs and anticipates such shortfalls to continue in the short-term to the next eighteen months. The Company’s history of operating losses and limited cash resources and lack of certainty regarding obtaining significant third-party reimbursement of its products, raise substantial doubt about its ability to continue as a going concern. As of June 30, 2020 the Company had net negative working capital of approximately $3.8 million. The Company’s principal source of liquidity as of June 30, 2020 consisted of approximately $1.6 million of cash and cash equivalents and restricted cash, and $2.9 million of accounts receivable. The Company’s anticipated operations include plans to (i) continue to integrate the sales and operations of the Company with the Lap-Band product line, (ii) continue development of the ReShape Vest, (iii) seek opportunities to leverage the Company’s intellectual property portfolio and custom development services to provide third-party sales and licensing opportunities, and (iv) explore and capitalize on synergistic opportunities to expand our portfolio and offer future minimally invasive treatments and therapies in the obesity continuum of care. The Company believes that it has the flexibility to manage the growth of its expenditures and operations depending on the amount of available cash flows, which could include reducing expenditures for marketing, clinical and product development activities. However, the Company will ultimately need to achieve sufficient revenues from product sales and obtain additional equity or debt financing to support its operations. Management is currently pursuing various funding options, including seeking additional equity or debt financing as well as a strategic merger or other transaction to obtain additional funding to support the expansion of Lap-Band product sales and to continue the development of, and to successfully commercialize, the ReShape Vest. While the acquisition of the Lap-Band product line does provide incremental revenues and cash flows to the Company, total expenses, including the cost to support the clinical trials of the ReShape Vest, are expected to exceed internally generated cash flows for the foreseeable future. While there can be no assurance that the Company will be successful in its efforts, the Company has a long history of raising equity financing to fund its development activities. Should the Company be unable to obtain adequate financing in the near term, the Company’s business, result of operations, liquidity and financial condition would be materially and negatively affected, and the Company would be unable to continue as a going concern. Additionally, there can be no assurance that, assuming the Company is able to strengthen its cash position, it will achieve sufficient revenue or profitable operations to continue as a going concern. COVID-19 Risk and Uncertainties and CARES Act Additionally, on January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally and on March 13, 2020, the United States declared a national emergency with respect to the coronavirus outbreak. This outbreak has severely impacted global economic activity, and many countries and many states in the United States have reacted to the outbreak by instituting quarantines, mandating business and school closures and restricting travel. These mandated business closures have at times included the cessation of non-elective surgeries in Australia, Europe and the United States for all but emergency procedures. As a result of these mandates, on April 16, 2020, the Company implemented various short-term cost reductions and cash flow improvement actions, such as reducing the compensation for executives, management and key employees and decreasing operating expenses where possible. In addition, the Company also identified temporary headcount reductions and made the decision to furlough a portion of its workforce. During the second quarter of 2020, the mandated closures began to ease in many areas throughout the world and within the United States. As a result of this, elective surgeries started back up again through various parts of the world, which led to improved sales progressing through the second quarter. Even after the COVID-19 outbreak has subsided, the Company may continue to experience materially adverse impact on its financial condition and results of operation. Additionally, on June 15, 2020, the Company ended the temporary pay reductions and the furloughed employees returned to work. The full impact of the COVID-19 outbreak continues to evolve and it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on the Company’s financial condition, liquidity, operations, suppliers, industry, and workforce and has taken actions to mitigate the impact including among other things, temporary reductions in pay, and furloughs of certain positions along with deferrals in payment for cash preservation. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2020. On March 27, 2020, President Trump signed into law the “Coronavirus Aid, Relief, and Economic Security (CARES) Act.” The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. Provided under the CARES Act is the Paycheck Protection Program (“PPP”), which the Company received a PPP loan, for further details see Note 5 below. We continue to examine the impact that the CARES Act may have on our business and the PPP loan.

Supplemental Balance Sheet Info

Supplemental Balance Sheet Information	6 Months Ended
	Jun. 30, 2020
Supplemental Balance Sheet Information
Supplemental Balance Sheet Information	(3) Supplemental Balance Sheet Information Components of selected captions in the condensed consolidated balance sheets consisted of the following: Inventory: June 30, December 31, 2020 2019 Sub-assemblies $ 579 $ — Finished goods 1,501 1,317 Total inventory $ 2,080 $ 1,317 Prepaid expenses and other current assets: June 30, December 31, 2020 2019 Prepaid contract research organization expenses $ 830 $ 1,356 Prepaid insurance 702 190 Other 474 165 Total prepaid expenses and other current assets $ 2,006 $ 1,711 Accrued and other liabilities: June 30, December 31, 2020 2019 Accrued professional services $ 501 $ 1,432 Payroll and benefits 1,285 1,021 Taxes 310 373 Equity transaction related liability — 211 Customer deposits 358 202 Accrued insurance premium 51 87 Other 504 495 Total accrued and other liabilities $ 3,009 $ 3,821

Intangible Assets

Intangible Assets	6 Months Ended
	Jun. 30, 2020
Intangible Assets
Intangible Assets	(4) Intangible Assets Indefinite-lived intangible assets consist of in-process research and development (“IPR&D”) for the ReShape Vest recorded in connection with the Company’s acquisition of BarioSurg, Inc. The Company’s finite-lived intangible assets consists of developed technology, trademarks and tradenames, and covenant not compete. The estimated useful lives of these finite-lived intangible assets ranges from 3 to 10 years. The amortization expenses for both the three months ended June 30, 2020 and 2019 was $0.4 million, and for both the six months ended June 30, 2020 and 2019 was $0.8 million. During the second quarter of 2020, the Company performed a qualitative impairment analysis of the IPR&D and finite-lived intangible assets and did not identify any impairment as a result of this analysis. Impairment of Intangible Assets – Second Quarter 2019 The Company has completed the feasibility study for the ReShape Vest and began clinical trials in Europe in 2018. During the second quarter of 2019, the Company performed a qualitative impairment analysis of the IPR&D. Due to delays in the clinical trials experienced during the first six months of 2019, the Company revised its expectations of when revenues would commence for the ReShape Vest, thus reducing the projected near-term future net cash flows related to the ReShape Vest. As a result, the Company performed a quantitative impairment analysis of the IPR&D and recorded a one-time nonrecurring impairment charge of $6.6 million, for the excess of the carrying value over the estimated fair value. The fair value of the IPR&D was estimated using an income approach using Level 3 assumptions which included discounting the revised projected future net cash flows to their present value, with a discount rate of 22.4%. The Company also assessed the recoverability of finite-lived intangible assets and did not identify any impairment as a result the performance of this analysis.

Debt

Debt	6 Months Ended
	Jun. 30, 2020
Debt
Debt	(5) Debt June 30, December 31, 2020 2019 Asset purchase consideration $ 4,754 $ 4,637 Credit agreement 3,000 — PPP Loan 955 — Total debt 8,709 4,637 Less: debt issuance costs 678 — Less: current portion of debt 4,597 1,909 Debt, noncurrent portion $ 3,434 $ 2,728 CARES Act On April 24, 2020, the Company entered into a PPP Loan agreement with Silicon Valley Bank (“SVB”) under the PPP, which is part of the CARES Act administered by the United States Small Business Administration (“SBA”). As part of the application for these funds, the Company in good faith, has certified that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further requires the Company to take into account our current business activity and our ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. Under this program, the Company received proceeds of $1.0 million from the PPP Loan. In accordance with the requirements of the PPP, the Company intends to use proceeds from the PPP Loan primarily for payroll costs, rent and utilities. The PPP Loan has a 1.00% interest rate per annum, matures on April 24, 2022 and is subject to the terms and conditions applicable to loans administered by the SBA under the PPP. Under the terms of PPP, all or certain amounts of the PPP Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act, which the Company continues to evaluate. Further, if despite the good-faith belief that given the Company’s circumstances all eligibility requirements for the PPP Loan were satisfied, if it is later determined the Company had violated any applicable laws or regulations or it is otherwise determined the Company was ineligible to receive the PPP Loan, it may be required to repay the PPP Loan in its entirety and/or be subject to additional penalties. The Company continues to examine the impact that the CARES Act may have on its business. Currently the Company is unable to determine the impact that the CARES Act will have on its financial condition, results of operation or liquidity. Credit Agreement On March 25, 2020, the Company executed a credit agreement up to $3.5 million, with an institutional investor (the “Lender”), who holds warrants in connection with the June 2019 and September 2019 transactions. On the day of closing, the Company received $2.5 million and the additional $1.0 million may be drawn from time to time 30 days after the closing date but prior to five months after the closing date, in $500 thousand increments per draw. On June 23, 2020, the Company made the first additional draw of $500 thousand. As a result of this drawdown, the Company has an outstanding principal balance of $3.0 million under the credit facility and has the option to borrow up to an additional $500 thousand pursuant to one additional delayed draw term loan. The credit facility matures six months after the closing date and bears interest at LIBOR plus 2.5%. As required by the terms of this credit agreement, the lender exercised its warrants to purchase an aggregate of 5,085,834 shares of common stock with a current exercise price of $0.12 per warrant on April 15, 2020, in which the Company received net proceeds of $0.6 million. In addition, the Company issued to the lender 1,200,000 Series G warrants to purchase an aggregate of 1,200,000 shares of common stock. The Series G warrants were valued using the relative fair value basis and the amount was recorded as part of the debt issuance costs, see Note 8 for additional details. Asset Purchase Consideration Payable The asset purchase consideration payable related to the Company’s December 2018 acquisition of the Lap-Band product line from Apollo Endosurgery, Inc. (“Apollo”), was initially recorded at net present value using a discount rate of 5.1%. The asset purchase consideration payable was originally secured by a first security interest in substantially all of the Company’s assets, but that security interest terminated in accordance with its terms in October 2019. At June 30, 2020, the aggregate carrying value of the current and noncurrent asset purchase consideration payable of approximately $4.8 million, as adjusted for accretion of interest of approximately $0.4 million. Convertible Subordinated Debentures On March 29, 2019, the Company completed a private placement with certain healthcare focused institutional investors for the sale of secured subordinated original issue discount convertible debentures (“debentures”) for a purchase price of $2.0 million. The debentures had a maturity of June 28, 2019 and a face amount of $2.2 million, reflecting a 10% original issue discount. The Company recorded an additional debt discount and a derivative liability for the fair value of the bifurcated embedded conversion features discussed below. The initial carrying amount of the debentures, net of discounts and deferred financing costs, was approximately $1.5 million. The Company repaid the debentures on June 20, 2019 at their face amount of $2.2 million. The Company analyzed the conversion features embedded in the debentures and determined that bifurcation and liability classification was required under ASC 815 due to the variable number of shares issuable upon conversion. The fair value of the bifurcated embedded conversion features was determined to be $0.5 million as of the issuance date using a Monte Carlo model and primarily Level 3 inputs using a risk-free rate of 2.19%; probability of conversion of 98.0%; probability of repayment at each conversion of 2.0%; volatility of 161.74%; option-adjusted spread of 50.0%; and a discount for lack or marketability of 20.0%. Upon the closing of the Company’s equity financing and the Company’s planned use of a portion of the proceeds to repay the debentures, the fair value of the embedded derivative liability was reduced to zero as the conversion feature was no longer available. As the Company did not elect the fair value option for the debentures, the initial carrying amount of the debentures, net of discounts and deferred financing costs of $1.5 million, which was accreted to the face amount over the term to maturity. In connection with the financing, the Company amended the exercise price of warrants to purchase up to 8,000,000 shares of common stock held by the investors that were issued on November 28, 2018 from $1.50 per share to $0.01 per share. The value attributable to the exercise price reduction of $0.1 million was recorded in Warrant Expense and was estimated using the Black Scholes option pricing model using a risk-free rate of 2.2%, an expected term of 4.7 years, expected dividends of zero and expected volatility of 204.4%.

Leases

Leases	6 Months Ended
	Jun. 30, 2020
Leases
Leases	(6) Leases The Company has a noncancelable operating lease for office and warehouse space in San Clemente, California and noncancelable operating leases for certain office equipment that expire at various dates through 2022. The Company does not have any short-term leases or financing lease arrangements and the effects of any lease modifications have not been material. Certain of the Company’s equipment leases include variable lease payments that are adjusted periodically based on actual usage. Lease and non-lease components are accounted for separately. Operating lease costs was $0.1 million for both the three months ended June 30, 2020 and 2019, and $0.2 million for both the six months ended June 30, 2020 and 2019. Variable lease costs were not material. Supplemental information related to operating leases is as follows: Balance Sheet Information at June 30, 2020 Operating lease ROU assets $ 613 Operating lease liabilities, current portion $ 303 Operating lease liabilities, long-term portion 323 Total operating lease liabilities $ 626 Cash Flow Information for the Six Months Ended June 30, 2020 Cash paid for amounts included in the measurement of operating leases liabilities $ 161 Maturities of operating lease liabilities were as follows: Twelve months ending June 30, 2021 $ 328 2022 332 2023 — Total lease payments 660 Less: imputed interest 34 Total lease liabilities $ 626 Weighted-average remaining lease term at end of period (in years) 1.9 Weighted-average discount rate at end of period %

Equity

Equity	6 Months Ended
	Jun. 30, 2020
Equity
Equity	(7) Equity June 2020 Cashless Exercise of Warrants for Common Stock On June 23, 2020, the Company issued 58,981 shares of common stock as a cashless exercise of warrants issued to the placement agents in connection with the June 2019 private placement with healthcare focused institutional investors. May 2020 Common Stock Issued for Professional Services On May 28, 2020, the Company issued 50,000 shares of common stock, having an aggregate fair value of $0.2 million for ongoing professional services. The $0.2 million was recorded as a prepaid asset and will be amortized over the minimum life of the agreement. April 2020 Exercise of Warrants for Common Stock As discussed in Note 5 above, in an agreement to the credit agreement, the lender exercised its Series C and Series F warrants to purchase an aggregate of 5,085,834 shares of common stock with a current exercise price of $0.12 per warrant on April 15, 2020, in which the Company received net proceeds of $0.6 million. June 2019 Issuance of Common Stock and Warrants On June 18, 2019, the Company completed a private placement with certain healthcare focused institutional investors for the sale of 130,000 shares of common stock at a purchase price of $2.40 per share and Series C pre-funded warrants to purchase 3,203,334 shares of common stock at a purchase price of $2.28 per share. The exercise price of each pre-funded warrant is $0.12 per share. The Company also issued Series A warrants to purchase 3,333,334 shares of common stock at an exercise price of $2.64 per share and Series B warrants to purchase 3,333,334 shares of common stock at an exercise price of $2.40 per share. Net proceeds from the private placement were $6.9 million after deducting placement agent fees and other transaction costs. In connection with the registered direct offering, the placement agent received warrants to purchase 233,334 shares of common stock at an exercise price of $3.00 per share. February 2019 Conversion of Common Stock into New Series of Convertible Preferred Stock On February 1, 2019, pursuant to an exchange agreement with Sabby Volatility Warrant Master Fund, Ltd. (“Sabby”) 9,993 shares of the Company’s common stock were exchanged for an aggregate of 1,192,000 shares of Series E Convertible Preferred Stock (“Series E Preferred Stock”), were issued in a noncash transaction. Each share of Series E Preferred Stock was convertible into one share of common stock at Sabby’s election pre-effect of the reverse stock split that occurred during November 2019. In April 2019, all shares of Series E Preferred Stock were converted into an equal number of shares of common stock. The November 2019 reverse stock split had no effect on this transaction. Conversion of Series B Convertible Preferred Stock into Common Stock During the six months ended June 30, 2019, 156 shares of Series B Convertible Preferred Stock (“Series B Preferred Stock”) were converted into 1,040 shares of common stock. At June 30, 2020, the remaining 3 shares of Series B Preferred stock are convertible into 1,250 shares of common stock.

Warrants

Warrants	6 Months Ended
	Jun. 30, 2020
Warrants.
Warrants	(8) Warrants On March 25, 2020, the Company issued 1,200,000 Series G Warrants to an institutional investor in connection with the credit agreement, see Note 5 above for details. The Series G Warrants were valued at $1.4 million using the relative fair value approach at the time of issuance and was recorded as deferred debt issuance cost. The relative fair value of the Series G Warrants was determined using a Black Scholes option pricing model using a risk-free interest rate of 0.56%; an expected term of five years; expected dividends of zero and expected volatility of 97.00%.

Revenue Disaggregation and Oper

Revenue Disaggregation and Operating Segments	6 Months Ended
	Jun. 30, 2020
Revenue Disaggregation and Operating Segments
Revenue Disaggregation and Operating Segments	(9) Revenue Disaggregation and Operating Segments The Company conducts operations worldwide and has sales in the following regions: United States, Australia, Europe and Rest of World. For the three and six months ended June 30, 2020 and 2019, the Company only sold the LAP-BAND products. The following table presents the Company’s revenue disaggregated by geography: Three Months Ended Six Months Ended 2020 2019 2020 2019 United States $ 1,458 $ 4,010 $ 3,412 $ 7,076 Australia 120 440 418 448 Europe 124 — 636 — Rest of world — — 25 — Total net revenue $ 1,702 $ 4,450 $ $ *The next largest individual country outside the United States was Australia for both the three and six months ended June 30, 2020 which was 7.0% and 9.3%, respectively, of total revenues. Australia was the next largest individual country outside the United States for both the three and six months ended June 30, 2019 and was 9.5% and 5.6%, respectively, of total revenues. Operating Segments The Company’s operating segments currently consist of the Lap-Band segment and the ReShape Vest segment. These two operating segments are reported based on the financial information provided to the Chief Operating Decision Maker (the Chief Executive Officer, or “CODM”). The Company’s CODM evaluates segment performance based on gross profit, which currently only consists of LAP-BAND. The Company’s CODM does not use operating segment assets information to allocate resources or to assess performance of the operating segments and thus total segment assets have not been disclosed.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2020
Income Taxes
Income Taxes	(10) Income Taxes The Company’s tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter the Company updates its estimate of the annual effective tax rate. The Company’s quarter tax provision, and quarterly estimate of annual effective tax rate, are subject to significant volatility due to several factors, including the Company’s ability to accurately predict pre-tax income and loss. During the three and six months ended June 30, 2020 a $50 thousand and $68 thousand, respectively, a tax benefit was recorded, primarily related to projected losses in Australia. The Company recorded an income tax benefit of $586 thousand for both the three and six months ended June 30, 2019, in connection with the impairment of IPR&D, which resulted in a reduction in the deferred tax liability associated with the indefinite-lived intangible asset. In assessing the realization of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. Based on the level of historical losses, projections of losses in future periods and potential limitations pursuant to changes in ownership under Internal Revenue Code (“IRC”) Section 382, the Company provided a valuation allowance at both June 30, 2020 and December 31, 2019.

Stock-based Compensation

Stock-based Compensation	6 Months Ended
	Jun. 30, 2020
Stock-based Compensation
Stock-based Compensation	(11) Stock-based Compensation Stock-based compensation expense related to stock options issued under the ReShape Lifesciences Inc. Second Amended and Restated 2003 Stock Incentive Plan (the “Plan”) and as inducement grants for the three and six months ended June 30, 2020 and 2019 was as follows: Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Sales and marketing $ — $ 71 $ — $ 148 General and administrative 347 625 774 1,771 Research and development — 31 — 64 Total stock-based compensation expense $ 347 $ 727 $ 774 $ 1,983 As of June 30, 2020 there was approximately $0.7 million of total unrecognized compensation costs related to unvested stock option awards, which are to be recognized over a weighted-average period of 1.7 years. There were no stock options granted during both the three and six months ended June 30, 2020 and 2019.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2020
Commitments and Contingencies
Commitments and Contingencies	(12) Commitments and Contingencies Litigation The Company is not currently a party to any material litigation and the Company is not aware of any pending or threatened litigation against it that could have a material adverse effect on the Company’s business, operating results or financial condition. The medical device industry in which the Company operates is characterized by frequent claims and litigations, including claims regarding patent and other intellectual property rights as well as improper hiring practices. As a result, the Company may be involved in various legal proceedings from time to time. Product Liability Claims The Company is exposed to product liability claims that are inherent in the testing, production, marketing and sale of medical devices. Management believes any losses that may occur from these matters are adequately covered by insurance, and the ultimate outcome of these matters will not have a material effect on the Company’s financial position or results of operations. The Company is not currently a party to any product liability litigation and is not aware of any pending or threatened product liability litigation that is reasonably possible to have a material adverse effect on the Company’s business, operating results or financial condition.

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2020
Subsequent Events
Subsequent Events	(13) Subsequent Events As part of the credit agreement discussed in Note 5 above, the Company is permitted to make two additional delayed drawdowns. On July 29, 2020 the Company received the second and final draw of $500 thousand dollars.

Basis of Presentation (Policies

Basis of Presentation (Policies)	6 Months Ended
	Jun. 30, 2020
Basis of Presentation
Basis of Presentation	Basis of Presentation The accompanying interim condensed consolidated financial statements and related disclosures of Reshape Lifesciences Inc. (the “Company”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed on April 30, 2020. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") have been condensed or omitted. In the opinion of management, the interim consolidated condensed financial statements reflect all adjustments considered necessary for a fair statement of the interim periods. All such adjustments are of a normal, recurring nature. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year.
Reverse Stock Splits	Reverse Stock Splits During the year ended December 31, 2019, the Company’s board of directors and stockholders approved the following reverse stock split: · 1-for-120 reverse split of the Company ’ s outstanding common stock that became effective after the close of market on November 11, 2019. In addition, the Company ’ s certificate of incorporation was amended to change the common stock and preferred stock par value from $0.01 per share to $0.001 per share. The reverse stock split in 2019 did not change the number of common or preferred shares authorized by the Company’s certificate of incorporation. All par value, share and per-share amounts have been retroactively adjusted to reflect the reverse stock split for all periods presented.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The carrying amounts of cash equivalents, accounts receivable, accounts payable and certain accrued and other liabilities approximate fair value due to their short-term maturities. Refer to Note 5 regarding the fair value of debt instruments and Note 8 regarding fair value measurements and inputs of warrants.
Net Loss Per Share	Net Loss Per Share The following table sets forth the potential shares of common stock that are not included in the calculation of diluted net loss per share because to do so would be anti-dilutive as of the end of each period presented: June 30, 2020 2019 Stock options 46 190 Convertible preferred stock 1,288 1,288 Warrants 8,283,447 2,022,576
Recent Accounting Pronouncements	Recent Accounting Pronouncements New accounting standards adopted by the Company in 2020 are discussed below or in the related notes, where appropriate. In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement , which modifies the disclosure requirements on fair value measurements and is intended to improve the effectiveness of disclosures, including the consideration of costs and benefits. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The adoption of this guidance did not have a material impact on the Company’s financial statements. New accounting standards not yet adopted are discussed below. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments, which is intended to provide financial statement users with more useful information about expected credit losses on financial assets held by a reporting entity at each reporting date. In May 2019, the FASB issued ASU No. 2019-05, which amended the new standard by providing targeted transition relief. The new guidance replaces the existing incurred loss impairment methodology with a methodology that requires consideration of a broader range of reasonable and supportable forward-looking information to estimate all expected credit losses. In November 2019, the FASB issued ASU No. 2019-11, which amended the new standard by providing additional clarification. This guidance is effective for the fiscal years and interim periods within those years beginning after December 15, 2022. The Company is currently evaluating the impact the guidance will have on its consolidated financial statements.

Basis of Presentation (Tables)

Basis of Presentation (Tables)	6 Months Ended
	Jun. 30, 2020
Basis of Presentation
Schedule of anti-dilutive securities	June 30, 2020 2019 Stock options 46 190 Convertible preferred stock 1,288 1,288 Warrants 8,283,447 2,022,576

Supplemental Balance Sheet In_2

Supplemental Balance Sheet Information (Tables)	6 Months Ended
	Jun. 30, 2020
Supplemental Balance Sheet Information
Schedule of components of inventory	June 30, December 31, 2020 2019 Sub-assemblies $ 579 $ — Finished goods 1,501 1,317 Total inventory $ 2,080 $ 1,317
Schedule of components of prepaid expenses and other current assets	June 30, December 31, 2020 2019 Prepaid contract research organization expenses $ 830 $ 1,356 Prepaid insurance 702 190 Other 474 165 Total prepaid expenses and other current assets $ 2,006 $ 1,711
Schedule of components of accrued and other liabilities	June 30, December 31, 2020 2019 Accrued professional services $ 501 $ 1,432 Payroll and benefits 1,285 1,021 Taxes 310 373 Equity transaction related liability — 211 Customer deposits 358 202 Accrued insurance premium 51 87 Other 504 495 Total accrued and other liabilities $ 3,009 $ 3,821

Debt (Tables)

Debt (Tables)	6 Months Ended
	Jun. 30, 2020
Debt
Summary of long term debt	June 30, December 31, 2020 2019 Asset purchase consideration $ 4,754 $ 4,637 Credit agreement 3,000 — PPP Loan 955 — Total debt 8,709 4,637 Less: debt issuance costs 678 — Less: current portion of debt 4,597 1,909 Debt, noncurrent portion $ 3,434 $ 2,728

Leases (Tables)

Leases (Tables)	6 Months Ended
	Jun. 30, 2020
Leases
Schedule of supplemental information related to operating leases	Balance Sheet Information at June 30, 2020 Operating lease ROU assets $ 613 Operating lease liabilities, current portion $ 303 Operating lease liabilities, long-term portion 323 Total operating lease liabilities $ 626 Cash Flow Information for the Six Months Ended June 30, 2020 Cash paid for amounts included in the measurement of operating leases liabilities $ 161
Schedule of maturities of operating lease liabilities	Twelve months ending June 30, 2021 $ 328 2022 332 2023 — Total lease payments 660 Less: imputed interest 34 Total lease liabilities $ 626 Weighted-average remaining lease term at end of period (in years) 1.9 Weighted-average discount rate at end of period %

Revenue Disaggregation and Op_2

Revenue Disaggregation and Operating Segments (Tables)	6 Months Ended
	Jun. 30, 2020
Revenue Disaggregation and Operating Segments
Schedule of revenue disaggregated by product and geography	Three Months Ended Six Months Ended 2020 2019 2020 2019 United States $ 1,458 $ 4,010 $ 3,412 $ 7,076 Australia 120 440 418 448 Europe 124 — 636 — Rest of world — — 25 — Total net revenue $ 1,702 $ 4,450 $ $ *The next largest individual country outside the United States was Australia for both the three and six months ended June 30, 2020 which was 7.0% and 9.3%, respectively, of total revenues. Australia was the next largest individual country outside the United States for both the three and six months ended June 30, 2019 and was 9.5% and 5.6%, respectively, of total revenues.

Stock-based Compensation (Table

Stock-based Compensation (Tables)	6 Months Ended
	Jun. 30, 2020
Stock-based Compensation
Schedule of stock-based compensation expense	Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Sales and marketing $ — $ 71 $ — $ 148 General and administrative 347 625 774 1,771 Research and development — 31 — 64 Total stock-based compensation expense $ 347 $ 727 $ 774 $ 1,983

Basis of Presentation - Reverse

Basis of Presentation - Reverse Stock Splits (Details)	Nov. 11, 2019$ / shares	Jun. 30, 2020$ / shares	Dec. 31, 2019$ / shares
Basis of Presentation
Reverse stock split ratio	120
Common stock, par value (in dollars per share)	$ 0.01	$ 0.001	$ 0.001

Basis of Presentation - Anti-di

Basis of Presentation - Anti-dilutive Securities (Details) - shares	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Stock options
Anti-dilutive securities
Anti-dilutive securities (in shares)	46	190
Convertible preferred stock
Anti-dilutive securities
Anti-dilutive securities (in shares)	1,288	1,288
Warrants
Anti-dilutive securities
Anti-dilutive securities (in shares)	8,283,447	2,022,576

Liquidity and Management_s Pl_2

Liquidity and Management’s Plans (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Liquidity and Management’s Plans
Working capital	$ 3,800
Cash and cash equivalents and restricted cash	1,576	$ 2,985	$ 4,355	$ 5,548
Accounts receivable	$ 2,883	$ 4,096

Supplemental Balance Sheet In_3

Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Supplemental Balance Sheet Information
Sub-assemblies	$ 579
Finished goods	1,501	$ 1,317
Total inventory	2,080	1,317
Prepaid expenses and other current assets:
Prepaid contract research organization expenses	830	1,356
Prepaid insurance	702	190
Other	474	165
Total prepaid expenses and other current assets	2,006	1,711
Accrued and other liabilities:
Accrued professional services	501	1,432
Payroll and benefits	1,285	1,021
Taxes	310	373
Equity transaction related liability		211
Customer Deposits	358	202
Accrued insurance premium	51	87
Other	504	495
Total accrued and other liabilities	3,009	3,821
Current inventory components
Total inventory	$ 2,080	$ 1,317

Intangible Assets (Details)

Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Indefinite-lived Intangible Assets [Line Items]
Amortization expense	$ 400	$ 400	$ 833	$ 833
Indefinite-lived intangible assets impairment		$ 6,600
Discount rate		22.40%
Minimum
Indefinite-lived Intangible Assets [Line Items]
Useful Life (years)			3 years
Maximum
Indefinite-lived Intangible Assets [Line Items]
Useful Life (years)			10 years

Debt - long term debt (Details)

Debt - long term debt (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Total debt	$ 8,709	$ 4,637
Less: debt issuance costs	678
Less: current portion of debt	4,597	1,909
Debt, noncurrent portion	3,434	2,728
Asset purchase consideration
Debt Instrument [Line Items]
Total debt	4,754	$ 4,637
Credit agreement
Debt Instrument [Line Items]
Total debt	3,000
PPP Loan
Debt Instrument [Line Items]
Total debt	$ 955

Debt - CARES Act (Details)

Debt - CARES Act (Details) - USD ($) $ in Thousands	Apr. 24, 2020	Jun. 30, 2020
Debt Instrument [Line Items]
Amount received		$ 955
PPP Loan
Debt Instrument [Line Items]
Amount received	$ 1,000
Discount rate (as a percent)	1.00%

Debt - Credit agreement (Detail

Debt - Credit agreement (Details) - USD ($) $ / shares in Units, $ in Thousands	Jun. 23, 2020	Apr. 15, 2020	Mar. 25, 2020	Jun. 30, 2020	Jun. 30, 2019
Subsequent Event [Line Items]
Amount received				$ 955
Warrant exercise price (in dollars per share)		$ 0.12
Proceeds from exercise of warrants		$ 600		610	$ 40
Credit agreement
Subsequent Event [Line Items]
Agreement amount			$ 3,500
Amount received	$ 500		2,500	3,000
Additional borrowing amount			$ 1,000	$ 500
Closing period			30 days
Threshold period to draw additional amount			5 months
Maximum amount per draw			$ 500
Credit facility matures			6 months
Credit facility bears interest			2.50%
Warrants purchased		5,085,834
Warrant exercise price (in dollars per share)		$ 0.12
Proceeds from exercise of warrants		$ 600
Credit agreement | Series G Warrants
Subsequent Event [Line Items]
Warrants purchased			1,200,000
Warrants issued			1,200,000

Debt - Asset Purchase Considera

Debt - Asset Purchase Consideration Payable (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2020USD ($)	Dec. 31, 2019USD ($)
Long-term debt
Total debt	$ 8,709	$ 4,637
Secured debt
Long-term debt
Total debt	4,800
Accretion of interest	$ 400
Secured debt | Discount rate
Long-term debt
Debt fair value measurement input (as a percent)	5.1

Debt - Convertible Subordinated

Debt - Convertible Subordinated Debentures (Details) - USD ($) $ / shares in Units, $ in Thousands	Jun. 20, 2019	Mar. 29, 2019	Jun. 30, 2019	Jun. 30, 2019	Apr. 15, 2020	Mar. 28, 2019	Nov. 28, 2018
Short-term debt
Purchase price				$ 2,000
Carrying amount		$ 1,500
Repayment of subordinated convertible debentures				2,200
Loss on extinguishment of debt			$ (71)	(71)
Embedded derivative liability		$ 500
Fair value adjustment of embedded derivative				481
Exercise price of warrants (in dollars per share)					$ 0.12
Warrant expense				$ 4,257
Level 3 | Risk-free interest rate
Short-term debt
Embedded Derivative Liability Measurement Input		2.19
Level 3 | Expected volatility
Short-term debt
Embedded Derivative Liability Measurement Input		161.74
Level 3 | Probability of conversion
Short-term debt
Embedded Derivative Liability Measurement Input		98
Level 3 | Probability of repayment at each conversion
Short-term debt
Embedded Derivative Liability Measurement Input		2
Level 3 | Option-adjusted spread
Short-term debt
Embedded Derivative Liability Measurement Input		50
Level 3 | Discount for lack or marketability
Short-term debt
Embedded Derivative Liability Measurement Input		20
Secured subordinated convertible debentures due June 28, 2019
Short-term debt
Purchase price		$ 2,000
Face amount		$ 2,200
Original issue discount		10.00%
Carrying amount		$ 1,500
Repayment of subordinated convertible debentures	$ 2,200
November 28, 2018 Series A investor warrants
Short-term debt
Number of shares in exchange of warrant exercise							8,000,000
Exercise price of warrants (in dollars per share)		$ 0.01				$ 1.50
Warrant expense		$ 100
November 28, 2018 Series A investor warrants | Risk-free interest rate
Short-term debt
Warrant fair value measurement inputs (as a percent)		2.2
November 28, 2018 Series A investor warrants | Expected term
Short-term debt
Warrants term		4 years 8 months 12 days
November 28, 2018 Series A investor warrants | Expected dividends
Short-term debt
Warrant fair value measurement inputs (as a percent)		0
November 28, 2018 Series A investor warrants | Expected volatility
Short-term debt
Warrant fair value measurement inputs (as a percent)		204.4

Leases - Supplemental Informati

Leases - Supplemental Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Leases
Operating lease costs	$ 100	$ 100	$ 200	$ 200
Balance Sheet Information related to operating leases
Operating lease ROU assets	613		613		$ 758
Operating lease liabilities, current portion	303		303		291
Operating lease liabilities, long-term portion	323		323		$ 477
Total operating lease liabilities	$ 626		626
Cash Flow Information related to operating leases
Cash paid for amounts included in the measurement of operating leases liabilities			$ 161

Leases - Maturities of Liabilit

Leases - Maturities of Liabilities (Details) $ in Thousands	Jun. 30, 2020USD ($)
Maturities of operating lease liabilities
2021	$ 328
2022	332
Total lease payments	660
Less: imputed interest	34
Total lease liabilities	$ 626
Weighted-average remaining lease term at end of period (in years)	1 year 10 months 24 days
Weighted-average discount rate at end of period	5.10%

Equity - Conversions of stock (

Equity - Conversions of stock (Details) - USD ($) $ / shares in Units, $ in Thousands	Jun. 23, 2020	May 28, 2020	Apr. 15, 2020	Feb. 01, 2019	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Equity
Cashless exercise of warrants (Shares)	58,981
Common stock issued for professional services (Shares)		50,000
Common stock issued for professional services		$ 200			$ 205		$ 205
Institutional exercise of warrants (Shares)			5,085,834
Warrant exercise price (in dollars per share)			$ 0.12
Proceeds from exercise of warrants			$ 600				$ 610	$ 40
Series B convertible preferred stock
Equity
Preferred stock outstanding					3		3		3
Common Stock
Equity
Cashless exercise of warrants (Shares)					58,981		58,981
Common stock issued for professional services (Shares)					50,000		50,000
Institutional exercise of warrants (Shares)					5,085,834	130,000	5,085,834	130,000
Common Stock | Series E convertible preferred stock
Equity
Shares issuable upon conversion of preferred stock				1
Common Stock | Series B convertible preferred stock
Equity
Shares issuable upon conversion of preferred stock					1,250		1,250
Common Stock | Conversion of common stock into series E preferred stock
Equity
Shares converted				9,993
Common Stock | Conversion of series B preferred stock into common stock
Equity
Shares issued on conversion								1,040
Preferred Stock | Series B convertible preferred stock
Equity
Preferred stock outstanding					3		3
Preferred Stock | Conversion of common stock into series E preferred stock | Series E convertible preferred stock
Equity
Shares issued on conversion				1,192,000
Preferred Stock | Conversion of series B preferred stock into common stock | Series B convertible preferred stock
Equity
Shares converted								156

Equity - Issuance of stock and

Equity - Issuance of stock and warrants (Details) - USD ($)	Apr. 15, 2020	Jun. 18, 2019	Jun. 30, 2020	Jun. 30, 2019
Equity
Stock issued (in shares)		$ 130,000
Purchase price (in dollars per share)		$ 2.40
Warrant exercise price (in dollars per share)	$ 0.12
Proceeds from exercise of warrants	$ 600,000		$ 610,000	$ 40,000
Series A warrants | Private placements
Equity
Warrant exercise price (in dollars per share)		$ 2.64
Series B warrants | Private placements
Equity
Number of shares in exchange of warrant exercise		3,333,334
Warrant exercise price (in dollars per share)		$ 2.40
Series C pre-funded warrants | Private placements
Equity
Purchase price (in dollars per share)		$ 0.12
Common Stock | Series B warrants | Private placements
Equity
Number of shares in exchange of warrant exercise		3,333,334
Common Stock | Series B warrants | Private placements
Equity
Number of shares in exchange of warrant exercise		3,203,334
Warrants | Private placements
Equity
Proceeds from exercise of warrants		$ 6,900,000
Warrants | Series C pre-funded warrants | Private placements
Equity
Purchase price (in dollars per share)		$ 2.28
Warrants | Placement agent warrants
Equity
Warrant exercise price (in dollars per share)		$ 3
Number of warrants issued		233,334

Warrants (Details)

Warrants (Details) - Series G Warrants $ in Millions	Mar. 25, 2020USD ($)shares
Class of Warrant or Right [Line Items]
Number of warrants issued | shares	1,200,000
Value of warrants issued | $	$ 1.4
Risk-free interest rate
Class of Warrant or Right [Line Items]
Warrant fair value measurement inputs (as a percent)	0.56
Expected dividends
Class of Warrant or Right [Line Items]
Warrant fair value measurement inputs (as a percent)	0
Expected term
Class of Warrant or Right [Line Items]
Warrants term	5 years
Expected volatility
Class of Warrant or Right [Line Items]
Warrant fair value measurement inputs (as a percent)	97

Revenue Disaggregation and Op_3

Revenue Disaggregation and Operating Segments - Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenue Recognition
Revenue	$ 1,702	$ 4,450	$ 4,491	$ 7,524
Percentage of total	7.00%	9.50%	9.30%	5.60%
United States
Revenue Recognition
Revenue	$ 1,458	$ 4,010	$ 3,412	$ 7,076
Australia
Revenue Recognition
Revenue	120	$ 440	418	$ 448
Europe
Revenue Recognition
Revenue	$ 124		636
Rest of world
Revenue Recognition
Revenue			$ 25

Revenue Disaggregation and Op_4

Revenue Disaggregation and Operating Segments - Operating Segments (Details)	6 Months Ended
	Jun. 30, 2020segment
Revenue Disaggregation and Operating Segments
Number of Operating Segments	2

Income Taxes - Income Tax Benef

Income Taxes - Income Tax Benefit (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Current:
Income tax benefit	$ 50	$ 586	$ 68	$ 586

Stock-based Compensation - Expe

Stock-based Compensation - Expense for Stock-Based Awards (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Compensation expense recognized
Stock-based compensation expense	$ 347	$ 727	$ 774	$ 1,983
Total unrecognized compensation costs related to unvested awards	$ 700		$ 700
Weighted-average period of recognition for unrecognized compensation costs related to unvested awards			1 year 8 months 12 days
Options granted (in shares)	0	0	0	0
Selling and marketing
Compensation expense recognized
Stock-based compensation expense		$ 71		$ 148
General and Administrative
Compensation expense recognized
Stock-based compensation expense	$ 347	625	$ 774	1,771
Research and development
Compensation expense recognized
Stock-based compensation expense		$ 31		$ 64

Subsequent Events (Details)

Subsequent Events (Details) $ in Thousands	Jul. 29, 2020USD ($)item	Jun. 23, 2020USD ($)	Mar. 25, 2020USD ($)	Jun. 30, 2020USD ($)
Subsequent events
Amount received				$ 955
Credit agreement
Subsequent events
Amount received		$ 500	$ 2,500	$ 3,000
Subsequent Event
Subsequent events
Number of additional delayed drawdowns | item	2
Subsequent Event | Credit agreement
Subsequent events
Amount received	$ 500