Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 31, 2018 | |
Document And Entity Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | Invuity, Inc. | |
Entity Central Index Key | 1,393,020 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 24,073,678 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 15,327 | $ 17,962 |
Short-term investments | 8,602 | 3,040 |
Restricted cash - current | 181 | 181 |
Accounts receivable, net | 6,668 | 7,421 |
Inventory, net | 8,534 | 7,436 |
Prepaid expenses and other current assets | 1,621 | 1,274 |
Total current assets | 40,933 | 37,314 |
Restricted cash | 727 | 727 |
Property and equipment, net | 6,868 | 7,169 |
Other long-term assets | 201 | 285 |
Total assets | 48,729 | 45,495 |
Current liabilities: | ||
Accounts payable | 3,502 | 3,598 |
Accrued and other current liabilities | 5,629 | 5,179 |
Deferred revenue - short term | 54 | |
Long-term debt, current portion | 4,615 | |
Short-term debt | 5,411 | 5,859 |
Total current liabilities | 19,211 | 14,636 |
Deferred rent | 2,468 | 2,569 |
Deferred revenue - long term | 86 | 36 |
Long-term debt, net of current portion | 24,632 | 29,116 |
Total liabilities | 46,397 | 46,357 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity (deficit): | ||
Preferred stock, $0.001 par value - 10,000,000 shares authorized at June 30, 2018 and December 31, 2017; no shares issued and outstanding at June 30, 2018 and December 31, 2017 | ||
Common stock, $0.001 par value - 100,000,000 shares authorized at June 30, 2018 and December 31, 2017; 24,073,537 and 17,179,258 shares issued and outstanding at June 30, 2018 and December 31, 2017 | 24 | 17 |
Additional paid-in capital | 208,589 | 185,255 |
Accumulated deficit | (206,281) | (186,134) |
Total stockholders' equity (deficit) | 2,332 | (862) |
Total liabilities and stockholders? equity (deficit) | $ 48,729 | $ 45,495 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Condensed Balance Sheets | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 24,073,537 | 17,179,258 |
Common stock, shares outstanding | 24,073,537 | 17,179,258 |
Condensed Statements of Operati
Condensed Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Condensed Statements of Operations and Comprehensive Loss | ||||
Revenue | $ 10,501 | $ 9,768 | $ 20,006 | $ 18,791 |
Cost of goods sold | 4,073 | 3,015 | 6,996 | 5,114 |
Gross profit | 6,428 | 6,753 | 13,010 | 13,677 |
Operating expenses: | ||||
Research and development | 2,145 | 2,410 | 4,027 | 4,839 |
Selling, general and administrative | 12,498 | 14,204 | 27,610 | 29,057 |
Total operating expenses | 14,643 | 16,614 | 31,637 | 33,896 |
Loss from operations | (8,215) | (9,861) | (18,627) | (20,219) |
Interest expense | (794) | (527) | (1,568) | (1,014) |
Interest income | 109 | 53 | 164 | 110 |
Other expense, net | (50) | (52) | (116) | (178) |
Loss on extinguishment of debt | (2,303) | |||
Net loss and comprehensive loss | $ (8,950) | $ (10,387) | $ (20,147) | $ (23,604) |
Net loss per common share, basic and diluted | $ (0.37) | $ (0.61) | $ (0.95) | $ (1.39) |
Weighted-average shares used to compute net loss per common share, basic and diluted | 24,047,256 | 16,986,074 | 21,102,254 | 16,972,280 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities | ||
Net loss | $ (20,147) | $ (23,604) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 748 | 1,009 |
Stock-based compensation | 1,609 | 1,421 |
Amortization of debt discount | 131 | 38 |
Recovery of doubtful receivable accounts | 22 | (82) |
Loss on extinguishment of debt | 2,302 | |
Payment of original issue discount | (782) | |
Accretion of premium (discount) on marketable securities | (30) | 4 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 835 | 262 |
Inventory | (1,098) | (508) |
Prepaid expenses and other current assets | (264) | 386 |
Accounts payable | (131) | 716 |
Accrued and other current liabilities | 351 | (441) |
Deferred rent | (101) | (71) |
Net cash used in operating activities | (18,075) | (19,350) |
Cash flows from investing activities | ||
Purchases of property and equipment | (413) | (558) |
Purchases of marketable securities | (8,586) | (9,462) |
Purchase of distribution license | (250) | |
Maturities of marketable securities | 3,050 | 10,742 |
Net cash (used in) provided by investing activities | (5,949) | 472 |
Cash flows from financing activities | ||
Proceeds from revolving credit facility, net of payment | (448) | 3,518 |
Proceeds from common stock offerings, net of offering costs | 21,700 | 57 |
Proceeds from issuance of long-term debt, net of issuance costs | 19,701 | |
Payments of long-term debt - related party | (14,193) | |
Proceeds from issuance of common stock upon exercise of stock options | 136 | 240 |
Prepayment penalty on long-term debt | (1,950) | |
Net cash provided by financing activities | 21,388 | 7,373 |
Net increase (decrease) in cash and cash equivalents and restricted cash | (2,636) | (11,505) |
Cash and cash equivalents and restricted cash, at beginning of period | 18,871 | 29,390 |
Cash and cash equivalents and restricted cash, at end of period | 16,235 | 17,885 |
Reconciliation of cash, cash equivalents and restricted cash as shown in the condensed statement of cash flows | ||
Total cash, cash equivalents and restricted cash | 18,871 | 29,390 |
Supplemental disclosures of cash flow information | ||
Interest paid to related party | 980 | |
Cash paid for interest | 1,247 | |
Non-cash investing and financing activities | ||
Purchases of property and equipment in accounts payable and accrued liabilities at period end | 25 | $ 16 |
Common stock offering costs in accounts payable and accrued liabilities | $ 128 |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2018 | |
Organization and Description of Business | |
Organization and Description of Business | NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) In this Quarterly Report on Form 10-Q, references to “Invuity,” “we,” “us,” “our” and the “Company” refer to Invuity, Inc., unless expressly indicated or the context otherwise requires 1. Organization and Description of Business Invuity, Inc. was incorporated in California on November 29, 2004 and reincorporated in Delaware in May 2015. The Company is a commercial-stage medical technology company that utilizes its proprietary Intelligent Photonics® technology to develop single-use and reusable illuminated surgical devices, which provide surgeons with illumination and direct visualization of surgical cavities during minimal access procedures. The Company’s manufacturing, development and management facilities are located in San Francisco, California. Liquidity and Going Concern The Company has incurred net losses from operations since inception, including $20.1 million in the six months ended June 30, 2018, and has an accumulated deficit of $206.3 million as of June 30, 2018. In March 2018, the Company issued and sold a total of 6,800,000 shares of its common stock at $3.50 per share, resulting in total net proceeds of approximately $21.7 million. The Company has $23.9 million in cash and cash equivalents and short-term investments, and $34.7 million in net debt outstanding at June 30, 2018. The Company is required to comply with a financial covenant relating to certain quarterly minimum Net Revenue (as defined in the debt agreements) requirements on a trailing twelve-month basis. See Note 5 for further details. As of June 30, 2018, the Company was not in compliance with this covenant. As disclosed in Note 10, the Company entered into an Amendment No. 3 to the Credit and Security Agreement (“Term Loan”) with MidCap Financial Trust (“MidCap”) to revise the financial covenant. After the execution of the amendment, the Company was in compliance with the revised covenant. The amendment also added a minimum cash covenant if the Company does not meet a minimum Net Revenue requirement on a trailing twelve month basis for the remainder of 2018. The minimum Net Revenue requirement is $41.5 million for the period ending September 30, 2018, $42.5 million for the period ending December 31, 2018, $45.7 million for the period ending March 31, 2019, and $47.7 million for the period ending June 30, 2019. In addition, the Company must comply with a minimum cash covenant of $5.0 million that is triggered if Net Revenue is not in excess of $45.0 million on a trailing twelve month basis as of December 31, 2018, which ends if and when Net Revenue is in excess of $50.0 million for any twelve month period thereafter. The Company expects to incur additional losses and negative cash flows for the foreseeable future as the Company continues to invest in its sales and marketing efforts and research and development activities to continue to grow its business. The Company believes that its cash, cash equivalents and short-term investments as of June 30, 2018, and expected sales from its products together with additional funding available under the Company’s revolving credit facility will not provide sufficient funds to enable the Company to meet its projected operating requirements for the next twelve months from the issuance of these financial statements. The Company intends to obtain additional funding through public or private financing, collaborative arrangements with strategic partners, or through additional credit lines or other debt financing sources to increase the funds available to support its operating and capital needs. If the Company is not able to perform according to the Company’s 2018 operating plan, the Company’s available capital resources may be consumed more rapidly than currently expected, and therefore may be required to raise additional funds sooner than anticipated. However, the Company may not be able to secure such financing in a timely manner or on favorable terms, if at all. Without additional funds, the Company will be forced to delay, scale back or eliminate some of its sales and marketing efforts, research and development activities, or other operations and potentially delay product development in an effort to provide sufficient funds to continue its operations. The uncertainty around the achievement of the Company’s plans to mitigate the risk of going concern raises substantial doubt about the Company’s ability to continue as a going concern for a one year period from the issuance of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10‑Q and Rule 10‑01 of Regulation S‑X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited interim condensed financial statements have been prepared on the same basis as the annual financial statements. In the opinion of management, the accompanying unaudited condensed financial statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2017 and filed with the U.S. Securities and Exchange Commission (the “SEC”). The accompanying year-end balance sheet was derived from the audited financial statements included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2017. The results for the three months and six months ended June 30, 2018 are not necessarily indicative of the results expected for the full fiscal year or any other periods. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The Company’s financial statements have been prepared in conformity with U.S. GAAP. The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, fair value of assets and liabilities, inventory, income taxes and stock-based compensation. Actual results could differ from those estimates and assumptions. Cash Equivalents Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of purchase. Cash equivalents consist primarily of amounts invested in money market funds. Restricted Cash Restricted cash represents a certificate of deposit held at a financial institution as collateral for a letter of credit related to the Company’s facility lease in San Francisco, California. Fair Value of Financial Instruments The carrying amounts of the Company’s financial instruments, including cash equivalents, short-term investments, accounts receivable and accounts payable, approximate fair value due to their relatively short maturities. As of June 30, 2018 and December 31, 2017, based on Level 2 inputs and the borrowing rates available to the Company for loans with similar terms and consideration of the Company’s credit risk, the carrying value of the Company’s long-term debt approximates its fair value. Customer Concentration Significant customers are those which represent 10% or more of the Company’s total revenue for each period presented in the condensed statements of operations and comprehensive loss or 10% or more of the Company’s net accounts receivable balance at each respective balance sheet date. As of and for the year ended December 31, 2017 and as of and for the three and six months ended June 30, 2018 and 2017, the Company had no customers that represented 10% or more of its revenue or accounts receivable balances. Changes in Significant Accounting Policies Except for the accounting policies for revenue recognition and deferred commissions that were updated as a result of adopting Topic 606, there have been no changes to our significant accounting policies described in the Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on March 5, 2018, that have had a material impact on the Company’s condensed financial statements and related notes. Revenue Recognition The Company’s revenue is generated from the sale of its products to hospitals and medical centers through direct sales representatives and independent sales agents. The Company accounts for a contract with a customer when there's approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, collectability of consideration is probable and the risks and rewards of ownership are transferred. In certain circumstances, the Company enters into arrangements in which multiple performance obligations are provided to customers. Under multiple performance obligations arrangements, the Company accounts for individual products and services separately if they are distinct, that is, if a product or service is separately identifiable from other items in the bundled package and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The consideration (including any discounts) is allocated between separate products and services in a bundle based on their individual stand-alone selling price (“SSP”). The SSP is determined based on observable prices at which the Company separately sells the products and services. The Company does not offer rights of return or price protection and does not provide credits or incentives, which may be required to be accounted for as variable consideration when estimating the amount of revenue to be recognized . With the exception of PhotonVue®, whereby customers can purchase service contracts for future periods of time, the Company has no post-delivery obligations other than the standard warranty for the Company’s products. Single use devices Single use device revenues include the Company’s single use products, such as the PhotonGuide® (which is used in conjunction with our reusable retractors), Photonsaber® F, the Photonsaber® Y, and the PhotonBlade®. Revenues from the sale of single use devices are recognized when the Company transfers the risks and rewards of ownership to the customer. The Company’s products do not require installation being readily available for use upon transfer of physical possession. Reusable retractors Reusable retractor revenues include the Company’s reusable products, such as the Eikon® LT, the Breisky, and the Breiten®. Revenues from the sale of reusable retractors are recognized when the Company transfers the risks and rewards of ownership to the customer. The Company’s products do not require installation being readily available for use upon transfer of physical possession. Sales to 3rd party medical device manufacturers At times, the Company sells uniquely modified products to 3 rd party medical device manufacturers. The products are modified based on the specifications provided by 3 rd party medical device manufacturers, who then incorporate these parts into products sold to their customers. Revenues from the sale to 3 rd party medical device manufacturers are recognized when the Company transfers the risks and rewards of ownership to the 3 rd party manufacturers. The Company’s products do not require installation being readily available for use upon transfer of physical possession. Other Other revenues include revenues from sales of accessories and service agreements. Revenues for sales of accessories, such as cables and trays, are recognized when the accessories are delivered to the customer and control is transferred. Revenues from service agreements are accounted for ratably over the term of the service agreement. Segment Reporting The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions. The majority of the Company’s assets are maintained in the United States. The Company derives its revenue primarily from sales to customers in the United States, based upon the billing address of the customer. The Company started selling in Asia in June 2017 and in Europe and Australia in June 2018. The Company had $20,000 and $141,000 in total international sales for the three months ended March 31, 2018 and June 30, 2018, and $0.2 million in total international sales for the six months ended June 30, 2018. Net loss per Common Share Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per common share is the same as basic net loss per common share since the effect of potentially dilutive securities are anti-dilutive. Shares subject to repurchase are excluded from the weighted-average shares. Contract Balances The timing of revenue recognition, billings and cash collections results in accounts receivables and deferred revenues on the Condensed Balance Sheet. Service contracts are usually billed upon initial purchase with the PhotonVue® system, resulting in a contract liability. These contract liabilities are reported as deferred revenues on the Condensed Balance Sheet at the end of each reporting period. Recent Accounting Pronouncements · In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014‑09, Revenue from Contracts with Customers (Topic 606) , which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition . This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, FASB issued ASU No. 2015‑14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which effectively delayed the adoption date by one year, to an effective date for public entities for annual and interim periods beginning after December 15, 2017. · In March 2016, the FASB issued ASU No. 2016‑08, Revenue from Contracts with Customers (Topic 606): Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net), to clarify certain aspects of the principal-versus-agent guidance in its new revenue recognition standard. · In April 2016, the FASB issued ASU No. 2016‑10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing to clarify on how to identify the performance obligations and the licensing implementation guidance in its new revenue recognition standard. · In May 2016, the FASB issued ASU No. 2016‑12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, to address certain issues identified by the Transition Resource Group, (the “TRG”) in the guidance on assessing collectability, presentation of sales tax, noncash consideration, and completed contracts and contracts modifications at transition. The adoption of ASC 606, using the modified retrospective approach in the first quarter of 2018 did not have a material impact on the Company’s financial statements. · In February 2016, the FASB issued ASU No. 2016‑02— Leases (“ASC 842”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. ASC 842 supersedes the previous leases standard, ASC 840 Leases . The Company expects to adopt the guidance on January 1, 2019. The Company is in the process of evaluating the impact of this new guidance on its financial statements, and expects the balance sheet to include a right of use asset and liability related to its lease arrangements. · In June 2016, the FASB issued ASU No. 2016‑13, Measurement of Credit Losses on Financial Statements (Topic 326) . This update provides financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The update replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU No. 2016‑13 is effective for public entities for annual periods beginning after December 15, 2019. The Company is in the process of evaluating the impact of this new guidance on its financial statements. · In August 2016, the FASB issued ASU No. 2016‑15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the FASB Emerging Issues Task Force) . The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This update addresses the following eight specific cash flow issues: debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (“COLIs”) (including bank-owned life insurance policies (“BOLIs”); distributions received from equity method investees; beneficial “interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. ASU No. 2016‑15 is effective for public entities for annual periods beginning after December 15, 2017. The Company adopted this standard in the first quarter of 2018. As a result of the adoption, the Company reclassified $2.0 million of Loss from debt extinguishment from Operating cash outflows in the three months ended March 31, 2017 to financing cash outflows on the Condensed Statements of Cash Flows. · In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The amendments in this update expand the scope of Topic 718 to include share based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The amendments in this Update are effective for private entities for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company is in the process of evaluating the impact of this new guidance on its financial statements. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | 3. Fair Value Measurements The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The guidance establishes three levels of the fair value hierarchy as follows: Level 1 —Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 —Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Level 3 —Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. The Company’s financial instruments consist of Level 1 and 2 assets. Level 1 assets consist primarily of highly liquid money market funds that are included in cash, cash equivalents, and restricted cash. Commercial paper and corporate debt securities are classified in Level 2 of the fair value hierarchy because these valuation inputs are observable or market-corroborated. The following table sets forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands): June 30, 2018 Level 1 Level 2 Level 3 Total Assets Money market funds $ 6,253 $ — $ — $ 6,253 Commercial paper — 12,642 — 12,642 Corporate debt securities — 1,348 — 1,348 $ 6,253 $ 13,990 $ — $ 20,243 December 31, 2017 Level 1 Level 2 Level 3 Total Assets Money market funds $ 13,071 $ — $ — $ 13,071 Commercial paper — 3,763 — 3,763 Corporate debt securities — 1,753 — 1,753 $ 13,071 $ 5,516 $ — $ 18,587 As of June 30, 2018 and December 31, 2017, the carrying value of the Company’s short-term investments approximates their fair value. |
Balance Sheet Components
Balance Sheet Components | 6 Months Ended |
Jun. 30, 2018 | |
Balance Sheet Components | |
Balance Sheet Components | 4. Balance sheet components Inventory Inventory consisted of the following (in thousands): June 30, December 31, 2018 2017 Raw materials $ 1,968 $ 1,606 Work-in-process 2,701 1,860 Finished goods 3,865 3,970 Total inventory $ 8,534 $ 7,436 Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): June 30, December 31, 2018 2017 Prepaid expenses $ 1,570 $ 1,252 Other 51 22 Total prepaid expenses and other current assets $ 1,621 $ 1,274 Property and Equipment, Net Property and equipment, net, consisted of the following (in thousands): June 30, December 31, 2018 2017 Computer equipment and software $ 1,606 $ 1,368 Laboratory and manufacturing equipment 3,116 3,008 Furniture and fixtures 1,550 1,516 Leasehold improvements 7,201 7,155 Assets in progress 188 167 Total property and equipment, gross 13,661 13,214 Less: accumulated depreciation and amortization (6,793) (6,045) Total property and equipment, net $ 6,868 $ 7,169 Depreciation and amortization expense was $0.4 million for the three months ended June 30, 2018, and $0.5 million for the three months ended June 30, 2017. Depreciation and amortization expense was $0.7 million for the six months ended June 30, 2018, and $1.0 million for the six months ended June 30, 2017. Accrued and Other Current Liabilities Accrued and other current liabilities consisted of the following (in thousands): June 30, December 31, 2018 2017 Accrued payroll-related expenses $ 3,885 $ 3,777 Accrued independent sales agent commissions 298 181 Accrued professional fees 830 501 Deferred rent 261 261 Other 355 459 Total accrued and other current liabilities $ 5,629 $ 5,179 As part of a corporate restructuring program the Company implemented in May 2018, the Company recorded $0.9 million in severance expense, of which $0.6 million is included in the total Accrued payroll-related expenses of $3.9 million for the six months ended June 30, 2018. The remaining severance payments of $0.6 million are expected to be fully disbursed by January 2019. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2018 | |
Debt | |
Debt | 5. Debt MidCap credit and security agreement: On March 10, 2017, the Company entered into a credit and security agreement with MidCap as agent, for up to $30.0 million in term loans. Under the terms of the agreement, the Company borrowed the first term loan of $20.0 million (“Tranche 1”) at closing. The Tranche 1 term loan accrues interest at a floating rate equal to 6.50% per annum, plus the greater of (i) 1.5% or (ii) one month LIBOR. Interest shall accrue on the date of the commencement of funding and is payable in arrears on the first day of each month. Principal was payable in 36 equal monthly installments beginning April 1, 2019, subject to extension to October 1, 2019, if the Company achieves a certain revenue target, until paid in full on March 1, 2022. The Company used $17.2 million of the $20.0 million Tranche 1 term loan to pay off in full the outstanding $15.0 million loan with Health Care Royalty Partners (“HCRP”). The Company also terminated its accounts receivable credit facility with Silicon Valley Bank which was never drawn down. The transaction was accounted for as a debt extinguishment and a loss of $2.3 million was accounted for as loss on extinguishment of debt in the income statement. The loss amount includes a $1.8 million prepayment fee paid to HCRP, a $150,000 fee paid to Silicon Valley Bank for termination of the accounts receivable facility and a $0.3 million non-cash expense related to unamortized issuance costs. The facility terminates in full on March 1, 2022, unless terminated earlier. As of June 30, 2018, the Company had drawn down $5.4 million under the revolving credit facility. In connection with the term loan facility, the Company agreed to issue to each lender warrants to purchase shares of the Company’s common stock upon the drawdown of each tranche in an aggregate amount equal to 2.0% of the amount drawn, divided by the exercise price per share for that tranche. In connection with the Tranche 1 term loan, the Company issued warrants to purchase an aggregate of 50,618 shares of the Company’s common stock, at an exercise price equal to $7.90 per share. These warrants, which were recorded within stockholders’ equity, were fair valued at $279,000 upon issuance using a Black-Scholes valuation model. The assumptions used in the Black-Scholes model consisted of a 10 year contractual term, interest free rate of 2.58%, dividend yield of 0.0% and volatility of 60.0%. The fair value was recorded as a discount to the initial $20.0 million term loan and will be amortized as interest expense over the term of the agreement, which is approximately five years. In connection with the Tranche 2 term loan, the Company issued warrants to purchase an aggregate of 47,790 shares of the Company’s common stock, at an exercise price equal to $8.37 per share. These warrants, which were recorded within stockholders’ equity, were fair valued at $278,000 upon issuance using a Black-Scholes valuation model. The assumptions used in the Black-Scholes model consisted of a 10 year contractual term, interest free rate of 2.24%, dividend yield of 0.0% and volatility of 60.0%. The fair value was recorded as a discount to the initial $10.0 million term loan and will be amortized as interest expense over the term of the agreement, which is approximately five years On September 26, 2017, the Company entered into an Amendment No. 2 to the Term Loan with MidCap and borrowed the second term loan of $10.0 million (“Tranche 2”). The Tranche 2 term loan accrues interest at a floating rate equal to 6.50% per annum, plus the greater of (i) 1.5% or (ii) one month LIBOR. Interest shall accrue on the date of the commencement of funding and is payable in arrears on the first day of each month. Principal was payable in 36 equal monthly installments beginning April 1, 2019, subject to extension to October 1, 2019, if the Company achieved a certain revenue target, until paid in full on March 1, 2022. The Company also entered into a separate Credit and Security Agreement (Revolving Loan) with MidCap on March 10, 2017 that provided for a revolving credit facility of up to $10.0 million based on the eligible accounts receivable and inventory balances, as amended on September 26, 2017. The Company could increase the total commitments under the revolving credit facility by up to an additional $10.0 million, subject to the Company meeting certain conditions. Loans under the revolving credit facility accrued interest at a floating rate equal to 3.25% per annum, plus the greater of (i) 1.5% or (ii) one month LIBOR. Interest was payable in arrears on the first day of each month subsequent to the draw down date. The term loan facility and the revolving credit facility are secured by substantially all of the Company’s assets, including intellectual property. In addition, under the terms of the agreement, the Company is required to meet certain covenants which if the Company is unable to meet, or if the Company does not make its payments, the Company may be found in default and all obligations may be accelerated and become immediately due and payable upon the sole election of the lenders. The Company must also comply with a financial covenant relating to certain quarterly minimum Net Revenue requirements on a trailing twelve month basis. As of June 30, 2018, the Company was not in compliance with this covenant. Additionally, the credit and security agreement with MidCap, includes customary events of default, including failure to pay amounts due, breaches of covenants and warranties, and material adverse effect events. If an event of default occurs, MidCap may require immediate repayment of all amounts due. On July 31, 2018, the Company entered into an Amendment No. 3 to the Term Loan, (the “Term Loan Amendment”). For the Term Loans and the Revolving Loan, the financial covenant, relating to certain quarterly minimum net revenue requirements on a trailing twelve-month basis, was revised. In addition, the amendment also added a minimum cash covenant if the Company does not meet a minimum Net Revenue requirement on a trailing twelve month basis for the remainder of 2018. The minimum Net Revenue requirement is $41.5 million for the period ending September 30, 2018, $42.5 million for the period ending December 31, 2018, $45.7 million for the period ending March 31, 2019, and $47.7 million for the period ending June 30, 2019. In addition, the Company must comply with a minimum cash covenant of $5.0 million that is triggered if Net Revenue is not in excess of $45.0 million on a trailing twelve month basis as of December 31, 2018, which ends if and when Net Revenue is in excess of $50.0 million for any twelve month period thereafter. For the term loan, the exit fee was increased from 6.5% to 7.0% of the total amount of all term loans and the repayment schedule was revised such that principal on each term loan advance is now payable in 39 equal monthly installments beginning January 1, 2019 until paid in full on March 1, 2022. In connection with the Term Loan Amendment, the Company also entered into an Amendment No. 3 to Revolving Loan (the “Revolving Loan Amendment”). For the Revolving Loan, the total commitments were increased from $10.0 million to $15.0 million. After the execution of the amendment, the Company was in compliance with the revised covenant. |
Stock Option Plans
Stock Option Plans | 6 Months Ended |
Jun. 30, 2018 | |
Stock Option Plans | |
Stock Option Plans | 6. Stock Option Plans In April 2015, the Company’s board of directors and stockholders approved the 2015 Equity Incentive plan (the “2015 Plan”), effective June 11, 2015, covering incentive stock options, nonstatutory stock options and restricted stock awards that may be granted to employees, directors and consultants. During the three months ended June 30, 2018 and 2017, the Company granted 8,840 options and 125,525 options, respectively, to employees and consultants, with a weighted average grant date fair value of $3.62 per share and $7.32 per share, respectively. During the six months ended June 30, 2018 and 2017, the Company granted 325,340 and 734,705 options, respectively, to employees and consultants, with a weighted average grant date fair value of $4.11 per share and $6.65 per share, respectively. The options granted in 2017 included 268,000 options granted to certain executive officers with a market-based condition. The 268,000 options were valued at an aggregate value of $0.7 million using the Monte Carlo Simulation model, which will be amortized over three years from the date of grant. The aggregate intrinsic value of options exercised was $30,000 for the three months and $45,000 for the six months ended June 30, 2018, respectively, and was $0.3 million for both of the three and six months ended June 30, 2017. The weighted-average remaining contractual life of options outstanding was 5.6 and 7.0 years at June 30, 2018 and December 31, 2017, respectively. For vested and expected to vest options, the weighted-average remaining contractual life as of June 30, 2018 and December 31, 2017, was 5.6 and 7.0 years, respectively. For the three months ended June 30, 2018, the Company granted 171,230 restricted stock units (“RSUs”) to non-employee board members (“Outside Directors”) with a grant date fair value, in the aggregate, of approximately $0.6 million. Under the Company’s Restricted Stock Unit Deferral Program for Outside Directors, Outside Directors may elect to defer the receipt of shares upon vesting of RSUs granted under the 2015 Plan. A deferral election will apply to the entirety of the particular RSU award and no partial elections may be made. A deferral election is irrevocable once made. In the event an Outside Director makes a deferral election, the shares of common stock underlying the deferred RSUs will not be distributed to such Outside Director until the earlier of his or her separation of service as a board member or upon a “Change in Control” (as defined in the 2015 Plan) of the Company. Three out of five of the Company’s Outside Directors elected to defer receipt of the RSUs granted to them on the date of the Company’s 2018 Annual Meeting (the “2018 Annual meeting”) under the 2015 plan. The Company also granted 60,000 RSUs to the Interim President and Chief Executive Officer, with a grant date fair value, in the aggregate, of approximately $0.2 million. For the six months ended June 30, 2018, the total RSUs granted were 522,665 with a fair value of $1.9 million, including RSUs granted to Outside Directors described above and 272,985 RSUs granted to executive officers with a fair value of $1.1 million. The RSUs granted to executive officers have a four-year term and vest 25% annually, with the exception of the RSUs granted as part of the new Interim President and Chief Executive Officer’s employment agreement that vest 100% after one year. The RSUs granted to Outside Directors on the date of the 2018 Annual Meeting will vest 100% on the one year anniversary of the 2018 Annual Meeting, with the exception of any RSUs that an Outside Director elected to defer, which RSUs generally will vest 100% on the first anniversary of the date that the Outside Director elected to defer such RSUs. For the three months ended June 30, 2017, the Company granted approximately 72,000 RSUs to Outside Directors with a grant date fair value, in the aggregate, of $0.5 million. The RSUs granted to Outside Directors on the date of the 2017 Annual Meeting will vest 100% on the earlier of the 2018 Annual Meeting of Stockholders or the one year anniversary of the 2017 Annual Meeting, with the exception of any RSUs that an Outside Director elected to defer, which RSUs generally will vest 100% on the first anniversary of the date that the Outside Director elected to defer such RSUs. As previously noted, under the Company’s Restricted Stock Unit Deferral Program for Outside Directors, Outside Directors may elect to defer the receipt of shares upon vesting of RSUs granted under the 2015 Plan. Three out of four of the Company’s Outside Directors elected to defer receipt of the RSUs granted to them on the date of the Company’s 2017 Annual Meeting (the “2017 Annual Meeting”) under the 2015 Plan. For the six months ended June 30, 2017, the total RSUs granted were 153,000 with a fair value of $1.0 million, including the RSUs granted to Outside Directors described above and 71,500 RSUs granted to executive officers with a fair value of $0.5 million. The RSUs granted to executive officers have a four-year term and vest 25% annually. Stock‑Based Compensation The fair value of stock options granted to employees is amortized on a straight-line basis over the requisite service period of the award. Stock‑based compensation related to stock options granted to non-employees is recognized as the stock options are earned. The Company recognized total employee-related stock compensation expenses of $0.6 million and $1.6 million for the three and six months ended June 30, 2018, respectively, and $0.7 million and $1.3 million for the three months and six months ended June 30, 2017, respectively. In addition, the Company recognized non-employee stock-based compensation expense of $29,000 and $48,000 for the three and six months ended June 30, 2018, respectively, and $44,000 and $111,000 for the three and six months ended June 30, 2017, respectively. The following table summarizes stock‑based compensation expense related to stock options and restricted stock units included in the condensed statements of operations and comprehensive loss (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Cost of goods sold $ 59 $ 51 $ 113 $ 96 Selling, general and administrative 481 475 183 1,007 Research and development 90 173 1,313 318 Total stock-based compensation expense $ 630 $ 699 $ 1,609 $ 1,421 As of June 30, 2018, unrecognized compensation expense related to unvested options was $6.9 million, which the Company expects to recognize on a straight‑line basis over a weighted‑average period of 2.6 years. Unrecognized compensation expense related to unvested RSUs was $2.7 million, which the Company expects to recognize on a straight‑line basis over a weighted‑average period of 2.1 years. |
Net Loss per Common Share
Net Loss per Common Share | 6 Months Ended |
Jun. 30, 2018 | |
Net Loss per Common Share | |
Net Loss per Common Share | 7. Net Loss per Common Share As the Company generated net losses for all the periods presented, all potentially dilutive common securities are determined to be anti-dilutive. The following table sets forth the computation of the basic and diluted net loss per share (in thousands, except share and per share data): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Numerator: Net loss $ (8,950) $ (10,387) $ (20,147) $ (23,604) Denominator: Weighted-average common shares outstanding 24,047,256 16,986,628 21,102,254 16,973,473 Less: weighted-average unvested common shares subject to repurchase — (554) — (1,193) Weighted-average shares used to compute net loss per common share, basic and diluted 24,047,256 16,986,074 21,102,254 16,972,280 Net loss per common share, basic and diluted $ (0.37) $ (0.61) $ (0.95) $ (1.39) The following outstanding shares of potentially dilutive securities have been excluded from diluted net loss per share because their inclusion would be anti‑dilutive: June 30, June 30, 2018 2017 Options to purchase common stock 2,696,767 2,949,908 Restricted stock units 620,315 250,447 Warrants to purchase common stock 235,415 187,625 Total 3,552,497 3,387,980 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 8. Commitments and Contingencies On February 27, 2017, a purported stockholder class action titled Paciga v. Invuity, Inc., et al., Case No. 3:17-cv-01005, was filed in the United States District Court for the Northern District of California against the Company, its Chief Executive Officer, and its Chief Financial Officer. The complaint alleges that the defendants made false or misleading statements to investors regarding the Company’s business prospects. The complaint purports to assert claims for violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, and the Securities Exchange Commission Rule 10b-5 on behalf of a purported class consisting of all purchasers of the Company’s common stock between July 19, 2016 and November 3, 2016, and seeks unspecified compensatory damages, attorney fees and costs, and other relief. On May 30, 2017, the Court appointed Mike Paciga as lead plaintiff. The lead plaintiff filed an amended complaint on July 31, 2017. Defendants filed a motion to dismiss on September 14, 2017, and the lead plaintiff filed his opposition to the motion on October 30, 2017. Defendants filed a reply brief on December 4, 2017. The Company intends to defend the litigation vigorously. Based on information currently available, the Company has determined that the amount of any possible loss or range of possible loss is not reasonably estimable. In December 2016, Medtronic, which competes with us across multiple product lines, filed a civil complaint in the State Court of Minnesota against us, alleging tortious interference with contract, and two of our former sales employees, alleging breach of contract, misappropriation of trade secrets and breach of duty of loyalty. The complaint seeks unspecified monetary damages. In April 2018, we entered into an agreement with Medtronic, pursuant to which we agreed to pay $1.0 million to Medtronic, which was paid during the quarter. Medtronic agreed to dismiss this complaint. The Company is, and from time to time may become, involved in legal proceedings arising from the ordinary course of its business. Management is currently not aware of any matters that will have a material adverse effect on the financial position, results of operations or cash flows of the Company. |
Disaggregation of Revenues
Disaggregation of Revenues | 6 Months Ended |
Jun. 30, 2018 | |
Disaggregation of Revenues | |
Disaggregation of Revenues | 9. Disaggregation of Revenues The Company disaggregates its revenues by product categories, as the Company believes this best depicts how the nature, amount, timing, and uncertainty of revenues and cash flows are affected by economic factors. See details in the tables below. Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (In thousands) (In thousands) Revenue Single use devices $ 9,245 $ 8,289 $ 17,826 $ 15,337 Reusable retractors 848 926 1,547 2,049 Sales to third party medical device manufacturers 86 278 86 827 Other 322 275 547 578 Total revenue $ 10,501 $ 9,768 $ 20,006 $ 18,791 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events | |
Subsequent Events | 10. Subsequent Events Debt Covenants: As of June 30, 2018, the Company was not in compliance with the financial covenant relating to the Term Loan and the Revolving Loan with MidCap. On July 31, 2018, the Company entered into an Amendment No. 3 to the Term Loan and to the Revolving Loan to revise the financial covenant. After the execution of the amendment, the Company was in compliance with the revised covenant. See Note 5, “Debt”, of the Notes to Condensed Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10‑Q for more details. The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Term Loan Amendment and the Revolving Loan Amendment, copies of which are attached hereto as Exhibits 10.1 and 10.2, respectively, and incorporated herein by reference. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10‑Q and Rule 10‑01 of Regulation S‑X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited interim condensed financial statements have been prepared on the same basis as the annual financial statements. In the opinion of management, the accompanying unaudited condensed financial statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2017 and filed with the U.S. Securities and Exchange Commission (the “SEC”). The accompanying year-end balance sheet was derived from the audited financial statements included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2017. The results for the three months and six months ended June 30, 2018 are not necessarily indicative of the results expected for the full fiscal year or any other periods. |
Use of Estimates | Use of Estimates The Company’s financial statements have been prepared in conformity with U.S. GAAP. The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, fair value of assets and liabilities, inventory, income taxes and stock-based compensation. Actual results could differ from those estimates and assumptions. |
Cash Equivalents | Cash Equivalents Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of purchase. Cash equivalents consist primarily of amounts invested in money market funds. |
Restricted Cash | Restricted Cash Restricted cash represents a certificate of deposit held at a financial institution as collateral for a letter of credit related to the Company’s facility lease in San Francisco, California. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of the Company’s financial instruments, including cash equivalents, short-term investments, accounts receivable and accounts payable, approximate fair value due to their relatively short maturities. As of June 30, 2018 and December 31, 2017, based on Level 2 inputs and the borrowing rates available to the Company for loans with similar terms and consideration of the Company’s credit risk, the carrying value of the Company’s long-term debt approximates its fair value. |
Customer Concentration | Customer Concentration Significant customers are those which represent 10% or more of the Company’s total revenue for each period presented in the condensed statements of operations and comprehensive loss or 10% or more of the Company’s net accounts receivable balance at each respective balance sheet date. As of and for the year ended December 31, 2017 and as of and for the three and six months ended June 30, 2018 and 2017, the Company had no customers that represented 10% or more of its revenue or accounts receivable balances. |
Changes in Significant Accounting Policies | Changes in Significant Accounting Policies Except for the accounting policies for revenue recognition and deferred commissions that were updated as a result of adopting Topic 606, there have been no changes to our significant accounting policies described in the Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on March 5, 2018, that have had a material impact on the Company’s condensed financial statements and related notes. |
Revenue Recognition | Revenue Recognition The Company’s revenue is generated from the sale of its products to hospitals and medical centers through direct sales representatives and independent sales agents. The Company accounts for a contract with a customer when there's approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, collectability of consideration is probable and the risks and rewards of ownership are transferred. In certain circumstances, the Company enters into arrangements in which multiple performance obligations are provided to customers. Under multiple performance obligations arrangements, the Company accounts for individual products and services separately if they are distinct, that is, if a product or service is separately identifiable from other items in the bundled package and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The consideration (including any discounts) is allocated between separate products and services in a bundle based on their individual stand-alone selling price (“SSP”). The SSP is determined based on observable prices at which the Company separately sells the products and services. The Company does not offer rights of return or price protection and does not provide credits or incentives, which may be required to be accounted for as variable consideration when estimating the amount of revenue to be recognized . With the exception of PhotonVue®, whereby customers can purchase service contracts for future periods of time, the Company has no post-delivery obligations other than the standard warranty for the Company’s products. Single use devices Single use device revenues include the Company’s single use products, such as the PhotonGuide® (which is used in conjunction with our reusable retractors), Photonsaber® F, the Photonsaber® Y, and the PhotonBlade®. Revenues from the sale of single use devices are recognized when the Company transfers the risks and rewards of ownership to the customer. The Company’s products do not require installation being readily available for use upon transfer of physical possession. Reusable retractors Reusable retractor revenues include the Company’s reusable products, such as the Eikon® LT, the Breisky, and the Breiten®. Revenues from the sale of reusable retractors are recognized when the Company transfers the risks and rewards of ownership to the customer. The Company’s products do not require installation being readily available for use upon transfer of physical possession. Sales to 3rd party medical device manufacturers At times, the Company sells uniquely modified products to 3 rd party medical device manufacturers. The products are modified based on the specifications provided by 3 rd party medical device manufacturers, who then incorporate these parts into products sold to their customers. Revenues from the sale to 3 rd party medical device manufacturers are recognized when the Company transfers the risks and rewards of ownership to the 3 rd party manufacturers. The Company’s products do not require installation being readily available for use upon transfer of physical possession. Other Other revenues include revenues from sales of accessories and service agreements. Revenues for sales of accessories, such as cables and trays, are recognized when the accessories are delivered to the customer and control is transferred. Revenues from service agreements are accounted for ratably over the term of the service agreement. |
Segment Reporting | Segment Reporting The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions. The majority of the Company’s assets are maintained in the United States. The Company derives its revenue primarily from sales to customers in the United States, based upon the billing address of the customer. The Company started selling in Asia in June 2017 and in Europe and Australia in June 2018. The Company had $20,000 and $141,000 in total international sales for the three months ended March 31, 2018 and June 30, 2018, and $0.2 million in total international sales for the six months ended June 30, 2018. |
Net loss per Common Share | Net loss per Common Share Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per common share is the same as basic net loss per common share since the effect of potentially dilutive securities are anti-dilutive. Shares subject to repurchase are excluded from the weighted-average shares. |
Contract Balances | Contract Balances The timing of revenue recognition, billings and cash collections results in accounts receivables and deferred revenues on the Condensed Balance Sheet. Service contracts are usually billed upon initial purchase with the PhotonVue® system, resulting in a contract liability. These contract liabilities are reported as deferred revenues on the Condensed Balance Sheet at the end of each reporting period. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements · In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014‑09, Revenue from Contracts with Customers (Topic 606) , which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition . This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, FASB issued ASU No. 2015‑14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which effectively delayed the adoption date by one year, to an effective date for public entities for annual and interim periods beginning after December 15, 2017. · In March 2016, the FASB issued ASU No. 2016‑08, Revenue from Contracts with Customers (Topic 606): Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net), to clarify certain aspects of the principal-versus-agent guidance in its new revenue recognition standard. · In April 2016, the FASB issued ASU No. 2016‑10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing to clarify on how to identify the performance obligations and the licensing implementation guidance in its new revenue recognition standard. · In May 2016, the FASB issued ASU No. 2016‑12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, to address certain issues identified by the Transition Resource Group, (the “TRG”) in the guidance on assessing collectability, presentation of sales tax, noncash consideration, and completed contracts and contracts modifications at transition. The adoption of ASC 606, using the modified retrospective approach in the first quarter of 2018 did not have a material impact on the Company’s financial statements. · In February 2016, the FASB issued ASU No. 2016‑02— Leases (“ASC 842”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. ASC 842 supersedes the previous leases standard, ASC 840 Leases . The Company expects to adopt the guidance on January 1, 2019. The Company is in the process of evaluating the impact of this new guidance on its financial statements, and expects the balance sheet to include a right of use asset and liability related to its lease arrangements. · In June 2016, the FASB issued ASU No. 2016‑13, Measurement of Credit Losses on Financial Statements (Topic 326) . This update provides financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The update replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU No. 2016‑13 is effective for public entities for annual periods beginning after December 15, 2019. The Company is in the process of evaluating the impact of this new guidance on its financial statements. · In August 2016, the FASB issued ASU No. 2016‑15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the FASB Emerging Issues Task Force) . The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This update addresses the following eight specific cash flow issues: debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (“COLIs”) (including bank-owned life insurance policies (“BOLIs”); distributions received from equity method investees; beneficial “interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. ASU No. 2016‑15 is effective for public entities for annual periods beginning after December 15, 2017. The Company adopted this standard in the first quarter of 2018. As a result of the adoption, the Company reclassified $2.0 million of Loss from debt extinguishment from Operating cash outflows in the three months ended March 31, 2017 to financing cash outflows on the Condensed Statements of Cash Flows. · In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The amendments in this update expand the scope of Topic 718 to include share based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The amendments in this Update are effective for private entities for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company is in the process of evaluating the impact of this new guidance on its financial statements. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Measurements | |
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis Based on Three-Tier Fair Value Hierarchy | The following table sets forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands): June 30, 2018 Level 1 Level 2 Level 3 Total Assets Money market funds $ 6,253 $ — $ — $ 6,253 Commercial paper — 12,642 — 12,642 Corporate debt securities — 1,348 — 1,348 $ 6,253 $ 13,990 $ — $ 20,243 December 31, 2017 Level 1 Level 2 Level 3 Total Assets Money market funds $ 13,071 $ — $ — $ 13,071 Commercial paper — 3,763 — 3,763 Corporate debt securities — 1,753 — 1,753 $ 13,071 $ 5,516 $ — $ 18,587 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Balance Sheet Components | |
Schedule of Inventory | Inventory consisted of the following (in thousands): June 30, December 31, 2018 2017 Raw materials $ 1,968 $ 1,606 Work-in-process 2,701 1,860 Finished goods 3,865 3,970 Total inventory $ 8,534 $ 7,436 |
Schedule of Prepaid Expenses and Other Assets | Prepaid expenses and other current assets consisted of the following (in thousands): June 30, December 31, 2018 2017 Prepaid expenses $ 1,570 $ 1,252 Other 51 22 Total prepaid expenses and other current assets $ 1,621 $ 1,274 |
Schedule of Property and Equipment, Net | Property and equipment, net, consisted of the following (in thousands): June 30, December 31, 2018 2017 Computer equipment and software $ 1,606 $ 1,368 Laboratory and manufacturing equipment 3,116 3,008 Furniture and fixtures 1,550 1,516 Leasehold improvements 7,201 7,155 Assets in progress 188 167 Total property and equipment, gross 13,661 13,214 Less: accumulated depreciation and amortization (6,793) (6,045) Total property and equipment, net $ 6,868 $ 7,169 |
Schedule of Accrued and Other Current Liabilities | Accrued and other current liabilities consisted of the following (in thousands): June 30, December 31, 2018 2017 Accrued payroll-related expenses $ 3,885 $ 3,777 Accrued independent sales agent commissions 298 181 Accrued professional fees 830 501 Deferred rent 261 261 Other 355 459 Total accrued and other current liabilities $ 5,629 $ 5,179 |
Stock Option Plans (Tables)
Stock Option Plans (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Stock Option Plans | |
Summary of Stock-based Compensation Expense Related to Stock Options and Restricted Stock Units Included in Condensed Statements of Operations and Comprehensive Loss | Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Cost of goods sold $ 59 $ 51 $ 113 $ 96 Selling, general and administrative 481 475 183 1,007 Research and development 90 173 1,313 318 Total stock-based compensation expense $ 630 $ 699 $ 1,609 $ 1,421 |
Net Loss per Common Share (Tabl
Net Loss per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Net Loss per Common Share | |
Schedule of Computation of Basic and Diluted Net Loss per Share | Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Numerator: Net loss $ (8,950) $ (10,387) $ (20,147) $ (23,604) Denominator: Weighted-average common shares outstanding 24,047,256 16,986,628 21,102,254 16,973,473 Less: weighted-average unvested common shares subject to repurchase — (554) — (1,193) Weighted-average shares used to compute net loss per common share, basic and diluted 24,047,256 16,986,074 21,102,254 16,972,280 Net loss per common share, basic and diluted $ (0.37) $ (0.61) $ (0.95) $ (1.39) |
Schedule of Potentially Dilutive Securities Outstanding Excluded from Computation of Diluted Shares Outstanding | June 30, June 30, 2018 2017 Options to purchase common stock 2,696,767 2,949,908 Restricted stock units 620,315 250,447 Warrants to purchase common stock 235,415 187,625 Total 3,552,497 3,387,980 |
Disaggregation of Revenues (Tab
Disaggregation of Revenues (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disaggregation of Revenues | |
Summary of disaggregation of Revenues | Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (In thousands) (In thousands) Revenue Single use devices $ 9,245 $ 8,289 $ 17,826 $ 15,337 Reusable retractors 848 926 1,547 2,049 Sales to third party medical device manufacturers 86 278 86 827 Other 322 275 547 578 Total revenue $ 10,501 $ 9,768 $ 20,006 $ 18,791 |
Organization and Description 22
Organization and Description of Business (Detail) - USD ($) $ / shares in Units, $ in Thousands | Jul. 31, 2018 | Mar. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Organization and Description of Business | |||||||
Net loss | $ 8,950 | $ 10,387 | $ 20,147 | $ 23,604 | |||
Accumulated deficit | 206,281 | 206,281 | $ 186,134 | ||||
Stock issued, shares | 6,800,000 | ||||||
Shares Issued, Price Per Share | $ 3.50 | ||||||
Proceeds from Issuance of Common Stock | $ 21,700 | 21,700 | $ 57 | ||||
Cash and cash equivalents and short-term investments | 23,900 | 23,900 | |||||
Face value of debt outstanding | $ 34,700 | $ 34,700 | |||||
Revolving Credit Facility | Term loan | |||||||
Organization and Description of Business | |||||||
Minimum net revenue requirements period ending September 30, 2018 | $ 41,500 | ||||||
Minimum net revenue requirements period ending December 31, 2018 | 42,500 | ||||||
Minimum net revenue requirements period ending March 31, 2019 | 45,700 | ||||||
Minimum net revenue requirements period ending June 30, 2019 | 47,700 | ||||||
Minimum cash covenant | 5,000 | ||||||
Minimum net revenue required for not maintain cash covenant for December 31, 2018 | 45,000 | ||||||
Minimum net revenue required for not maintain cash covenant, there after | $ 50,000 |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Detail) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018USD ($)customer | Mar. 31, 2018USD ($) | Jun. 30, 2017USD ($)customer | Mar. 31, 2017USD ($) | Jun. 30, 2018USD ($)segmentcustomer | Jun. 30, 2017USD ($)customer | |
Summary of Significant Accounting Policies | ||||||
Number of operating segments | segment | 1 | |||||
Revenue | $ 10,501 | $ 9,768 | $ 20,006 | $ 18,791 | ||
Debt extinguishment cost | $ (2,303) | |||||
ASU 2016-15 | ||||||
Summary of Significant Accounting Policies | ||||||
Debt extinguishment cost | $ 2,000 | |||||
Asia, Europe and Australia | ||||||
Summary of Significant Accounting Policies | ||||||
Revenue | $ 141 | $ 20 | $ 200 | |||
Customer Concentration Risk | ||||||
Summary of Significant Accounting Policies | ||||||
Number of Customers | customer | 0 | 0 | 0 | 0 | ||
Revenue | Customer Concentration Risk | ||||||
Summary of Significant Accounting Policies | ||||||
Concentration risk, percentage | 10.00% | |||||
Accounts Receivable, Net | Customer Concentration Risk | ||||||
Summary of Significant Accounting Policies | ||||||
Concentration risk, percentage | 10.00% |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis Based on Three-Tier Fair Value Hierarchy (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Assets | $ 20,243 | $ 18,587 |
Level 1 | ||
Assets | ||
Assets | 6,253 | 13,071 |
Level 2 | ||
Assets | ||
Assets | 13,990 | 5,516 |
Money Market Funds | ||
Assets | ||
Assets | 6,253 | 13,071 |
Money Market Funds | Level 1 | ||
Assets | ||
Assets | 6,253 | 13,071 |
Commercial Paper | ||
Assets | ||
Assets | 12,642 | 3,763 |
Commercial Paper | Level 2 | ||
Assets | ||
Assets | 12,642 | 3,763 |
Corporate Debt Securities | ||
Assets | ||
Assets | 1,348 | 1,753 |
Corporate Debt Securities | Level 2 | ||
Assets | ||
Assets | $ 1,348 | $ 1,753 |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Inventory (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Balance Sheet Components | ||
Raw materials | $ 1,968 | $ 1,606 |
Work-in-process | 2,701 | 1,860 |
Finished goods | 3,865 | 3,970 |
Total inventory | $ 8,534 | $ 7,436 |
Balance Sheet Components - Sc26
Balance Sheet Components - Schedule of Prepaid Expenses and Other Assets (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Balance Sheet Components | ||
Prepaid expenses | $ 1,570 | $ 1,252 |
Other | 51 | 22 |
Total prepaid expenses and other current assets | $ 1,621 | $ 1,274 |
Balance Sheet Components - Sc27
Balance Sheet Components - Schedule of Property and Equipment, Net (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Property, Plant and Equipment | |||||
Total property and equipment, gross | $ 13,661 | $ 13,661 | $ 13,214 | ||
Less: accumulated depreciation and amortization | (6,793) | (6,793) | (6,045) | ||
Total property and equipment, net | 6,868 | 6,868 | 7,169 | ||
Depreciation and amortization | 400 | $ 500 | 748 | $ 1,009 | |
Computer Equipment and Software | |||||
Property, Plant and Equipment | |||||
Total property and equipment, gross | 1,606 | 1,606 | 1,368 | ||
Laboratory and Manufacturing Equipment | |||||
Property, Plant and Equipment | |||||
Total property and equipment, gross | 3,116 | 3,116 | 3,008 | ||
Furniture and Fixtures | |||||
Property, Plant and Equipment | |||||
Total property and equipment, gross | 1,550 | 1,550 | 1,516 | ||
Leasehold Improvements | |||||
Property, Plant and Equipment | |||||
Total property and equipment, gross | 7,201 | 7,201 | 7,155 | ||
Assets in progress | |||||
Property, Plant and Equipment | |||||
Total property and equipment, gross | $ 188 | $ 188 | $ 167 |
Balance Sheet Components - Sc28
Balance Sheet Components - Schedule of Accrued and Other Current Liabilities (Detail) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | |
Jan. 31, 2019 | Jun. 30, 2018 | Dec. 31, 2017 | |
Accrued payroll-related expenses | $ 3,885 | $ 3,777 | |
Accrued independent sales agent commissions | 298 | 181 | |
Accrued professional fees | 830 | 501 | |
Deferred rent | 261 | 261 | |
Other | 355 | 459 | |
Total accrued and other current liabilities | 5,629 | $ 5,179 | |
Severance Costs | $ 600 | 900 | |
Employee Severance [Member] | |||
Accrued payroll-related expenses | $ 600 |
Debt - (Detail)
Debt - (Detail) - USD ($) | Jul. 31, 2018 | Jul. 30, 2018 | Jun. 30, 2018 | Sep. 26, 2017 | Mar. 10, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Debt | |||||||
Loss on extinguishment of debt | $ (2,303,000) | ||||||
Prepayment penalty on debt | $ 1,950,000 | ||||||
Non-cash expenses related to unamortized issuance costs | $ 300,000 | ||||||
Revolving Credit Facility | |||||||
Debt | |||||||
Additional loan amount | $ 15,000,000 | $ 10,000,000 | |||||
Drawn amount | $ 5,400,000 | ||||||
HealthCare Royalty Partners | |||||||
Debt | |||||||
Prepayment penalty on debt | 1,800,000 | ||||||
Mid Cap | Revolving Credit Facility | |||||||
Debt | |||||||
Maximum loan amount | 10,000,000 | ||||||
Additional loan amount | $ 10,000,000 | ||||||
Interest rate (as a percent) | 3.25% | ||||||
Applicable margin (as a percent) | 1.50% | ||||||
Silicon Valley Bank | Accounts Receivable Credit Facility | |||||||
Debt | |||||||
Termination fee | $ 150,000 | ||||||
Term loan | |||||||
Debt | |||||||
Common stock drawdown percent of amount drawn | 2.00% | ||||||
Term loan | Revolving Credit Facility | |||||||
Debt | |||||||
Minimum net revenue requirements period ending September 30, 2018 | 41,500,000 | ||||||
Minimum net revenue requirements period ending December 31, 2018 | 42,500,000 | ||||||
Minimum net revenue requirements period ending March 31, 2019 | 45,700,000 | ||||||
Minimum net revenue requirements period ending June 30, 2019 | 47,700,000 | ||||||
Minimum cash covenant | 5,000,000 | ||||||
Minimum net revenue required for not maintain cash covenant for December 31, 2018 | 45,000,000 | ||||||
Minimum net revenue required for not maintain cash covenant, there after | $ 50,000,000 | ||||||
Term loan | HealthCare Royalty Partners | |||||||
Debt | |||||||
Debt instrument, repayment of loan payable | $ 15,000,000 | ||||||
Term loan | Mid Cap | |||||||
Debt | |||||||
Maximum loan amount | 30,000,000 | ||||||
Drawn amount | $ 20,000,000 | ||||||
Interest rate (as a percent) | 6.50% | ||||||
Applicable margin (as a percent) | 1.50% | ||||||
Loan term period | 39 months | 36 months | |||||
Frequency periodic payment of loan | monthly | monthly | monthly | ||||
Loan termination fee (percentage) | 7.00% | 6.50% | |||||
Tranche 1 | Mid Cap | |||||||
Debt | |||||||
Maximum loan amount | $ 20,000,000 | ||||||
Drawn amount | $ 20,000,000 | ||||||
Loan term period | 5 years | ||||||
Warrants issued to purchase of shares | 50,618 | ||||||
Exercise price of warrants | $ 7.90 | ||||||
Tranche 1 | Mid Cap | Level 3 | |||||||
Debt | |||||||
Warrants liability | $ 279,000 | ||||||
Contractual term | 10 years | ||||||
Interest free rate | 2.58% | ||||||
Dividend yield | 0.00% | ||||||
Volatility | 60.00% | ||||||
Tranche 1 | Mid Cap | HealthCare Royalty Partners | |||||||
Debt | |||||||
Loan paid off | $ 17,200,000 | ||||||
Tranche 2 | Mid Cap | |||||||
Debt | |||||||
Maximum loan amount | $ 10,000,000 | ||||||
Drawn amount | $ 10,000,000 | ||||||
Interest rate (as a percent) | 6.50% | ||||||
Applicable margin (as a percent) | 1.50% | ||||||
Loan term period | 36 months | 5 years | |||||
Warrants issued to purchase of shares | 47,790 | ||||||
Exercise price of warrants | $ 8.37 | ||||||
Tranche 2 | Mid Cap | Level 3 | |||||||
Debt | |||||||
Warrants liability | $ 278,000 | ||||||
Contractual term | 10 years | ||||||
Interest free rate | 2.24% | ||||||
Dividend yield | 0.00% | ||||||
Volatility | 60.00% |
Stock Option Plans - Additional
Stock Option Plans - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($)director$ / sharesshares | Jun. 30, 2018USD ($)director$ / sharesshares | Jun. 30, 2017USD ($)$ / sharesshares | Dec. 31, 2017shares | |
Aggregate intrinsic value of options exercised | $ 30,000 | $ 300,000 | $ 45,000 | $ 300,000 | |
Amortized period | 3 years | ||||
Weighted-average remaining contractual life of options outstanding | 5 years 7 months 6 days | 7 years | |||
Weighted-average remaining contractual life of options outstanding, vested and expected to vest | 5 years 7 months 6 days | 7 years | |||
Total number of board members | director | 5 | ||||
Employees | |||||
Stock options granted | shares | 8,840 | 125,525 | 325,340 | 734,705 | |
Weighted average grant date fair value of options, granted | $ / shares | $ 3.62 | $ 7.32 | $ 4.11 | $ 6.65 | |
Aggregate intrinsic value of options exercised | $ 700,000 | ||||
Outside Directors | |||||
Total number of board members | director | 4 | ||||
2015 Plan | Executive | |||||
Stock options granted | shares | 268,000 | ||||
Restricted Stock Units | |||||
Restricted stock units, granted fair value | $ 1,000,000 | ||||
Restricted Stock Units | Executive | |||||
Stock options granted | shares | 272,985 | ||||
Aggregate intrinsic value of options exercised | $ 1,100,000 | ||||
Restricted stock units, granted | shares | 71,500 | ||||
Restricted stock units, granted fair value | $ 500,000 | ||||
Restricted stock units, vesting term | 4 years | 4 years | |||
Restricted stock units, vesting percentage | 25.00% | 25.00% | |||
Restricted Stock Units | Outside Directors | |||||
Stock options granted | shares | 171,230 | 522,665 | |||
Aggregate intrinsic value of options exercised | $ 600,000 | $ 1,900,000 | |||
Restricted stock units, granted | shares | 72,000 | ||||
Restricted stock units, granted fair value | $ 500,000 | ||||
Restricted stock units, vesting percentage | 100.00% | ||||
Restricted Stock Units | President and Chief Executive Officer | |||||
Restricted stock units, vesting percentage | 100.00% | ||||
Restricted Stock Units | 2015 Plan | |||||
Stock options granted | shares | 60,000 | ||||
Aggregate intrinsic value of options exercised | $ 200,000 | ||||
Number of board members elected to defer receipts of restricted stock units awarded. | director | 3 | ||||
Restricted Stock Units | 2015 Plan | Outside Directors | |||||
Number of board members elected to defer receipts of restricted stock units awarded. | director | 3 |
Stock Option Plans - Stock-base
Stock Option Plans - Stock-based Compensation (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ||||
Total stock-based compensation expense | $ 630,000 | $ 699,000 | $ 1,609,000 | $ 1,421,000 |
Unrecognized compensation expense | ||||
Unrecognized compensation expense related to unvested options | 6,900,000 | $ 6,900,000 | ||
Weighted-average expected period to recognize of compensation expense, term | 2 years 7 months 6 days | |||
Cost of Goods Sold | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ||||
Total stock-based compensation expense | 59,000 | 51,000 | $ 113,000 | 96,000 |
Selling, General and Administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ||||
Total stock-based compensation expense | 481,000 | 475,000 | 183,000 | 1,007,000 |
Research and Development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ||||
Total stock-based compensation expense | 90,000 | 173,000 | 1,313,000 | 318,000 |
Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ||||
Total stock-based compensation expense | 600,000 | 700,000 | 1,600,000 | 1,300,000 |
Non-employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ||||
Total stock-based compensation expense | 29,000 | $ 44,000 | $ 48,000 | $ 111,000 |
Restricted Stock Units | ||||
Unrecognized compensation expense | ||||
Weighted-average expected period to recognize of compensation expense, term | 2 years 1 month 6 days | |||
Unrecognized compensation expense related to RSUs | $ 2,700,000 | $ 2,700,000 |
Net Loss per Common Share - Sch
Net Loss per Common Share - Schedule of Computation of Basic and Diluted Net Loss per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Numerator: | ||||
Net loss | $ (8,950) | $ (10,387) | $ (20,147) | $ (23,604) |
Denominator: | ||||
Weighted-average common shares outstanding | 24,047,256 | 16,986,628 | 21,102,254 | 16,973,473 |
Less: weighted-average unvested common shares subject to repurchase | (554) | (1,193) | ||
Weighted-average shares used to compute net loss per common share, basic and diluted | 24,047,256 | 16,986,074 | 21,102,254 | 16,972,280 |
Net loss per common share, basic and diluted | $ (0.37) | $ (0.61) | $ (0.95) | $ (1.39) |
Net Loss per Common Share - S33
Net Loss per Common Share - Schedule of Potentially Dilutive Securities Outstanding Excluded from Computation of Diluted Shares Outstanding (Detail) - shares | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive securities excluded from computation of diluted net loss per share | 3,552,497 | 3,387,980 |
Options to Purchase Common Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive securities excluded from computation of diluted net loss per share | 2,696,767 | 2,949,908 |
Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive securities excluded from computation of diluted net loss per share | 620,315 | 250,447 |
Warrants to Purchase Common Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive securities excluded from computation of diluted net loss per share | 235,415 | 187,625 |
Commitments and Contingencies (
Commitments and Contingencies (Detail) - USD ($) $ in Millions | Jun. 30, 2018 | Apr. 30, 2018 | Dec. 31, 2017 |
Commitments and Contingencies | |||
Commitments And Contingencies | |||
Settlement Agreement Medtronic | |||
Commitments and Contingencies | |||
Commitments And Contingencies | $ 1 |
Disaggregation of Revenues (Det
Disaggregation of Revenues (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Disaggregation of Revenues | ||||
Revenue | $ 10,501 | $ 9,768 | $ 20,006 | $ 18,791 |
Single use devices | ||||
Disaggregation of Revenues | ||||
Revenue | 9,245 | 8,289 | 17,826 | 15,337 |
Reusable retractors | ||||
Disaggregation of Revenues | ||||
Revenue | 848 | 926 | 1,547 | 2,049 |
Sales to third party medical device manufacturers | ||||
Disaggregation of Revenues | ||||
Revenue | 86 | 278 | 86 | 827 |
Other | ||||
Disaggregation of Revenues | ||||
Revenue | $ 322 | $ 275 | $ 547 | $ 578 |